As filed with the Securities and Exchange Commission
on September 27, 2004

Registration No. 333-______

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
______________________

FORM SB-2

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

TGC INDUSTRIES, INC.

(Name of small business issuer in its charter)

TEXAS 1382 74-2095844
(State or other jurisdiction of Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Identification No.)
Classification
Code Number

1304 SUMMIT, SUITE 2
PLANO, TEXAS 75074
(972) 881-1099

(Address and telephone number of principal executive offices)

WAYNE A. WHITENER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TGC INDUSTRIES, INC.
1304 SUMMIT, SUITE 2
PLANO, TEXAS 75074
(972) 881-1099

(Name, address, and telephone number of agent for service)

With copies sent to:
RICE M. TILLEY, JR., ESQ.
JAMES O. WYSS, ESQ.
LAW, SNAKARD & GAMBILL, P.C.
1600 WEST SEVENTH STREET, SUITE 500
FORT WORTH, TEXAS 76102
(817) 335-7373

Approximate date of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. [ ]

CALCULATION OF REGISTRATION FEE
==============================================================================

Amount Proposed Proposed Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered(1) per Share(2) Offering Price Fee (3)
- ------------------------------------------------------------------------------
Common stock,
$.01 par value 1,252,064 $1.71 $2,141,029 $271.27
per share

(1) 1,252,064 shares of common stock to be offered by selling
stockholders of the Registrant issuable upon the conversion of
shares of the Registrant's 8.5% Senior Convertible Preferred Stock.
In addition, pursuant to Rule 416 under the Securities Act of 1933,
this Registration Statement shall be deemed to cover, or to
proportionally reduce, as applicable, an indeterminate number of
shares of common stock of the Registrant issuable in the event the
number of shares of the Registrant is increased, or reduced, as
applicable, by reason of any stock split, reverse stock split,
stock dividend, or other similar transaction.

(2) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457(c) under the Securities Act of 1933
based on the average of the closing bid and asked prices of
Registrant's common stock on September 21, 2004, as reported on the
OTC Bulletin Board.

(3) Registration fee calculations are based on the filing fee of
$126.70 per $1,000,000 of securities registered.

REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT FILES A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL
THIS REGISTRATION STATEMENT BECOMES EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.

The information contained in this prospectus is not complete and
may be changed. A Registration Statement relating to these securities
has been filed with the Securities and Exchange Commission. The
Registrant's selling stockholders may not sell these securities until
that Registration Statement becomes effective. This prospectus is not an
offer to sell securities, and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED September 27, 2004
PROSPECTUS
TGC INDUSTRIES, INC.
----------------------------
1304 Summit, Suite 2
Plano, Texas 75074

1,252,064 SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF SENIOR PREFERRED STOCK

THE SELLERS: All of our common stock offered by this prospectus is
offered from time to time by the selling stockholders
identified in this prospectus. We will not receive any
proceeds from the sale of our common stock offered by
the selling stockholders.

MARKET FOR Our common stock is presently quoted on the
SECURITIES: over-the-counter bulletin board under the
symbol "TGCI." On September 21, 2004, the last
reported sale price of our common stock on the
over-the-counter bulletin board was $1.80 per share
(rounded to the nearest penny). See "DESCRIPTION OF
STOCK-Common Stock."

RISK INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE
FACTORS: OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6.

As of August 27, 2004, we had 5,729,948 shares of our common stock
issued and outstanding. The shares of common stock offered by this
prospectus represent about 9.92% of our issued and outstanding common
stock as of August 27, 2004, assuming that, as of that date, all of our
outstanding warrants and options were exercised and all of our preferred
stock was converted into shares of common stock.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED ANY OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is September 27,2004

TABLE OF CONTENTS
Page
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . 5
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . 5
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
MANAGEMENT'S DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . 10
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . 14
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . . . . 16
DETERMINATION OF OFFERING PRICE. . . . . . . . . . . . . . . . . . . 17
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . 17
DESCRIPTION OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . 20
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . 20
TRANSACTIONS WITH MANAGEMENT . . . . . . . . . . . . . . . . . . . . 22
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . 23
LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 27
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 28
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 29
INFORMATION NOT REQUIRED IN PROSPECTUS . . . . . . . . . . . . . . . 55

FORWARD-LOOKING STATEMENTS

This prospectus includes "forward-looking statements" which reflect
our view with respect to future events. We base these forward-looking
statements on our current expectations and projections about future
events. These forward looking statements are subject to risks,
uncertainties, and assumptions about our company, including:

- dependence upon energy industry spending for seismic services;
- the unpredictable nature of forecasting weather;
- the potential for contract delay or cancellation;
- the potential for fluctuations in oil and gas prices; and
- the availability of capital resources.

You should only rely on the information contained in this
prospectus. We have not authorized any person to provide you with
different information. If anyone provides you with different or
inconsistent information, you should not rely on it. The selling
stockholders are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus is accurate as of the
date on the front cover of this prospectus only. Our business, financial
condition, results of operations, and prospects may have changed since
that date.

PROSPECTUS SUMMARY

The following summary highlights certain information contained
throughout this prospectus. It is not complete and may not contain all
of the information that you should consider before investing in the
securities offered by this prospectus. To understand this offering
fully, you should read this entire prospectus carefully, including the
risk factors. Before you make your investment decision, you should also
carefully read our report on Form 10-KSB for our fiscal year ended
December 31, 2003 and our quarterly reports on Form 10-QSB for the
fiscal quarters ended March 31, 2004 and June 30, 2004.

The Company

We are engaged in the domestic geophysical services business and
primarily conduct seismic surveys and sell gravity data to companies
engaged in exploration in the oil and gas industry. Our principal
business office is located at 1304 Summit Avenue, Suite 2, Plano, Texas
75074. (Telephone: 972-881-1099). See "THE COMPANY."

The Offering

This offering includes 1,252,064 shares of our common stock
issuable upon the conversion of our Senior Preferred Stock (defined
below) owned by the stockholders identified later in this prospectus.

Use of Proceeds

We will not receive any proceeds from the sale of the shares of our
common stock offered by this prospectus. See "USE OF PROCEEDS" for more
information.

Risk Factors

Your investment in our common stock offered by this prospectus
involves a high degree of risk. See "RISK FACTORS" below.

RISK FACTORS

When deciding whether or not to purchase our common stock offered
by this prospectus, you should carefully consider the risks described
below.

We Have a History of Losses

The U.S. geophysical industry declined significantly due to the
decline in the price of oil beginning in 1998. However, we reported net
income (before dividend requirements on preferred stock) of $555,165 for
the year ended December 31, 2003, which is the first year since 1998
that we have reported net income. For the six months ended June 30,
2004, we reported net income (before dividend requirements on preferred
stock) of $1,309,764. Prior to 2003, we reported a net loss (before
dividend requirements on preferred stock) of $1,711,509, $1,148,843, and
$1,912,064 for 2002, 2001, and 2000, respectively. At December 31,
2003, the Company had net operating loss carryforwards of approximately
$7,900,000 available to offset future taxable income, which carryforward
expires at various dates through 2023. Although oil prices have
recently increased significantly, we cannot predict future prices or the
future demand for or profitability of our services.

Concentration of Credit Risk

We sell our geophysical services primarily to large independent oil
and gas companies operating in the United States. We perform ongoing
credit evaluations of our customer's financial condition and, generally,
require no collateral from our customers.

We May Not Have the Financing to
Pay for Needed Capital Expenditures

We are in a very competitive environment which requires
sophisticated and expensive equipment to carry out our geophysical
services business. Technological developments are constantly occurring
with the result that older equipment quickly becomes obsolete. Since we
are in a capital intensive environment and have limitations on our
ability to obtain the financing necessary to enable us to purchase newer
types of equipment, we could find ourselves in an adverse situation
where our competitors are able to purchase the newer types of equipment,
but we are not.

We Do Not Expect to Pay Dividends in the Foreseeable Future

We have never paid cash dividends on our common stock. We do not
expect to pay cash dividends on our common stock at any time in the
foreseeable future. The future payment of dividends depends upon our
future earnings, capital requirements, financial requirements, and other
factors that our Board of Directors will consider. In addition, prior to
paying any dividends on our common stock, we have a requirement to pay
dividends on our 8.5% Senior Convertible Preferred Stock ("Senior
Preferred Stock") and our Series C 8% Convertible Exchangeable Preferred
Stock ("Series C Preferred Stock"). Dividends are payable on our Senior
Preferred Stock semi-annually during June and December of each year at a
rate of 8.5% per annum. Dividends are payable on our Series C Preferred
Stock semi-annually during January and July of each year at a rate of 8%
per annum. With regard to both the Senior Preferred Stock and the
Series C Preferred Stock, dividend payments are cumulative and accrue
annually whether or not declared by the Board of Directors. As of June
30, 2004, we had cumulative dividends of $127,820 in arrears on our
Series C Preferred Stock. No dividends were in arrears on our Senior
Preferred Stock.

Since we do not anticipate paying cash dividends on our common
stock, return on your investment (if any) will depend solely on an
increase, if any, in the market value of our common stock.

The Market Price of Our Common Stock
Could Be Adversely Affected by Sales
Of Substantial Amounts of Common Stock
in the Public Market after this Offering

As of August 27, 2004, we had 5,729,948 shares of our common stock
outstanding. If all of our outstanding options and warrants were
exercised, and all of our convertible securities were converted to
common stock, we could have up to 12,607,374 shares of common stock
outstanding. As of August 27, 2004, approximately 3,235,776 shares of
our common stock were "restricted" or "control" securities within the
meaning of Rule 144 under the Securities Act of 1933. These restricted
securities can be sold if they are registered under the Securities Act
of 1933, or if an exemption from registration is otherwise available,
including the exemption that is contained in Rule 144. The market price
of our common stock could be adversely affected by sales in the public
market of substantial amounts of the common stock referred to above
(especially in view of the fact that the amount of the common stock
herein being offered represents approximately fifty percent of the
current "public float".

The Resale of Our Common Stock by You May Be
Limited Because of its Low Price Which Could
Make it More Difficult for Broker/Dealers to
Sell Our Common Stock

The Securities Enforcement and Penny Stock Reform Act of 1990
requires additional disclosure relating to the market for penny stocks
in connection with trades in any stock defined as a penny stock.
Regulations enacted by the SEC generally define a penny stock as an
equity security that has a market price of less than $5.00 per share,
subject to some exceptions. Unless an exception applies, a disclosure
schedule explaining the penny stock market and the risks associated with
investing in penny stocks must be delivered before any transaction in
penny stock can occur.

Our common stock is currently subject to the Securities and
Exchange Commission's "penny stock" rules, and it is anticipated that
trading in our common stock will continue to be subject to the penny
stock rules for the foreseeable future.

Until such time as our common stock meets an exception to the penny
stock regulations cited above, trading in our securities is covered by
Rule 15g-9 promulgated under the Securities Exchange Act of 1934. Under
this rule, broker/dealers who recommend penny stocks to persons who are
not established customers or accredited investors must make a special
determination in writing for the purchaser that the investment is
suitable, and must also obtain the purchaser's written agreement to a
transaction before the sale.

The regulations could limit the ability of broker/dealers to sell
our securities (and thus the ability of purchasers of our securities to
sell their securities in the secondary market) for so long as our common
stock has a market price of less than $5.00 per share.

THE COMPANY

General

Since our formation, we have engaged in the domestic geophysical
services business principally through conducting seismic surveys and, to
a lesser extent, through sales of gravity information from our Data Bank
to companies engaged in the exploration for oil and gas in the United
States. Geophysics is the study of the structure and composition of the
earth's interior and involves the measuring and interpretation of the
earth's properties with appropriate instruments. Such studies are
generally conducted by means of surveys performed by field crews
employing seismic, gravity, or magnetic instruments to acquire data that
is then interpreted by various means to obtain useful information for
oil and gas companies. The two survey techniques used by us in
acquiring geophysical data are seismic and gravity. Land seismic
surveys are our principal method of data acquisition and are by far the
most widely used geophysical technique. Our seismic crews use dynamite
and vibroseis as energy sources for such surveys. The processing and
interpretation of seismic data we acquire are transmitted to data
processing centers (not owned or operated by us) designated by our
clients for processing.

Our Data Bank contains gravity data and, to a lesser extent,
magnetic data, from many of the major oil and gas producing areas
located within the United States. We do not have a seismic data bank.
Data Bank information has been amassed through participatory surveys as
well as speculative surveys funded by us alone. All data and
interpretations may be licensed to our customers at a fraction of the
cost of newly acquired data.

As a service business, our domestic geophysical services are not
dependent upon the supply of raw materials or any other products and,
therefore, we do not have arrangements with any raw material suppliers.

We have the capability of utilizing three seismic crews to perform
our geophysical services and, in any given period, these crews may
generate a significant portion of their respective revenues from one or
more of our clients. For the year ended December 31, 2003, two
customers accounted for fifteen percent (15%) and twelve percent (12%)
of our revenue, respectively. We have entered into a general or master
agreement with each of our clients for the provision of geophysical
services and a supplementary agreement (which becomes a part of the
general agreement) with respect to each particular job that the Company
performs for a client. Under the terms of these agreements, we
generally contract to supply all personnel, transportation, and
equipment to perform seismic surveys for a given prospect for a fixed
price plus reimbursement for certain third party charges. We generally
bill our clients on a progressive basis over the term of the contract.
We are usually obligated to maintain insurance against injury or damage
to persons or equipment arising from the performance of our services and
to indemnify our customers against all claims and liability arising
therefrom. We believe that this insurance coverage is sufficient.

Beginning approximately in mid 1998, activity in the U.S.
geophysical industry declined significantly due to a decline in the
price of oil. As a result, we reduced our operations to one crew in 1999
and continued to operate one crew during 2000. We experienced an
increase in demand for our services in 2001, securing a sufficient
number of contracts to operate at a two-crew level during the second
half of 2001. However, this increased level of activity was short-
lived, and we reduced our operations back to one crew in 2002. As a
result, we began exploring ways of increasing bidding opportunities in
existing markets.

In February of 2002, we entered into an agreement with a
corporation to dispose of our shot hole drilling equipment and to use
the proceeds of the disposal to acquire five buggy-mounted Vibroseis
units and purchase certain additional equipment needed to make the
Vibroseis equipment compatible with our recording equipment. A one-year
$30,000 note financed this additional equipment. The acquisition of
this equipment opened up an opportunity in an existing market, in which
we had not previously participated, thereby increasing our bidding
opportunities. We have been successful in the Vibroseis market with a
significant portion of our 2003 revenue being generated from Vibroseis
contracts. Although we continued to operate at the one-crew level
during 2003, revenue increased 35% over 2002. We announced in mid
January of 2004 that, given that oil and gas exploration companies had
increased the level of activity in their domestic oil and gas
exploration programs, we had acquired three additional Vibroseis units
and deployed a second seismic crew. In June of 2004, as a result of
oil and gas exploration companies continuing to increase their oil and
gas exploration programs, we acquired three more Vibroseis units and
announced deployment of a third seismic crew. Although there can be no
assurance, should this increased level of activity in the industry
continue during 2004, we believe that we will be able to operate at the
three-crew level for the remainder of 2004. Excess capacity remains in
the land-based geophysical service industry, and pricing continues to be
very competitive. We continue to monitor expenses and, where possible,
implement cost containment programs to remain highly competitive through
this continuing difficult period in the industry.

During 2001, there were a number of consolidations and mergers in
the geophysical industry. In addition, in late 2002 a major seismic
competitor shut down all of its U.S. and Canadian land-based seismic
operations. Although there can be no assurance, we are hopeful that
with fewer seismic crews available in the marketplace, we will be able
to secure contracts with improved margins thereby improving our future
performance.

As of August 27, 2004, we employed 108 employees, supporting three
seismic crews with a total of 99 crew members and direct support
members. We believe our relationship with our employees to be
satisfactory.

Description of Property

Our headquarters are in leased facilities located in Plano, Texas,
from which we conduct all of our current operations. These facilities
include 8,000 square feet of office and warehouse space and an outdoor
storage area of approximately 10,000 square feet. The monthly rent is
$6,559. This facility is used to house corporate offices and serves as
the headquarters for our geophysical business. We are not responsible
for insuring the facilities. The condition of our facilities is good,
and we believe that these properties are suitable and adequate for our
foreseeable needs.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of operations

Revenues for the year ended December 31, 2003 were $8,468,051
compared with revenues of $6,262,206 for the year ended December 31,
2002. Revenues for the six months ended June 30, 2004 were $7,754,069
compared with revenues of $4,437,206 for the six months ended June 30,
2003. A primary reason for the increase in revenues was the deployment
of a second and a third crew during 2004. We reported net income
(before dividend requirements on preferred stock) of $555,165 for the
year ended December 31, 2003, compared with a net loss (before dividend
requirements on preferred stock) of $1,711,509 for the year ended
December 31, 2002. We reported net income (before dividend requirements
on preferred stock) of $1,309,764 for the six months ended June 30,
2004, compared with net income (before dividend requirements on
preferred stock) of $175,036 for the six months ended June 30, 2003.
2003 is the first year since 1998 that we have reported net income.

In 2003 we were able to secure a sufficient number of contracts to
keep one of our crews employed the entire year. As a result, we
reported a 35% increase in revenues in 2003 over 2002. This increase in
revenue was principally the result of our successful entry into the
Vibroseis market with a significant portion of the 2003 revenue being
generated from Vibroseis contracts. Vibroseis contracts tend to have
higher margins than dynamite contracts because they do not incur the
additional third-party costs associated with dynamite contracts of
drilling and explosives. As a result of higher revenues and reduced
costs, our cost of services, as a percentage of revenue, decreased to
82.1% in 2003 from 112.2% in 2002. Selling, general, and administrative
expense increased to $932,709 in 2003 from $884,572 in 2002. This
increase was due primarily to an increase in expenses associated with
the higher level of revenues. Interest expense decreased to $8,792 in
2003 from $16,807 in 2002. This decrease was attributable to the lower
level of debt in 2003 compared with 2002.

In June of 2003, we issued 750,000 detachable stock warrants, with
a value of $22,500, to certain directors in exchange for their financial
commitment for a line of credit that expired December 31, 2003, in an
amount up to $300,000. During 2003, we had no borrowings against the
line of credit.

On December 31, 2003, we had net operating loss carryforwards of
approximately $7,900,000 available to offset future taxable income,
which carryforwards expire at various dates through 2023.

Financial Condition

Cash of $1,066,743 was provided by operations for the twelve months
ended December 31, 2003, compared with cash used in operations of
$404,100 for the same period of the prior year. The primary reason for
the increase in cash from operations in 2003 compared with 2002 was a
significant increase in revenue and net income in 2003 compared with
2002. Net cash of $295,610 was used in investing activities during
2003. This was primarily the result of capital expenditures of $314,959
to acquire three additional Vibroseis units and to replace certain
vehicles and equipment that had become worn-out during 2003. Principal
payments on debt obligations in the amount of $133,458 and principal
payments on capital lease obligations of $135,574 resulted in net cash
of $269,032 being used in financing activities during 2003. The capital
leases entered into in 2003 were primarily for replacement of certain
equipment and additional surveying equipment. The terms of these
capital leases range in length from six months to three years. We
anticipate that available funds, together with anticipated cash flows
generated from future operations, will be sufficient to meet our minimum
lease and note payment obligations.

Cash of $4,711,473 was provided by operations for the six months
ended June 30, 2004, compared with cash provided by operations of
$241,526 for the same period of the prior year. The primary reason for
the increase in cash provided by operations between the two periods was
a significant increase in revenue and net income in the first six months
of 2004 as compared with the first six months of 2003.

Working capital increased $1,462,408 to $1,326,594 at December 31,
2003, from the December 31, 2002, working capital deficit of $135,814.
Our current ratio increased to 3.1 at December 31, 2003 from .9 at
December 31, 2002. Stockholders' equity increased to $1,943,339 at
December 31, 2003, from the December 31, 2002, balance of $1,360,274 due
primarily to the net income reported in 2003 of $555,165. We anticipate
that available funds, together with anticipated cash flows generated
from future operations, will be sufficient to meet our cash needs during
2004, so long as one of our three crews is employed, of which there is
no assurance.

Working capital increased $167,431 to $1,494,025 at June 30, 2004,
from the December 31, 2003 working capital of $1,326,594. Our current
ratio was 1.33 at June 30, 2004, as compared with a current ratio of 3.1
at December 31, 2003. The reason for the decrease was a substantial
increase in "trade accounts payable" and "billings in excess of costs
and estimated earnings on uncompleted contracts" during the first six
months of 2004. Stockholders' equity increased to $3,122,123 at June 30,
2004, as compared with $1,943,339 at December 31, 2003, due primarily to
the net income (before dividend requirements on preferred stock)
reported for the first six months of 2004 of $1,309,764.

In September of 2001, we entered into a three-year operating lease
for our headquarters facility located in Plano, Texas. We anticipate
that available funds, together with anticipated cash flows generated
from future operations, will be sufficient to meet our 2004 minimum
rental payment obligation of $52,488.

During 2001, we entered into an unsecured revolving line of credit
arrangement with a bank providing for borrowings of up to $125,000. The
facility bore interest at prime plus 1% per annum, and matured in
October of 2003. We had committed the availability to irrevocable
letters of credit totaling $125,000 which also expired in October of
2003. Therefore, we had no borrowing availability under this line of
credit. The letters of credit, with an insurance company as
beneficiary, were being used to guarantee continuing seismic insurance
bonds totaling $125,000. These letters of credit were issued by the
insurance company to two states in which we perform seismic surveys. In
October of 2003, we were able to secure replacement seismic bonds from
an insurance company that did not require letters of credit.

On December 13, 1999, WEDGE Energy Services, L.L.C., ("WEDGE") an
affiliate of WEDGE Group Incorporated, a diversified Houston, Texas firm
with interests in oil and gas services, purchased from us a $2,500,000
8.5% Convertible Subordinated Debenture, Series B due December 1, 2009
(the "Debenture"). Proceeds of the financing, together with other
available funds, were utilized for working capital and an expanded
capital expenditure program. The Debenture, at WEDGE's option, could be
converted into either Senior Preferred Stock or common stock at a price
of $1.15 per share.

At the 2000 Annual Meeting of Shareholders, the holders of our
outstanding Series C Preferred Stock voted to consent to the issuance of
the new Senior Preferred Stock. As a result of the consent to the new
series of Senior Preferred Stock by the Series C Preferred Stock
shareholders and in accordance with the terms of the Debenture
Agreement, WEDGE converted its Debenture plus accrued interest into
2,252,445 shares of Senior Preferred Stock. Per the Debenture
Agreement, dividends on the Senior Preferred Stock were paid by the
issuance of additional shares of Senior Preferred Stock through December
1, 2000. After December 1, 2000, WEDGE could either receive dividends
in cash or additional shares. WEDGE elected to receive dividends in
additional shares. As a result, 771,819 shares of Senior Preferred
Stock were issued to WEDGE as dividend payments from June 1, 2000,
through December 1, 2003.

In February of 2004, WEDGE sold all of its 3,024,264 shares of
Senior Preferred Stock to a small number of investors who included
several members of our Board of Directors. In addition, WEDGE's two
designated Board members resigned. The Senior Preferred Stock, at the
Senior Preferred Stock shareholders' election, can be converted into
common stock on the basis of one share of common stock for each share of
Senior Preferred Stock.

At a November 30, 2001 meeting, our Board of Directors, in an
effort to encourage the conversion of Series C 8% Convertible
Exchangeable Preferred Stock ("Series C Preferred Stock") into shares of
Common Stock, voted to reduce, on a post-reverse split basis, the
conversion price of the Series C Preferred Stock from $2.00 per share of
Common Stock to $1.61 per share of Common Stock. In addition, the Board
of Directors voted to extend the conversion price increase date of the
Series C Preferred Stock from the close of business on December 31, 2001
until the close of business on January 31, 2002. As a result, the
conversion price was $1.61 per share of Common Stock if converted prior
to the close of business on January 31, 2002. After January 31, 2002,
and prior to the close of business on December 31, 2002, the conversion
price per share of Common Stock was $3.75. Thereafter, the conversion
price per share of Common Stock became $6.00. This action by the Board
of Directors resulted in 977,550 shares of Series C Preferred Stock
being converted into 3,035,839 shares of Common Stock during 2002. As a
result, 58,100 shares of Series C Preferred Stock remained outstanding
at December 31, 2003, and the cumulative dividends in arrears on the
Series C Preferred Stock were $116,200 at December 31, 2003.

MANAGEMENT

Name, Age, and Positions with Company
Business Experience
________________________________________________________________________

Wayne A. Whitener, 52 President, CEO,
Chief Executive Officer of the Company since and Director
January of 1999; Chief Operating Officer of the
Company from July of 1986 to December of 1998;
President of the Geophysical Division since
1984; served as Vice President of TGC from 1983
to 1984; Area Manager for Grant Geophysical Co.
from December of 1978 until July of 1983.

Daniel G. Winn, Age 53 Vice President
Vice President of the Company since June of 2004;
Operations Manager of the Company from August of
1997 to June of 2004; Operations Supervisor of the
Company from January of 1990 to August of 1997;
Operations Supervisor for Halliburton Geophysical,
from January of 1988 to January of 1990.

Kenneth W. Uselton, Age 61 Secretary, Treasurer,
Secretary of the Company since March of 2004; and CFO
Treasurer of the Company since November of 1995;
served as Vice President and CFO of Texstar, Inc.,
a plastics manufacturer from May of 1990 to August
of 1995.

Allen T. McInnes, 66 Director
Chairman of the Board from July of 1993 to March
of 2004; Secretary from November of 1997 to March
of 2004; Chief Executive Officer of the Company
from August of 1993 to March of 1996; Executive
Vice-President and Director of Tenneco, Inc.
1960-1992; President and CEO of Tetra Technologies,
Inc. from April of 1996 to September of 2001;
Director of Tetra Technologies, 1996 to present;
Dean, Rawls College of Business, Texas Tech
University from August of 2001 to present;
Director of Alamosa PCS, a wireless
communication company which is an affiliate
of Sprint, since February of 2003.

William J. Barrett, 65 Director
Secretary of the Company from 1986 to November
of 1997; President of Barrett-Gardner Associates,
Inc., an investment banking firm since November
of 2002, and previously Senior Vice President of
Janney Montgomery Scott LLC, investment bankers,
since 1978; Director of Supreme Industries,
Inc., a manufacturer of specialized truck bodies
and shuttle buses, since 1979; and Chairman of the
Board of Rumson-Fair Haven Bank and Trust, a
New Jersey state independent, commercial bank and
trust company.

Name, Age, and Positions with Company
Business Experience
________________________________________________________________________

Herbert M. Gardner, 64 Director
Executive Vice President of Barrett-Gardner
Associates, Inc., an investment banking firm
since November of 2002, and previously Senior
Vice President of Janney Montgomery Scott LLC,
investment bankers since 1978; Chairman of
the Board of Supreme Industries,
Inc., a manufacturer of specialized truck bodies
and shuttle buses, since 1979; and President
since 1992. Also a Director of: Nu Horizons
Electronics Corp., an electronic component
distributor; Rewards Network, Inc., formerly
Transmedia Network, Inc., a company that
develops and markets transaction-based dining
and other consumer rewards programs; Co-Active
Marketing Group, Inc., a marketing and sales
promotion company; and Rumson-Fair Haven Bank
and Trust Company, a New Jersey state independent,
commercial bank and trust company.

Edward L. Flynn, 69 Director
Owner of Flynn Meyer Company, a management
company for the restaurant industry, since
1976; Director and Treasurer, Citri-Lite Co.,
a soft drink company; and Director of Bioject
Medical Technologies, Inc., a drug delivery
system company.

William C. Hurtt, Jr., 59 Director
Retired, Vero Beach, FL; BA Harvard College
1967; MBA Wharton School of Business, University
of Pennsylvania, 1969; Manager of Blue Lake
Properties, LLC, Tuscaloosa, Alabama, from November
of 1998 to present; Former Director of River Gas
Corporation, October of 1998 to September of 2000.

EXECUTIVE COMPENSATION

The table below sets forth, on an accrual basis, all cash and cash
equivalent remuneration paid by us during the year ended December 31,
2003, to the Chief Executive Officer and any other executives whose
salary and bonus exceeded $100,000.

Summary Compensation Table

Name and Principal Annual Compensation Options/ All Other
Position Year Salary Bonus Stock SAR's Compensation
________________________________________________________________________
Wayne A. Whitener 2003 $125,000 $15,000 -0- -0- $7,039 (1)
President 2002 $125,000 -0- -0- -0- $6,021 (2)
& CEO 2001 $ 94,875 -0- -0- -0- $6,298 (3)

(1) Represents personal use of a Company vehicle ($3,960),
Company's payment for personal income tax preparation
($145), Company's contribution to 401(k) program
($2,658), and life insurance premiums ($276).

(2) Represents personal use of Company vehicle ($4,883),
Company's payment for personal income tax preparation
($145), Company's contribution to 401(k) program ($717),
and life insurance premiums ($276).

(3) Represents personal use of Company vehicle ($5,522),
Company's payment for personal income tax preparation
($135), Company's contribution to 401(k) program ($365),
and life insurance premiums ($276).

401(k) Plan

In 1987, we implemented a 401(k) salary deferral plan (the "Plan")
which covers all employees who have reached the age of 20-1/2 years and
have been employed by us for at least one year. The covered employees
may elect to have an amount deducted from their wages for investment in
a retirement plan. We have the option, at our discretion, to make
contributions to the Plan. For several years prior to 1999, we made a
matching contribution to the Plan equal to the sum of 75% of each
Participant's salary reduction contributions to the Plan for such Plan
year which were not in excess of 3% of the Participant's compensation
for such Plan year, and 50% of each Participant's salary reduction
contributions to the Plan for such Plan Year which were in excess of 3%
of the Participant's compensation but not in excess of 8% of the
Participant's compensation for such Plan Year. As of January 1, 1999,
we decided to make a contribution to the Plan equal to 100% of each
participant's salary reduction contributions to the Plan up to 2% of the
participant's compensation. The total amount of our contribution during
2003 for the one (1) executive officer participating in the 401(k) Plan
was as follows: Wayne A. Whitener - $2,658.

Options Granted in Last Fiscal Year

During the year ended December 31, 2003, no stock options or stock
appreciation rights were granted to any of our executive officers.

Prior to 2003, our directors did not receive any compensation for
service as a director.

Because of the additional burdens imposed upon directors of public
companies by the Sarbanes-Oxley Act of 2002, our directors began
receiving compensation in 2003. Because of limited cash availability,
this compensation was paid in common stock on the basis of each director
receiving 7,500 shares of our common stock for each year of service as a
director up to a maximum of five years, or a maximum of 37,500 shares of
common stock per director, as compensation. As a result, Messrs.
William J. Barrett, Herbert M. Gardner, Allen T. McInnes, and Wayne A.
Whitener each received 37,500 shares of common stock, and Mr. Edward L.
Flynn received 30,000 shares of common stock.

In March of 2004, 5,814 shares of our common stock were issued, as
director compensation, to each of Messrs. William J. Barrett, Herbert M.
Gardner, Allen T. McInnes, Wayne A. Whitener, Edward L. Flynn, and
William C. Hurtt, Jr.

Equity Compensation Plan Information

(a) (b) (c)
Number of Securities
Number of Securities Weighted-Average Remaining Available for
to be Issued Upon Exercise Price Future Issuance Under
Exercise of Outstanding of Outstanding Equity Compensation
Plans
Options, Warrants, and Options, Warrants, (Excluding Securities
Plan Category and Rights and Rights Reflected in Column
(a))
_____________ _______________________ _________________
_________________________

Equity compensation plans
approved by security
holders 182,100 $.96 147,000

Equity compensation plans
not approved by security
holders 230,000(1) $.09
_______
Total 412,100

Note (1): In 1999, 50,000 Warrants were issued as bonus compensation.
Each Warrant is exercisable into one share of our common stock at a
purchase price of $.30 and expires on July 31, 2009. As of December 31,
2003, we issued 180,000 shares of common stock to our directors as
compensation.

USE OF PROCEEDS

The shares of our common stock offered by this prospectus are being
registered for the account of the selling stockholders named in this
prospectus. Therefore, any proceeds from the sale of our common stock
will be received by the related selling stockholders for their own
account, and we will not receive any proceeds from the sale of our
common stock offered by this prospectus.

With respect to the shares of our common stock offered by this
prospectus, we previously received $2,500,000 from the sale of the
Debenture described in "MANAGEMENT'S DISCUSSION AND ANALYSIS Financial
Condition." We used the proceeds from the sale of the Debenture for
general working capital purposes. The Debenture was subsequently
converted into Senior Preferred Stock.

We will incur all of the costs associated with the registration of
the shares of our common stock offered by this prospectus, if any. See
"PLAN OF DISTRIBUTION."

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock traded on the NASDAQ SmallCap Market under the
symbol "TGCI" from September 25, 1994, until May 24, 2002. We were
notified by NASDAQ of potential delisting of our common stock for: (1)
having failed to maintain a minimum market value of publicly held shares
of $1,000,000 and (2) having failed to equal or exceed the minimum bid
price requirement of $1 per share, in each case for thirty (30)
consecutive trading days. As a condition to continued listing of our
securities on the SmallCap Market, we were required to satisfy these
requirements for a minimum of ten (10) consecutive trading days by May
15, 2002, and August 13, 2002, respectively. Our common stock did not
trade at sufficient levels, for ten (10) consecutive trading days, to
comply with the May 15, 2002 deadline. As a result, our securities were
delisted from the NASDAQ SmallCap Market at the opening of business on
May 24, 2002, and now trade over-the-counter on the National Association
of Securities Dealers, Inc. Over-The-Counter Bulletin Board System. We
maintain our trading symbol "TGCI".

The number of shareholders of record of our common stock as of
August 27, 2004, was 114. Due to the number of shares held in nominee or
street name, we believe that there are a significantly greater number of
beneficial owners of our common stock. As of such date, CEDE & CO. held
4,269,910 shares in street name. On September 7, 2004, our common stock
was quoted at a closing bid price of $1.80. The high and low bid prices
shown below represent prices among the dealers and do not include retail
mark-ups, mark-downs, or commissions, and do not necessarily represent
actual transactions.

Bid Price of Common Stock

Date High Low
Bid Price Bid Price
______________________________ _________ _________
April 1 -- June 30, 2004 2.450 1.200
January 1 -- March 31, 2004 1.200 .700
October 1 -- December 31, 2003 .700 .380
July 1 -- September 30, 2003 .380 .150
April 1 -- June 30, 2003 .150 .075
January 1 -- March 31, 2003 .100 .063
October 1 -- December 31, 2002 .150 .063
July 1 -- September 30, 2002 .230 .150
April 1 -- June 30, 2002 .350 .150
January 1 -- March 31, 2002 .520 .150

Dividends are payable on our common stock at the discretion of the
Board of Directors. In light of our working capital needs, it is
unlikely that cash dividends will be declared and paid on our common
stock in the foreseeable future.

DETERMINATION OF OFFERING PRICE

The selling stockholders may sell all or a portion of their shares
of our stock in the over-the-counter market at prices prevailing at the
time of sale, or related to the market price at the time of sale, or at
other negotiated prices. See "PLAN OF DISTRIBUTION."

SELLING STOCKHOLDERS

Background

We are registering the shares of our common stock offered for
resale by this prospectus in order to satisfy our obligations to the
selling stockholders named below. None of our officers or directors are
included in the selling stockholder group. In February of 2004, the
selling stockholders named below acquired the Senior Preferred Stock
which can be converted into common stock at the selling stockholders'
election as described in "MANAGEMENT'S DISCUSSION AND ANALYSIS-Financial
Condition." Pursuant to the designation establishing the Senior
Preferred Stock, we are obligated to register, under the Securities Act
of 1933, the shares of our common stock that will be held by each of
these stockholders, assuming these stockholders convert all of the
shares of Senior Preferred Stock sold to each of the selling
stockholders as described in "MANAGEMENT'S DISCUSSION AND ANALYSIS-
Financial Condition." We are obligated to keep the registration
statement, of which this prospectus forms a part, effective for twenty-
four (24) months following the date of this registration.

Selling Stockholders Table

The shares of our common stock offered by this prospectus are being
sold for the account of the selling stockholders identified in the
following table. The information in the following table and footnotes is
based solely on information furnished to us by the selling stockholders
which, for each selling stockholder, includes:

(a) the name and address of the selling stockholder,

(b) any position, office, or other material relationship (if
any) which the selling stockholder has had with us, our
predecessors, or our affiliates within the past three years,

(c) the number of shares of our common stock currently
beneficially owned by the selling stockholder and the percentage
that those shares of our common stock represent of all of our
outstanding common stock as of August 27, 2004 (on a fully-diluted
basis),

(d) the number of shares of our common stock offered by the
selling stockholder, and

(e) the amount and, if 1% or more, the percentage of shares of
our common stock that will be beneficially owned by the selling
stockholder after completion of the offering, assuming the sale of
all of the shares of our common stock as referenced in (d) above.

Except as indicated in the footnotes to this table, the persons
named in the table have sole voting and investment power with respect to
all shares of our common stock shown as beneficially owned by them. Each
selling stockholder that is a broker-dealer or is affiliated with a
broker-dealer has represented to us that such stockholder purchased the
securities to be resold pursuant to this prospectus in the ordinary
course of business and, at the time of the purchase of such securities,
had no agreements or understandings, directly or indirectly, with any
person to distribute such securities.

(a) (b) (c) (d) (e)
Material Amount of Common Amount of Common Amount of Common
Relationship Stock/Percentage Stock Offered(1) Stock/Percentage
Name and Address of With Company Within Owned Before Owned After
Selling Stockholder Last 3 Years Offering (1) Offering
___________________ _______________ ________________ ________________
________________

Nicholas A. Baker, III
18 Horseshoe Bend Road
Mendham, NJ 07945 None 113,200/1.6% 113,200 -0-/*

William J. Barrett, Jr.
457 Mine Brook Road
Far Hills, NJ 07931 None 170,701/2.4% 169,800 901/*

Robert J. Deputy
22628 Weatherby Lane
Elkhart, IN 46514 None 73,999/1.1% 34,000 39,999/*

Jason M. Elsas, Jr.
26 Tuxedo Road
Rumson, NJ 07760 None 360,024/5.2% 235,800 124,224/1.8%

Arthur J. Gajarsa and
Melanie Gajarsa, JTWROS
3552 Reservoir Road NW
Washington, DC 20007 None 47,100/* 47,100 -0-/*

National Investor Services
Cust FBO Ann Green Roth IRA
c/o TD Waterhouse Investor
Services, Inc. Attn:
Mike Gelber (2)
125 Maiden Lane
New York, NY 10038 None 39,029/* 9,664 29,365/*

Stuart M. Gerson & Pamela
E. Somers, JTWROS
3 E. Irving Street
Chevy Chase, MD 20815 None 114,056/1.6% 83,000 31,056/*

William D. Marohn
54943 Woodhold Ct.
Elkhart, IN 46516 None 70,000/1.0%* 60,000 10,000/*

Ellen M. Noreen & Clifford
M. Noreen, JTWROS
95 Bent Tree Drive
East Longmeadow, MA 01028 None 73,739/1.1% 47,000 26,739/*

Sidney Todres
250 Park Avenue
New York, NY 10177 None 427,735/6.1% 300,000 127,735/1.8%

National Investor
Services Cust FBO C.
Richard Stafford MPPP
c/o TD Waterhouse Investor
Services, Inc.
Attn: Mike Gelber (3)
125 Maiden Lane
New York, NY 10038 None 206,356/3.0% 34,000 172,356/2.5%

Technology Insurance
Company, Inc.
Attn: B. Zyskind (4)
59 Maiden Lane
New York, NY 10038 None 59,250/* 59,250 -0-/*

Rochdale Insurance Company
Attn: B. Zyskind (5)
59 Maiden Lane
New York, NY 10038 None 59,250/* 59,250 -0-/*

*Less than 1%

(1) Includes the number of shares of common stock which are deemed to be
beneficially owned as a result of ownership of Senior Preferred Stock.
Each share of Senior Preferred Stock is convertible into one share of
common stock.
(2) Ann Green has voting and dispositive power over the shares of common
stock being offered.
(3) C. Richard Stafford has voting and dispositive power over the shares
of common stock being offered.
(4) B. Zyskind, President, has voting and dispositive power over the
shares of common stock being offered.
(5) B. Zyskind, President, has voting and dispositive power over the
shares of common stock being offered.

DESCRIPTION OF STOCK

Our authorized capital stock consists of 25,000,000 shares of
common stock, $.01 par value per share, and 4,000,000 shares of
preferred stock, $1.00 par value per share. As of August 27, 2004 we had
5,729,948 shares of common stock, 3,024,264 shares of Senior Preferred
Stock, and 58,100 shares of Series C Preferred Stock issued and
outstanding. We have outstanding warrants and options which, if
exercised, will total 3,804,745 shares of common stock. Overall, we
would have a total of 12,607,374 shares of common stock issued and
outstanding if all of our outstanding warrants and options were
exercised and all of our preferred stock were converted into shares of
common stock.

Common Stock

Each share of our common stock is entitled to one vote on each
matter submitted to a vote of the stockholders and is equal to each
other share of our common stock with respect to voting, liquidation, and
dividend rights. Holders of our common stock are entitled to receive the
dividends, if any, as may be declared by our Board of Directors out of
assets legally available therefor and to receive net assets in
liquidation after payment of all amounts due to creditors and any
liquidation preference due to preferred stockholders. Holders of our
common stock have no conversion rights and are not entitled to any
preemptive or subscription rights. Our common stock is not subject to
redemption or any further calls or assessments. Our common stock does
not have cumulative voting rights in the election of directors. The
transfer agent for our common stock is American Stock Transfer & Trust
Company, 59 Maiden Lane, Plaza Level, New York, New York 10038.

Dividend Policy

While there currently are no restrictions prohibiting us from
paying dividends to our stockholders, we have not paid any cash
dividends on our common stock in the past, and we do not anticipate
paying any dividends in the foreseeable future. Earnings, if any, are
expected to be retained to fund our future operations. There can be no
assurance that we will pay dividends on our common stock at any time in
the future.

Trading of Our Common Stock

Our common stock presently is quoted on the over-the-counter
bulletin board maintained by the National Association of Securities
Dealers, Inc. under the symbol "TGCI." The average of the closing bid
and asked prices for our common stock was $1.71 on September 21, 2004.

PLAN OF DISTRIBUTION

The selling stockholders may, from time to time, use this
prospectus to sell all or a portion of the shares of our common stock
offered by this prospectus. These sales and transfers of our common
stock may be effected from time to time in one or more transactions on
the over-the-counter bulletin board, in the over-the-counter market, in
negotiated transactions, or otherwise, at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at
negotiated prices, or without consideration, or by any other legally
available means.
These transfers or sales may occur directly or by or through
brokers, dealers, agents, or underwriters, who may receive compensation
in the form of underwriting discounts, concessions, or commissions from
the selling holders and/or from purchasers of the common stock for whom
they may act as agent. Any or all of the shares of common stock may be
sold or transferred from time to time by means of:

- a block trade in which the broker or dealer so engaged will
attempt to sell the common stock as agent but may position
and resell a portion of the block as principal to facilitate
the transaction;
- purchases by a broker or dealer as principal and resale by
that broker or dealer for its account based on this
prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- the writing of options on the common stock;
- pledges as collateral to secure loans, credit, or other
financing arrangements and any subsequent foreclosure, if
any, under those arrangements;
- gifts, donations, and contributions; and
- any other legally available means.

To the extent required by the Securities Act of 1933, the number of
shares of common stock to be sold or transferred, the purchase price,
the name of any agent, broker, dealer, or underwriter, and any
applicable discounts or commissions and any other required information
with respect to a particular offer will be shown in an accompanying
prospectus supplement or post-effective amendment.

In the event of the transfer by any selling stockholder of shares
of our common stock offered by this prospectus to any pledgee, donee, or
other transferee, we will supplement or amend this prospectus (as
required by the Securities Act of 1933), and the Registration Statement
of which this prospectus forms a part, in order to have the pledgee,
donee, or other transferee included as a selling stockholder.

We have agreed to keep this prospectus effective until twenty-four
(24) months following the effective date of this registration statement.

If necessary to comply with state securities laws, the common stock
will be sold only through registered or licensed brokers or dealers. In
addition, the common stock may not be sold unless it has been registered
or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied
with.

The selling stockholders and any brokers, dealers, agents, or
underwriters who participate in the distribution of the common stock may
be deemed to be "underwriters" within the meaning of the Securities Act
of 1933, in which event any discounts, concessions, and commissions
received by those brokers, dealers, agents, or underwriters, and any
profit on the resale of the common stock purchased by them, may be
deemed to be underwriting commissions or discounts under the Securities
Act of 1933.

No underwriter, broker, dealer, or agent has been engaged by us or,
to our knowledge, any of the selling stockholders, in connection with
the distribution of the common stock.

We and the selling stockholders will be subject to the applicable
provisions of the Securities Exchange Act of 1934 and the rules and
regulations under it, including, without limitation, Rule 10b-5 and,
insofar as the selling stockholders are distributors and we, under
certain circumstances, may be a distribution participant, under
Regulation M.

The anti-manipulation provisions of Regulation M under the
Securities Exchange Act of 1934 will apply to purchases and sales of
shares of our common stock by the selling stockholders, and there are
restrictions on market-making activities by persons engaged in the
distribution of the shares of our common stock. Under Regulation M, a
selling stockholder or its agents may not bid for, purchase, or attempt
to induce any person to bid for, or purchase, shares of our common stock
while they are distributing shares of our common stock covered by this
prospectus. Accordingly, the selling stockholders are not permitted to
cover short sales by purchasing shares of our common stock while the
distribution is taking place.

Any common stock covered by this prospectus which also qualifies
for sale based on Rule 144 under the Securities Act of 1933 may be sold
under Rule 144 rather than based on this prospectus. There is no
assurance that the selling stockholders identified in this prospectus
will sell any or all of the common stock. The selling stockholders may
transfer, devise, or gift common stock by other means not described in
this prospectus.

We will pay all of the expenses incident to the registration of the
common stock, other than underwriting discounts and selling commissions,
if any. The aggregate proceeds to the selling holders from the sale of
the common stock will be the purchase price of that common stock less
any of these discounts or commissions.

We have agreed to indemnify the selling stockholders against some
of the liabilities under the Securities Act of 1933 arising from this
prospectus or the Registration Statement of which it is a part.

TRANSACTIONS WITH MANAGEMENT

During 2002, in order to enable us to meet working capital needs,
an investor group (that included certain directors) provided us with
their financial commitment for a line of credit in an amount up to
$300,000 that expired on December 31, 2002. During September of 2002,
we used $150,000 of available funds under the line of credit. On
December 31, 2002, $120,000 remained outstanding under the line of
credit and was paid by us in January of 2003. In connection therewith,
we issued stock purchase warrants to such investor group. The warrants
cover 1,500,000 shares of common stock, expire on September 10, 2012,
and are exercisable at $.20 per share. The Warrant Agreements contain
provisions permitting the warrant holders to exercise their warrants for
additional common shares as a result of the Senior Preferred
Stockholders electing to receive additional shares of Senior Preferred
Stock as dividends. A $30,000 note and a warrant for 300,000 shares
were issued to each of Allen T. McInnes, William C. Hurtt, Jr., William
J. Barrett, Herbert M. Gardner, and Edward L. Flynn.

In June of 2003, certain directors provided us with their financial
commitment for a line of credit up to $300,000 through December 31,
2003, on the same terms as the 2002 financial commitment described
above, provided that warrants covering only 750,000 shares of common
stock were issued upon execution of the financial commitment and
warrants covering the remaining 750,000 shares of common stock were to
be issued in proportion to the amount of the $300,000 commitment which
we drew on (e.g. if we borrowed a total of $150,000, warrants covering
375,000 shares were to be issued, and if we borrowed the full commitment
of $300,000, warrants covering 750,000 shares were to be issued). We
had no borrowings under this commitment during 2003. A warrant for
150,000 shares was issued to each of Allen T. McInnes, William C. Hurtt,
Jr., William J. Barrett, Herbert M. Gardner, and Edward L. Flynn.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following tabulation sets forth the names of those persons who
are known to be the beneficial owner(s) as of August 27, 2004, of more
than five percent (5%) of our common stock or Senior Preferred Stock.
Such tabulation also sets forth the number of shares of our common stock
or Senior Preferred Stock beneficially owned as of August 27, 2004, by
all of our directors and executive officers (naming them), and all
directors and officers as a group (without naming them). Persons having
direct beneficial ownership of our common stock or Senior Preferred
Stock possess the sole voting and dispositive power in regard to such
stock. The Senior Preferred Stock is freely convertible into shares of
common stock at the conversion ratio of one share of common stock for
each share of Senior Preferred Stock. Ownership of the Senior Preferred
Stock is deemed to be beneficial ownership of common stock at a
conversion ratio of one share of common stock for each one share of
Senior Preferred Stock under Rule 13d-3(d)(1) promulgated under the
Securities Exchange Act of 1934. As of August 27, 2004, there were
5,729,948 shares of common stock and 3,024,264 shares of Senior
Preferred Stock outstanding.

The following tabulation also includes common stock covered by (i)
options granted under our 1993 and 1999 Stock Option Plans, which
options are collectively referred to as "Stock Options," (ii) stock
purchase warrants, which warrants are collectively referred to as "Stock
Purchase Warrants," and (iii) Senior Preferred Stock which is
convertible on a one-for-one basis into common stock. The Stock Options
and Stock Purchase Warrants have no voting or dividend rights.

The following tabulation excludes the Series C Preferred Stock
since the Series C Preferred Stock is not owned by any of our officers
and directors or five percent (5%) or more beneficial owners.

Name & Address Title of Class Amount & Nature Percent
of Beneficial Owner of Beneficial of
Ownership (1)(2)(3) Class(4)
___________________ ______________ ___________________ ___________

William J. Barrett Common 2,349,936 (5) 32.37%
636 River Road
Fair Haven, NJ 07704

Jason M. Elsas, Jr. Common 360,024 6.03%
26 Tuxedo Road
Rumson, NY 07760

Edward L. Flynn Common 1,870,661 (6) 28.08%
75-11 Myrtle Avenue
Glendale, New York 11385

Herbert M. Gardner Common 1,390,362 (7) 20.72%
636 River Road
Fair Haven, NJ 07704

William C. Hurtt, Jr. Common 1,319,527 (8) 19.87%
917 Lady Bug Lane
Vero Beach, FL 32963

Allen T. McInnes Common 1,521,964 22.84%
5529 50th Street
Lubbock, TX 79414

Sidney Todres Common 427,735 7.09%
250 Park Avenue
New York, NY 10177

Kenneth W. Uselton Common 15,224 *
1304 Summit, Ste 2
Plano, TX 75074

Wayne A. Whitener Common 228,047 3.86%
1304 Summit Ave., Ste 2
Plano, Texas 75074

Daniel G. Winn Common 22,000 *
1304 Summit Ave., Ste 2
Plano, Texas 75074
__________________ ______

All directors and Common 8,717,721 (5)(6) 77.75%
executive officers as a (7)(8)
group (eight persons)

* Less than 1%

Depositories such as The Depository Trust Company (Cede & Company) as of
August 27, 2004 held, in the aggregate, more than five percent (5%) of
our then outstanding Common Stock voting shares. We understand that
such depositories hold such shares for the benefit of various
participating brokers, banks, and other institutions which are entitled
to vote such shares according to the instructions of the beneficial
owners thereof. We have no reason to believe that any of such
beneficial owners owns more than five percent (5%) of our outstanding
voting securities.

(1) Includes the number of shares of Common Stock set forth
opposite the person's name in the following table, which shares are
beneficially owned as a result of the ownership of Stock Options and
Stock Purchase Warrants.

Stock Options Warrants
_____________ ________

William J. Barrett 10,000 733,329
Edward L. Flynn 10,000 733,329
Herbert M. Gardner 10,000 733,329
William C. Hurtt, Jr. -0- 533,329
Allen T. McInnes 10,000 733,329
Kenneth W. Uselton 10,000 -0-
Wayne A. Whitener 121,100 50,000
Daniel G. Winn 22,000 -0-
_______ _________
All directors and officers
as a group 193,100 3,516,645

The number of shares set forth above for each of Messrs.
Barrett, Flynn, Gardner and McInnes includes 200,000 shares
each issuable upon exercise (at $.30 per whole share) of
warrants issued in 1999. In addition, the number of shares
set forth above for each of Messrs. Barrett, Flynn, Hurtt,
Gardner, and McInnes includes 300,000 shares each issuable
upon exercise (at $.20 per whole share) of warrants issued
in 2002 and 150,000 shares each issuable upon the exercise
(at $.20 per whole share) of warrants issued in 2003, in
connection with debt financing provided to us. The above
also includes the additional warrants resulting from
application of the anti-dilution provisions under the 2002
and 2003 warrants as a result of stock dividends paid on the
Senior Preferred Stock.

(2) Includes the number of shares of common stock which are
deemed to be beneficially owned as a result of ownership of Senior
Preferred Stock set forth opposite the person's name in the following
table. Each share of Senior Preferred Stock is convertible into one
share of common stock.

Stockholder Senior Preferred Stock
__________________ ______________________

William J. Barrett 709,200
Edward L. Flynn -0-
Herbert M. Gardner 188,500
William C. Hurtt, Jr. 375,000
Allen T. McInnes 188,500
Jason M. Elsas, Jr. 235,800
Sidney Todres 300,000
_________
1,997,000

(3) Of the shares of Common Stock to Warrants referred to in this
column, all are immediately exercisable. Of the shares of Common Stock
subject to Options referred to in this column, all are exercisable
within sixty (60) days from the date of this prospectus, except for the
following: (a) 6,000 options owned by Kenneth W. Uselton; (b) 50,000
options owned by Wayne A. Whitener; and (c) 8,000 options owned by
Daniel G. Winn.

(4) The percentage calculations have been made in accordance with
Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934.
In making these calculations, shares of common stock beneficially owned
by a person as a result of the ownership of Senior Preferred Stock and
certain options and warrants were deemed to be currently outstanding
solely with respect to the holders of such Senior Preferred Stock,
options, and warrants.

(5) Includes 55,231 shares of common stock and 75,500 shares of
Senior Preferred Stock owned by William J. Barrett's wife. Mr. Barrett
has disclaimed beneficial ownership of these shares.

(6) Includes 20,316 shares of common stock and 188,500 shares of
Senior Preferred Stock owned by Edward L. Flynn's wife. Mr. Flynn has
disclaimed beneficial ownership of these shares.

(7) Includes 35,261 shares of common stock and 47,000 shares of
Senior Preferred Stock owned by Herbert M. Gardner's wife. Mr. Gardner
has disclaimed beneficial ownership of these shares.

(8) Includes 10,800 shares of common stock owned by William C.
Hurtt's wife. Mr. Hurtt has disclaimed beneficial ownership of these
shares.

LITIGATION

We are a defendant in various legal actions that arose out of the
normal course of business. In our opinion, none of the actions will
result in any significant loss to us.

INDEMNIFICATION

Our Restated Articles of Incorporation provide that none of our
directors will be personally liable for monetary damages arising from
breach of fiduciary duty as a director, with certain limited exceptions.

Pursuant to Texas corporation law, every Texas corporation has the
power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action, suit,
or proceeding (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a
director, officer, employee, or agent of the corporation or is or was
serving in such a capacity at the request of the corporation for another
corporation, partnership, joint venture, trust, or other enterprise,
against any and all expenses, judgments, fines, and amounts paid in
settlement and reasonably incurred in connection with such action, suit,
or proceeding. The power to indemnify applies only if such person acted
in good faith and in a manner such person reasonably believed to be in
the best interests, or not opposed to the best interests, of the
corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe that his or her conduct was unlawful.

The power to indemnify applies to actions brought by or in the
right of the corporation as well, but only to the extent of defense and
settlement expenses and not to any satisfaction of a judgment or
settlement of the claim itself, and with the further limitation that in
such actions no indemnification may be made in the event of any
adjudication of negligence or misconduct unless the court, in its
discretion, believes that, in light of all the circumstances,
indemnification should apply. Our Restated Articles of Incorporation
contain provisions authorizing it to indemnify our officers and
directors to the fullest extent permitted by Texas corporation law.

We have been advised that, in the opinion of the Securities and
Exchange Commission, indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") is against public policy as expressed
in the Act, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities is asserted by one of our
directors, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our legal
counsel the matter has been settled by controlling precedent, submit the
question of whether such indemnification is against public policy to a
court of appropriate jurisdiction. We will then be governed by the
court's decision.

EXPERTS

Our audited financial statements for the year ended December 31,
2003 have been included herein in reliance upon the report of Lane
Gorman Trubitt, L.L.P., independent certified public accountants ("our
auditor"), which expresses an unqualified opinion, given upon their
authority as experts in auditing and accounting.

Our audited financial statements for the year ended December 31,
2002 have been included herein in reliance upon the report of our former
auditor, Grant Thornton LLP, independent certified public accountants,
which expresses an unqualified opinion, given upon their authority as
experts in auditing and accounting.

LEGAL MATTERS

The validity of the shares of common stock being registered will be
passed on for us by our legal counsel, Law, Snakard & Gambill, P.C.,
Fort Worth, Texas.

AVAILABLE INFORMATION

We are subject to the informational requirements of the Securities
Exchange Act of 1934 and, in compliance with this act, file periodic
reports and other information with the SEC. These reports and the other
information we file with the SEC can be inspected and copied at the
Public Reference Room facilities maintained by the SEC in Washington,
D.C. at 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC's
telephone number to obtain information on the operation of the Public
Reference Room is (800) SEC-0330. In addition, the SEC maintains a World
Wide Web site that contains reports, proxy statements, and other
information regarding registrants like our company that file
electronically with the SEC at the following Internet address:
(http://www.sec.gov). The SEC's telephone number is (800) SEC-0330.

We have filed with the SEC in Washington, D.C. a Registration
Statement on Form SB-2 under the Securities Act of 1933 with respect to
the shares of our common stock offered by this prospectus.

ADDITIONAL INFORMATION

This prospectus is part of a Registration Statement on Form SB-2
that we have filed with the SEC. This prospectus is only a part of that
Registration Statement, and does contain all of the information that is
included in the Registration Statement, several sections of which are
not included at all in this prospectus. The statements contained in
this prospectus, including statements as to the contents of any contract
or other document, are not necessarily complete. You should refer to
the Registration Statement and to an actual copy of the contract or
document filed as an exhibit to the Registration Statement for more
complete information. The Registration Statement may be obtained from
the SEC through one of the methods described above in "AVAILABLE
INFORMATION."

FINANCIAL STATEMENTS

December 31, 2003 and 2002

CONTENTS

Reports of Independent Certified Public Accountants p. 30

Financial Statements
Balance Sheets p. 32
Statements of Operations p. 34
Statement of Stockholders' Equity p. 35
Statements of Cash Flows p. 36
Notes to Financial Statements p. 37
Condensed Balance Sheet June 30, 2004 (Unaudited) p. 49
Statements of Income (Unaudited) Three and Six Months
Ended June 30, 2004 and 2003 p. 51
Statements of Cash Flows (Unaudited) Six Months Ended
June 30, 2004 and 2003 p. 52
Notes to Financial Statements (Unaudited) p. 53

Report of Independent Registered Public Accounting Firm

Board of Directors and
Shareholders of TGC Industries, Inc.

We have audited the accompanying balance sheet of TGC Industries, Inc.
as of December 31, 2003, and the related statements of operations,
stockholders' equity, 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.

We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (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 financial statements referred to above present
fairly, in all material respects, the financial position of TGC
Industries, Inc. as of December 31, 2003, and the results of its
operations and its cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of
America.

/s/ Lane Gorman Trubitt, L.L.P.

Dallas, Texas
January 30, 2004

Report of Independent Registered Public Accounting Firm

Board of Directors and
Shareholders of TGC Industries, Inc.

We have audited the accompanying balance sheet of TGC Industries, Inc.
as of December 31, 2002, and the related statements of operations,
stockholders' equity, 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 audits.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of TGC
Industries, Inc. as of December 31, 2002, and the results of its
operations and its cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of
America.

/s/ Grant Thornton LLP

Dallas, Texas
February 4, 2003

TGC Industries, Inc.
BALANCE SHEETS
December 31,

2003 2002
____________ ___________
ASSETS

CURRENT ASSETS
Cash and cash equivalents $1,025,221 $523,120
Trade accounts receivable 797,454 662,050
Costs and estimated earnings in excess
of billings on uncompleted contracts 30,494 32,845
Prepaid expenses and other 106,322 101,965
__________ _________
Total current assets 1,959,491 1,319,980

PROPERTY AND EQUIPMENT - at cost
Machinery and equipment 11,888,410 11,635,752
Automobiles and trucks 893,297 833,743
Furniture and fixtures 326,108 323,323
___________ __________
13,107,815 12,792,818
Less accumulated depreciation
and amortization (12,313,180) (11,173,415)
___________ ___________
794,635 1,619,403

OTHER ASSETS 4,824 4,824
___________ ___________

$2,758,950 $2,944,207
=========== ============

The accompanying notes are an integral part of these statements.

TGC Industries, Inc.
BALANCE SHEETS - Continued
December 31,

2003 2002
__________ __________

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Trade accounts payable $ 120,149 $ 199,336
Accrued liabilities 105,307 121,517
Billings in excess of costs and
estimated earnings on
uncompleted contracts 295,979 874,187
Current maturities of notes payable 2,594 133,459
Current portion of capital lease
obligations 108,868 127,295
__________ _________
Total current liabilities 632,897 1,455,794

NOTES PAYABLE, less current maturities 96,379 98,972

CAPITAL LEASE OBLIGATIONS, less current
portion 86,335 29,167

COMMITMENTS AND CONTINGENCIES - -

STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value;
4,000,000 shares authorized; 8.5%
senior convertible preferred stock;
3,024,264 and 2,782,708 shares issued
and outstanding at December 31,2003 and
2002, respectively 3,024,264 2,782,708

8% Series C convertible exchangeable
preferred stock; 1,150,350 shares issued,
58,100 shares outstanding 58,100 58,100

Common stock, $.01 and $.30 par value;
25,000,000 shares authorized; 5,727,008
and 5,547,008 issued at December 31,
2003 and 2002, respectively 57,270 1,664,102
Additional paid-in capital 6,696,047 5,302,871
Accumulated deficit (7,677,028) (8,232,193)
Treasury stock, at cost, 31,944 shares (215,314) (215,314)
__________ __________
1,943,339 1,360,274
__________ __________
$2,758,950 $2,944,207
========== ==========

The accompanying notes are an integral part of these statements.

TGC Industries, Inc.
STATEMENTS OF OPERATIONS
Year Ended December 31,

2003 2002
__________ __________

Revenue $8,468,051 $6,262,206

Cost and expenses
Cost of services 6,948,885 7,027,336
Selling, general and administrative 932,709 884,572
Interest expense 8,792 16,807
Debt financing costs 22,500 45,000
__________ __________
7,912,886 7,973,715

Net income(loss) 555,165 (1,711,509)

Less dividend requirements on
preferred stock (302,998) (280,653)
__________ ___________
Income(loss) allocable to common
stockholders $ 252,167 $(1,992,162)
========== ===========
Earnings(loss) per common share
Basic $ 0.05 $ (0.37)
Diluted $ 0.04 $ (0.37)

Weighted average number of shares
outstanding
Basic 5,546,132 5,330,492
Diluted 6,279,109 5,330,492

The accompanying notes are an integral part of these statements.

TGC Industries, Inc.
STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2003 and 2002

Additional
Preferred stock Common stock Paid-in Accumulated Treasury
Shares Amount Shares Amount capital deficit stock Total
______ ______ ______ ______ ___________ ___________ ________ _____
Balances at
January 1, 2002 3,596,095 $3,596,095 2,511,169 $753,350 $5,413,336 $(6,520,684) $(215,314) $3,026,783

Conversion of
preferred stock (977,550) (977,550) 3,035,839 910,752 66,798 - - -

Dividend on 8-1/2%
senior convertible
preferred stock 222,263 222,263 (222,263) - - -

Issuance of
stock warrants - - - - 45,000 - - 45,000

Net loss - - - - - (1,711,509) - (1,711,509)
_________ __________ _________ _________ _________ ___________ ________ __________
Balances at
December 31, 2002 2,840,808 2,840,808 5,547,008 1,664,102 5,302,871 (8,232,193) (215,314) 1,360,274

Reduction in Par Value
of Common Stock
from $.30 to $.01 - - - (1,608,632) 1,608,632 - - -

Dividend on 8-1/2%
senior convertible
preferred stock 241,556 241,556 - - (241,556) - - -

Issuance of
stock warrants - - - - 22,500 - - 22,500

Issuance of
Common Stock - - 180,000 1,800 3,600 - - 5,400

Net income - - - - - 555,165 - 555,165
_________ __________ _________ _______ __________ ___________ _________ __________
Balances at
December 31, 2003 3,082,364 $3,082,364 5,727,008 $57,270 $6,696,047 $(7,677,028) $(215,314) $1,943,339
========= ========== ========= ======= ========== =========== ========= ==========
The accompanying notes are an integral part of these statements.
TGC Industries, Inc.
STATEMENTS OF CASH FLOWS
Year Ended December 31,

2003 2002
__________ __________
Cash flows from operating activities
Net income (loss) $ 555,165 $(1,711,509)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities
Depreciation and amortization 1,314,042 1,522,815
Gain on disposal of property and equipment (19,349) -
Debt issuance costs 22,500 45,000
Director fees 5,400
Changes in operating assets and liabilities
Trade accounts receivable (135,404) 593,904
Costs and estimated earnings in excess
of billings on uncompleted contracts 2,351 (12,711)
Prepaid expenses and other (4,357) (29,146)
Trade accounts payable (79,187) (868,170)
Accrued liabilities (16,210) (55,469)
Billings in excess of costs and estimated
earnings on uncompleted contracts (578,208) 111,186
_________ _________
Net cash provided by (used in)
operating activities 1,066,743 (404,100)
Cash flows from investing activities
Capital expenditures (314,959) (70,377)
Proceeds from sale of property and equipment 19,349 -
_________ _________
Net cash used in investing activities (295,610) (70,377)
Cash flows from financing activities
Proceeds from issuance of debt - 150,000
Principal payments on notes payable (133,458) (67,731)
Principal payments on capital lease obligations (135,574) (128,633)
________ _________
Net cash used in financing activities (269,032) (46,364)
________ _________
Net increase (decrease) in cash and cash
equivalents 502,101 (520,841)
Cash and cash equivalents at beginning of year 523,120 1,043,961
__________ _________
Cash and cash equivalents at end of year $1,025,221 $ 523,120
========== =========
Supplemental cash flow information
Interest paid $ 11,267 $ 14,332
Income taxes paid $ - $ -

Noncash investing and financing activities
Capital lease obligations incurred $ 174,315 $ 70,558
Financed equipment purchase $ - $ 29,861

At the election of the Senior Preferred Stockholder, 108,819, 113,444,
118,265 and 123,291 shares of 8.5% Senior Preferred Stock were issued
to the Senior Preferred Stockholder as payment for the June 1, 2002,
December 2002, June 1, 2003 and December 1, 2003 dividends, respectively.

The accompanying notes are an integral part of these statements.

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002

NOTE A - NATURE OF OPERATIONS

TGC Industries, Inc. (TGC or the Company) is engaged in the domestic
geophysical services business and primarily conducts seismic surveys and
sells gravity data to companies engaged in exploration in the oil and
gas industry.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents

The Company considers all highly liquid investments with original
maturity dates of three months or less to be cash equivalents. The
Company maintains its accounts at financial institutions located in
Texas. The bank accounts are insured by the Federal Deposit Insurance
Corporation up to $100,000.
Trade Receivables

Trade accounts receivable are recorded in accordance with terms and
amounts as specified in the related contracts on an ongoing basis. The
Company evaluates the collectibility of accounts receivable on a
specific account basis using a combination of factors, including the age
of the outstanding balances, evaluation of the customer's financial
condition, and discussions with relevant Company personnel and with the
customers directly. An allowance for doubtful accounts or direct write-
off is recorded when it is determined that the receivable may not be
collected, depending on the facts known and the probability of
collection of the outstanding amount.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization
are provided using the straight-line method over the estimated useful
lives of the individual assets ranging from 1 to 7 years. Expenditures
for major renewals and betterments that extend the useful lives of
property and equipment are capitalized. Expenditures for maintenance and
repairs are charged to expenses as incurred.

Long-Lived Assets

Long-lived assets held and used by the Company are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. For the purposes of
evaluating the recoverability of long-lived assets, the recoverability
test is performed using undiscounted cash flows estimated to be
generated by those assets.

Income Taxes

Deferred income taxes reflect the impact of temporary differences
between the amounts of assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax purposes.

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Revenue Recognition

Revenues from conducting seismic surveys are recognized over the term of
the contract using the percentage-of-completion method. Under this
method, revenues are recognized on the units-of-production method.
Revenues for the sale of gravity data are recognized when services are
rendered.

Stock-Based Compensation

The Company has two stock-based employee compensation plans, which are
described more fully in Note H. The Company accounts for those plans
under the recognition and measurement principles of Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted
under those plans had an exercise price equal to the market value of the
underlying common stock on the date of grant. The following table
illustrates the effect on net income (loss) and income (loss) per share
allocable to common stockholders if the Company had applied the fair
value recognition provisions of Financial Accounting Standards Board
("FASB") Statement No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation", to stock-based employee compensation:

Year Ended December 31,
_______________________
2003 2002
________ ________
Net income (loss) allocable to common
stockholders, as reported $252,167 $(1,992,162)

Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of related tax
effects (39,123) (54,643)
_________ ___________
Pro forma net income (loss) allocable to
common stockholders $213,044 $(2,046,805)
========= ===========
Income (loss) per common share
Basic - as reported $0.05 $(.37)
Diluted - as reported $0.04 $(.37)

Basic - pro forma $0.04 $(.38)
Diluted - pro forma $0.03 $(.38)

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Financial Instruments

The Company's financial instruments recorded on the balance sheet
include cash and cash equivalents, accounts receivable, accounts payable
and debt. The carrying amounts of cash and cash equivalents, accounts
receivable and accounts payable approximate fair value because of the
short-term nature of these items. Fair value of long-term debt is based
on rates available to the Company for debt with similar terms and
maturities.

Earnings (Loss) Per Share

Basic earnings (loss) per common share is based upon the weighted
average number of shares of common stock outstanding. Diluted earnings
(loss) per share is based upon the weighted average number of common
shares outstanding and, when dilutive, common shares issuable for stock
options, warrants and convertible securities.

Reclassifications

Certain reclassifications have been made to prior year amounts to
conform to the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

New Accounting Standards

Recent Accounting Pronouncements - During 2003, the FASB released
Statement No. 149, "Amendment of Statement 133 on Derivative Instruments
and Hedging Activities", and Statement No. 150 "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity." The FASB also revised Statement No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits and
amendment of Statements No. 87, 88, and 103." The Company believes that
the impact of these new standards will not have a material effect on the
Company's financial position, results of operations or disclosures.

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

Note C - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

The components of uncompleted contracts are as follows at December 31,:

2003 2002
_____________
___________

Costs incurred on uncompleted contracts
and estimated earnings $111,567 $264,751
Less billings to date (377,052)
(1,106,093)
_________ __________
$(265,485) $
(841,342)
========= =========

The components of uncompleted contracts are reflected in the balance sheets
at December 31, 2003 and 2002 as follows:

2003 2002
_____________
___________

Costs and estimated earnings in excess
of billings on uncompleted contracts $ 30,494 $ 32,845
Billings in excess of costs and
Estimated earnings on uncompleted
contracts (295,979) (874,187)
_________ _________
$(265,485) $(841,342)
========= =========

NOTE D - ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31,:

2003 2002
_____________
___________

Compensation and payroll taxes $ 65,690 $ 33,465
Other 39,617 88,052
________ ________
$105,307 $121,517
======== ========

NOTE E - DEBT

Line of Credit

During 2001, the Company entered into an unsecured revolving line of
credit arrangement with a bank, providing for borrowings of up to
$125,000. The facility bore interest at prime plus 1% per annum, and
matured in October 2003. The Company had committed the availability to
irrevocable letters of credit totaling $125,000 which also expired in
October 2003. Therefore, the Company had no borrowing availability under
this line of credit. The letters of credit, with an insurance company as
TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE E - DEBT - Continued

beneficiary, were being used to guarantee continuing seismic insurance
bonds totaling $125,000, issued by the insurance company to two states in
which the Company performs seismic surveys. In October 2003, the Company
was able to secure replacement seismic bonds from an insurance company
that did not require letters of credit.

On June 12, 2003, certain Directors extended a line of credit with a
$300,000 credit limit. The line of credit accrued interest at 6.75% and
matured December 31, 2003. There were no advances made under this line
of credit.

Notes Payable

Notes payable consist of the following at December 31:

2003 2002
_____________
___________

Note payable to a finance company,
interest at 4%, due in monthly
installments of $552 including
interest; collateralized by
equipment and accounts receivable $ 98,973 $101,461

Note payable to a finance company,
interest at 4%, due in monthly
installments of $1,130 including
interest; collateralized by
equipment and accounts receivable - 3,365

Note payable to a finance company,
Interest at 5%, due in monthly
installments of $2,556 including
interest; collateralized by equipment - 7,605

Note payable to certain investors - 120,000
________ ________
$ 98,973 $232,431
======== ========

Aggregate annual maturities of notes payable at December 31, 2003 are as
follows:

Year Ending
December 31,
______________

2004 $ 2,594
2005 2,702
2006 2,816
2007 2,934
2008 3,058
Thereafter 84,869
________

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE E - DEBT - Continued
98,973
Less current maturities (2,594)
________
$ 96,379
========

NOTE F - LEASES

Capital Leases

The Company leases certain specialized seismic equipment under leases
classified as capital leases. The following is a schedule showing the
future minimum lease payments under capital leases by years and the
present value of the minimum lease payments as of December 31, 2003.

Year Ending
December 31,
__________________
2004 $115,555
2005 51,484
2006 45,681
________
Total minimum lease payments required 212,720
Less: Amount representing interest (17,517)
________
Present value of minimum lease payments 195,203
Less current maturities (108,868)
________
$ 86,335
========

The net book value of the capital assets leased was approximately
$259,000 and $285,000 as of December 31, 2003 and 2002, respectively.
Total accumulated depreciation on these assets was approximately
$132,000 and $168,000 as of December 31, 2003 and 2002, respectively.

Operating Leases

The Company leases office space under an operating lease that expires
September 30, 2004. The lease expense for the years ended December 31,
2003 and 2002, was approximately $69,000 and $64,000, respectively.

The following is a schedule by years of future minimum rental payments
required under the operating lease as of December 31, 2003:

Year Ending
December 31,
__________________
2004 $ 52,488
Thereafter -
________
Total minimum payments required $ 52,488
========

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE G FAIR VALUE OF DEBT OBLIGATIONS

The fair value of debt obligations is estimated using discounted cash
flows based on the Company's incremental borrowing rate for similar
types of borrowings. A comparison of the carrying value and fair value
of these instruments is as follows:

December 31,
___________________________
2003 2002
___________ __________
Carrying value $ 98,973 $232,431
Fair value $ 98,973 $201,737

NOTE H - STOCKHOLDERS' EQUITY

Earnings Per Share

The following is a reconciliation of net income and weighted average
common shares outstanding for purposes of calculating basic and diluted
net income per share:

December 31,
___________________________
2003 2002
___________ __________
Numerator:
Net income (loss) $555,165 $(1,711,509)
Less dividend requirements on
preferred stock (302,998) (280,653)
________ __________
Income (loss) allocable to
common stockholders 252,167 (1,992,162)
======== ==========
Denominator:
Basic - weighted average common
shares outstanding 5,546,132 5,330,492
Dilutive effect of warrants 732,977 -
_________ _________
Diluted outstanding shares 6,279,109 5,330,492
========= =========

Basic net income (loss) per share $.05 $(0.37)
Diluted net income (loss) per share $.04 $(0.37)

The effect of preferred stock dividends on the amount of income (loss)
available to common stockholders was $.05 and $.05 for the years ended
December 31, 2003 and 2002, respectively.

Outstanding warrants that were not included in the diluted calculation
because their effect would be anti-dilutive total 850,000 and 1,310,274
for the years ended December 31, 2003 and 2002, respectively.

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE H - STOCKHOLDERS' EQUITY - Continued

Outstanding options that were not included in the diluted calculation
because their effect would be anti-dilutive total 182,100 and 232,100
for the years ended December 31, 2003 and 2002, respectively.

Stock-Based Compensation Plans

The Company currently has in effect a 1993 Stock Option Plan (the "1993
Plan"). Options for up to 283,334 shares of the Company's common stock
may be granted under the 1993 Plan. Options under the 1993 Plan must be
granted at prices not less than the market price at the date of grant
and must be exercised within five years from the date of grant. As of
December 31, 2002, options covering 63,100 shares are exercisable as
follows: (i) one-third of the shares after the 12 month period following
the date of the grant, (ii) two-thirds of the shares after the 24 month
period following the date of the grant, and (iii) all of the shares of
stock after the 36 month period following the date of the grant.
Options covering 34,000 shares expired or were canceled during 2003. At
December 31, 2003, outstanding options for 29,100 shares were
exercisable.

The Company currently has in effect a 1999 stock option plan (the "1999
Plan"). Options for up to 300,000 shares of the Company's common stock
may be granted under the 1999 Plan. Options under the 1999 Plan must be
granted at prices not less than the lesser of the par value per share of
the stock or the fair market value per share of the Company's stock on
the date of the grant, and their term cannot exceed five years from the
date of the grant. As of December 31, 2002, options covering 169,000
shares, expire five years from the date of the grant and are exercisable
as follows: (i) one-third of the shares after the 12 month period
following the date of the grant, (ii) two-thirds of the shares after the
24 month period following the date of the grant, and (iii) all of the
shares of stock after the 36 month period following the date of the
grant. Options covering 16,000 shares were canceled during 2003. At
December 31, 2003, outstanding options covering 153,000 shares were
exercisable.

The following table summarizes activity under the Plans:

Weighted
Shares under average
option exercise
price
____________
______________

Balance at January 1, 2002 232,100 $.96
Canceled/expired ________

Balance at December 31, 2002 232,100 .96
Canceled/expired (50,000) .98
________ ____
Balance at December 31, 2003 182,100 $.96
======= ====
Exercisable at December 31:
2003 182,100 $.96
2002 175,766 $.95

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE H - STOCKHOLDERS' EQUITY - Continued

The following information applies to options outstanding and exercisable
at December 31, 2003:

Weighted
average
remaining Weighted
Range of Number contractual average
Exercise prices outstanding life (in years) exercise price
_______________ ___________ _______________ ______________

$.75 - $1.00 182,100 1.72 $.96

Stock Warrants

Effective January 1, 2001, 181,634 warrants covering 6,054 shares of common
stock expired. Per the warrant agreement, any unexercised warrants are
automatically deemed exercised at the rate of one share of the Company's
common stock for each 30 warrants held. These warrants remain unredeemed at
December 31, 2003 and 2002, respectively.

In connection with the issuance of subordinated notes payable during 1999,
certain officers and directors received warrants covering 850,000 shares
with a value of $391,000. These warrants have a strike price of $.30 and
expire on July 31, 2009.

In connection with the issuance of debt during 2002, certain investors
received warrants covering 1,500,000 shares with a value of $45,000. These
warrants have a strike price of $.20 and expire on September 12, 2012.

In connection with the commitment to provide the Company with a line of
credit up to $300,000 during 2003, certain Directors received warrants
covering 750,000 shares with a value of $22,500. These warrants have a
strike price of $.20 and expire on June 12, 2013.

The agreements covering the warrants issued in 2002 and 2003 contain
provisions that in the event dividends are declared and paid on the
Company's Senior Preferred Stock in additional shares of Senior Preferred
Stock the number of additional common shares for which the warrants are
exercisable and the purchase price shall be adjusted. At December 31,
2003, the warrants issued in 2002 and the warrants issued in 2003 were
exercisable into 1,855,000 shares at $.16 per share and 811,645 shares at
$.18 per share, respectively.

Preferred Stock

During 1996, the Company issued 1,150,350 shares of Series C 8% convertible
exchangeable preferred stock ("Series C Preferred Stock") at $5.00 per
share in a private placement offering with gross proceeds of approximately
$5,800,000. The Series C Preferred Stock is, at the option of the Company,
exchangeable into 8% subordinated convertible debentures. Prior to November
30, 2001, the Series C Preferred Stock and debentures were convertible into
shares of the Company's common stock at the conversion price of (i) $2.00

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE H - STOCKHOLDERS' EQUITY - Continued

per share if exercised by December 31, 2001, (ii) $3.75 per share if
exercised from January 1, 2002 through December 31, 2002, and (iii) $6.00
per share thereafter. At a November 30, 2001 meeting, the Company's Board
of Directors approved amendments to the conversion terms of the Series C
Preferred Stock. The amendments were as follows: the conversion price was
reduced from $2.00 per share to $1.61 per share and the date of the
conversion price increase to $3.75 per share was delayed from December 31,
2001, until January 31, 2002. The subsequent date of the increase in the
conversion price to $6.00 per share remained December 31, 2002. In January
2002, the Series C Preferred shareholders converted 977,550 shares of
Series C Preferred Stock into 3,035,839 shares of common stock. As a
result, 58,100 shares of Series C Preferred Stock remain outstanding at
December 31, 2003.

In 2000, the Company issued 2,252,445 shares of 8.5% Senior Convertible
Preferred Stock (Senior Preferred Stock) to a debt holder in consideration
for an outstanding debenture plus accrued interest, and in accordance with
the terms of the agreement, issued 103,490 additional shares of Senior
Preferred Stock to the Senior Preferred stockholder as payment for 2000
dividends. At the election of the Senior Preferred stockholder, the Company
issued 100,127, 104,383, 108,819, 113,444, 118,265 and 123,291 additional
shares of Senior Preferred Stock to the Senior Preferred stockholder as
payment for the June 1, 2001, December 1, 2001, June 1, 2002, December 1,
2002, June 1, 2003 and December 1, 2003 dividends, respectively, resulting
in 3,024,264 shares outstanding at December 31, 2003.

Dividends

Holders of the Company's Series C Preferred Stock will receive, when, as
and if declared by the Board of Directors of the Company, dividends at a
rate of 8% per annum. The dividends are payable semi-annually during
January and July of each year. As of December 31, 2003, following the
conversion of 977,550 shares of the Series C Preferred Stock as noted
above, cumulative dividends of $116,200 were in arrears.

Holders of the Company's Senior Preferred Stock will receive, when, as and
if declared by the Board of Directors of the Company, dividends at a rate
of 8.5% per annum. The dividends are payable semi-annually during June and
December of each year. Dividends payable in 2003 and 2002 were paid in
additional shares of Senior Preferred Stock, at the election of the Senior
Preferred Stockholder.

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE I - INCOME TAXES

The income tax provision (benefit) reconciled to the tax computed at the
statutory Federal rate is as follows:

Years Ended
December 31,
___________________________
2003 2002
___________ _________

Federal tax provision (benefit) at statutory rate $188,756
$(581,913)
Non-deductible expenses 33,370 24,109
Change in prior year estimates - -
Change in valuation allowance (222,126) 557,804
_________ _________
$ - $ -
========= =========

Deferred tax assets and liability consist of the following:

December 31,
___________________________
2003 2002
__________ __________

Deferred tax assets
Net operating loss carryfowards $2,783,950 $3,159,224
Other 3,280 3,502
__________ __________
2,787,230 3,162,726
Deferred tax liability
Property and equipment (107,093) (260,463)
_________ __________
2,680,137 2,902,263
Less valuation allowance (2,680,137) (2,902,263)
__________ __________
Net deferred tax asset $- $-
========== ==========

At December 31, 2003, the Company had net operating loss carryforwards of
approximately $7,900,000 available to offset future taxable income, which
expire at various dates through 2023. Future tax benefits, such as net
operating loss carryforwards, are recognized to the extent that realization
of such benefits are more likely than not.

NOTE J - 401(k) PLAN

The Company has a 401(k) salary deferral plan which covers all employees who
have reached the age of 20.5 years and have been employed by the Company for
at least one year. The covered employees may elect to have an amount deducted
from their wages for investment in a retirement plan. The Company makes
contributions to the plan equal to 100% of each participant's salary

TGC Industries, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2003 and 2002

NOTE J - 401(k) PLAN - CONTINUED

reduction contributions to the plan up to 2% of the participant's
compensation. The Company's matching contribution to the plan was
approximately $21,000 and $17,000 for the years ended December 31, 2003 and
2002, respectively.

NOTE K - CONCENTRATION OF CREDIT RISK

The Company sells its geophysical services primarily to large independent oil
and gas companies operating in the United States. The Company performs
ongoing credit evaluations of its customer's financial condition and,
generally, requires no collateral from its customers.

Sales and accounts receivable from the Company's largest customers as of and
for the years ended December 31, 2003 and 2002 consist of the following:

Accounts
Sales Receivable
________________ _____________________
Company 2003 2002 2003 2002
_______ ______ _______ _______ ________
A 15% - - 37%
B 12% - - 53%
C - 39% - -
D - 12% - -
E - 11% - -

As of December 31, 2003, 3 additional customers accounted for 64%, 11% and
10% of outstanding accounts receivable, respectively.

NOTE L - CONTINGENCIES

In conducting its activities, the Company from time to time is the subject of
various claims arising from the ordinary course of business. In the opinion
of management, the ultimate resolution of such claims is not expected to have
a material adverse effect upon the financial position of the Company.

TGC INDUSTRIES, INC.
BALANCE SHEET
(UNAUDITED)

JUNE 30,
2004
_____________
ASSETS

CURRENT ASSETS

Cash and cash equivalents $4,257,181
Trade accounts receivable 1,641,441
Cost and estimated earnings in excess
of billings on uncompleted contracts 6,235
Prepaid expenses and other 123,228
___________
Total current assets 6,028,085

PROPERTY AND EQUIPMENT - at cost

Machinery and equipment 13,146,750
Automobiles and trucks 1,267,338
Furniture and fixtures 332,754
Other 18,144
____________
14,764,986
Less accumulated depreciation
and amortization (12,764,033)
___________
2,000,953

OTHER ASSETS 3,395
____________
Total assets $8,032,433
============
See notes to Financial Statements

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Trade accounts payable $1,660,022
Accrued liabilities 78,099
Billings in excess of costs and estimated
earnings on uncompleted contracts 2,570,688
Current maturities of notes payable 147,334
Current portion of capital lease obligations 77,917
___________
Total current liabilities 4,534,060

NOTES PAYABLE, less current maturities 95,095

CAPITAL LEASE OBLIGATIONS, less current portion 281,155

COMMITMENTS AND CONTINGENCIES -

TGC INDUSTRIES, INC.
BALANCE SHEET
(UNAUDITED)
(Continued)

JUNE 30,
2004
_____________

STOCKHOLDERS' EQUITY

Preferred stock, $1.00 par value; 4,000,000
shares authorized:
8-1/2% Senior convertible preferred stock;
3,024,264 shares issued and outstanding 3,024,264

8% Series C convertible exchangeable
preferred stock; 1,150,350 shares issued,
58,100 shares outstanding 58,100

Common stock, $.01 par value; 25,000,000
shares authorized; 5,761,892 shares issued 57,619

Additional paid-in capital 6,564,718

Accumulated deficit (6,367,264)

Treasury stock, at cost (31,944 shares) (215,314)
___________
3,122,123
___________
Total liabilities and stockholders' equity $8,032,433
===========

See notes to Financial Statements

TGC INDUSTRIES, INC.
STATEMENTS OF INCOME

Three Months Ended Six Months Ended
June 30, June 30,
________________________ _________________________
(Unaudited) (Unaudited)
2004 2003 2004 2003
___________ ___________ ___________ ___________
Revenue $4,783,197 $2,835,401 $7,754,069 $4,437,206

Cost of services 3,981,134 2,369,624 5,859,028 3,807,055
Selling, general,
administrative 276,480 244,988 576,875 450,737
__________ __________ __________ __________
4,257,614 2,614,612 6,435,903 4,257,792

INCOME FROM OPERATIONS 525,583 220,789 1,318,166 179,414

Interest expense 5,334 2,274 8,402 4,378
_________ __________ __________ __________
NET INCOME 520,249 218,515 1,309,764 175,036

Less dividend requirements
on preferred stock 79,716 74,776 159,431 148,588
__________ __________ __________ __________
INCOME ALLOCABLE TO
COMMON STOCKHOLDERS $ 440,533 $ 143,739 $1,150,333 $ 26,448

Income per common share:
Basic $ .08 $ .03 $ .20 $ .00
Diluted $ .04 $ .03 $ .11 $ .00

Weighted average number
of common shares:
Basic 5,726,881 5,515,064 5,710,973 5,515,064
Diluted 12,015,284 5,515,064 11,796,154 5,515,064

See notes to Financial Statements

TGC INDUSTRIES, INC.
Statements of Cash Flows (Unaudited)

Six Months Ended
June 30,
________________________
2004 2003
__________ __________
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,309,764 $ 175,036
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 432,709 732,271
Directors fees 11,512 -
Warrants issued for services 5,319 -
Gain on disposal of property and equipment - (9,349)
Changes in operating assets and liabilities
Trade accounts receivable (843,987) (25,329)
Cost and estimated earnings in excess of
billings on uncompleted contracts 24,259 32,845
Prepaid expenses and other (16,906) 45,381
Other assets 1,429 -
Trade accounts payable 1,539,873 (108,025)
Accrued liabilities (27,208) (19,023)
Billings in excess of cost and estimated
earnings on uncompleted contracts 2,274,709 (582,281)
__________ _________
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,711,473 241,526

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,227,158) (74,264)
Proceeds from sale of property and equipment - 9,349
_________ ________
NET CASH USED IN INVESTING ACTIVITIES (1,227,158) (64,915)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (147,811) -
Principal payments on notes payable (32,637) (132,201)
Principal payments on capital lease obligations (71,907) (90,669)
_________ ________
NET CASH USED IN FINANCING ACTIVITIES (252,355) (222,870)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,231,960 (46,259)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,025,221 523,120
__________ _________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,257,181 $ 476,861
========== =========
Supplemental cash flow information

Interest paid $ 8,402 $ 2,274
Income taxes paid $ - $ -

Noncash investing and financing activities

Capital lease obligations incurred $ 235,775 $ -
Financed equipment purchase $ 176,094 $ -

At the election of the Senior Preferred Stockholder, 118,265 and 123,291
shares of 8.5% Senior Preferred Stock were issued to the Senior Preferred
Stockholder as payment for the June 1, 2003 and December 1, 2003
dividends, respectively.

See notes to Financial Statements

TGC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2004

NOTE A -- BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and therefore do not include
all information and footnotes necessary for a fair presentation of financial
position, results of operations and changes in financial position in
conformity with accounting principles generally accepted in the United States
of America.

NOTE B -- MANAGEMENT PRESENTATION

In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of financial position,
results of operations, and changes in financial position have been included.
The results of the interim periods are not necessarily indicative of results
to be expected for the entire year. For further information, refer to the
financial statements and the footnotes thereto included in the Company's
Annual Report for the year ended December 31, 2003 filed on Form 10-KSB.

NOTE C -- EARNINGS PER SHARE

Basic earnings per common share are based upon the weighted average number of
shares of common stock outstanding. Diluted earnings per share are based upon
the weighted average number of common shares outstanding and, when dilutive,
common shares issuable for stock options, warrants and convertible securities.
The effect of preferred stock dividends on the amount of income available to
common stockholders was $.01 for the three months ended June 30, 2004 and
2003, and $.03 for the six months ended June 30, 2004 and 2003.

Outstanding warrants that were not included in the diluted calculation because
their effect would be anti-dilutive totaled 2,350,000 for the three and six
month periods ended June 30, 2003. Outstanding options that were not included
in the diluted calculation because their effect would be anti-dilutive totaled
222,100 for each of the three and six month periods ended June 30, 2003.

The following is a reconciliation of net income and weighted average
common shares outstanding for purposes of calculating basic and
diluted net income per share:

Three Months Ended Six Months Ended
June 30, June 30,
_______________________________________________
(Unaudited) (Unaudited)
2004 2003 2004 2003
__________ _________ _________ ________
Basic:
Numerator:
Net income $520,249 $218,515 $1,309,764 $175,036
Less dividend requirements
on preferred stock (79,716) (74,776) (159,431) (148,588)
_________ _________ ___________ _________
Income allocable to common
stockholders $440,533 $143,739 $1,150,333 $26,448

Denominator:
Basic - weighted average
common shares outstanding 5,726,881 5,515,064 5,710,973 5,515,064
__________ _________ _________ __________
Basic EPS $ .08 $ .03 $ .20 $ .00

TGC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2004

NOTE C -- EARNINGS PER SHARE - CONTINUED

Three Months Ended Six Months Ended
June 30, June 30,
_______________________________________________
(Unaudited) (Unaudited)
2004 2003 2004 2003
__________ _________ _________ ________

Diluted:
Numerator:
Income allocable to common
stockholders $440,533 $143,739 $1,150,333 $26,448
Plus dividend requirements
on preferred stock 79,716 74,776 159,431 148,588
_________ _________ __________ ________
Net income $520,249 $218,515 $1,309,764 $175,036

Denominator:
Weighted average common
shares outstanding 5,726,881 5,515,064 5,710,973 5,515,064
Effect of Dilutive Securities:
Warrants 3,092,335 - 2,948,180 -
Stock options 123,387 - 64,320 -
Convertible Preferred Stock 3,072,681 - 3,072,681 -
__________ _________ __________ _________
12,015,284 5,515,064 11,796,154 5,515,064

Diluted EPS $ .04 $ .03 $ .11 $ .00

NOTE D DIVIDENDS

Holders of the Company's Series C 8% Convertible Exchangeable Preferred Stock
("Series C Preferred Stock") will receive, when, as and if declared by the
Board of Directors of the Company, dividends at a rate of 8% per annum. The
dividends are payable semi-annually during January and July of each year. At
June 30, 2004, cumulative dividends of $127,820 were in arrears on the
Company's Series C Preferred Stock.

Holders of the Company's 8-1/2% Senior Convertible Preferred Stock (the
"Senior Preferred Stock") will receive, when, as and if declared by the Board
of Directors of the Company, dividends at a rate of 8-1/2% per annum. The
dividends are payable semi-annually during June and December of each year.
Dividends paid during 2000, on the Senior Preferred Stock, were paid in
additional shares of Senior Preferred Stock, in accordance with the terms of
the Statement of Resolution Establishing the Senior Preferred Stock. In
addition, the holders elected to receive payment of the 2001, 2002 and 2003
dividends in additional shares of Senior Preferred Stock. A cash dividend of
$147,811 was paid to the Senior Preferred Shareholders in June 2004. At June
30, 2004, there were no dividends in arrears on the Company's Senior Preferred
Stock.

NOTE E INCOME TAXES

At December 31, 2003, the Company had net operating loss carryforwards of
approximately $7,900,000 available to offset future taxable income, which
expire at various dates through 2023. Current year federal taxable income is
being offset with net operating loss carryforwards, therefore, no federal tax
expense is reflected on the statements of income. Presently deferred tax
assets are fully reserved.

PART II INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article 7.b. the Registrant's Restated Articles of Incorporation,
as amended, provide that the Registrant shall indemnify its
directors, officers, employees, and agents to the maximum extent
and in accordance with the provisions of the Texas Business
Corporation Act, as in effect from time to time (the "TBCA").
Article 2.02-1 of the TBCA provides generally, and in pertinent
part, that a Texas corporation may indemnify its directors and
officers against: expenses, judgments, fines, and settlements
actually and reasonably incurred by them in connection with any
civil suit or action or any administrative or investigative
proceeding, except actions by or in the right of the corporation,
if, in connection with the matters in issue, they acted in good
faith and in a manner they reasonably believed to be in, or not
opposed to, the best interests of the corporation, and in
connection with any criminal suit or proceeding, if in connection
with the matters in issue, they had no reasonable cause to believe
their conduct was unlawful. Article 2.02-1 further provides that
in connection with the defense or settlement of any action by or in
the right of the corporation, a Texas corporation may indemnify its
directors and officers against expenses actually and reasonably
incurred by them in connection therewith, provided that they acted
in good faith and in a manner they reasonably believed to be in, or
not opposed to, the best interests of the corporation. Article
2.02-1 permits a Texas corporation to grant its directors and
officers additional rights of indemnification through bylaw
provisions and otherwise, and Article 2.02-1 permits a Texas
corporation to purchase indemnity insurance or make other financial
arrangements on behalf of its directors and officers.

Article 7.j. of the Registrant's Restated Articles of Incorporation
(as amended) provide that directors shall not be liable to the
registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability arising from (1)
breach of a director's duty of loyalty to the corporation, (2) an
act or omission not in good faith or that involves intentional
misconduct or a knowing violation of the law, (3) a transaction
from which a director received an improper benefit, whether or not
the benefit resulted from an action taken within the scope of the
director's office, (4) an act or omission for which the liability
of a director is expressly provided for by statute, (5) an act
related to an unlawful corporate distribution. See Item 28
"Undertakings" herein.

Item 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following are the estimated expenses in connection with the
registration and distribution of the shares of the Registrant's
common stock:

Securities and Exchange Commission
Registration Fee $271.27
Printing Expenses 500.00
Accounting Fees and Expenses 9,000.00
Legal Fees and Expenses 30,000.00*
Blue Sky Fees and Expenses 2,000.00
Miscellaneous 5,000.00*
_______________________________________
Total: $46,771.27*

All of the expenses will be incurred by the Registrant and
not by the selling stockholders.
________________
*Estimated.

Item 26. RECENT SALES OF UNREGISTERED SECURITIES

In September of 2002, the Registrant issued 1,500,000 detachable
common stock purchase warrants exercisable at the then market
price of $.20 per share ("2002 Warrants") valued at $45,000 to
certain accredited investors in exchange for their financial
commitment for a line of credit in an amount up to $300,000 that
expired December 31, 2002. The Registrant relied on the exemption
from registration with the Securities and Exchange Commission
provided under Section 4(2) of the Securities Act of 1933 and Rule
506 of Regulation D under the Securities Act of 1933.

In June of 2003, the Registrant issued 750,000 detachable common
stock purchase warrants with a value of $22,500 on the same terms
as the 2002 Warrants ("2003 Warrants") to certain directors in
exchange for their financial commitment for a line of credit in an
amount up to $300,000 that expired December 31, 2003. The
Registrant relied on the exemption from registration with the
Securities and Exchange Commission provided under Section 4(2) of
the Securities Act of 1933 and Rule 506 of Regulation D under the
Securities Act of 1933.

Under the 2002 and 2003 Warrant Agreements the warrant holders are
entitled to exercise their warrants for additional shares of the
Registrant's common stock as a result of the Senior Preferred
Stockholder electing to receive additional shares of Senior
Preferred Stock as dividends. As a result, as of August 27, 2004,
the 2002 Warrants and the 2003 Warrants were exercisable into
1,855,000 shares of common stock at $.16 per share and 811,645
shares of common stock at $.18 per share, respectively.

In November of 2003, the Registrant entered into an Agreement for
Services with Barry Kaplan Associates ("Kaplan") which grants
Kaplan 2,000 detachable common stock purchase warrants exercisable
at $1.00 per share ("Service Warrants") per month as partial
consideration for public relations services provided to the
Registrant. As of August 27, 2004, 16,000 Service Warrants were
issued and exercisable into 16,000 shares of common stock at $1.00
per share.

Item 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS.

The following is a complete list of Exhibits filed as part of
this Registration Statement. Exhibit numbers correspond to
the numbers in the exhibit table of Item 601 of Regulation
S-B.

EXHIBIT NO. DESCRIPTION

*5.00 Opinion from Law, Snakard & Gambill, P.C.

*23.01 Consent of Independent Registered Public
Accounting Firm, Lane Gorman Trubitt, L.L.P.

*23.02 Consent of Grant Thornton LLP

*23.03 Consent of Law, Snakard & Gambill, P.C.
(included in Exhibit 5.00)

*24.00 Power of Attorney (included under
"SIGNATURES - POWER OF ATTORNEY" on page
60 of the registration statement)

*Filed herewith.

Item 28. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes to:

(i) File, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:

(1) include any prospectus required by section
10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");

(2) reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
Registration Statement, and, notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range that may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective
registration statement;

(3) include any additional or changed material
information on the plan of distribution.

(ii) For determining liability under the Securities Act,
treat each post-effective amendment as a new Registration
Statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide
offering.

(iii) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the offering.

(b) The undersigned Registrant hereby understands that, for
purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act of
1934, as amended (the "Exchange Act") (and, where applicable,
each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement
shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form SB-2 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Plano, State of
Texas, on September 27, 2004.

TGC INDUSTRIES, INC.

By /s/ Wayne A. Whitener
Wayne A. Whitener, President and
Chief Executive Officer and Director

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Wayne A. Whitener and William J.
Barrett, and each of them, his true and lawful attorney-in-fact and agent
with full power of substitution and resubstitution for him and in his name,
place, and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to the Registration Statement on Form
SB-2 and file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent full power and authority to do and
perform each and every act and things requisite and necessary to be done in
and about the premises, to all intents and purposes and as in full as they
might or could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent, or his substitute, lawfully may do or cause to
be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement on Form SB-2 is signed by the
following persons in the capacities and on the dates indicated.

SIGNATURE TITLE DATE

/s/ Wayne A. Whitener President, Chief Executive September 27, 2004
Wayne A. Whitener Officer and Director
(Principal Executive
officer)

/s/ Daniel G. Winn Vice President September 27, 2004
Daniel G. Winn

/s/ Kenneth W. Uselton Secretary, Treasurer
Kenneth W. Uselton (Chief Financial officer) September 27, 2004

/s/ William J. Barrett
William J. Barrett Director September 27, 2004

/s/ Herbert M. Gardner
Herbert M. Gardner Director September 27, 2004

/s/ Allen T. McInnes
Allen T. McInnes Director September 27, 2004

/s/ Edward L. Flynn
Edward L. Flynn Director September 27, 2004

/s/ William C. Hurtt, Jr.
William C. Hurtt, Jr. Director September 27, 2004

INDEX TO EXHIBITS

EXHIBIT NUMBER DESCRIPTION

*5.00 Opinion from Law, Snakard & Gambill, P.C.

*23.01 Consent of Independent Registered Public
Accounting Firm, Lane Gorman Trubitt, L.L.P.

*23.02 Consent of Grant Thornton LLP

*23.03 Consent of Law, Snakard & Gambill, P.C.
(included in Exhibit 5.00)

*24.00 Power of Attorney (included under
"SIGNATURES POWER OF ATTORNEY" on page
60 of the registration statement)

*Filed herewith.

EXHIBIT 5.00

LAW, SNAKARD & GAMBILL
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELORS
1600 WEST SEVENTH STREET
SUITE 500
FORT WORTH, TEXAS 76102
_____________

PHONE (817) 335-7373
FAX (817) 332-7473

DIRECT DIAL NUMBER:
(817) 878-6350

September 27, 2004

TGC Industries, Inc.
1304 Summit Ave., Ste. 2
Plano, TX 75074-0846

Re: TGC Industries, Inc. - Shares of Common Stock

Ladies and Gentlemen:

We have acted as counsel to TGC Industries, Inc. (the "Company"), a
Texas corporation, in connection with the filing of a registration
statement to which this opinion is filed as an exhibit on Form SB-2, under
the Securities Act of 1933, amended (the "Act"). The registration
statement covers up to 1,252,064 shares of the Company's common stock, par
value $.01 per share (collectively, the "Shares"), issuable upon the
conversion of shares of the Company's 8.5% Senior Convertible Preferred
Stock. The Shares may be sold from time to time by the selling
stockholders identified in the Company's Registration Statement on Form SB-
2 (the "Registration Statement"). The Registration Statement, as amended,
on file with the Securities and Exchange Commission (the "Commission") at
the time such Registration Statement becomes effective (including financial
statements and schedules, exhibits, and all other documents filed as a part
thereof or incorporated therein) are herein referred to as the
"Registration Statement."

In connection with this opinion, we have made such investigations and
examined such records, including a copy of the Company's Restated Articles
of Incorporation and any amendments thereto (the "Articles"), Bylaws, a
certificate dated a recent date of the Secretary of State of the State of
Texas as to the existence and good standing of the Company, and copies of
corporate minutes, as we deemed necessary to the performance of our
services and to give this opinion. We have also examined and are familiar
with the originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, corporate records, and other
instruments as we have deemed necessary for the preparation of this
opinion. In expressing this opinion we have relied, as to any questions of
fact upon which our opinion is predicated, upon representations and
certificates of the officers of the Company.

TGC Industries, Inc.
September 27, 2004
Page 2
______________________________

In giving this opinion we assumed:

(a) the genuineness of all signatures and the authenticity and
completeness of all documents submitted to us as originals;

(b) the conformity to originals and the authenticity of all
documents supplied to us as certified, photocopies, conformed, or facsimile
copies and the authenticity and completeness of the originals of any such
documents; and

(c) the proper, genuine, and due execution and delivery of all
documents by all parties to them and that there has been no breach of the
terms thereof.

Based upon the foregoing and subject to the qualifications set forth
above, and assuming that: (i) the Registration Statement has become
effective under the Act; (ii) all required actions have been taken and
conditions satisfied with respect to the issuance of the Company's Shares
as specified in the Registration Statement; (iii) adequate consideration
has been received for the Company's 8.5% Senior Convertible Preferred Stock
(the "Senior Preferred Stock") convertible into the Shares; and (iv) the
proper exercise of the conversion rights under the Senior Preferred Stock,
we are of the opinion that, when issued, the Shares will be legally issued,
fully paid, and non-assessable.

In giving the foregoing opinion, we express no opinion as to the laws
of any jurisdiction other than the State of Texas and the federal laws of
the United States of America.

We consent to the filing of this opinion as an exhibit to the
Registration Statement and the use of our name in the Registration
Statement. In giving such consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of
the Act or the Rules and Regulations of the Commission promulgated pursuant
thereto.

Very truly yours,

LAW, SNAKARD & GAMBILL, P.C.

By: /s/ Rice M. Tilley, Jr.
Rice M. Tilley, Jr.

/s/ James O. Wyss
James O. Wyss

Exhibit 23.01

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Registration Statement of TGC
Industries, Inc. on Form SB-2 of our report, dated January 30, 2004,
appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our firm under the caption
"Experts" in such Prospectus.

/s/ Lane Gorman Trubitt, L.L.P.
Lane Gorman Trubitt, L.L.P.

Dallas, Texas
September 27, 2004

Exhibit 23.02

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated February 4, 2003, accompanying the
financial statements of TGC Industries, Inc. contained in the Registration
Statement. We consent to use of the aforementioned report in the
Registration Statement, and to the use of our name as it appears under the
caption, "Experts."

/s/ GRANT THORNTON LLP
GRANT THORNTON LLP

Dallas, Texas
September 27, 2004