CLB Q4 2012: Deepwater Drives Most Profitable Quarter Ever; All-Time Quarterly And Annual Highs For Revenue, Net Income, EPS &

CLB Q4 2012: Deepwater Drives Most Profitable Quarter Ever; All-Time Quarterly
      And Annual Highs For Revenue, Net Income, EPS & FCF; 2012 FCF Tops

PR Newswire

AMSTERDAM, Jan. 30, 2013

AMSTERDAM, Jan. 30, 2013 /PRNewswire/ -- Core Laboratories N.V. (NYSE: "CLB
US" and NYSE Euronext: "CLB NA") posted its most profitable quarter in Company
history, with earnings per diluted share ("EPS") of $1.17 for the fourth
quarter of 2012. The effects of a lower than expected share count used to
calculate fourth quarter guidance was offset by currency translation losses in
the quarter. Excluding year-ago one-time items, quarterly EPS increased 7%
year-over-year as net income increased to an all-time quarterly high of
$54,801,000. Revenue increased to a quarterly record of $254,455,000, and
operating income reached $75,868,000, yielding operating margins of 30%. Free
cash flow ("FCF"), defined as cash from operations less capital expenditures,
for the fourth quarter of 2012 also established an all-time quarterly high at
$78,055,000, eclipsing the quarter's net income by over $23,000,000, while the
Company's average diluted share count for the quarter fell to 46,857,000,
nearing a 15-year quarterly low. Core repurchased approximately 894,000 shares
during the fourth quarter at an average share price of approximately $103.32.


The Company's improved year-over-year and sequential quarterly results reflect
Core's continued focus on international crude-oil developments, especially
those in deepwater, unconventional oil plays in North America and high-grading
international unconventional opportunities. An industry leading 13%
sequential quarterly increase in international revenue underpinned results.

The fourth quarter of 2012 saw record demand for Core's Reservoir Description
reservoir fluids and advanced reservoir-rock properties technologies,
especially for projects in the deepwater Gulf of Mexico, North Sea, Iraq,
Africa, including offshore Gabon and Angola, the Middle East, and Asia
Pacific. Production Enhancement operations recorded its highest revenue
quarter ever because of increased market penetration by its patented and
proprietary field-flood and fracture-stimulation diagnostic services, coupled
with increased demand for the Company's HTD Blast™ and HTD BlastXL™
technologies. The Reservoir Management segment continued to add participants
and expand projects in unconventional reservoirs in North America, especially
liquids-rich plays in the Duvernay, Cardium, Bakken, Niobrara, Eagle Ford, and
Mississippi Lime formations, and unconventional stacked reservoirs in the
Permian Basin. The Company also initiated a new joint industry project in the
Pearsall shale in South Texas. Several international unconventional plays in
Europe, Russia, North and South Africa, China, Australia, and especially in
the Middle East continue to be evaluated by Core.

Compared with full-year 2011 results, Core's 2012 revenue increased 8% to
$981,080,000; net income increased 17% to $216,071,000; and EPS was up 19% to
$4.54, all of which establish historic annual highs for the Company.
Operating margins set an annual high of 30%, up 300 basis points over
year-earlier levels. FCF also reached an historic annual high of
$206,051,000, turning more than one in five revenue dollars into free cash

As reported in the previous quarters, the Board of Supervisory Directors (the
"Board") of Core Laboratories N.V. has established an internal performance
metric of achieving a return on invested capital ("ROIC") in the top decile of
the service companies listed as Core's peers by Bloomberg Financial. Based on
Bloomberg's calculations for the latest comparable data available, Core's ROIC
was the highest in its oilfield services Comp Group. Moreover, the Company
had the highest ROIC to Weighted Average Cost of Capital ("WACC") ratio in the
Comp Group.

Segment Highlights

Core Laboratories reports results under three operating segments: Reservoir
Description, Production Enhancement, and Reservoir Management.

Reservoir Description

Reservoir Description operations, focused primarily on international crude-oil
developments, posted its best revenue quarter ever while year-over-year
operating margins increased for the ninth consecutive quarter. Fourth quarter
2012 revenue reached $128,805,000, up 4% over year-earlier totals against an
international rig count that remained flat for the year. Operating income
increased 8% to $37,231,000, and operating margins climbed more than 100 basis
points over levels for the fourth quarter of 2011.

During the full year of 2012, Reservoir Description margins climbed over 440
basis points. The record quarterly revenue and the continued expansion of
operating margins are the results of Core's focus on higher-margin deepwater
developments, where accurate and abundant data for high-temperature,
high-pressure environments and reservoir-condition testing of reservoir fluids
and rock properties continue to be mission-critical for optimizing reservoir
development to maximize the clients' returns on invested capital.
Combinations of reservoir fluids pressure-volume-temperature phase-behavior
studies and reservoir-condition advanced reservoir-rock properties data sets
are required to optimize daily hydrocarbon production and maximize hydrocarbon
recovery rates in multibillion dollar deepwater developments. Core's
Reservoir Description operations executed projects in nearly every deepwater
development in the world during the fourth quarter, including the Gulf of
Mexico, eastern South America, Western and Eastern Africa, the Eastern
Mediterranean, and Asia-Pacific, including Australia.

Deepwater high-pressure, high-temperature reservoirs that are undersaturated
with natural gas, as is the case for some reservoirs in the Gulf of Mexico and
offshore South America, pose field development challenges for operators.
Recovery rates from undersaturated reservoirs tend to be lower than worldwide
average rates of approximately 40% of in-place resources. As an industry
leader in high-pressure, high-temperature miscible gas injection technology,
Core should benefit by responding to the challenges of increasing and
maximizing recovery rates from these undersaturated reservoirs.

As reservoirs in the North Sea continue to age and decline curves continue to
steepen, Core is performing an increasing number of reservoir fluid studies to
determine the most effective programs to abate production declines.
Combinations of reservoir fluids and advanced rock properties data sets are
being used to determine optimal pressure-maintenance programs that increase
hydrocarbon production while limiting the growth in water cuts from these
aging reservoirs.

In Iraq, Core continues to analyze hundreds of reservoir fluids samples and
thousands of feet of core samples from fields in the south that are being
redeveloped, as well as new field discoveries in the Kurdistan area. Core has
experienced no project or contract delays in what are some of the most
profitable projects in Company history. Many of the recent large discoveries
in Kurdistan also are undersaturated with natural gas, posing challenges to
boost ultimate recovery levels. Core's Reservoir Description operations will
play an instrumental role in determining which production drive mechanisms can
be most economically introduced into these reservoirs.

Also in the Middle East, clients are pursuing unconventional natural gas
developments. Future production from these unconventional reservoirs will be
used for power generation and desalinization processes in hopes of offsetting
the more than three million barrels of oil per day used for these purposes.
This fuel switching would free additional crude oil for export. Core is
engaged in several projects where mostly vertical and some horizontal cores
have been cut to evaluate the potential of unconventional natural gas
production throughout the Middle East, including Kuwait, Saudi Arabia, Qatar,
the United Arab Emirates, and Oman.

Production Enhancement

Production Enhancement operations, largely focused on North American deepwater
and unconventional developments but expanding internationally, posted one of
its most profitable quarters ever despite a North American rig count that
decreased year-over-year from fourth quarter 2011 and sequentially from third
quarter 2012. Greater market penetration by the Company's patented and
proprietary field-flood and fracture-diagnostics services, coupled with
continuously increasing demand for Core's HTD Blast™ and HTD BlastXL™ ^
technologies, more than offset the decline in North American land activity.
International expansion also boosted results.

Year-over-year fourth quarter 2012 revenue increased 3% to a quarterly record
of $106,641,000, while operating income was $33,168,000, yielding operating
margins of 31%. Operations benefited from an increasing number of stages
being completed with fracture stimulation in extended-reach horizontal wells
in unconventional reservoirs. As highlighted by Cabot Oil and Gas in its
third quarter 2012 earnings conference call, and supported by recent technical
literature (Liberty Resources), operators are benefiting from shorter-spaced,
and optimally placed, stages with more stages per well leading to increased
production and higher ultimate recoveries. Shorter and more frequent stages
per well expose more surface area of the unconventional reservoir to flow
paths to the wellbore. Core's fracture diagnostics technology clearly
indicates the benefits from shorter, optimally placed, and more frequent
stages as it has been proved that migrating fractures into the reservoir do
not branch out as much as earlier believed. Pumping additional proppant per
stage is also recommended to further increase initial flow and ultimate
hydrocarbon recovery from unconventional reservoirs.

Core has developed a proprietary Completion Diagnostic ScoreCard™ service that
applies several reservoir, completion, and stimulation data sets to optimize
the hydraulic fracture and stimulation process. Among the significant
parameters are wellbore- and stage-spacing, reservoir rock type, perforating
charges and gun systems, proppant type and amount, and frac fluids and gels,
among others. The Completion Diagnostic ScoreCard service, when used to score
individual or multi-well projects, has resulted in increased initial flow and
higher ultimate hydrocarbon recovery rates, maximizing our clients' returns on
invested capital. This new service has yielded significant additional value
to Core's clients and is driving continued market expansion of the Company's
patented and proprietary completion diagnostic services.

The Company's HTD Blast and HTD Blast XL technologies, used to more
effectively and efficiently perforate extended-reach horizontal wells,
continue to be in high demand. As shorter and more numerous fracture stages
are expected to be completed into 2013, HTD Blast and related technologies
provide economical completion solutions for long, extended-reach lateral

Core, with client research and development funding, is developing an Ultra
High Pressure, Ultra High Temperature UltraHPHT™ perforating gun system. The
UltraHPHT system is designed to withstand pressures of up to 30,000 psi and
temperatures of up to 470 degrees Fahrenheit and will be suitable to perforate
ultradeep wells currently being drilled on the continental shelf in the Gulf
of Mexico. Deepwater reservoirs with higher pressures and temperatures also
will be logical applications for the UltraHPHT technology. The first
deployment of the Company's new UltraHPHT system is expected to occur during
the first quarter of 2013. Core, in developing the UltraHPHT^TM system, along
with reservoir fluids sampling cylinders rated to 25,000 psi and 335 degrees
Fahrenheit (as discussed in the Company's Q3 2012 Earnings Release), is
responding to client requests for higher pressure and temperature capabilities
that will be needed over the next decade as deeper horizons become the next
target of frontier developments.

Reservoir Management

Reservoir Management operations posted fourth quarter 2012 year-over-year
revenue gains of 11% to $19,009,000, an all-time fourth quarter high, while
operating income climbed 22% to $5,371,000, yielding operating margins of
28%. Additional oil company clients have been added to several of Reservoir
Management's joint industry projects, including the Utica, Duvernay, and
Mississippi Lime studies; and in the Marcellus, Bakken, Niobrara, Wolfcamp,
and Eagle Ford projects, among others, continue to expand. Four additional
companies joined Core's Tight Oil Reservoirs of the Midland Basin Study,
bringing the total to 36.

Core has initiated a new joint industry project to evaluate the potential of
the Pearsall shale, which underlies the shallow portions of the Eagle Ford in
South Texas. The Pearsall, at greater depths and situated in the oil window,
has potential as a liquids-rich play.

Internationally, Core's Global Shales Study continues to seek high-grade
unconventional opportunities in the United Kingdom, Europe, Russia, North and
South Africa, China, Australia, and especially the Middle East. Petrobras,
Core's largest national oil company client, recently joined the Global Shales
Study. Reservoir Management also is conducting proprietary studies for
individual clients in Uganda, the Middle East, and offshore regions of Ghana,
Liberia, Cameroon, and Namibia. Recent pre-salt discoveries offshore Angola
and Gabon portend higher levels of activity over the next several years that
will benefit Core's Reservoir Management operations because its data sets will
help define the emerging carbonate play.

Free Cash Flow, Share Repurchases, Dividends, Capital Returned To Shareholders

During the fourth quarter of 2012, Core Laboratories generated $85,052,000 of
cash from operating activities and had capital expenditures of $6,997,000,
yielding an all-time quarterly high FCF of $78,055,000. This fourth quarter
total increased Core's FCF for all of 2012 to $206,051,000, an all-time annual
high for the Company. Therefore, in 2012, Core converted more than one of
every five revenue dollars into free cash flow, the highest conversion rate of
all major oilfield service companies.

The FCF in the fourth quarter, along with borrowings from the Company's
revolving credit facility, was used to pay approximately $13,000,000 in cash
dividends and to repurchase approximately 894,000 shares at an average share
price of approximately $103.32 per share. This total includes 471,400 shares
in addition to the 422,600 shares the Company had purchased, disclosed, and
included for calculating fourth quarter EPS guidance as detailed in Core's
third quarter earnings release of 17 October 2012. Core's current outstanding
diluted share count of 46,566,000 is within approximately 200,000 shares of a
15-year low in the Company's quarterly weighted average diluted share total.

On 9 October 2012, the Company's Board announced a quarterly cash dividend of
$0.28 per share that was paid on 20 November 2012 to shareholders of record on
19 October 2012. Dutch withholding tax was deducted from the dividend at the
rate of 15%.

On 11 January 2013, the Board announced a cash dividend of $0.32 per share of
common stock payable in the first quarter of 2013. This amount represents a
14.2% increase over the quarterly dividends of $0.28 per share that were paid
in 2012, and if paid each quarter of 2013, it would equal a payout of $1.28
per share of common stock. The quarterly $0.32 per share cash dividend will
be paid on 22 February 2013 to shareholders of record on 22 January 2013.
Dutch withholding tax will be deducted from the dividend at a rate of 15%.

For the full year 2012, the Company generated $237,202,000 in cash from
operations, had capital expenditures of $31,151,000, and generated free cash
flow of $206,051,000. This FCF and borrowings under the Company's credit
facility were used to fund approximately $52,950,000 in regular quarterly
dividends and to repurchase approximately 1,581,000 shares for approximately
$175,732,000. The repurchased shares totaled approximately 3% of the
Company's diluted outstanding shares. Total capital returned to shareholders
in 2012 was approximately $228,682,000, or about $4.81 per diluted share.

Since the Company initiated its share repurchase program in October 2002, Core
has returned almost $1.4 billion to its shareholders via quarterly and special
dividends, the repurchase of shares, and settlement of warrants. The total
number of shares repurchased and warrants settled by the Company over the
ten-plus-year period represents 36,775,000 diluted shares. Through the fourth
quarter of 2012, when Core's average diluted share count reached 46,857,000,
the Company had its outstanding diluted shares reduced by over 44%,
representing a return to its shareholders of over $29.00 per diluted share.
During 2011 and 2012, Core returned over $11.50 per diluted share to its
shareholders via dividends, settled warrants, and share repurchases.

Return On Invested Capital

As reported in previous quarters, the Company's Board has established an
internal performance metric of achieving an ROIC in the top decile of the
oilfield service companies listed as Core's peers by Bloomberg Financial. The
Company and its Board believe that ROIC is a leading performance metric used
by shareholders to determine the relative investment value of publicly traded
companies. Further, the Company and its Board believe shareholders will
benefit if Core consistently performs in the highest ROIC decile among its
Bloomberg peers. According to the latest financial information from
Bloomberg, Core Laboratories' ROIC was the highest of any of the oilfield
service companies listed in its Comp Group. Several of the peer companies
failed to post ROIC that exceeded their WACC, thereby eroding capital and
shareholder value. Core's ratio of ROIC to WACC is the highest of any company
in the Comp Group.

Comp Group companies listed by Bloomberg include Halliburton, Schlumberger,
Carbo Ceramics, FMC Technologies, Baker Hughes, Cameron International,
Oceaneering, National Oilwell Varco, and Oil States International, among
others. Core will update the ROIC for the oilfield services sector for the
fourth quarter 2012 in its first quarter 2013 earnings release.

First Quarter 2013 and Full Year 2013 Earnings Guidance

The Company's outlook for 2013 remains positive. With continued support from
robust Brent crude pricing and the expected delivery of additional deepwater
drilling rigs, Core believes that it will continue to work increasingly in
more established fields, as well as new field development projects. In
addition, as it has consistently done in the past decade, the Company plans to
enter new fields where it currently does not have operations and to offer new
technologies and additional services in 2013. These new technologies and
services will be focused on increasing daily productivity and ultimate
hydrocarbon recovery rates from deepwater fields and liquids-related
unconventional reservoir developments worldwide. Therefore, Core believes its
business model, with the goal of achieving a revenue growth rate of 200 to 400
basis points above the increase in worldwide activity level directed towards
producing fields, remains intact with incremental margins positively impacting
operating margins.

Core expects FCF totals to remain at elevated levels in 2013, with the
Company's client-directed capex program to be equal to slightly greater than
that of 2012. The Company has announced its increased quarterly dividend in
2013 and continues its share buyback program.

Core Lab anticipates 2013 North American activity levels to be flat at fourth
quarter 2012 levels and international activity levels to increase
approximately 7%, yielding a worldwide activity increase of approximately 5%.
The Company expects its revenue to grow at a rate faster than its expected
change in worldwide industry activity by approximately 200 to 400 basis

Therefore, for the first quarter of 2013, Core expects revenue of
approximately $240,000,000 to $250,000,000, after taking into account seasonal
effects, and EPS in the $1.12 to $1.18 range.

For the full year, Core expects revenue to range between $1,030,000,000 and
$1,070,000,000 with operating margins averaging approximately 31% and
incremental margins ranging from 35% to 45% are projected for the full year of
2013. This operations guidance excludes any foreign currency translations,
and a 25% effective tax rate is assumed for the year. This would drive
midpoint EPS to a range between $4.96 to $5.22 with a midpoint of $5.09. The
midpoint of revenue guidance suggests revenue growth of approximately 7% in a
range up to 9% and the EPS guidance suggests earnings growth of approximately
12% in a range up to 16%.

The Company has scheduled a conference call to discuss Core's fourth quarter
2012 earnings announcement. The call will begin at 7:30 a.m. CST/2:30 p.m.
CET on Thursday, 31 January 2013. To listen to the call, please go to Core's
website at

Core Laboratories N.V. ( a leading provider of proprietary
and patented reservoir description, production enhancement, and reservoir
management services used to optimize petroleum reservoir performance. The
Company has over 70 offices in more than 50 countries and is located in every
major oil-producing province in the world.

This release includes forward-looking statements regarding the future revenue,
profitability, business strategies and developments of the Company made in
reliance upon the safe harbor provisions of Federal securities law. The
Company's outlook is subject to various important cautionary factors,
including risks and uncertainties related to the oil and natural gas industry,
business conditions, international markets, international political climates
and other factors as more fully described in the Company's 2011 Form 10-K
filed on 15 February 2012, and in other securities filings. These important
factors could cause the Company's actual results to differ materially from
those described in these forward-looking statements. Such statements are based
on current expectations of the Company's performance and are subject to a
variety of factors, some of which are not under the control of the Company.
Because the information herein is based solely on data currently available,
and because it is subject to change as a result of changes in conditions over
which the Company has no control or influence, such forward-looking statements
should not be viewed as assurance regarding the Company's future performance.
The Company undertakes no obligation to publicly update any forward looking
statement to reflect events or circumstances that may arise after the date of
this press release.

(amounts in thousands, except per share data)
                             Three Months Ended        Twelve Months Ended
                             31 December  31 December  31 December  31
                             2012         2011         2012         December
                             (Unaudited)  (Unaudited)  (Unaudited)
REVENUE                      $  254,455   $  243,786   $  981,080   $ 907,648
  Costs of services and      160,958      154,034      621,819      593,369
  General and                12,302       10,678       43,185       41,141
  administrative expenses
  Depreciation and           5,498        5,929        22,917       23,303
  Other (income) expense,    (171)        257          (4,121)      (919)
OPERATING INCOME             75,868       72,888       297,280      250,754
Loss on exchange of Senior   —            142          —            1,012
Exchangeable Notes
Interest expense             2,292        2,216        8,820        10,900
INCOME BEFORE INCOME TAX     73,576       70,530       288,460      238,842
INCOME TAX EXPENSE           18,394       17,371       71,848       54,198
NET INCOME                   55,182       53,159       216,612      184,644
ATTRIBUTABLE TO              381          83           541          (40)
NET INCOME ATTRIBUTABLE TO   $  54,801    $  53,076    $  216,071   $ 184,684
Diluted Earnings Per Share:  $  1.17      $  1.11      $  4.54      $ 3.82
WEIGHTED AVERAGE DILUTED     46,857       47,677       47,553       48,393
Reservoir Description        $  128,805   $  123,543   $  495,529   $ 469,775
Production Enhancement       106,641      103,157      403,792      371,449
Reservoir Management         19,009       17,086       81,759       66,424
  Total                      $  254,455   $  243,786   $  981,080   $ 907,648
Operating income (loss):
Reservoir Description        $  37,231    $  34,397    $  144,502   $ 116,244
Production Enhancement       33,168       34,086       128,602      112,576
Reservoir Management         5,371        4,414        26,428       21,887
Corporate and other          98           (9)          (2,252)      47
  Total                      $  75,868    $  72,888    $  297,280   $ 250,754

(amounts in thousands)
ASSETS:                                     31 December 2012  31 December 2011
Cash and Cash Equivalents                   $   19,226        $   29,332
Accounts Receivable, net                    184,774           170,805
Inventory                                   49,265            53,214
Other Current Assets                        43,642            33,197
        Total Current Assets                296,907           286,548
Property, Plant and Equipment, net          125,418           115,295
Intangibles, Goodwill and Other Long Term   214,191           209,030
Assets, net
        Total Assets                        $   636,516       $   610,873
Short-Term Debt & Lease Obligations         $   40            $   2,344
Accounts Payable                            55,168            57,639
Other Current Liabilities                   85,302            83,212
        Total Current Liabilities           140,510           143,195
Long-Term Debt & Lease Obligations          $   234,033       $   223,075
Other Long-Term Liabilities                 74,060            62,948
Total Equity                                187,913           181,655
        Total Liabilities and Equity        $   636,516       $   610,873

(amounts in thousands)
                                               Twelve Months Ended
                                               31 December 2012
CASH AND CASH EQUIVALENTS, beginning of period 29,332
CASH AND CASH EQUIVALENTS, end of period       $      19,226

Free Cash Flow

Core uses the non-GAAP measure of free cash flow to evaluate its cash flows
and results of operations. Free cash flow is an important measurement because
it represents the cash from operations, in excess of capital expenditures,
available to operate the business and fund non-discretionary obligations. Free
cash flow is not a measure of operating performance under GAAP, and should not
be considered in isolation nor construed as an alternative consideration to
operating income, net income, earnings per share, or cash flows from
operating, investing, or financing activities, each as determined in
accordance with GAAP. You should also not consider free cash flow as a measure
of liquidity. Moreover, since free cash flow is not a measure determined in
accordance with GAAP and thus is susceptible to varying interpretations and
calculations, free cash flow as presented may not be comparable to similarly
titled measures presented by other companies.

Computation of Free Cash Flow
(amounts in thousands)
                                           Three Months      Twelve Months
                                           Ended             Ended
                                           31 December 2012  31 December 2012
Net cash provided by operating activities  $    85,052       $   237,202
Less: capital expenditures                 (6,997)           (31,151)
Free cash flow                             $    78,055       $   206,051

SOURCE Core Laboratories N.V.

Contact: Richard L. Bergmark, + 1-713-328-2101,
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