CORE LAB REPORTS FOURTH QUARTER AND FULL YEAR 2022 RESULTS FROM CONTINUING OPERATIONS

• FOURTH QUARTER REVENUE OF $128 MILLION; UP SLIGHTLY SEQUENTIALLY

• FOURTH QUARTER OPERATING INCOME OF $16 MILLION; EX-ITEMS OF $15 MILLION, UP 10% SEQUENTIALLY

• FOURTH QUARTER OPERATING MARGIN, EX-ITEMS, OF 12% WITH SEQUENTIAL INCREMENTAL MARGINS EXCEEDING 80%, DRIVEN BY PRODUCTION ENHANCEMENT

• FOURTH QUARTER GAAP EPS OF $0.14; EX-ITEMS, $0.20

• FOURTH QUARTER CASH FROM OPERATIONS OF $13.2 MILLION

• FOURTH QUARTER FREE CASH FLOW OF $11.2 MILLION

• FOURTH QUARTER NET DEBT REDUCED BY $11.7 MILLION SEQUENTIALLY

• COMPANY ANNOUNCED DELISTING FROM EURONEXT AND REDOMESTICATION TO THE U.S.

• COMPANY ANNOUNCES Q1 2023 QUARTERLY DIVIDEND

AMSTERDAM, Feb. 1, 2023 /PRNewswire/ — Core Laboratories N.V. (NYSE: CLB) (“Core”, “Core Lab”, or the “Firm”) reported fourth quarter 2022 income of $127,600,000. Core’s working revenue was $15,600,000, with diluted earnings per share (“EPS”) of $0.14, all in accordance with U.S. typically accepted accounting rules (“GAAP”). The monetary outcomes for the fourth quarter of 2022 embody a non-cash adjustment of $1,900,000, reducing inventory compensation expense related to efficiency share awards that vested in the course of the quarter. Working revenue, ex-items, a non-GAAP monetary measure, was $14,700,000, yielding working margins of 12%, and EPS, ex-items, of $0.20. A full reconciliation of non-GAAP monetary measures is included within the hooked up monetary tables.

For 2022, Core’s income of $489,700,000 elevated 4% from the prior yr. Core’s full-year income was adversely impacted by the devaluation of the Euro and British Pound when translated into U.S. {dollars}. Utilizing a relentless U.S. greenback alternate charge, 2022 income would have been roughly $12,800,000 greater. As well as, Core’s 2022 income was additionally adversely impacted by the Russia–Ukraine battle. Throughout Core’s European, Russian and Ukrainian operations, exercise declined on account of disruptions in crude-oil buying and selling patterns, inflicting the Firm’s crude-oil assay and derived product testing income and product gross sales to say no in extra of $10,000,000 year-over-year. The mixed influence of those forex fluctuations and geopolitical elements adversely impacted 2022 income by roughly $22,800,000 year-over-year, considerably offsetting worldwide development in different areas.

Core’s CEO, Larry Bruno said, “First, our ideas stay with our Ukrainian workers and their households in the course of the on-going battle. Regardless of the challenges posed by forex and geopolitical battle, Core’s outcomes in the course of the fourth quarter of 2022 displayed continued constructive momentum, as we achieved sequential enchancment in income, working revenue, working margins and EPS, with robust incremental margins. These enhancements translated into greater free money move (“FCF”), which enabled the Firm to lower internet debt by $11,700,000 or 7%, sequentially. Core stays intently centered on executing towards its key monetary and operational methods, together with 1) lowering debt and strengthening our steadiness sheet, in addition to 2) constantly pursuing efficiencies and the introduction of latest applied sciences. For 2023, Core sees the continuation of a multi-year restoration cycle for the oil and gasoline trade led by enchancment in each onshore and offshore shopper exercise throughout our world operations, though the Russia–Ukraine battle continues to create volatility and uncertainties to development prospects in Europe, Russia and Ukraine.”

Voluntary Delisting from Euronext and Redomestication to the US

On 4 November 2022, Core Lab introduced its resolution to voluntarily delist its shares from Euronext Amsterdam, and the final buying and selling day for the Firm’s shares on the Euronext was 2 December 2022. The Firm’s shares proceed to commerce on the New York Inventory Alternate below the image “CLB”.

Following the delisting of the shares, on 17 January 2023, Core Lab introduced plans to reorganize the Firm’s company construction, ensuing within the redomestication of the mother or father firm from the Netherlands to the US (the “Redomestication”). The Firm and its Board believes that the Redomestication will improve shareholder worth over the long-term by means of simplifying the company construction, bettering operational efficiencies and lowering administrative prices. The Redomestication, if accepted by the Firm’s shareholders, will change the Firm’s jurisdiction of group from the Netherlands to the State of Delaware.

Advantages of the Redomestication embody: (i) a discount within the company footprint and regulatory necessities related to getting ready duplicative audited monetary statements and different reporting obligations, (ii) improved efficiencies and alternatives within the Firm’s company treasury, money administration, danger administration and tax features, and (iii) a simplified and extra environment friendly tax construction.

Reservoir Description

Reservoir Description operations are intently correlated with developments in worldwide and offshore exercise ranges, with roughly 80% of income sourced from tasks originating exterior the U.S. Reservoir Description income within the fourth quarter of 2022 was $78,100,000, down barely sequentially and year-over-year. Geopolitical sanctions that grew to become efficient in the course of the fourth quarter of 2022, additional disrupted buying and selling patterns of crude oil and derived merchandise in Europe, Russia and Ukraine. Consequently, the demand for laboratory companies within the fourth quarter of 2022 was adversely impacted, offsetting income development in different worldwide areas. Working revenue for the fourth quarter of 2022 on a GAAP foundation was $6,800,000, whereas working revenue, ex-items, was $6,000,000, yielding working margins of 8%.

Reservoir Description income for 2022 was adversely impacted by the devaluation of the Euro and British Pound when translated into U.S. {dollars}. Utilizing a relentless U.S. greenback alternate charge, Reservoir Description 2022 income would have been roughly $12,000,000 greater. For 2022, income was additionally adversely impacted by the Russia–Ukraine battle, declining over $9,000,000 in comparison with 2021. Mixed, these two elements adversely impacted Reservoir Description 2022 income by roughly $21,000,000, considerably offsetting worldwide development in different areas.

In the course of the fourth quarter of 2022, below the route of a South American Nationwide Oil Firm, Core Lab performed a collection of Enhanced Oil Restoration (“EOR”) and move assurance research for a multi-well onshore program utilizing CO₂-rich injection gases. The research decided the influence of mixing these CO₂-rich gases with reservoir fluids and supplied the premise for superior equation-of-state modelling. Whereas defining the gasoline injection parameters for a profitable subject software are crucial to bettering crude oil recoveries, operators should concurrently mitigate the flocculation of asphaltenes that consequence from CO₂ injection, and which, can erase such positive factors. CO₂ injection tasks mirror a globally increasing curiosity in EOR and Carbon Seize and Storage applied sciences. When correctly evaluated with rigorous laboratory testing, injecting CO₂ into hydrocarbon-bearing subsurface formations can concurrently enhance oil restoration and cut back CO₂ emissions.

Additionally, in the course of the fourth quarter of 2022, Core obtained each reservoir fluid and reservoir rock samples from Talos Vitality Inc.’s Deepwater Gulf of Mexico Lime Rock and Venice prospects. Leveraging Core’s expertise with prior profitable Gulf of Mexico drilling campaigns, the Firm was in a position to rapidly implement laboratory analytical protocols to fast-track outcomes and consider reservoir potential inside days of receiving the samples. The analytical outcomes supplied key reservoir parameters together with: 1) an evaluation of the pore system and fluid move properties of those high-quality sandstone strata, 2) measurement of the crude oil and pure gasoline saturations within the recovered rocks, and three) dedication of key reservoir fluid properties such because the gas-oil ratio, and with the composition of the hydrocarbons. Talos’ specialists included these parameters into their evaluation of the business viability of those prospects. Core’s proprietary excessive stress, excessive temperature, full visualization Strain-Quantity-Temperature applied sciences, together with the Firm’s intensive database of manufacturing reservoirs within the Gulf of Mexico, helped Talos on this profitable drilling program.

Manufacturing Enhancement

Manufacturing Enhancement operations, that are centered on advanced completions in unconventional, tight-oil reservoirs within the U.S., in addition to typical tasks throughout the globe, posted fourth quarter 2022 income of $49,400,000, growing over 5% sequentially and 10% year-over-year. Working revenue on a GAAP foundation was $7,900,000, whereas working revenue, ex-items, was $7,700,000, yielding working margins of 16% and sequential incremental margins, ex-items, in extra of 100%. As well as, Core’s proprietary diagnostic companies grew over 22% sequentially and 17% year-over-year.

In the course of the fourth quarter of 2022, a U.S.-based working firm expressed the necessity to overcome injectivity challenges of their saltwater disposal wells. Value-effective disposal of produced frac fluid is crucial to the monetary success of unconventional sources. Reservoir modeling decided that to optimize injection efficiencies, 14 zones dispersed throughout a 1,700 ft lateral wellbore wanted to be perforated concurrently in an over-balanced stress configuration. Core Lab supplied a personalized resolution for this difficult technical downside by combining its proprietary Pulse Wave™ Tubular Conveyed System with its proprietary HERO^® Onerous Rock energetics. Pulse Wave™ makes use of a singular vitality switch know-how that may set off a number of, unevenly-spaced perforating weapons in a single downhole journey, eliminating the necessity for inert spacer weapons between reside weapons to create a steady communication string. Eliminating the necessity for spacer weapons reduces materials price and considerably reduces the rig time required to deploy the system. The HERO^® Onerous Rock energetic know-how makes use of a complicated, patented, liner materials know-how that yields debris-free perforations, whereas additionally offering deep penetration and simpler move efficiencies in exhausting rock formations. By using Pulse Wave™ know-how, the shopper saved over 30% on the price of consumables, along with lowered rig time. The HERO^® Onerous Rock energetics created communication throughout every perforating interval, enabling the operator to ascertain the specified injection charge, which was double that of comparable wells accomplished utilizing typical wireline perforating applied sciences.

Liquidity, Free Money Move and Dividend

Core continues to give attention to maximizing FCF, a non-GAAP monetary measure outlined as money from operations much less capital expenditures. For the fourth quarter of 2022, money from operations was $13,200,000 and capital expenditures have been $2,000,000, yielding FCF of $11,200,000. Core’s free money will proceed to be returned to its shareholders by means of the Firm’s common quarterly dividend in addition to being centered in direction of lowering long-term debt.

In the course of the fourth quarter of 2022, Core’s internet debt was lowered by $11,700,000, which additionally lowered the Firm’s leverage ratio to 2.29 as of 31 December 2022, down from 2.42 on the finish of third quarter of 2022. The Firm will proceed making use of free money in direction of lowering debt till the Firm reaches its goal leverage ratio (calculated as whole internet debt divided by trailing twelve months adjusted EBITDA) of 1.5 occasions or decrease.

On 26 October 2022, Core’s Board of Supervisory Administrators (“Board”) introduced a quarterly money dividend of $0.01 per share of frequent inventory, which was paid on 28 November 2022 to shareholders of report on 7 November 2022. Dutch withholding tax was deducted from the dividend at a charge of 15%.

On 1 February 2023, the Board accepted a money dividend of $0.01 per share of frequent inventory payable on 6 March 2023 to shareholders of report on 13 February 2023. Dutch withholding tax will likely be deducted from the dividend at a charge of 15%.

Return On Invested Capital

The Board and the Firm’s Government Administration proceed to give attention to methods that maximize return on invested capital (“ROIC”) and FCF, elements which have excessive correlation to whole shareholder return. Core’s dedication to an asset-light enterprise mannequin and disciplined capital stewardship promotes capital effectivity and is designed to provide extra predictable and superior long-term ROIC.

The Board has established an inside efficiency metric of demonstrating superior ROIC efficiency relative to the oilfield service firms listed as Core’s Comp Group by Bloomberg, because the Firm continues to imagine superior ROIC will lead to greater whole return to shareholders. Bloomberg’s calculations utilizing the newest comparable knowledge obtainable point out Core Lab’s ROIC improved to 7.2%.

Trade and Core Lab Outlook and Steerage

Wanting ahead into 2023, Core sees crude-oil macro fundamentals persevering with to help a multi-year restoration cycle for the oil and gasoline trade. Crude-oil demand for 2023, as forecast by the Worldwide Vitality Company in January 2023, is projected to extend by 1.9 million barrels per day (“mbpd”) to a report 101.7 mbpd as consumption in China grows together with the reopening of its economic system. As crude-oil demand is projected to exceed pre-COVID ranges, crude-oil provide is projected to tighten. Manufacturing development continues to face constraints on account of extended underinvestment in lots of areas across the globe and the pure decline of manufacturing from present fields. Consequently, Core Lab expects operators to broaden their upstream spending plans for 2023 by mid-teens in comparison with 2022. This helps Core’s outlook for continued enchancment in worldwide onshore and offshore exercise, with tasks rising and underway, most notably throughout the Center East, Latin America and West Africa areas.

Turning to the U.S., Core sees related challenges with crude-oil provide which ought to require elevated spending by operators to develop and exchange manufacturing. Whereas operators stay centered on capital self-discipline, 2023 forecasts point out their U.S. upstream spending will improve roughly 15% year-over-year.

As customary, Core expects typical sequential seasonal trade patterns will trigger exercise within the first quarter of 2023 to say no in some areas. As such, Core anticipates Reservoir Description first quarter 2023 income to be down low to mid-single digits, sequentially. Continued volatility with crude-oil buying and selling patterns could influence Core’s Reservoir Description section’s worldwide development inside its Russian, Ukrainian and European operations. Manufacturing Enhancement section income is estimated to be up mid-single digits as U.S. land exercise is projected to recuperate from regular seasonal declines skilled at year-end.

Core tasks first quarter 2023 income to vary from $125,000,000 to $129,000,000 and working revenue of $11,500,000 to $14,500,000, yielding working margins of roughly 10%. EPS for the primary quarter of 2023 is anticipated to be $0.14 to $0.19.

The Firm’s first quarter 2023 steerage is predicated on projections for underlying operations and excludes positive factors and losses in international alternate. First quarter 2023 steerage additionally assumes an efficient tax charge of 20%.

Earnings Name Scheduled

The Firm has scheduled a convention name to debate Core’s fourth quarter 2022 earnings announcement. The decision will start at 7:30 a.m. CST / 2:30 p.m. CET on Thursday, 2 February 2023. To hearken to the decision, please go to Core’s web site at www.corelab.com.

Core Laboratories N.V. is a number one supplier of proprietary and patented reservoir description and manufacturing enhancement companies and merchandise used to optimize petroleum reservoir efficiency. The Firm has over 70 places of work in additional than 50 international locations and is positioned in each main oil-producing province on the planet. This launch, in addition to different statements we make, contains forward-looking statements concerning the longer term income, profitability, enterprise methods and developments, together with the Redomestication of the Firm made in reliance upon the protected harbor provisions of Federal securities regulation. The Firm’s outlook is topic to varied vital cautionary elements, together with dangers and uncertainties associated to the oil and pure gasoline trade, enterprise and normal financial situations, together with inflationary pressures, the flexibility to realize the advantages of the Redomestication, worldwide markets, worldwide political climates, together with the Russia–Ukraine geopolitical battle, public well being crises, such because the COVID-19 pandemic, and any associated actions taken by companies and governments, and different elements as extra totally described within the Firm’s most up-to-date Varieties 10-Okay, 10-Q and 8-Okay filed with or furnished to the U.S. Securities and Alternate Fee. These vital elements may trigger the Firm’s precise outcomes to vary materially from these described in these forward-looking statements. Such statements are based mostly on present expectations of the Firm’s efficiency and are topic to quite a lot of elements, a few of which aren’t below the management of the Firm. As a result of the data herein is predicated solely on knowledge presently obtainable, and since it’s topic to vary on account of adjustments in situations over which the Firm has no management or affect, such forward-looking statements shouldn’t be considered as assurance concerning the Firm’s future efficiency.

The Firm undertakes no obligation to publicly replace or revise any forward-looking assertion to mirror occasions or circumstances that will come up after the date of this press launch, besides as required by regulation.

Go to the Firm’s web site at www.corelab.com. Join with Core Lab on Fb, LinkedIn and YouTube.