David M. Demshur - Core Laboratories NV Gwendolyn Y. Schreffler - Core Laboratories NV Christopher S. Hill - Core Laboratories NV Lawrence Bruno - Core Laboratories NV.

James Wicklund - Credit Suisse James West - Evercore ISI Sean C. Meakim - JPMorgan Securities LLC George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc..

Good day, and welcome to the Core Lab Q2 2018 Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to David Demshur, Chairman and CEO of Core Laboratories. Please go ahead..

Thanks, Kelly. Good morning in North America, good afternoon in Europe and good evening in Asia-Pacific. We'd like to welcome all of our shareholders, analysts and most importantly, our employees, to Core Laboratories' second quarter 2018 earnings conference call.

This morning I am joined by Dick Bergmark, Core's Executive Vice President; Monty Davis, Core's COO; Chris Hill, Core's CFO; Gwen Schreffler, Core's Head of IR; and Larry Bruno, Core's President, who will be giving a detailed operational review. The call will be divided into five segments.

Gwen will start by making remarks regarding forward-looking statements. Then we'll review the current macro environment, updating industry trends that should be beneficial to Core. We will then review Core's three financial tenets, which the company employs to build long-term shareholder value.

Chris will then follow with a detailed financial overview and additional comments regarding building shareholder value. This will be followed by Gwen, discussing Core's third quarter 2018 outlook and a general industry outlook as it pertains to Core's prospects.

And then Larry will go over Core's two operating segments, detailing our progress and discussing the successful introduction of new Core Lab technologies and then highlighting some of Core's operations and major projects worldwide. Then we'll open the phones for a Q&A session.

I'll now turn it back over to Gwen for remarks regarding forward-looking statements.

Gwen?.

Before we start the conference call this morning, I'll mention that some of the statements that we make during this call may include projections, estimates and other forward-looking information. This would include any discussion of the company's business outlook.

These types of forward-looking statements are subject to a number of risks and uncertainties relating to the oil and gas industry, business conditions, international markets, international political climate, and other factors including those discussed in our 1934 Act filings that may affect our outcome.

Should one or more of these risks or uncertainties materialize or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A – Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as well as other reports and registration statements filed by us with the SEC and the AFM. Our comments include non-GAAP financial measures.

Reconciliation to the most directly comparable GAAP financial measures is included in the press release announcing our second quarter results. Those non-GAAP financial measures can also be found on our website. With that said, I'll pass the discussion back to Dave..

Thanks, Gwen. First some industry investment trends that are taking place. Core is encouraged that operating companies are buying into living within free cash flow and emphasizing returns on invested capital as demanded by today's investors.

This trend should benefit Core, whose clients tend to be more technologically sophisticated and are heavy users of technology over commodity-driven solutions offered by drillers, pressure pumpers and wireline providers. Now for the macro operating environment.

Projected 2018 U.S.-related CapEx is still running approximately 40% below 2014 peak levels when record amounts of capital was being destroyed leading to over 130 U.S. E&P bankruptcies. Core projects that the U.S.

will drill 18,000 less wells in 2018 when compared to 2014, but still add approximately 1.6 million barrels to its production base of 9.2 million barrels per day from May of 2017.

The industry is drilling fewer, but better wells, more efficient wells and wells that benefit Core Lab as E&Ps are high-grading reservoir quality to Tier 1 zones and employing new Core Lab technologies like our Digital Rock Characterization Services, our digital analytics, Core's FLOWPROFILER engineered delivery systems and our HERO PerFRAC completion systems to name a few.

A new emerging trend will be the upsizing of well spacing in more mature regions as we learn more and more about the deleterious effects of down spacing on parent-child well relationships. Several operators, including Pioneer Natural Resources, have already signaled this trend.

The industry will continue to add perf clusters per stage, yielding less stages, while lateral lengths are nearing maximum levels owing to frictional forces. Perf clusters per stage could increase from 5 to 6 to as many as 15 per stage, reducing the time and cost for well completion and stimulation program owing to a lesser and lower stage count.

Pad sizes are said to further increase with as many as 24 or more wells per pad being drilled. This will add to DUCs over the next year, as operators will only frac the pad after all wells have been drilled.

We are starting to observe the use of micro proppants in complex completions with some 200-mesh sand being incorporated into some stimulation programs. Core continues to test the effectiveness of both 200- and 400-mesh sand in these upcoming complex completions.

Core's clients see the largest potential increases in their ROICs, tied to boosting recovery rates from unconventional reservoirs. Extensive proprietary studies and joint industry projects have shown great promise, with some recovery factors increasing from an average of about 9% into the low and mid-teens.

Utilizing EOR in unconventional reservoirs has the potential to add 500,000 barrels of oil over the life of a well that originally had a type curve of 1 million barrels for an incremental CapEx spend of about $2 million. That's a real ROIC winner.

Core's testing shows that every formation and basin will have unique designs needed for EOR in unconventional reservoirs to be successful. The engineered gases that enable greater recovery rates will require extensive testing and specifications, services that are only available from Core Lab today.

The latest and most important trend for Core is that client discussions have continued to increase for international and deepwater longer-cycle projects that will be needed to meet future production demands. The foreshadow of this increase in activity has been evident in the 20 FIDs approved in 2017, with another 25 to 30 expected in 2018.

Revenue from these longer-cycle projects have been mainly absent from Core's Reservoir Description revenue streams dating back to 2015, and should start to bolster Reservoir Description revenue late in 2018. Core's revenue opportunity usually occurs three to four quarters after an FID has been sanctioned.

Remember a rig needs to be mobilized, wells need to be drilled, and then cores and fluids can be sampled from the reservoir zones to be analyzed by Core in its Reservoir Description laboratories. Q1 2018 Reservoir Description results did mark the bottom of the international and deepwater cycle.

Increases in global demand, increases in net decline curve rates and decreases in global inventories that have been occurring since July of 2016, coupled with steeply falling production in Mexico, Venezuela, Colombia, Angola, China and the North Sea, has tightened global markets to the point where longer-dated barrels on the futures curve have to increase in price to ensure greater international and deepwater investment for future supply.

To note, Brent crude has recently reverted to contango status after being in backwardation for over a year. Remember that the decline curve always wins and it never sleeps. Now to review the three financial tenets by which Core used to build shareholder value over our 22-year-plus history of being a publicly traded company.

During the second quarter of 2018, Core generated $19,500,000 in free cash flow and converted 11% of every revenue dollar into free cash, the highest in all oilfield services. The dip in 1H free cash flow is typical, as operations consume working capital in anticipation of growing their businesses throughout 2018 and into 2019.

And once again, Core produced the oilfield industry-leading return on invested capital for the 35th consecutive quarter, with an ROIC of 28%, over double Core's weighted average cost of capital. Core's 28% ROIC is over three times that of any other company listed in the OSX.

Also, during the second quarter of 2018, Core returned over $24 million back to our shareholders via our quarterly dividend and some small shareholder repurchases. Core will continue to return all excess capital back to our shareholders in future quarters via quarterly dividends and opportunistic share repurchases.

I will now turn it back over to Chris for a detailed financial review.

Chris?.

Thanks, David. Before I begin, I would like to remind everyone that our guidance provided on June 29 and past calls specifically excluded the impact of any FX gains or losses and assumed an effective tax rate of 15% for the second quarter.

So accordingly our discussion today excludes any foreign exchange gain or loss for current and prior periods and is also reflective of results from continuing operations. Now looking at the income statement, revenues from continuing operations were $175.5 million in the second quarter, up 11% year-over-year from Q2 2017.

And this growth is primarily attributable to our business in North America. Of this revenue, service revenue, which is more international, was $122.1 million for the quarter, up $5 million year-over-year, which is over a 4% increase from the same quarter last year.

Product sales, which is tied more to North American activities, were $53.4 million for the quarter, an increase of over 29% or $12.1 million year-over-year. Our product sales revenue is primarily driven by completions of wells in the North American market. And more specifically the activity associated with the completion of each stage in a wellbore.

We continue to benefit from the increasing completion activity in the U.S. and our clients' acceptance of our new products such as our HERO PerFRAC perforating system. Moving on to cost of services at 71% of service revenue, remained relatively consistent year-over-year and from the previous quarters.

Cost of sales in the second quarter was 69% of product sales revenue, which continues to improve and has significantly improved from the 81% for the same quarter last year. We continue to see improvements in our operating leverage and the absorption of our fixed costs on higher levels of product sales.

G&A for the quarter was $12.2 million, which is consistent with the last few quarters. We expect G&A to be around $50 million for the full year. Depreciation and amortization for the quarter was $5.9 million, and comparable with the last several quarters. Depreciation expense is expected to be approximately $24 million to $25 million for the full year.

EBIT ex-items for the quarter was $34.1 million, up over 23% from prior year and continues to represent best-in-class EBIT margins of 19%. GAAP EBIT for the quarter was $33.4 million. Income tax expense for the quarter was $4.6 million using an effective tax rate of 15% and was $5 million on a GAAP basis.

As discussed in prior earnings calls, the effective tax rate will continue to be somewhat sensitive to the geographic mix of earnings across the board. Net income from continuing operations ex-items for the quarter was $26.2 million, up 23% or $4.9 million from $21.3 million in the second quarter of last year.

GAAP net income for the quarter was $24.8 million. Earnings per diluted share from continuing operations ex-items was $0.59 and GAAP EPS was $0.57 for the quarter. Now we'll move on to significant aspects of the balance sheet.

Receivables stood at $136.1 million, up from $133.1 million at last year end, and importantly our DSOs showed a slight improvement for the quarter at 67 days.

Inventory at $39.9 million is up $3.4 million sequentially as demand for products continues to expand and we made some bulk purchases of raw materials during the quarter in anticipation of potential tariffs.

Inventory turns have remained consistent in the first half of 2018 and we expect our inventory turns to show improvement throughout the remainder of the year. And now to liability side of the balance sheet. Our long-term debt ended the quarter at $242 million, up from $227 million at year-end.

On June 19, we amended and extended our revolving credit facility for an additional five years under substantially the same terms as our previous agreement. The new facility has a capacity of $300 million with an accordion option to increase the facility an additional $100 million.

Looking at cash flow, in the second quarter, cash flow from operating activities was $27 million. And after paying for our $7.5 million in CapEx, our free cash flow in the quarter was $19.5 million.

We expect capital expenditures for the year to be around $20 million and we will continue to adhere to our strict capital discipline as we evaluate the capital expenditure opportunities throughout the year based on client demand.

Our free cash flow conversion ratio, which is free cash flow divided by net income, continues to be one of the highest in the industry at 78% for the quarter and the first half of 2018. Additionally, we would expect our free cash flow conversion to improve for the second half of 2018.

We believe this is an important metric for shareholders when comparing companies' financial results, particularly for those shareholders who utilize discounted cash flow models to assess valuations. I will now turn it over to Gwen for an update on our guidance and outlook..

based on our guidance, the Production Enhancement segment's historical recovery incrementals of 60%-plus are implied in the Q3 guidance. And with that guidance, we'll turn the call over to Larry for an operational review..

Thanks, Gwen. First I'd like to thank our 4,600 employees around the globe for providing innovative solutions, integrity and superior service to our clients. Our employees are the engine that keeps Core Lab running.

Looking first at Reservoir Description, as described in the Q1 commentary, Core Lab received several cores from discovery wells drilled on the North Slope of Alaska. These cores are now in the lab undergoing basic and advanced rock property testing that will define the geological and petrophysical properties of the reservoir zones.

This analytical program, which includes many reservoir stress condition and laboratory experiments, will continue over the next several quarters. While these traditional lab tests are being conducted, the client is making use of early time petrophysical parameters generated by Core's proprietary Digital Rock Characterization services.

With this technology, lithology, porosity and geomechanical data were generated within days of the core reaching the lab. Core continues to see increasing demand for various enhanced oil recovery solutions that require its proprietary reservoir conditioning techniques and state-of-the-art lab testing capabilities.

Both conventional and unconventional reservoirs are being addressed to identify EOR opportunities. For example in Core's Aberdeen facility, the rock and reservoir fluids labs are working on a project for an E&P major that is an industry leader in carbon capture and storage.

The goal of the project is to reduce CO2 emissions by identifying and capturing CO2 produced from the reservoir within their production stream, then separating out that CO2 and reinjecting the CO2 back into crude oil bearing reservoir zones in their North Sea fields.

Core is helping the client understand how the CO2 injection will affect the chemical and physical properties of the reservoir fluid, as well as determining the optimum pressure for CO2 injection so as to maximize the incremental barrels of oil that can be recovered by this EOR process.

In the second quarter, Core also saw increasing adoption of reservoir-condition engineered gas injection laboratory experiments as a means to validate EOR opportunities in unconventional reservoirs. These laboratory programs employ specialized analytical devices that are proprietary to Core Lab.

Core has both single client and multi-company lab-based projects underway for a variety of its technologically sophisticated clients that are assessing the potential for enhanced oil recovery in these tight rocks.

Some clients have moved from lab experiments to field scale experiments to determine the best methods for maximizing incremental crude oil production recovered by these cycle gas injection techniques.

Lab analytical programs are underway in the Eagle Ford and Permian Basin regions, as well as preliminary work on international unconventional reservoir targets.

Also in the second quarter, operators in the Gulf of Mexico area of the United States, as well as international locations, began using a new laboratory service package offered by Core Lab to evaluate the reservoir conditions at which potentially damaging asphaltene particles begin to flocculate in the crude oil.

Understanding the details of this process will allow the client companies to mitigate formation damage and permeability impairment.

Due to the extreme pressures and temperatures encountered in the deepwater arena, Core brought together a combination of proprietary rock and reservoir fluid laboratory technologies to address these challenging analytical programs.

In central China, in Q2, Core began a multi-well analytical program on cores to evaluate a potential unconventional gas reservoir. In addition to measurements performed in the field, an extensive laboratory program is underway to measure the reservoir properties and determine the best completion and stimulation practices.

Geological, geochemical, geomechanical and petrophysical analyses are being performed. Core's already-proven proprietary technologies like RwCore and MR scale magnetic resonance testing, are being used to better understand the rock and reservoir fluid properties. Turning now to Production Enhancement.

As many of you are aware, Core focuses on energetic products that are engineered to enhance recovery from oil and gas fields. We do not focus on the commodity gun market as a driver for our business.

As such, Core's ballistic engineers recently teamed up with a major service provider to conduct laboratory experiments on the productivity enhancements provided by Core's patented KODIAK propellant.

When compared to commodity perforating products, the productivity improvements seen in the 7-inch diameter, 30-inch long sandstone core sample were presented at an SPE International Conference on Formation Damage and published in an accompanying technical paper.

Core's Reservoir Description scientists provided detailed analysis of the rock fabric in both the pre- and post-shot cores using proprietary CT, micro CT and other imaging technologies. This analysis shows significant permeability increase and better clean-up near the walls of the perforation tunnel.

These are attributes that will improve reservoir productivity. In a recent field application, in a tight unconventional reservoir in West Texas, the operator confirmed that initial production had increased by 15% by using Core's KODIAK Enhanced Perforating System. Core Lab continues to provide innovative technologies that bring value to its customers.

An example of this is Core's proprietary oriented plug-and-perf technology. Commodity perforating systems cannot be reliably oriented in the well bore prior to initiation. This poses a risk to costly down-hole cables that provide reservoir temperature and pressure data.

If the cables are separate during the perforating process, this critical data opportunity could be lost. In Q2, Core's oriented plug-and-perf system was successfully used on two 50 stage wells in the Duvernay Formation in Canada having greatly de-risked the loss of data due to separate cables.

Also in the second quarter of 2018, Core saw even broader acceptance of FLOWPROFILER EDS, a proprietary technology that uses an engineered delivery system for completion diagnostics.

The break-through EDS technology enables the diagnostic tracer element to be absorbed and chemically-bonded to the durable, proppant-sized particles that accompany the frac sand.

EDS has rapidly become the preferred method for monitoring completion success and for assessing oil production from individual stages of unconventional horizontal completions. Recently, an operator in the Eagle Ford formation in South Texas used FLOWPROFILER EDS for two of their potentially high volume crude oil wells.

The client recognized the advantage of having the diagnostic tracer technology deployed with the proppant during the frac operation, as opposed to traveling in a liquid-phase within the frac fluid. In addition, the FLOWPROFILER EDS tracer element is time-released from the durable particles as crude oil flows through the propped fracture network.

The operator is currently working with Core's engineers on computations to assist in optimizing their future completion strategies. That concludes our operational review. We appreciate your participation. And Kelly will now open the call for questions..

Thank you. We will now begin question-and-answer session. The first question comes from Jim Wicklund with Credit Suisse. Please go ahead..

Good morning, guys..

Good morning, Jim..

Reservoir Description, Q1 was the lowest revenue level I've got on my model going back eight years or so; and Q2 was up slightly.

Has Reservoir Description revenues bottomed here? And if they have, when do we get back to 20% EBITDA margins? Is that a 2019 event? How is your crystal ball looking?.

Yeah, Jim, we feel that Reservoir Description did bottom in Q1 of 2018 and 20% margins probably get stretched out into 2019..

You okay?.

Yeah. You get some additional contribution from the FIDs and deepwater and that should push it over 20%..

Okay. Okay. That's helpful. I appreciate it. And, David, we have heard that some of the FIDs that have been awarded end of last year and so far this year, they're being slow rolled just a bit.

Are you seeing the schedule, the timing, the execution of the FIDs awarded last year and this year? Are they on the schedule that you expected? A little bit above? A little bit below? Can you give us some color on how the execution of the recent FIDs are going?.

I would say, Jim, probably a little bit below our expectations and maybe pushed out a little bit, maybe a quarter because we thought we would have some more meaningful contribution in the third quarter and we just don't see that and we think that that's been pushed out to the fourth quarter.

But as you can see, rigs are certainly being put under contract and investment plans are leading forward..

Yeah, which is delaying the inevitable. I agree..

Correct..

And, David, if I could squeeze one in because those were quick. The deepwater recovery, we're putting a couple of rigs to work at different rates.

When do you think we get a material move in the deepwater market? What year?.

I think in 2019 second half you have a material add to deepwater..

Okay. Perfect. Thank you all very much. Appreciate it..

Okay, Jim..

The next question comes from James West with Evercore ISI. Please go ahead..

Hey, good morning, guys..

Good morning, James..

Dave, so the international recovery here, we've – kind of to Jim's question about slow rolling some FIDs, but we've seen some, I guess, pushback of activity levels (32:01) in your commentary and now starting to improve (32:15)....

Yeah, James, there were some break up on that, but I think we get the juice of your question. If you look year-over-year, international rig count was only up 1%.

You've got to remember that we don't take participation in early moves in the international rig count market because the drilling of the well, companies that provide those drilling rigs, do benefit early on from that revenue flow. We have to drill several wells down to the reservoir level.

Cores and fluids have to be taken and then put into our laboratories. So when we see a material move in the international rig count level, that's maybe a quarter or two later, we start to see the impact of that revenue into Reservoir Description. Just hasn't happened yet. We thought we would see some of that in Q3.

Now we expect some of that in Q4, but a lot more of it in 2019..

Okay. Fair enough. And sorry about bad connection here. Just one last one from me.

On Permian takeaway constraints, what are your customers telling to you about their activity plans for second half 2018 and early 2019?.

Yeah, James, Larry Bruno here. So I think it depends very much on the client. Some were rather foresighted and saw this takeaway problem emerging and planned well and some other companies may be caught a little flat-footed and are having to see the price of barrel they're able to generate being compromised a bit.

Talked to a client just earlier this week. There will be some reallocation of resources to other regions outside the Permian. And I think that works out for us as our products and services are a bit easier to shift than heavy iron investments.

And so, I think there will be some potential tapping of the brakes, little bit of slowdown for selected clients in the Permian. And I think that will affect any company that's got exposure to completions..

Yeah, James, we've already seen an uptick in activity levels for us in the Eagle Ford, the Bakken and in the Haynesville. So some of those investment dollars from the E&P clients are being spread around other basins, and due to the mobility of our services and products we can be there. We don't have to mobilize a frac crew..

Got it. Okay. Thanks, guys..

Okay, James..

Your next question comes from Sean Meakim with JPMorgan. Please go ahead..

Thanks. Good morning..

Good morning, Sean..

So I was hoping in Production Enhancement, could we talk about what drove that flatter incremental margin in the second quarter? And then, given we're acknowledging that completions activity is likely to slow, what gives us the confidence that we're going to reaccelerate back towards that long-term 60% bogie?.

Yeah, I think as we look at our Production Enhancement revenue, year-over-year numbers incremental margins were 51%. U.S. land, we saw services up 17%. We saw products up in a similar area. So we were about on pace with the increase in completions.

We do think that, if you recall, Sean, about a third of that business is still exposed to international markets, which were flat overall. And we think that we see some of that coming back in the Gulf of Mexico and international, a little bit helping out into the third quarter compared to the second quarter.

As those filter in, we think that helps us get back to historical incremental margin levels in that segment..

Yeah, if you just back-engineer, as Gwen said, looking at our third quarter guidance mainly coming out of PE, keeping international flat, you get back to somewhere on the order of 60%-plus incremental margins for Production Enhancement..

And, Dave, just to clarify.

You're saying that on a year-over-year basis, not quarter-over-quarter?.

That is correct..

Okay. Got it. Thank you. And then just maybe to tack on some of the discussion around international growth potential next year. Some of the large-cap diversifieds have endorsed a growth rate for international CapEx north of 10%.

Could you maybe give us your take on whether or not you think that's a good hurdle rate to start? And do you expect offshore activity to outpace or under-pace overall international activity next year?.

Yeah, if you remember back, Sean, our original bogey for international CapEx growth for 2018 was somewhere around 5%, 6% and we looked at the potential for revenue to be up 8% or 9%. That clearly hasn't happened just looking at international activity levels and international rig counts year-over-year.

If indeed the international spend next year is up 10%, we would still guide our revenue Reservoir Description up 12% to 14%. Sooner or later these long-cycle barrels have to enter the picture. And I think we're seeing that, as pointed out by the Brent crude pricing curve that has gone into contango.

So these longer-term, longer-cycle barrels are going to become more and more important as we have production declines and increases in the decline curve worldwide. So we certainly would welcome that. We'll keep our fingers crossed that that does indeed happen..

Fair enough. Thanks..

Okay, Sean..

The next question comes from George O'Leary with TPH & Company. Please go ahead..

Good morning, guys..

Good morning..

I thought the color you provided on just mentioning that we could see some activity shifts in the U.S. and potential slowdown in the Permian offset by an increase in areas like the Bakken, Eagle Ford and the Haynesville, I think were the basins that you sighted.

I guess in your discussions with customers in the Permian, are there clear signs that that throttle back is coming or are you not yet hearing that from your customers? I guess any framing the discussions that you're having with your customers specific to the Permian would be super helpful..

Yeah, George, I think as I mentioned, it's very company-specific or client-specific here. Some clients were prepared for it and had locked in takeaway capacity. Others are going to have to tap the brakes or deal with the lower commodity prices they're able to get given the takeaway challenges..

That's helpful.

And then, just given your presence in the wellbore and the various businesses that you have that are associated with stage and cluster count, I wonder if you could characterize for us – and the strong growth you guys put up in your energetics business in particular – if you could characterize the interplay between stage count and cluster count as some E&Ps seem to be moving towards something like up-spacing where they're actually reducing stage count, but materially increasing the cluster count within those stages..

Yes. That's exactly a trend that we're seeing as well. We had that in our commentary last quarter. We see that even more so now. So additional perf clusters leading to lesser stage count. We actually think that adds to the efficiency of the well and reduces the time to drill, stimulate and complete that well..

And, George, I'd add one comment to that.

With the work we've doing on stimulation, completions and in particular the work we've been doing on enhanced oil recovery, the critical issue for our clients is going to be maximizing stimulated rock volume, getting as much rock stimulated as possible, particularly where we've been able to demonstrate for them that there's an EOR opportunity.

So they'll be trialing different techniques to get that maximize surface area and stimulated rock volume because they don't want to be in a position to miss the opportunity to increase their recovery from these reservoirs by few hundred basis points..

Great. That's very helpful. Thank you, guys for the color..

Okay, George. Thank you..

Kelly, we're going to go ahead and close. So in summary, Core's operations continue to position the company for activity levels in the third quarter of 2018, and we know significant challenges await. However, we have never been better operationally or technologically positioned to help our clients to maintain and expand their existing production base.

We remain uniquely focused and are the most technologically advanced reservoir optimization company in the oilfield services sector. This positions Core well for the challenges ahead.

The company remains committed to industry-leading levels of free cash generation and returns on invested capital with all capital being returned to shareholders via our dividends and/or future opportunistic share repurchases.

So in closing our 92nd quarterly earnings release, we thank all of our shareholders and the analysts that follow Core, and as already noted by Larry Bruno, the Executive Management and Board of Core Laboratories gives a special thanks to our worldwide employees that have made these results possible.

We are proud to be associated with our continuing achievements. So thanks for spending time with us this morning and we look forward to the next update. So goodbye for now..

Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation..