As filed with the Securities and Exchange Commission on September     , 1998
                                                                  ----

                                                      Registration No. 333-     
                                                                           -----

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form S-8
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


                                  SEITEL, INC.
             (Exact name of registrant as specified in its charter)

        Delaware                                              76-0025431
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)


                              50 Briar Hollow Lane
                             7th Floor, West Bldg.
                              Houston, Texas 77027

   (Address of registrant's principal executive offices, including zip code)

                 SEITEL, INC. 1998 EMPLOYEE STOCK PURCHASE PLAN
                              (Full Title of Plan)

                                 PAUL A. FRAME
                     President and Chief Executive Officer
                                  Seitel, Inc.
                  50 Briar Hollow Lane, 7th Floor, West Bldg.
                              Houston, Texas 77027
                                 (713) 881-8900
  (Name and address, including zip code, and telephone number, including area
                    code, of registrant's agent for service)

                                    Copy to:

                               William Mark Young
                       Gardere Wynne Sewell & Riggs, LLP
                              333 Clay, Suite 800
                              Houston, Texas 77002
                   Phone (713) 308-5500, Fax: (713) 308-5555
<TABLE>

                                                  CALCULATION OF REGISTRATION FEE
<CAPTION>
==================================================================================================================
Title of Each Class of          Amount        Proposed Maximum          Proposed Maximum           Amount of 
Securities to be                to be          Offering Price           Aggregate Offering        Registration
Registered                    Registered      Per Security (1)<F1>         Price (1)<F1>              Fee

------------------------------------------------------------------------------------------------------------------
<S>                           <C>                  <C>                    <C>                      <C>    
Units                         1,194,000            $9.50                  $11,343,000              $3,350 
------------------------------------------------------------------------------------------------------------------
Common Stock, par value 
$0.01 per share               1,194,000             (2)<F2>                   (2)<F2>               (2)<F2>
------------------------------------------------------------------------------------------------------------------
Common Stock
Purchase Warrants             1,194,000             (2)<F2>                   (2)<F2>               (2)<F2>
------------------------------------------------------------------------------------------------------------------
Common Stock, underlying
Common Stock Purchase
Warrants (3)<F3>              1,194,000           $10.6875                $12,760,875              $3,765  
------------------------------------------------------------------------------------------------------------------
Total                                                                     $24,103,875              $7,115  
==================================================================================================================

<PAGE>

                             (cover page continued)
<FN>

<F1>(1)   Pursuant to the Employee Stock Purchase Plan (the "Plan"),  Units will
          be  offered  to  participants  at the  market  price of Common  Stock.
          Therefore,  the filing fee with  respect to Units has been  calculated
          pursuant  to Rule  457(h)(1)  based on the average of the high and low
          sales  price of the  Common  Stock as  reported  on the New York Stock
          Exchange on  September  10, 1998.  Pursuant to the Plan,  the exercise
          price of the  Warrants  will  equal 112 1/2% of the  sales  price of a
          Unit.  Therefore,  the filing fee with  respect to  Warrants  has been
          calculated pursuant to Rule 457(g)(2) based on the average of the high
          and low sales  price of the Common  Stock as  reported on the New York
          Stock Exchange on September 10, 1998.

<F2>(2)   Included in the Units. No additional registration fee required.

<F3>(3)   Issuable  upon  exercise.  Pursuant  to Rule  416(a),  there  are also
          registered such an indeterminate number of shares of Common Stock that
          may be issued pursuant to the anti-dilution  provisions  applicable to
          the Common Stock Purchase Warrants.
</FN>
</TABLE>
<PAGE>

                                EXPLANATORY NOTE

     This Registration  Statement  contains two parts: the first part contains a
Prospectus on Form S-3 (in accordance with Section C of the General Instructions
to Form S-8) which covers  re-offers  and  re-sales by the Selling  Stockholders
listed,  from time to time,  in the  Prospectus of shares of Common Stock of the
Company to be issued  pursuant to  purchases  made under the Seitel,  Inc.  1998
Employee  Stock Purchase Plan and upon exercise of warrants  issued  pursuant to
purchases made under the Seitel, Inc. 1998 Employee Stock Purchase Plan.

     The second part contains information required in the Registration Statement
pursuant to Part II of Form S-8.

     Pursuant to Note to Part I of Form S-8, the Plan  Information  specified by
Part I is not being filed with the Securities and Exchange  Commission,  as such
information  will be sent or given to each  employee  participant  in accordance
with Rule 428 under the  Securities  Act of 1933,  as amended  (the  "Securities
Act").  This  information and the documents  incorporated by reference into this
Registration  Statement  pursuant  to Item 3 of  Part  II of  this  Registration
Statement,  taken together,  constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.

<PAGE>

PROSPECTUS                        SEITEL, INC.
(Form S-3)
                                 812,500 Shares
                                  Common Stock
                           ($.01 Par Value Per Share)


                 SEITEL, INC. 1998 EMPLOYEE STOCK PURCHASE PLAN


     This Prospectus is being used in connection with the offering, from time to
time, by certain stockholders (the "Selling  Stockholders") of Seitel, Inc. (the
"Company")  of shares of common  stock,  $.01 par value per share  (the  "Common
Stock")  which may be  acquired  under the  Seitel,  Inc.  1998  Employee  Stock
Purchase  Plan (the  "Purchase  Plan") and upon exercise of warrant which may be
acquired under the Purchase Plan.

     The securities being registered hereby (the "Securities") may be sold, from
time to time,  by the  Selling  Stockholders,  directly or  indirectly,  through
agents  designated  from time to time, in one or more open market  transactions,
including block trades, on the New York Stock Exchange,  in privately negotiated
transactions,  or in a  combination  of such methods of sale.  Such sales may be
made through dealers or underwriters to be designated, on terms to be determined
at the time of sale,  or at prices  and at terms  then  prevailing  or at prices
related to the then current market price. In effecting sales, brokers or dealers
engaged by the Selling  Stockholders may arrange for other brokers or dealers to
participate.  Brokers or dealers will  receive  commissions  or  discounts  from
Selling Stockholders in amounts to be negotiated  immediately prior to the sale.
Such  brokers or dealers and any other  participating  brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the  "Securities  Act"),  in connection  with such sales. To the extent
required,  the specific  securities sold, the name of the Selling  Stockholders,
the purchase price,  public offering  price,  name of any such agent,  dealer or
underwriter,  and any  applicable  discount  or  commission  with  respect  to a
particular  offer  will  be set  forth  by  supplement  to this  Prospectus.  In
addition,  any  securities  covered by this  Prospectus  which  qualify for sale
pursuant  to Rule 144 may be sold under Rule 144 rather  than  pursuant  to this
Prospectus.  The Company will not receive any of the  proceeds  from the sale of
these  shares,  but will  receive  the  aggregate  exercise  price  of  warrants
exercised  under the  Purchase  Plan.  The  Company's  Common Stock is presently
listed on the New York Stock  Exchange under the symbol "SEI." The closing price
for the Common Stock on the New York Stock  Exchange on September 11, 1998,  was
$10.625.


         SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR
           CERTAIN MATTERS TO BE CONSIDERED BY PROSPECTIVE INVESTORS


               The date of this Prospectus is September 14, 1998.
<PAGE>

THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE  COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


     No  person is  authorized  in  connection  with the  offering  made by this
Prospectus to give any information or to make any  representations not contained
or  incorporated  by  reference  in  this  Prospectus,  and any  information  or
representation  not contained or  incorporated  by reference in this  Prospectus
must  not be  relied  upon  as  having  been  authorized  by the  Company.  This
Prospectus is not an offer to sell, or a solicitation of an offer to buy, by any
person in any  jurisdiction  in which it is unlawful  for that person to make an
offer or solicitation.  Neither the delivery of this Prospectus or any sale made
under this Prospectus shall, under any circumstance, create any implication that
the  information in this  Prospectus is correct as of any time subsequent to the
date of this Prospectus.


AVAILABLE INFORMATION

     Seitel,  Inc. (the "Company") is subject to the informational  requirements
of the Securities  Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith,  files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission").  The
reports,  proxy statements and other  information  filed by the Company with the
Commission  can be  obtained  by mail from the Public  Reference  Section of the
Commission at Judiciary Plaza,  450 Fifth Street,  Room 1024,  Washington,  D.C.
20549, at prescribed  rates.  In addition,  such reports,  proxy  statements and
information may be inspected and copied at the  aforementioned  public reference
facility and at the Commission's  regional offices at Citicorp Center,  500 West
Madison Street, Suite 1400, Chicago,  Illinois 60661-2511,  and at 7 World Trade
Center,  13th Floor, New York, New York 10048. The Commission  maintains a world
wide web site on the Internet at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding registrants that file
electronically  with the Commission.  Such reports,  proxy  statements and other
information may also be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.

     The Company has filed with the  Commission a Registration  Statement  under
the Securities Act with respect to the  securities  offered by this  Prospectus.
This  Prospectus  does  not  contain  all of the  information  set  forth in the
Registration  Statement,  certain parts of which are omitted in accordance  with
the rules and regulations of the Commission.  Additional  information concerning
the  securities  offered  hereby is to be found in the  Registration  Statement,
including various exhibits  thereto,  which may be inspected at the Commission's
office in Washington, D.C.
<PAGE>

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The Company incorporates by reference into this Prospectus the following
documents and portions of documents:

1.   The Company's Annual Report on Form 10-K for the fiscal year ended December
     31, 1997, as amended by Form 10-K/A dated April 28, 1998, as filed with the
     Commission  on April 29, 1998 and by Form 10-K/A  dated June 10,  1998,  as
     filed with the Commission on June 12, 1998.

2.   The Company's  Quarterly Reports on Form 10-Q for the fiscal quarters ended
     March 31 and June 30, 1998.

3.   All  other  reports  filed  pursuant  to  Section  13(a)  or  15(d)  of the
     Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  since
     December 31, 1997.

4.   The  description of the Company's  Common Stock  contained in the Company's
     Registration  Statement  on Form 8-A,  dated March 27,  1991  (Registration
     Number 0-14488).

     All documents filed by the Company pursuant to Section 13(a),  13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Stock contemplated hereby shall be
deemed to be  incorporated  by reference  into this  Prospectus  and made a part
hereof from the  respective  dates of filing of such  documents.  Any  statement
contained  herein,  or in a  document  incorporated  or deemed  incorporated  by
reference  herein,  shall be deemed to be modified or superseded for purposes of
the  Registration  Statement and this  Prospectus to the extent that a statement
contained  herein or in any  subsequently  filed  document  which  also is or is
deemed to be incorporated herein modifies or supersedes such statement. Any such
statements so modified or superseded shall not be deemed,  except as so modified
or  superseded,  to  constitute  a part of the  Registration  Statement  or this
Prospectus.

     The  Company  will  provide  without  charge  to each  person  to whom this
Prospectus is delivered,  upon written or oral request of that person, a copy of
all other documents incorporated by reference into the Registration Statement of
which  this  Prospectus  is a part,  other  than  exhibits  to those  documents.
Requests  should be directed to Debra D. Valice,  Seitel,  Inc., 50 Briar Hollow
Lane,  West  Building,  7th  Floor,  Houston,  Texas  77027  (telephone:   (713)
881-8900).

<PAGE>

                                  RISK FACTORS

     Prospective  purchasers of the Common Stock should carefully  consider,  in
addition  to  the  other  information  contained  in  this  Prospectus  and  any
accompanying Prospectus Supplement, the following risk factors.

     Competition.  Competition in the seismic data licensing industry and in the
oil and gas  exploration  and  production  industry  is  intense.  A  number  of
independent  oil-service  companies create and market seismic data, and numerous
oil and gas companies  create  seismic data and maintain  their own seismic data
banks.  Due to difficult  industry  conditions  in recent  years,  the number of
independent  seismic  companies has  decreased,  and oil and gas companies  have
acquired an  increasing  portion of their  seismic  data from  outside  sources,
including the Company.  In the oil and gas exploration and production  business,
there are  numerous  oil and gas  companies  competing  for the  acquisition  of
mineral  properties.  Although the Company has significant  operating history in
its seismic data licensing  operations,  it has limited operating history in oil
and gas  exploration.  Some of the Company's  competitors  have longer operating
histories,  greater  financial  resources  and  larger  sales  volumes  than the
Company.  Although  the  Company  believes  that  its  fully-integrated  seismic
resources and technical,  geophysical  and marketing  expertise will allow it to
compete  effectively  in both  the  seismic  data  industry  and the oil and gas
exploration and development  industry,  there can be no assurance that this will
be the case.

     Industry  Conditions.   Demand  for  the  Company's  seismic  data  depends
primarily  upon the level of spending by oil and gas companies for  exploration,
production and  development  activities.  These spending levels tend to increase
and decrease with  increases  and decreases in the commodity  prices for oil and
gas, so that demand for the Company's seismic data is affected to some degree by
market prices for natural gas and crude oil, which have  historically  been very
volatile.  Revenues  generated  by the  Company's  oil and gas  exploration  and
development  business  increase and decrease with increases and decreases in the
market prices of oil and gas. A substantial  or extended  decline in oil and gas
prices could have a material adverse effect on the Company's financial position.
In  addition,  if oil and gas prices  decrease  materially,  the  Company may be
unable to find partners  willing to pay the relatively high costs of exploration
and  development and grant the Company an interest in production in exchange for
seismic  data.  Further,  as high quality 3D data becomes more widely  available
from  other  sources,  the  Company  may be unable to obtain  the same  level of
working  interests in oil and gas properties in exchange for use of its 3D data.
Also,  other  factors  beyond the  Company's  control may affect its oil and gas
operations.  These  factors  include the level of supply of natural gas and oil,
the availability of adequate  pipeline and other  transportation  and processing
facilities and the marketing of competitive  fuels.  See also  "Compliance  with
Governmental Regulations."

     Operating  Risks.  The  Company's  oil and gas  operations  are  subject to
hazards  incident  to the  drilling  of oil and gas  wells,  such as  cratering,
explosions,  uncontrollable flows of oil, gas or well fluids, fires,  pollution,
or  other  environmental  risks,  as well as to the  risk  that no  commercially
productive  natural  gas or oil  reserves  will be  encountered.  Some of  these
hazards  can  cause  personal  injury  and loss of life,  severe  damage  to and

<PAGE>

destruction  of property and equipment,  environmental  damage and suspension of
operations. In addition, the cost of drilling, completing and operating wells is
often uncertain,  and drilling operations may be curtailed,  delayed or canceled
as a result of a variety of factors,  including  unexpected drilling conditions,
pressure or  irregularities  in  formations,  equipment  failures or  accidents,
weather  conditions and shortages or delays in the delivery of equipment.  These
risks are typically  shared by the Company and its petroleum  company  partners.
The Company also seeks to reduce dry hole risks by  utilizing  3D seismic  data,
where  deemed  appropriate,  to assist in the  determination  of where to drill.
However,  since the Company does not act as operator in its oil and gas drilling
business,  it is  dependent  upon its  petroleum  company  partners  to  conduct
operations in a manner so as to minimize these  operating  risks.  In accordance
with industry  practice,  the Company maintains  insurance against some, but not
all, of these operating risks. There can be no assurance that adequate insurance
will be  available  in the future,  or that the Company will be able to maintain
adequate  insurance on terms and conditions it finds acceptable.  As a result of
the risks  inherent in oil and gas  operations,  there can be no assurance as to
the success of the Company's oil and gas exploration, development and production
activities.

     Holding  Company  Structure.  The Company has no operations or  significant
assets  other  than  through  its   ownership  of  the  capital   stock  of  its
subsidiaries. Dividends and other permitted payments from such subsidiaries will
be the primary source of funds to pay dividends on the Common Stock.  The rights
of the Company and its creditors to  participate in the assets of any subsidiary
upon the latter's  liquidation  or  reorganization  will be subject to the prior
claims of the  subsidiary's  creditors except to the extent that the Company may
itself be a creditor with recognized claims against the subsidiary.

     Dependence on Key Personnel.  The Company's operations are dependent upon a
relatively small group of management and technical personnel. The loss of one or
more of these  individuals  could have a material adverse effect on the Company.
The Company utilizes equity ownership and other incentives to attract and retain
its employees. In addition, the Company's President and Chief Executive Officer,
Paul A. Frame,  Executive Vice President and Chief Operating Officer,  Horace A.
Calvert, and Senior Vice President-Finance and Chief Financial Officer, Debra D.
Valice, all have employment agreements with the Company.

     Geographic Concentration of Operations.  Most of the Company's seismic data
in its seismic data library, as well as most of the Company's existing interests
in oil and gas properties,  are located along the coast and offshore in the U.S.
Gulf of Mexico. Because of this concentration, any regional events that increase
costs,  reduce  availability  of equipment or supplies,  reduce  demand or limit
production  will impact the Company more adversely than if the Company were more
geographically diversified.

     Compliance  with  Governmental  Regulations.  The oil and gas  industry  in
general is subject to extensive  governmental  regulation,  which may be changed
from  time  to  time  in  response  to  economic  or  political  conditions.  In
particular,  oil and gas  exploration  and  production is subject to federal and
state regulations governing  environmental quality and pollution control,  state
limits on allowable  rates of  production by well or proration  unit,  and other

<PAGE>

similar  regulations.  State and federal  regulations  generally are intended to
prevent waste of natural gas and oil,  protect rights to produce natural gas and
oil between owners in a common reservoir,  control the amount of natural gas and
oil  produced  by  assigning   allowable   rates  of   production   and  control
contamination  of the  environment.  Also,  the Company  believes that the trend
toward more  expansive  and stricter  environmental  laws and  regulations  will
continue.  The  implementation of new, or the modification of existing,  laws or
regulations  affecting  the oil and gas industry  could have a material  adverse
impact on the Company.

     Shares  Eligible  for  Future  Sale.  No  prediction  can be made as to the
effect,  if any, that future sales of shares of the Company's  capital stock, or
the  availability  of shares of capital  stock for future  sale will have on the
market  price of such  stock  prevailing  from time to time.  Almost  all of the
4,500,105  shares of Common  Stock  currently  held by or  issuable  pursuant to
options,  warrants  and  other  rights  granted  prior  to the date  hereof  and
exercisable  within 60 days of the date hereof to the  Company's  directors  and
executive officers are eligible for sale currently or immediately upon exercise.
Sales of substantial  amounts of Common Stock (including  shares issued upon the
exercise of stock options or warrants),  or the perception that such sales could
occur, could adversely affect prevailing market prices for the Common Stock.

                DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION

     This Prospectus includes "forward-looking statements" within the meaning of
Section  27A of the  Securities  Act and Section 21E of the  Exchange  Act.  All
statements   other  than  statements  of  historical   facts  included  in  this
Prospectus,  including without  limitation,  statements  regarding the Company's
financial  position,   business  strategy,  budgets,  plans  and  objectives  of
management  for future  operations  are  forward-looking  statements.  The words
"anticipate,"  "believe,"  "expect,"  "plan," "intend,"  "estimate,"  "project,"
"will,"  "could," "may," "predict" and similar terms and phrases are intended to
identify  forward-looking   statements.   These  statements  involve  risks  and
uncertainties  that may cause actual future activities and results of operations
to be materially different from those suggested or described in this Prospectus.
Although  the  Company  believes  that  the   expectations   reflected  in  such
forward-looking  statements are  reasonable,  it can give no assurance that such
expectations will prove to have been correct. Important factors that could cause
actual results to differ materially from the Company's expectations ("Cautionary
Statements")   are  disclosed   under  "Risk  Factors"  and  elsewhere  in  this
Prospectus.  Should one or more of these risks or uncertainties materialize,  or
should  underlying   assumptions  prove  incorrect,   actual  results  may  vary
materially from those expected,  estimated or projected.  All subsequent written
and oral  forward-looking  statements  attributable  to the Company,  or persons
acting  on  its  behalf,  are  expressly  qualified  in  their  entirety  by the
Cautionary Statements.

<PAGE>

                                  THE COMPANY

     The Company and its subsidiaries,  located in Houston, Texas, are a leading
provider of seismic data and related  geophysical  services and expertise to the
petroleum  industry.  The Company has evolved into a diversified  energy concern
with several niche operations,  including one of the largest independent seismic
data libraries in the United States;  three-dimensional  seismic data processing
and  interpretation   technology;   and  direct  participation  in  exploration,
development and ownership of natural gas and crude oil reserves.

     Since  its  inception  in  1982,  the  Company  has  been  engaged  in  the
development  of a  proprietary  library  of  seismic  data,  created by both the
Company and others.  The Company's seismic data library is owned and marketed by
Seitel Data,  Ltd., a Texas limited  partnership  of which  wholly-owned  Seitel
subsidiaries  constitute all of the limited and general  partners.  Seitel Data,
Ltd. markets the data library, which consists of both two-dimensional ("2D") and
three-dimensional   ("3D")  data,  to  oil  and  gas  companies   under  license
agreements.   Seismic   surveys  and  the  analysis  of  seismic  data  for  the
identification and definition of underground geological structures are principal
techniques  used in oil and gas  exploration  and  development  to determine the
existence and location of subsurface hydrocarbons.

     The Company's  integrated  seismic data operations include its large 2D and
3D seismic library,  its seismic data processing  center and computer  software,
and the Company's geophysical application experience in interpreting 3D data.

     In March  1993,  the Company  formed DDD Energy,  Inc.  ("DDD  Energy"),  a
wholly-owned  subsidiary,  to  participate  directly in  petroleum  exploration,
development  and  ownership  of  hydrocarbon  reserves  through cost and revenue
sharing relationships with oil and gas producers.  The Company's objective is to
participate  through DDD Energy in exploration  and  development  programs which
combine  the  Company's  3D and 2D seismic  resources  and  related  geophysical
technologies  with the geology and  engineering  expertise and land positions of
selected petroleum producers.


                                USE OF PROCEEDS

     The Company will not receive any part of the proceeds  from the sale of the
shares of Common Stock by the Selling  Stockholders.  The Company will, however,
receive the exercise price of warrants  under the Purchase Plan,  which warrants
must be exercised before the Selling Stockholders can sell certain of the shares
offered hereunder.  The exercise price of the warrants will be determined at the
time such options are purchased by the Selling  Stockholders  under the Purchase
Plan. The Company intends to use the proceeds from the exercise of such warrants
for general corporate purposes.

<PAGE>

                COMMON STOCK OFFERED BY THE SELLING STOCKHOLDERS

     This  Prospectus  covers  offers,  from time to time, of a total of 812,500
shares of Common Stock that may be  purchased  by officers and  directors of the
Company  pursuant to the Company's  Purchase Plan or pursuant to the exercise of
warrants under the Purchase Plan.


                              SELLING STOCKHOLDERS

     This  Prospectus  may be used by officers and  directors of the Company for
the  resale of up to 812,500  shares of Common  Stock that may be issued to them
pursuant to the  Purchase  Plan and upon  exercise  of warrants  pursuant to the
Purchase Plan. As of the date hereof, no shares had been acquired by officers or
directors of the Company  pursuant to the Purchase Plan and no warrants had been
acquired by officers or directors  under the Purchase  Plan.  If and when any of
the  812,500  shares  of Common  Stock are  issued  to  officers  or  directors,
including  issuances  upon  exercise of warrants  under the Purchase  Plan,  are
sought to be  offered  for  resale by the  Selling  Stockholders,  the number of
shares of Common  Stock  beneficially  owned by each  Selling  Stockholder,  the
number of shares acquired pursuant to the Purchase Plan, including the number of
shares that may be acquired upon  exercise of warrants  pursuant to the Purchase
Plan,  and the number of shares offered for resale  pursuant to this  Prospectus
will be indicated by Prospectus Supplement.

                              PLAN OF DISTRIBUTION

     All  Securities  covered  by this  Prospectus  are  being  offered  for the
accounts of the Selling  Stockholders.  The Securities may be sold, from time to
time,  in one or more  transactions  at a fixed  offering  price,  which  may be
changed,  at  varying  prices  determined  at the  time of sale,  at terms  then
prevailing  or at  prices  related  to  the  then  current  market  price  or at
negotiated  prices.  The  Securities  may be  sold in one or  more  open  market
transactions  on  the  New  York  Stock  Exchange  or  in  privately  negotiated
transactions.  The Securities may be sold by various methods, including, but not
limited to, one or more of the  following:  a block trade in which the broker or
dealer so engaged will attempt to sell  Securities 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 the broker or dealer
for its own account pursuant to this  Prospectus,  a transaction on the New York
Stock  Exchange in  accordance  with the rules of such  exchange,  and  ordinary
brokers   transactions  and  transactions  in  which  the  broker  solicits  the
purchasers.  Alternatively,  the Selling Stockholder may from time to time offer
the  securities  through  underwriters,   dealers  or  agents  who  may  receive
compensation in the form of underwriting discounts,  concessions, or commissions
from the Selling  Stockholders and/or purchasers of Securities for whom they act
as agents. In addition, any of the Securities which qualify for sale pursuant to
Rule 144 under the  Securities  Act,  or  otherwise  pursuant  to an  applicable
exemption  under the  Securities  Act,  may be sold other than  pursuant to this
Prospectus.

     The Selling Stockholders and any such underwriters,  dealers or agents that
participate in the  distribution of Securities may be deemed to be underwriters,

<PAGE>

and  any  profit  on the  sale of the  Securities  by  them  and any  discounts,
commissions  or  concessions  received by them may be deemed to be  underwriting
discounts and commissions under the Securities Act. Brokers or dealers acting in
connection  with the sale of the Securities  contemplated by this Prospectus may
receive commissions in connection therewith.

     At the  time a  particular  offer of  Securities  is  made,  to the  extent
required,  a  supplement  to this  Prospectus  will be  distributed  which  will
identify the Selling  Stockholders,  identify and set forth the aggregate amount
of Securities being offered and the terms of the offering, including the name or
names of any  underwriters,  dealers or agents,  the purchase  price paid by any
underwriter  for  Securities  purchased  from  the  Selling   Stockholder,   any
discounts,  commissions  and  other  items  constituting  compensation  from the
Selling  Stockholder  and any discounts,  commissions or concessions  allowed or
re-allowed  or paid to dealers,  including  the  proposed  selling  price to the
public.  Such supplement to this Prospectus and, if necessary,  a post-effective
amendment to the Registration  Statement of which the Prospectus is a part, will
be filed with the Commission to reflect the disclosure of additional information
with respect to the distribution of the Securities.  The Company will pay all of
the expenses  incident to the registration and certain other expenses related to
this  offering  of the  Securities,  other  than  underwriting  commissions  and
discounts,  normal commission  expenses and brokerage fees,  applicable transfer
taxes and attorneys' fees of Selling Stockholders' counsel.

     The  Company  intends to require  the  Selling  Stockholders  to enter into
indemnification  agreements with the Company  pursuant to which the Company will
be  indemnified  against  failure  by the  Selling  Stockholders  to  deliver  a
Prospectus if required, as well as against certain civil liabilities,  including
liabilities under the Securities Act or the Exchange Act, incurred in connection
with any untrue (or alleged untrue)  statement of a material fact or omission of
a  material  fact in  this  Registration  Statement  pursuant  to an  applicable
Prospectus  Supplement  to the extent  such  liability  relates  to  information
supplied by the Selling Stockholder for inclusion in the Registration  Statement
pursuant to an applicable Prospectus Supplement.

     In order to comply with certain states' securities laws, if applicable, the
Securities  will be  sold  in such  jurisdictions  only  through  registered  or
licensed brokers or dealers.  In certain states,  the Securities may not be sold
unless the Securities  have been registered or qualified for sale in such state,
or unless an exemption from  registration or  qualification  is available and is
obtained.


                                 LEGAL MATTERS

     The  validity  of the  Securities  will be passed  upon for the  Company by
Gardere Wynne Sewell & Riggs, L.L.P., Houston, Texas.

                                    EXPERTS

     The financial  statements  incorporated  by reference in this  registration
statement  have  been  audited  by  Arthur  Andersen  LLP,   independent  public
accountants,  as  indicated  in their  reports  with  respect  thereto,  and are
incorporated by reference  herein in reliance upon the authority of said firm as
experts in giving said reports.
<PAGE>

     The estimate of natural gas  reserves  contained  in the  Company's  Annual
Report on Form 10-K for the year ended  December  31, 1997,  was  obtained  from
reserve  reports dated as of January 1, 1998 prepared by Miller and Lents,  Ltd.
and dated January 1, 1998 prepared by Forrest A. Garb &  Associates,  Inc.,  and
are incorporated  herein in reliance upon the authority of said firms as experts
in such matters.


                                    PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3:  Incorporation  of Documents by Reference.  The Company  incorporates by
     reference into this  Registration  Statement the following  documents which
     have been or will be filed by the Company with the  Securities and Exchange
     Commission (the "Commission"):


          1. The Company's  Annual Report on Form 10-K for the fiscal year ended
     December 31, 1997, as amended by Form 10-K/A dated April 28, 1998, as filed
     with the  Commission on April 29, 1998, and as amended by Form 10-K/A dated
     June 10, 1998, as filed with the Commission on June 12, 1998.

          2.  The  Company's  Quarterly  Reports  on Form  10-Q  for the  fiscal
     quarters ended March 31 and June 30, 1998.

          3. All other reports  filed  pursuant to Section 13(a) or 15(d) of the
     Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  since
     December 31, 1997.

          4. The  description  of the  Company's  Common Stock  contained in the
     Company's  Registration  Statement  on  Form  8-A,  dated  March  27,  1991
     (Registration Number 0-14488).

     In addition,  all documents  subsequently  filed by the Company pursuant to
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which de-registers all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration  Statement and to be a part
hereof from the date of filing of such documents.

     Any  statement  contained in a document  incorporated  by reference  herein
shall be deemed to be modified or superseded for purposes of this  Prospectus to
the extent  that a  statement  contained  herein  modifies  or  supersedes  such
statement.  Any such  statement so modified or  superseded  shall not be deemed,
except as so modified or superseded, to constitute part of this Prospectus.

Item 4: Description of Securities.

Units
-----

     Each unit  consists of one share of Common Stock and one Warrant.  The Plan
authorizes the issuance of 2,388,000  shares of Common Stock, of which 1,194,000
are issuable  pursuant to the  exercise of the  1,194,000  Warrants  that may be
issued under the Plan.

Terms of Warrants
-----------------

     Each Warrant entitles the holder to purchase one share of Common Stock at a
price equal to one hundred twelve and one-half percent (112 1/2%) of the average
of the  closing  prices  of one  share of  Common  Stock  on the New York  Stock

<PAGE>

Exchange on the 10 trading days before the Closing Date (as such term is defined
in the Plan) rounded up to the next one-quarter of one dollar. The Warrants will
expire on the earlier of (i) the date that is five years after the Closing Date,
(ii) the date that is five business days after  termination of employment if the
original  purchaser of the Warrant from the Company  ceases to be an employee of
the Company or a subsidiary of the Company for any reason (other than for death,
disability  or  retirement  after the age of 65),  or (iii) the date that is one
year after the death,  disability  or  retirement  after age 65 of the  original
purchaser  of the Warrant from the Company if he ceases to be an employee of the
Company or a Subsidiary because of death, disability or retirement after age 65.

Exercise of Warrants
--------------------

     A Warrant may be exercised  only by a holder during his lifetime,  or after
his disability by his legal  representative on his behalf, or after his death by
his personal  representative or estate or the person or persons entitled thereto
under his will or under the laws of descent and distribution.

     Warrants may be  exercised in whole or part at any time,  within the period
permitted for exercise  thereof.  Warrants  must be exercised by written  notice
with  respect to a specified  number of shares  delivered  to the Company at its
principal office, together with payment in full to the Company for the number of
shares of Common Stock to be purchased pursuant to the exercise of the Warrant.

     Upon any exercise of a Warrant,  the holder must pay the full amount of the
exercise price in cash at the time of the exercise.  Holders will not be or have
any of the rights or privileges  of a  stockholder  of the Company in respect of
any Shares  purchasable  upon the  exercise of any part of a Warrant  unless and
until  certificates  representing  such  Shares  shall  have been  issued by the
Company to such holders after exercise of a Warrant.

     A Warrant is  exercisable  only if the issuance of Common Stock pursuant to
the  exercise  would be in  compliance  with  applicable  securities  laws.  The
Warrants further provide that the holder  exercising a warrant shall pay or make
provisions  satisfactory  to the Company for the payment of certain  taxes which
the Company may be obligated to collect upon exercise.

Adjustments
-----------

     The number of shares of Common Stock  issuable upon exercise of outstanding
Warrants,  and the exercise price of such Warrants,  is subject to adjustment by
the Board of  Directors  of the  Company,  acting in good faith,  to reflect any
stock   dividend,   stock  split,   share   combination,   exchange  of  shares,
recapitalization, merger, consolidation, separation, reorganization, liquidation
or the like,  of or by the  Company.  If the Company is a party to any merger or
similar transaction and is the surviving  corporation,  the Warrants will not be
affected.  If (i) the Company sells all or substantially all of its assets, (ii)
is a  party  to a  merger  or  similar  transaction  and  is not  the  surviving
corporation,  or (iii)  another  company  makes a tender  offer for stock of the
Company, then the Company may, at its election,  (a) reach an agreement with the
purchaser in that  transaction that the purchaser will assume the obligations of

<PAGE>

the Company under the Warrants;  (b) reach an agreement  with the purchaser that
the purchaser will convert the Warrants into warrants of at least equal value as
to stock of the  purchaser;  or (c) not later than thirty (30) days prior to the
effective  date of the  transaction,  notify the holder of the  Warrants  of the
proposed  transaction  and afford the holders of the Warrants the right prior to
such transaction to exercise the Warrants, which exercise may be contingent upon
consummation of the transaction. 

Restrictions on Transfer of Warrants
------------------------------------

     Warrants  are not be  transferable  other  than  by will or by the  laws of
descent  and  distribution,  except  that  Warrants  may be  transferred  by the
original  purchaser of the Warrant from the Company to members of his  immediate
family who are U.S.  residents or to trusts or business  entities formed for the
benefit of members of his immediate  family who are U.S.  residents.  "Immediate
family" means your parents,  children,  grandchildren,  or spouse. A Warrant may
not be  subsequently  transferred by such immediate  family member other than by
will or by the laws of descent and distribution.  If a Warrant is transferred to
an immediate family member, the Company may require  investment  representations
upon exercise of the Warrant and may impose such conditions upon the exercise of
the Warrant as may be required to comply with federal and state securities laws,
and the  Shares of Common  Stock  issuable  upon  exercise  of a Warrant by such
immediate  family member may be  "restricted  shares" as such term is defined in
Rule 144 under the  Securities  Act of 1933,  as amended,  and may contain  such
restrictive legends as may be deemed necessary by the Company.

Item 5: Interests of Named Experts and Counsel. Not applicable.

Item 6: Indemnification of Directors and Officers. Section 145(a) of the General
Corporation  Law of the  State  of  Delaware  (the  "General  Corporation  Law")
provides,  in general,  that a corporation shall have 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,  whether civil,
criminal,  administrative  or  investigative  (other than an action by or in the
right of the corporation), by reason of the fact that he is or was a director or
officer of the corporation.  Such indemnity may be against  expenses  (including
attorneys' fees),  judgments,  fines and amounts paid in settlement actually and
reasonably incurred in connection with such action,  suit or proceeding,  if the
indemnitee acted in good faith and in a manner  reasonably  believed to be in or
not opposed to the best  interests of the  corporation  and, with respect to any
criminal action or proceeding, the indemnitee must not have had reasonable cause
to believe his conduct was unlawful.

     Section 145(b) of the General Corporation Law provides,  in general, that a
corporation  shall have 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 or suit by or in the right of the  corporation  to procure a judgment  in
its favor by reason of the fact that he is or was a  director  or officer of the
corporation against expenses (including attorneys' fees) actually and reasonably
incurred by him in  connection  with the defense or settlement of such action or
suit if he acted in good faith and in a manner he  reasonably  believed to be in
or not opposed to the best interest of the corporation;  provided, however, that
if the person is found to be liable to the corporation, no indemnification shall
be made except to the extent that the court determines that  indemnification  is
fair and reasonable under the circumstances.

     Section 145(g) of the General Corporation Law provides,  in general, that a
corporation shall have power to purchase and maintain insurance on behalf of any

<PAGE>

person  who is or was a  director  or officer  of the  corporation  against  any
liability  asserted  against him or incurred by him in any capacity,  or arising
out of his status as such,  whether or not the corporation  would have the power
to indemnify him against such liability under the provisions of the law.

     Article Eighth of the Registrant's Certificate of Incorporation and Section
Six of the  Registrant's  Bylaws  give a  director  or  officer  the right to be
indemnified  by the Registrant to the fullest  extent  permitted  under Delaware
law.

Item 7: Exemption From Registration Claimed. [Not Applicable.]

Item 8: Exhibits:

     4.1  Seitel,  Inc. 1998 Employee  Stock  Purchase  Plan  including  Form of
          Common Stock Purchase Warrant.*

     5.1  Opinion of Gardere Wynne Sewell & Riggs,  L.L.P., legal counsel to the
          Company.*

     23.1 Consent of Arthur Andersen LLP.*

     23.2 Consent of Miller and Lents, Ltd.*

     23.3 Consent of Forrest A. Garb & Associates, Inc.*

     23.4 Consent of Gardere, Wynne, Sewell & Riggs, L.L.P. (included in Exhibit
          5.1).

     24.1 Power of Attorney (included on Signature Page).

* filed herewith

Item 9: Undertakings. The undersigned registrant hereby undertakes:

          (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement:

               (i) To include any prospectus required by section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  registration  statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          in the  registration  statement.  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

<PAGE>

          registered)  and  any  deviation  from  the  low  or  high  end of the
          estimated  maximum  offering  range  may be  reflected  in the form of
          prospectus  filed with the  Commission  pursuant to Rule 424(b) if, in
          the aggregate,  the changes in 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;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  registration
          statement  or  any  material   change  to  such   information  in  the
          registration statement.

          provided,  however, that paragraphs (1)(i) and (1)(ii) do not apply if
     the registration  statement is on Form S-3 or Form S-8, and the information
     required to be included in a  post-effective  amendment by those paragraphs
     is  contained  in  periodic  reports  filed by the  registrant  pursuant to
     section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
     incorporated by reference in the registration statement.

          (2) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment 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.

          (3) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     The  undersigned   registrant  hereby  undertakes  that,  for  purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
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.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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  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 Act and will be governed by the final adjudication of
such issue.

<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the  City of  Houston,  State  of  Texas,  on this  14th  day of
September, 1998.
                                   SEITEL, INC.

                                   BY:  /s/Paul A. Frame
                                      ------------------------------------------
                                   PAUL A. FRAME, President, Chief Executive 
                                   Officer and Director (principal executive 
                                   officer)

                                   BY:  /s/ Debra D. Valice
                                      ------------------------------------------
                                   DEBRA D. VALICE, Senior Vice President of 
                                   Finance, Chief Financial Officer and Director
                                   (principal financial and accounting officer)

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been  signed by the  following  individuals  in the
capacities and on the date indicated.  Each person whose signature appears below
constitutes  and  appoints  Paul A.  Frame and Debra D.  Valice  true and lawful
attorneys-in-fact   and  agents,   each  acting  alone,   with  full  powers  of
substitution and  re-substitution,  for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments)  to this  Registration  Statement,  and to file the  same,  with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents,  each acting alone, full powers and authority to do and perform each and
every  act and  thing  requisite  and  necessary  to be done  in and  about  the
premises,  as  fully  to all  intents  and  purposes  as he might or could do in
person,  hereby  ratifying and  confirming all that said  attorneys-in-fact  and
agents, each acting alone, or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities indicated on September 14, 1998. 

          Signature                                  Title
          ---------                                  -----

/s/Herbert M. Pearlman
------------------------------------
HERBERT M. PEARLMAN                     Chairman of the Board of Directors


/s/Paul A. Frame
------------------------------------
PAUL A. FRAME                           President, Chief Executive Officer
                                        and Director

/s/Horace A. Calvert
------------------------------------
HORACE A. CALVERT                       Executive Vice President,
                                        Chief Operating Officer and Director

/s/Debra D. Valice
------------------------------------
DEBRA D. VALICE                         Senior Vice President of Finance,
                                        Chief Financial Officer and Director

/s/David S. Lawi
------------------------------------
DAVID S. LAWI                           Director


/s/Walter M. Craig, Jr.
------------------------------------
WALTER M. CRAIG, JR.                    Director


/s/Fred S. Zeidman
------------------------------------
FRED S. ZEIDMAN                         Director


/s/John E. Stieglitz
------------------------------------
JOHN E. STIEGLITZ                       Director


/s/William Lerner
------------------------------------
WILLIAM LERNER                          Director

<PAGE>

Index of Exhibits



 Exhibit                         Document                                   Page
 -------                         --------                                   ----

  4.1    Seitel,  Inc. 1998 Employee  Stock  Purchase Plan  including
         Form of Common Stock Purchase Warrant. 

  5.1    Opinion of  Gardere,  Wynne,  Sewell & Riggs,  L.L.P., legal
         counsel to the Company. 

  23.1   Consent of Arthur Andersen L.L.P.

  23.2   Consent of Miller and Lents, Ltd. 

  23.3   Consent of Forrest A. Garb & Associates, Inc. 

  23.4   Consent of Gardere,  Wynne, Sewell & Riggs, L.L.P. (included
         in Exhibit 5.1).

  24.1   Power of Attorney (included on Signature Page).
[{"type": "S-8", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 57255}]
{"company-data": {"conformed-name": "SEITEL INC", "cik": "0000750813", "assigned-sic": "1382", "irs-number": "760025431", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-63383", "film-number": "98709410"}, "business-address": {"street1": "50 BRIAR HOLLOW LN", "street2": "WEST BLDG 7TH FLR", "city": "HOUSTON", "state": "TX", "zip": "77027", "phone": "7136271990"}, "mail-address": {"street1": "50 BRIAR HOLLOW LANE WEST", "street2": "7TH FLOOR", "city": "HOUSTON", "state": "TX", "zip": "77027"}, "former-company": {"former-conformed-name": "SEISMIC ENTERPRISES INC", "date-changed": "19870814"}}
As filed with the Securities and Exchange Commission on September     , 1998
                                                                  ----

                                                      Registration No. 333-     
                                                                           -----

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form S-8
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                  SEITEL, INC.
             (Exact name of registrant as specified in its charter)

        Delaware                                              76-0025431
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)

                              50 Briar Hollow Lane
                             7th Floor, West Bldg.
                              Houston, Texas 77027

   (Address of registrant's principal executive offices, including zip code)

                 SEITEL, INC. 1998 EMPLOYEE STOCK PURCHASE PLAN
                              (Full Title of Plan)

                                 PAUL A. FRAME
                     President and Chief Executive Officer
                                  Seitel, Inc.
                  50 Briar Hollow Lane, 7th Floor, West Bldg.
                              Houston, Texas 77027
                                 (713) 881-8900
  (Name and address, including zip code, and telephone number, including area
                    code, of registrant's agent for service)

                                    Copy to:

                               William Mark Young
                       Gardere Wynne Sewell & Riggs, LLP
                              333 Clay, Suite 800
                              Houston, Texas 77002
                   Phone (713) 308-5500, Fax: (713) 308-5555

                                                  CALCULATION OF REGISTRATION FEE
==================================================================================================================
Title of Each Class of          Amount        Proposed Maximum          Proposed Maximum           Amount of 
Securities to be                to be          Offering Price           Aggregate Offering        Registration
Registered                    Registered      Per Security (1)
Price (1)
Fee

------------------------------------------------------------------------------------------------------------------
Units                         1,194,000            $9.50                  $11,343,000              $3,350 
------------------------------------------------------------------------------------------------------------------
Common Stock, par value 
$0.01 per share               1,194,000             (2)
(2)
(2)
------------------------------------------------------------------------------------------------------------------
Common Stock
Purchase Warrants             1,194,000             (2)
(2)
(2)
------------------------------------------------------------------------------------------------------------------
Common Stock, underlying
Common Stock Purchase
Warrants (3)
1,194,000           $10.6875                $12,760,875              $3,765  
------------------------------------------------------------------------------------------------------------------
Total                                                                     $24,103,875              $7,115  
==================================================================================================================
(cover page continued)
(1)   Pursuant to the Employee Stock Purchase Plan (the "Plan"),  Units will
          be  offered  to  participants  at the  market  price of Common  Stock.
          Therefore,  the filing fee with  respect to Units has been  calculated
          pursuant  to Rule  457(h)(1)  based on the average of the high and low
          sales  price of the  Common  Stock as  reported  on the New York Stock
          Exchange on  September  10, 1998.  Pursuant to the Plan,  the exercise
          price of the  Warrants  will  equal 112 1/2% of the  sales  price of a
          Unit.  Therefore,  the filing fee with  respect to  Warrants  has been
          calculated pursuant to Rule 457(g)(2) based on the average of the high
          and low sales  price of the Common  Stock as  reported on the New York
          Stock Exchange on September 10, 1998.
(2)   Included in the Units. No additional registration fee required.
(3)   Issuable  upon  exercise.  Pursuant  to Rule  416(a),  there  are also
          registered such an indeterminate number of shares of Common Stock that
          may be issued pursuant to the anti-dilution  provisions  applicable to
          the Common Stock Purchase Warrants.
EXPLANATORY NOTE

     This Registration  Statement  contains two parts: the first part contains a
Prospectus on Form S-3 (in accordance with Section C of the General Instructions
to Form S-8) which covers  re-offers  and  re-sales by the Selling  Stockholders
listed,  from time to time,  in the  Prospectus of shares of Common Stock of the
Company to be issued  pursuant to  purchases  made under the Seitel,  Inc.  1998
Employee  Stock Purchase Plan and upon exercise of warrants  issued  pursuant to
purchases made under the Seitel, Inc. 1998 Employee Stock Purchase Plan.

     The second part contains information required in the Registration Statement
pursuant to Part II of Form S-8.

     Pursuant to Note to Part I of Form S-8, the Plan  Information  specified by
Part I is not being filed with the Securities and Exchange  Commission,  as such
information  will be sent or given to each  employee  participant  in accordance
with Rule 428 under the  Securities  Act of 1933,  as amended  (the  "Securities
Act").  This  information and the documents  incorporated by reference into this
Registration  Statement  pursuant  to Item 3 of  Part  II of  this  Registration
Statement,  taken together,  constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.
PROSPECTUS                        SEITEL, INC.
(Form S-3)
                                 812,500 Shares
                                  Common Stock
                           ($.01 Par Value Per Share)

                 SEITEL, INC. 1998 EMPLOYEE STOCK PURCHASE PLAN

     This Prospectus is being used in connection with the offering, from time to
time, by certain stockholders (the "Selling  Stockholders") of Seitel, Inc. (the
"Company")  of shares of common  stock,  $.01 par value per share  (the  "Common
Stock")  which may be  acquired  under the  Seitel,  Inc.  1998  Employee  Stock
Purchase  Plan (the  "Purchase  Plan") and upon exercise of warrant which may be
acquired under the Purchase Plan.

     The securities being registered hereby (the "Securities") may be sold, from
time to time,  by the  Selling  Stockholders,  directly or  indirectly,  through
agents  designated  from time to time, in one or more open market  transactions,
including block trades, on the New York Stock Exchange,  in privately negotiated
transactions,  or in a  combination  of such methods of sale.  Such sales may be
made through dealers or underwriters to be designated, on terms to be determined
at the time of sale,  or at prices  and at terms  then  prevailing  or at prices
related to the then current market price. In effecting sales, brokers or dealers
engaged by the Selling  Stockholders may arrange for other brokers or dealers to
participate.  Brokers or dealers will  receive  commissions  or  discounts  from
Selling Stockholders in amounts to be negotiated  immediately prior to the sale.
Such  brokers or dealers and any other  participating  brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the  "Securities  Act"),  in connection  with such sales. To the extent
required,  the specific  securities sold, the name of the Selling  Stockholders,
the purchase price,  public offering  price,  name of any such agent,  dealer or
underwriter,  and any  applicable  discount  or  commission  with  respect  to a
particular  offer  will  be set  forth  by  supplement  to this  Prospectus.  In
addition,  any  securities  covered by this  Prospectus  which  qualify for sale
pursuant  to Rule 144 may be sold under Rule 144 rather  than  pursuant  to this
Prospectus.  The Company will not receive any of the  proceeds  from the sale of
these  shares,  but will  receive  the  aggregate  exercise  price  of  warrants
exercised  under the  Purchase  Plan.  The  Company's  Common Stock is presently
listed on the New York Stock  Exchange under the symbol "SEI." The closing price
for the Common Stock on the New York Stock  Exchange on September 11, 1998,  was
$10.625.

         SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR
           CERTAIN MATTERS TO BE CONSIDERED BY PROSPECTIVE INVESTORS

               The date of this Prospectus is September 14, 1998.
THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE  COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

     No  person is  authorized  in  connection  with the  offering  made by this
Prospectus to give any information or to make any  representations not contained
or  incorporated  by  reference  in  this  Prospectus,  and any  information  or
representation  not contained or  incorporated  by reference in this  Prospectus
must  not be  relied  upon  as  having  been  authorized  by the  Company.  This
Prospectus is not an offer to sell, or a solicitation of an offer to buy, by any
person in any  jurisdiction  in which it is unlawful  for that person to make an
offer or solicitation.  Neither the delivery of this Prospectus or any sale made
under this Prospectus shall, under any circumstance, create any implication that
the  information in this  Prospectus is correct as of any time subsequent to the
date of this Prospectus.

AVAILABLE INFORMATION

     Seitel,  Inc. (the "Company") is subject to the informational  requirements
of the Securities  Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith,  files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission").  The
reports,  proxy statements and other  information  filed by the Company with the
Commission  can be  obtained  by mail from the Public  Reference  Section of the
Commission at Judiciary Plaza,  450 Fifth Street,  Room 1024,  Washington,  D.C.
20549, at prescribed  rates.  In addition,  such reports,  proxy  statements and
information may be inspected and copied at the  aforementioned  public reference
facility and at the Commission's  regional offices at Citicorp Center,  500 West
Madison Street, Suite 1400, Chicago,  Illinois 60661-2511,  and at 7 World Trade
Center,  13th Floor, New York, New York 10048. The Commission  maintains a world
wide web site on the Internet at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding registrants that file
electronically  with the Commission.  Such reports,  proxy  statements and other
information may also be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.

     The Company has filed with the  Commission a Registration  Statement  under
the Securities Act with respect to the  securities  offered by this  Prospectus.
This  Prospectus  does  not  contain  all of the  information  set  forth in the
Registration  Statement,  certain parts of which are omitted in accordance  with
the rules and regulations of the Commission.  Additional  information concerning
the  securities  offered  hereby is to be found in the  Registration  Statement,
including various exhibits  thereto,  which may be inspected at the Commission's
office in Washington, D.C.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The Company incorporates by reference into this Prospectus the following
documents and portions of documents:

1.   The Company's Annual Report on Form 10-K for the fiscal year ended December
     31, 1997, as amended by Form 10-K/A dated April 28, 1998, as filed with the
     Commission  on April 29, 1998 and by Form 10-K/A  dated June 10,  1998,  as
     filed with the Commission on June 12, 1998.

2.   The Company's  Quarterly Reports on Form 10-Q for the fiscal quarters ended
     March 31 and June 30, 1998.

3.   All  other  reports  filed  pursuant  to  Section  13(a)  or  15(d)  of the
     Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  since
     December 31, 1997.

4.   The  description of the Company's  Common Stock  contained in the Company's
     Registration  Statement  on Form 8-A,  dated March 27,  1991  (Registration
     Number 0-14488).

     All documents filed by the Company pursuant to Section 13(a),  13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Stock contemplated hereby shall be
deemed to be  incorporated  by reference  into this  Prospectus  and made a part
hereof from the  respective  dates of filing of such  documents.  Any  statement
contained  herein,  or in a  document  incorporated  or deemed  incorporated  by
reference  herein,  shall be deemed to be modified or superseded for purposes of
the  Registration  Statement and this  Prospectus to the extent that a statement
contained  herein or in any  subsequently  filed  document  which  also is or is
deemed to be incorporated herein modifies or supersedes such statement. Any such
statements so modified or superseded shall not be deemed,  except as so modified
or  superseded,  to  constitute  a part of the  Registration  Statement  or this
Prospectus.

     The  Company  will  provide  without  charge  to each  person  to whom this
Prospectus is delivered,  upon written or oral request of that person, a copy of
all other documents incorporated by reference into the Registration Statement of
which  this  Prospectus  is a part,  other  than  exhibits  to those  documents.
Requests  should be directed to Debra D. Valice,  Seitel,  Inc., 50 Briar Hollow
Lane,  West  Building,  7th  Floor,  Houston,  Texas  77027  (telephone:   (713)
881-8900).
RISK FACTORS

     Prospective  purchasers of the Common Stock should carefully  consider,  in
addition  to  the  other  information  contained  in  this  Prospectus  and  any
accompanying Prospectus Supplement, the following risk factors.

     Competition.  Competition in the seismic data licensing industry and in the
oil and gas  exploration  and  production  industry  is  intense.  A  number  of
independent  oil-service  companies create and market seismic data, and numerous
oil and gas companies  create  seismic data and maintain  their own seismic data
banks.  Due to difficult  industry  conditions  in recent  years,  the number of
independent  seismic  companies has  decreased,  and oil and gas companies  have
acquired an  increasing  portion of their  seismic  data from  outside  sources,
including the Company.  In the oil and gas exploration and production  business,
there are  numerous  oil and gas  companies  competing  for the  acquisition  of
mineral  properties.  Although the Company has significant  operating history in
its seismic data licensing  operations,  it has limited operating history in oil
and gas  exploration.  Some of the Company's  competitors  have longer operating
histories,  greater  financial  resources  and  larger  sales  volumes  than the
Company.  Although  the  Company  believes  that  its  fully-integrated  seismic
resources and technical,  geophysical  and marketing  expertise will allow it to
compete  effectively  in both  the  seismic  data  industry  and the oil and gas
exploration and development  industry,  there can be no assurance that this will
be the case.

     Industry  Conditions.   Demand  for  the  Company's  seismic  data  depends
primarily  upon the level of spending by oil and gas companies for  exploration,
production and  development  activities.  These spending levels tend to increase
and decrease with  increases  and decreases in the commodity  prices for oil and
gas, so that demand for the Company's seismic data is affected to some degree by
market prices for natural gas and crude oil, which have  historically  been very
volatile.  Revenues  generated  by the  Company's  oil and gas  exploration  and
development  business  increase and decrease with increases and decreases in the
market prices of oil and gas. A substantial  or extended  decline in oil and gas
prices could have a material adverse effect on the Company's financial position.
In  addition,  if oil and gas prices  decrease  materially,  the  Company may be
unable to find partners  willing to pay the relatively high costs of exploration
and  development and grant the Company an interest in production in exchange for
seismic  data.  Further,  as high quality 3D data becomes more widely  available
from  other  sources,  the  Company  may be unable to obtain  the same  level of
working  interests in oil and gas properties in exchange for use of its 3D data.
Also,  other  factors  beyond the  Company's  control may affect its oil and gas
operations.  These  factors  include the level of supply of natural gas and oil,
the availability of adequate  pipeline and other  transportation  and processing
facilities and the marketing of competitive  fuels.  See also  "Compliance  with
Governmental Regulations."

     Operating  Risks.  The  Company's  oil and gas  operations  are  subject to
hazards  incident  to the  drilling  of oil and gas  wells,  such as  cratering,
explosions,  uncontrollable flows of oil, gas or well fluids, fires,  pollution,
or  other  environmental  risks,  as well as to the  risk  that no  commercially
productive  natural  gas or oil  reserves  will be  encountered.  Some of  these
hazards  can  cause  personal  injury  and loss of life,  severe  damage  to and
destruction  of property and equipment,  environmental  damage and suspension of
operations. In addition, the cost of drilling, completing and operating wells is
often uncertain,  and drilling operations may be curtailed,  delayed or canceled
as a result of a variety of factors,  including  unexpected drilling conditions,
pressure or  irregularities  in  formations,  equipment  failures or  accidents,
weather  conditions and shortages or delays in the delivery of equipment.  These
risks are typically  shared by the Company and its petroleum  company  partners.
The Company also seeks to reduce dry hole risks by  utilizing  3D seismic  data,
where  deemed  appropriate,  to assist in the  determination  of where to drill.
However,  since the Company does not act as operator in its oil and gas drilling
business,  it is  dependent  upon its  petroleum  company  partners  to  conduct
operations in a manner so as to minimize these  operating  risks.  In accordance
with industry  practice,  the Company maintains  insurance against some, but not
all, of these operating risks. There can be no assurance that adequate insurance
will be  available  in the future,  or that the Company will be able to maintain
adequate  insurance on terms and conditions it finds acceptable.  As a result of
the risks  inherent in oil and gas  operations,  there can be no assurance as to
the success of the Company's oil and gas exploration, development and production
activities.

     Holding  Company  Structure.  The Company has no operations or  significant
assets  other  than  through  its   ownership  of  the  capital   stock  of  its
subsidiaries. Dividends and other permitted payments from such subsidiaries will
be the primary source of funds to pay dividends on the Common Stock.  The rights
of the Company and its creditors to  participate in the assets of any subsidiary
upon the latter's  liquidation  or  reorganization  will be subject to the prior
claims of the  subsidiary's  creditors except to the extent that the Company may
itself be a creditor with recognized claims against the subsidiary.

     Dependence on Key Personnel.  The Company's operations are dependent upon a
relatively small group of management and technical personnel. The loss of one or
more of these  individuals  could have a material adverse effect on the Company.
The Company utilizes equity ownership and other incentives to attract and retain
its employees. In addition, the Company's President and Chief Executive Officer,
Paul A. Frame,  Executive Vice President and Chief Operating Officer,  Horace A.
Calvert, and Senior Vice President-Finance and Chief Financial Officer, Debra D.
Valice, all have employment agreements with the Company.

     Geographic Concentration of Operations.  Most of the Company's seismic data
in its seismic data library, as well as most of the Company's existing interests
in oil and gas properties,  are located along the coast and offshore in the U.S.
Gulf of Mexico. Because of this concentration, any regional events that increase
costs,  reduce  availability  of equipment or supplies,  reduce  demand or limit
production  will impact the Company more adversely than if the Company were more
geographically diversified.

     Compliance  with  Governmental  Regulations.  The oil and gas  industry  in
general is subject to extensive  governmental  regulation,  which may be changed
from  time  to  time  in  response  to  economic  or  political  conditions.  In
particular,  oil and gas  exploration  and  production is subject to federal and
state regulations governing  environmental quality and pollution control,  state
limits on allowable  rates of  production by well or proration  unit,  and other
similar  regulations.  State and federal  regulations  generally are intended to
prevent waste of natural gas and oil,  protect rights to produce natural gas and
oil between owners in a common reservoir,  control the amount of natural gas and
oil  produced  by  assigning   allowable   rates  of   production   and  control
contamination  of the  environment.  Also,  the Company  believes that the trend
toward more  expansive  and stricter  environmental  laws and  regulations  will
continue.  The  implementation of new, or the modification of existing,  laws or
regulations  affecting  the oil and gas industry  could have a material  adverse
impact on the Company.

     Shares  Eligible  for  Future  Sale.  No  prediction  can be made as to the
effect,  if any, that future sales of shares of the Company's  capital stock, or
the  availability  of shares of capital  stock for future  sale will have on the
market  price of such  stock  prevailing  from time to time.  Almost  all of the
4,500,105  shares of Common  Stock  currently  held by or  issuable  pursuant to
options,  warrants  and  other  rights  granted  prior  to the date  hereof  and
exercisable  within 60 days of the date hereof to the  Company's  directors  and
executive officers are eligible for sale currently or immediately upon exercise.
Sales of substantial  amounts of Common Stock (including  shares issued upon the
exercise of stock options or warrants),  or the perception that such sales could
occur, could adversely affect prevailing market prices for the Common Stock.

                DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION

     This Prospectus includes "forward-looking statements" within the meaning of
Section  27A of the  Securities  Act and Section 21E of the  Exchange  Act.  All
statements   other  than  statements  of  historical   facts  included  in  this
Prospectus,  including without  limitation,  statements  regarding the Company's
financial  position,   business  strategy,  budgets,  plans  and  objectives  of
management  for future  operations  are  forward-looking  statements.  The words
"anticipate,"  "believe,"  "expect,"  "plan," "intend,"  "estimate,"  "project,"
"will,"  "could," "may," "predict" and similar terms and phrases are intended to
identify  forward-looking   statements.   These  statements  involve  risks  and
uncertainties  that may cause actual future activities and results of operations
to be materially different from those suggested or described in this Prospectus.
Although  the  Company  believes  that  the   expectations   reflected  in  such
forward-looking  statements are  reasonable,  it can give no assurance that such
expectations will prove to have been correct. Important factors that could cause
actual results to differ materially from the Company's expectations ("Cautionary
Statements")   are  disclosed   under  "Risk  Factors"  and  elsewhere  in  this
Prospectus.  Should one or more of these risks or uncertainties materialize,  or
should  underlying   assumptions  prove  incorrect,   actual  results  may  vary
materially from those expected,  estimated or projected.  All subsequent written
and oral  forward-looking  statements  attributable  to the Company,  or persons
acting  on  its  behalf,  are  expressly  qualified  in  their  entirety  by the
Cautionary Statements.
THE COMPANY

     The Company and its subsidiaries,  located in Houston, Texas, are a leading
provider of seismic data and related  geophysical  services and expertise to the
petroleum  industry.  The Company has evolved into a diversified  energy concern
with several niche operations,  including one of the largest independent seismic
data libraries in the United States;  three-dimensional  seismic data processing
and  interpretation   technology;   and  direct  participation  in  exploration,
development and ownership of natural gas and crude oil reserves.

     Since  its  inception  in  1982,  the  Company  has  been  engaged  in  the
development  of a  proprietary  library  of  seismic  data,  created by both the
Company and others.  The Company's seismic data library is owned and marketed by
Seitel Data,  Ltd., a Texas limited  partnership  of which  wholly-owned  Seitel
subsidiaries  constitute all of the limited and general  partners.  Seitel Data,
Ltd. markets the data library, which consists of both two-dimensional ("2D") and
three-dimensional   ("3D")  data,  to  oil  and  gas  companies   under  license
agreements.   Seismic   surveys  and  the  analysis  of  seismic  data  for  the
identification and definition of underground geological structures are principal
techniques  used in oil and gas  exploration  and  development  to determine the
existence and location of subsurface hydrocarbons.

     The Company's  integrated  seismic data operations include its large 2D and
3D seismic library,  its seismic data processing  center and computer  software,
and the Company's geophysical application experience in interpreting 3D data.

     In March  1993,  the Company  formed DDD Energy,  Inc.  ("DDD  Energy"),  a
wholly-owned  subsidiary,  to  participate  directly in  petroleum  exploration,
development  and  ownership  of  hydrocarbon  reserves  through cost and revenue
sharing relationships with oil and gas producers.  The Company's objective is to
participate  through DDD Energy in exploration  and  development  programs which
combine  the  Company's  3D and 2D seismic  resources  and  related  geophysical
technologies  with the geology and  engineering  expertise and land positions of
selected petroleum producers.

                                USE OF PROCEEDS

     The Company will not receive any part of the proceeds  from the sale of the
shares of Common Stock by the Selling  Stockholders.  The Company will, however,
receive the exercise price of warrants  under the Purchase Plan,  which warrants
must be exercised before the Selling Stockholders can sell certain of the shares
offered hereunder.  The exercise price of the warrants will be determined at the
time such options are purchased by the Selling  Stockholders  under the Purchase
Plan. The Company intends to use the proceeds from the exercise of such warrants
for general corporate purposes.
COMMON STOCK OFFERED BY THE SELLING STOCKHOLDERS

     This  Prospectus  covers  offers,  from time to time, of a total of 812,500
shares of Common Stock that may be  purchased  by officers and  directors of the
Company  pursuant to the Company's  Purchase Plan or pursuant to the exercise of
warrants under the Purchase Plan.

                              SELLING STOCKHOLDERS

     This  Prospectus  may be used by officers and  directors of the Company for
the  resale of up to 812,500  shares of Common  Stock that may be issued to them
pursuant to the  Purchase  Plan and upon  exercise  of warrants  pursuant to the
Purchase Plan. As of the date hereof, no shares had been acquired by officers or
directors of the Company  pursuant to the Purchase Plan and no warrants had been
acquired by officers or directors  under the Purchase  Plan.  If and when any of
the  812,500  shares  of Common  Stock are  issued  to  officers  or  directors,
including  issuances  upon  exercise of warrants  under the Purchase  Plan,  are
sought to be  offered  for  resale by the  Selling  Stockholders,  the number of
shares of Common  Stock  beneficially  owned by each  Selling  Stockholder,  the
number of shares acquired pursuant to the Purchase Plan, including the number of
shares that may be acquired upon  exercise of warrants  pursuant to the Purchase
Plan,  and the number of shares offered for resale  pursuant to this  Prospectus
will be indicated by Prospectus Supplement.

                              PLAN OF DISTRIBUTION

     All  Securities  covered  by this  Prospectus  are  being  offered  for the
accounts of the Selling  Stockholders.  The Securities may be sold, from time to
time,  in one or more  transactions  at a fixed  offering  price,  which  may be
changed,  at  varying  prices  determined  at the  time of sale,  at terms  then
prevailing  or at  prices  related  to  the  then  current  market  price  or at
negotiated  prices.  The  Securities  may be  sold in one or  more  open  market
transactions  on  the  New  York  Stock  Exchange  or  in  privately  negotiated
transactions.  The Securities may be sold by various methods, including, but not
limited to, one or more of the  following:  a block trade in which the broker or
dealer so engaged will attempt to sell  Securities 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 the broker or dealer
for its own account pursuant to this  Prospectus,  a transaction on the New York
Stock  Exchange in  accordance  with the rules of such  exchange,  and  ordinary
brokers   transactions  and  transactions  in  which  the  broker  solicits  the
purchasers.  Alternatively,  the Selling Stockholder may from time to time offer
the  securities  through  underwriters,   dealers  or  agents  who  may  receive
compensation in the form of underwriting discounts,  concessions, or commissions
from the Selling  Stockholders and/or purchasers of Securities for whom they act
as agents. In addition, any of the Securities which qualify for sale pursuant to
Rule 144 under the  Securities  Act,  or  otherwise  pursuant  to an  applicable
exemption  under the  Securities  Act,  may be sold other than  pursuant to this
Prospectus.

     The Selling Stockholders and any such underwriters,  dealers or agents that
participate in the  distribution of Securities may be deemed to be underwriters,
and  any  profit  on the  sale of the  Securities  by  them  and any  discounts,
commissions  or  concessions  received by them may be deemed to be  underwriting
discounts and commissions under the Securities Act. Brokers or dealers acting in
connection  with the sale of the Securities  contemplated by this Prospectus may
receive commissions in connection therewith.

     At the  time a  particular  offer of  Securities  is  made,  to the  extent
required,  a  supplement  to this  Prospectus  will be  distributed  which  will
identify the Selling  Stockholders,  identify and set forth the aggregate amount
of Securities being offered and the terms of the offering, including the name or
names of any  underwriters,  dealers or agents,  the purchase  price paid by any
underwriter  for  Securities  purchased  from  the  Selling   Stockholder,   any
discounts,  commissions  and  other  items  constituting  compensation  from the
Selling  Stockholder  and any discounts,  commissions or concessions  allowed or
re-allowed  or paid to dealers,  including  the  proposed  selling  price to the
public.  Such supplement to this Prospectus and, if necessary,  a post-effective
amendment to the Registration  Statement of which the Prospectus is a part, will
be filed with the Commission to reflect the disclosure of additional information
with respect to the distribution of the Securities.  The Company will pay all of
the expenses  incident to the registration and certain other expenses related to
this  offering  of the  Securities,  other  than  underwriting  commissions  and
discounts,  normal commission  expenses and brokerage fees,  applicable transfer
taxes and attorneys' fees of Selling Stockholders' counsel.

     The  Company  intends to require  the  Selling  Stockholders  to enter into
indemnification  agreements with the Company  pursuant to which the Company will
be  indemnified  against  failure  by the  Selling  Stockholders  to  deliver  a
Prospectus if required, as well as against certain civil liabilities,  including
liabilities under the Securities Act or the Exchange Act, incurred in connection
with any untrue (or alleged untrue)  statement of a material fact or omission of
a  material  fact in  this  Registration  Statement  pursuant  to an  applicable
Prospectus  Supplement  to the extent  such  liability  relates  to  information
supplied by the Selling Stockholder for inclusion in the Registration  Statement
pursuant to an applicable Prospectus Supplement.

     In order to comply with certain states' securities laws, if applicable, the
Securities  will be  sold  in such  jurisdictions  only  through  registered  or
licensed brokers or dealers.  In certain states,  the Securities may not be sold
unless the Securities  have been registered or qualified for sale in such state,
or unless an exemption from  registration or  qualification  is available and is
obtained.

                                 LEGAL MATTERS

     The  validity  of the  Securities  will be passed  upon for the  Company by
Gardere Wynne Sewell & Riggs, L.L.P., Houston, Texas.

                                    EXPERTS

     The financial  statements  incorporated  by reference in this  registration
statement  have  been  audited  by  Arthur  Andersen  LLP,   independent  public
accountants,  as  indicated  in their  reports  with  respect  thereto,  and are
incorporated by reference  herein in reliance upon the authority of said firm as
experts in giving said reports.
The estimate of natural gas  reserves  contained  in the  Company's  Annual
Report on Form 10-K for the year ended  December  31, 1997,  was  obtained  from
reserve  reports dated as of January 1, 1998 prepared by Miller and Lents,  Ltd.
and dated January 1, 1998 prepared by Forrest A. Garb &  Associates,  Inc.,  and
are incorporated  herein in reliance upon the authority of said firms as experts
in such matters.

                                    PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3:  Incorporation  of Documents by Reference.  The Company  incorporates by
     reference into this  Registration  Statement the following  documents which
     have been or will be filed by the Company with the  Securities and Exchange
     Commission (the "Commission"):

          1. The Company's  Annual Report on Form 10-K for the fiscal year ended
     December 31, 1997, as amended by Form 10-K/A dated April 28, 1998, as filed
     with the  Commission on April 29, 1998, and as amended by Form 10-K/A dated
     June 10, 1998, as filed with the Commission on June 12, 1998.

          2.  The  Company's  Quarterly  Reports  on Form  10-Q  for the  fiscal
     quarters ended March 31 and June 30, 1998.

          3. All other reports  filed  pursuant to Section 13(a) or 15(d) of the
     Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  since
     December 31, 1997.

          4. The  description  of the  Company's  Common Stock  contained in the
     Company's  Registration  Statement  on  Form  8-A,  dated  March  27,  1991
     (Registration Number 0-14488).

     In addition,  all documents  subsequently  filed by the Company pursuant to
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which de-registers all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration  Statement and to be a part
hereof from the date of filing of such documents.

     Any  statement  contained in a document  incorporated  by reference  herein
shall be deemed to be modified or superseded for purposes of this  Prospectus to
the extent  that a  statement  contained  herein  modifies  or  supersedes  such
statement.  Any such  statement so modified or  superseded  shall not be deemed,
except as so modified or superseded, to constitute part of this Prospectus.

Item 4: Description of Securities.

Units
-----

     Each unit  consists of one share of Common Stock and one Warrant.  The Plan
authorizes the issuance of 2,388,000  shares of Common Stock, of which 1,194,000
are issuable  pursuant to the  exercise of the  1,194,000  Warrants  that may be
issued under the Plan.

Terms of Warrants
-----------------

     Each Warrant entitles the holder to purchase one share of Common Stock at a
price equal to one hundred twelve and one-half percent (112 1/2%) of the average
of the  closing  prices  of one  share of  Common  Stock  on the New York  Stock
Exchange on the 10 trading days before the Closing Date (as such term is defined
in the Plan) rounded up to the next one-quarter of one dollar. The Warrants will
expire on the earlier of (i) the date that is five years after the Closing Date,
(ii) the date that is five business days after  termination of employment if the
original  purchaser of the Warrant from the Company  ceases to be an employee of
the Company or a subsidiary of the Company for any reason (other than for death,
disability  or  retirement  after the age of 65),  or (iii) the date that is one
year after the death,  disability  or  retirement  after age 65 of the  original
purchaser  of the Warrant from the Company if he ceases to be an employee of the
Company or a Subsidiary because of death, disability or retirement after age 65.

Exercise of Warrants
--------------------

     A Warrant may be exercised  only by a holder during his lifetime,  or after
his disability by his legal  representative on his behalf, or after his death by
his personal  representative or estate or the person or persons entitled thereto
under his will or under the laws of descent and distribution.

     Warrants may be  exercised in whole or part at any time,  within the period
permitted for exercise  thereof.  Warrants  must be exercised by written  notice
with  respect to a specified  number of shares  delivered  to the Company at its
principal office, together with payment in full to the Company for the number of
shares of Common Stock to be purchased pursuant to the exercise of the Warrant.

     Upon any exercise of a Warrant,  the holder must pay the full amount of the
exercise price in cash at the time of the exercise.  Holders will not be or have
any of the rights or privileges  of a  stockholder  of the Company in respect of
any Shares  purchasable  upon the  exercise of any part of a Warrant  unless and
until  certificates  representing  such  Shares  shall  have been  issued by the
Company to such holders after exercise of a Warrant.

     A Warrant is  exercisable  only if the issuance of Common Stock pursuant to
the  exercise  would be in  compliance  with  applicable  securities  laws.  The
Warrants further provide that the holder  exercising a warrant shall pay or make
provisions  satisfactory  to the Company for the payment of certain  taxes which
the Company may be obligated to collect upon exercise.

Adjustments
-----------

     The number of shares of Common Stock  issuable upon exercise of outstanding
Warrants,  and the exercise price of such Warrants,  is subject to adjustment by
the Board of  Directors  of the  Company,  acting in good faith,  to reflect any
stock   dividend,   stock  split,   share   combination,   exchange  of  shares,
recapitalization, merger, consolidation, separation, reorganization, liquidation
or the like,  of or by the  Company.  If the Company is a party to any merger or
similar transaction and is the surviving  corporation,  the Warrants will not be
affected.  If (i) the Company sells all or substantially all of its assets, (ii)
is a  party  to a  merger  or  similar  transaction  and  is not  the  surviving
corporation,  or (iii)  another  company  makes a tender  offer for stock of the
Company, then the Company may, at its election,  (a) reach an agreement with the
purchaser in that  transaction that the purchaser will assume the obligations of
the Company under the Warrants;  (b) reach an agreement  with the purchaser that
the purchaser will convert the Warrants into warrants of at least equal value as
to stock of the  purchaser;  or (c) not later than thirty (30) days prior to the
effective  date of the  transaction,  notify the holder of the  Warrants  of the
proposed  transaction  and afford the holders of the Warrants the right prior to
such transaction to exercise the Warrants, which exercise may be contingent upon
consummation of the transaction. 

Restrictions on Transfer of Warrants
------------------------------------

     Warrants  are not be  transferable  other  than  by will or by the  laws of
descent  and  distribution,  except  that  Warrants  may be  transferred  by the
original  purchaser of the Warrant from the Company to members of his  immediate
family who are U.S.  residents or to trusts or business  entities formed for the
benefit of members of his immediate  family who are U.S.  residents.  "Immediate
family" means your parents,  children,  grandchildren,  or spouse. A Warrant may
not be  subsequently  transferred by such immediate  family member other than by
will or by the laws of descent and distribution.  If a Warrant is transferred to
an immediate family member, the Company may require  investment  representations
upon exercise of the Warrant and may impose such conditions upon the exercise of
the Warrant as may be required to comply with federal and state securities laws,
and the  Shares of Common  Stock  issuable  upon  exercise  of a Warrant by such
immediate  family member may be  "restricted  shares" as such term is defined in
Rule 144 under the  Securities  Act of 1933,  as amended,  and may contain  such
restrictive legends as may be deemed necessary by the Company.

Item 5: Interests of Named Experts and Counsel. Not applicable.

Item 6: Indemnification of Directors and Officers. Section 145(a) of the General
Corporation  Law of the  State  of  Delaware  (the  "General  Corporation  Law")
provides,  in general,  that a corporation shall have 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,  whether civil,
criminal,  administrative  or  investigative  (other than an action by or in the
right of the corporation), by reason of the fact that he is or was a director or
officer of the corporation.  Such indemnity may be against  expenses  (including
attorneys' fees),  judgments,  fines and amounts paid in settlement actually and
reasonably incurred in connection with such action,  suit or proceeding,  if the
indemnitee acted in good faith and in a manner  reasonably  believed to be in or
not opposed to the best  interests of the  corporation  and, with respect to any
criminal action or proceeding, the indemnitee must not have had reasonable cause
to believe his conduct was unlawful.

     Section 145(b) of the General Corporation Law provides,  in general, that a
corporation  shall have 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 or suit by or in the right of the  corporation  to procure a judgment  in
its favor by reason of the fact that he is or was a  director  or officer of the
corporation against expenses (including attorneys' fees) actually and reasonably
incurred by him in  connection  with the defense or settlement of such action or
suit if he acted in good faith and in a manner he  reasonably  believed to be in
or not opposed to the best interest of the corporation;  provided, however, that
if the person is found to be liable to the corporation, no indemnification shall
be made except to the extent that the court determines that  indemnification  is
fair and reasonable under the circumstances.

     Section 145(g) of the General Corporation Law provides,  in general, that a
corporation shall have power to purchase and maintain insurance on behalf of any
person  who is or was a  director  or officer  of the  corporation  against  any
liability  asserted  against him or incurred by him in any capacity,  or arising
out of his status as such,  whether or not the corporation  would have the power
to indemnify him against such liability under the provisions of the law.

     Article Eighth of the Registrant's Certificate of Incorporation and Section
Six of the  Registrant's  Bylaws  give a  director  or  officer  the right to be
indemnified  by the Registrant to the fullest  extent  permitted  under Delaware
law.

Item 7: Exemption From Registration Claimed. [Not Applicable.]

Item 8: Exhibits:

     4.1  Seitel,  Inc. 1998 Employee  Stock  Purchase  Plan  including  Form of
          Common Stock Purchase Warrant.*

     5.1  Opinion of Gardere Wynne Sewell & Riggs,  L.L.P., legal counsel to the
          Company.*

     23.1 Consent of Arthur Andersen LLP.*

     23.2 Consent of Miller and Lents, Ltd.*

     23.3 Consent of Forrest A. Garb & Associates, Inc.*

     23.4 Consent of Gardere, Wynne, Sewell & Riggs, L.L.P. (included in Exhibit
          5.1).

     24.1 Power of Attorney (included on Signature Page).

* filed herewith

Item 9: Undertakings. The undersigned registrant hereby undertakes:

          (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement:

               (i) To include any prospectus required by section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  registration  statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          in the  registration  statement.  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  may be  reflected  in the form of
          prospectus  filed with the  Commission  pursuant to Rule 424(b) if, in
          the aggregate,  the changes in 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;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  registration
          statement  or  any  material   change  to  such   information  in  the
          registration statement.

          provided,  however, that paragraphs (1)(i) and (1)(ii) do not apply if
     the registration  statement is on Form S-3 or Form S-8, and the information
     required to be included in a  post-effective  amendment by those paragraphs
     is  contained  in  periodic  reports  filed by the  registrant  pursuant to
     section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
     incorporated by reference in the registration statement.

          (2) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment 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.

          (3) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     The  undersigned   registrant  hereby  undertakes  that,  for  purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
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.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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  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 Act and will be governed by the final adjudication of
such issue.
SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the  City of  Houston,  State  of  Texas,  on this  14th  day of
September, 1998.
                                   SEITEL, INC.

                                   BY:  /s/Paul A. Frame
                                      ------------------------------------------
                                   PAUL A. FRAME, President, Chief Executive 
                                   Officer and Director (principal executive 
                                   officer)

                                   BY:  /s/ Debra D. Valice
                                      ------------------------------------------
                                   DEBRA D. VALICE, Senior Vice President of 
                                   Finance, Chief Financial Officer and Director
                                   (principal financial and accounting officer)

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been  signed by the  following  individuals  in the
capacities and on the date indicated.  Each person whose signature appears below
constitutes  and  appoints  Paul A.  Frame and Debra D.  Valice  true and lawful
attorneys-in-fact   and  agents,   each  acting  alone,   with  full  powers  of
substitution and  re-substitution,  for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments)  to this  Registration  Statement,  and to file the  same,  with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents,  each acting alone, full powers and authority to do and perform each and
every  act and  thing  requisite  and  necessary  to be done  in and  about  the
premises,  as  fully  to all  intents  and  purposes  as he might or could do in
person,  hereby  ratifying and  confirming all that said  attorneys-in-fact  and
agents, each acting alone, or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities indicated on September 14, 1998. 

          Signature                                  Title
          ---------                                  -----

/s/Herbert M. Pearlman
------------------------------------
HERBERT M. PEARLMAN                     Chairman of the Board of Directors

/s/Paul A. Frame
------------------------------------
PAUL A. FRAME                           President, Chief Executive Officer
                                        and Director

/s/Horace A. Calvert
------------------------------------
HORACE A. CALVERT                       Executive Vice President,
                                        Chief Operating Officer and Director

/s/Debra D. Valice
------------------------------------
DEBRA D. VALICE                         Senior Vice President of Finance,
                                        Chief Financial Officer and Director

/s/David S. Lawi
------------------------------------
DAVID S. LAWI                           Director

/s/Walter M. Craig, Jr.
------------------------------------
WALTER M. CRAIG, JR.                    Director

/s/Fred S. Zeidman
------------------------------------
FRED S. ZEIDMAN                         Director

/s/John E. Stieglitz
------------------------------------
JOHN E. STIEGLITZ                       Director

/s/William Lerner
------------------------------------
WILLIAM LERNER                          Director
Index of Exhibits

 Exhibit                         Document                                   Page
 -------                         --------                                   ----

  4.1    Seitel,  Inc. 1998 Employee  Stock  Purchase Plan  including
         Form of Common Stock Purchase Warrant. 

  5.1    Opinion of  Gardere,  Wynne,  Sewell & Riggs,  L.L.P., legal
         counsel to the Company. 

  23.1   Consent of Arthur Andersen L.L.P.

  23.2   Consent of Miller and Lents, Ltd. 

  23.3   Consent of Forrest A. Garb & Associates, Inc. 

  23.4   Consent of Gardere,  Wynne, Sewell & Riggs, L.L.P. (included
         in Exhibit 5.1).

  24.1   Power of Attorney (included on Signature Page).