Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to the Core Lab First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Larry Bruno, Chairman and CEO. Please go ahead.

Larry Bruno

Thanks, Danielle. Americas, and in good the the Africa in East Middle evening morning good Europe, afternoon and Good in Asia-Pacific. welcome employees First to most like all shareholders, our We'd analysts importantly, our XXXX to Quarter Laboratories Core Earnings Call. of and Hill, by Gwen Senior and I'm President Financial Investor of Core's Chief Chris morning, Officer; Core's This Relations. Vice Head joined and Gresham,

of then The important a remarks regarding making will start call by including QX Core's will be in comments, statements. factors divided have We'll performance. into high-level opening X review segments. Gwen some forward-looking

In that addition, shareholder then regarding and we'll value. build financial review overview Core's strategies comments will in the long-term value. the X give Chris to financial additional tenets a detailed company employs have shareholder

guidance. progress of review session. detailing and Lab's I'll operating worldwide. segments, Following of discussing and as and Q&A X highlighting then some Core's phones for on Gwen Chris, provide and some Core's our will continued as a well Core comments Then deployment the operations successful the technologies we'll introduction open projects outlook the major company's

I'll Gwen on to statements. for the now forward-looking call remarks turn over

Gwen Gresham

us could SEC annual risks as statements uncertainties the actual to from the with by report This start discussion the of results that well include XX-K make forward-looking of company's to and cause are our number estimates Form mention outlook. subject may and a that as forward-looking this we and uncertainties other statements and any that Before this These we of morning, the during other discussed and the registration types These projections, would call conference AFM. most forward-looking include on risks information. statements. filed I'll some business of statements are materially differ reports in our recent

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

results. Those announcing measures. the quarter our non-GAAP directly on Our non-GAAP also be financial press in the release include comparable comments can is our included found most GAAP to also website. Reconciliation first financial measures measures

Larry. said, that With to back discussion I'll pass the

Larry Bruno

I'd March we serving the the the Gwen. the that of XX. the saying Dave Core to the Board start Lab today, a Demshur Chief building period. section Executive on words about comments like in by know today Thanks, Dave was Officer and untimely figure central as a passing of over few XX-year Chairman

commitment. multifaceted led the and Lab in management Having always oversaw Core attest one aspire. a his to of word that kept personally the we than which service at company. acquisitions Dave through of XX a and set that the standard challenges honored so XXXX those Dave I he international still company acquisitions, arrived more grew fact all can Core a every In to buyout oilfield doing through into

and dedication Core its Those us X loyalty Over along a relentlessly expectations of by optimism remember he success still the thousands his and of of Dave friends Lab loving confidence, culture company. that he touched. workday survived through Laureen, Dave setting that legacy Dave and good lives permeate every whose to high the list our built employees, with is all Core with to the approached that coworkers long will work wife and a and company. of of fortune closely had the traits with pursuing decades, of the

at quarter well of to activity which completion for year. that quarter XXXX. activity seasonal QX as came high-level decline as now lower-than-expected Revenue were first somewhat in of U.S. to of land revenue in and quarter client million. some $XXX typical the Core the best XXXX, quarter Moving was comparable the overcame operating last to about post in comments the income first

to debt in debt sheet. our remained an growth incremental operating from executing Sequentially, in our income showed XXXX strengthening X.XX. the revenue of company's X.XX quarter first with reducing margins. balance including and focused XX% key strategies, ratio financial XXX% the XX% Year-over-year, and We on growth ex-items, improved leverage

operating margins quarter compared full first the For XXXX. for were in the company, XX% QX to of XX%

year-over-year seasonal well Production QX, Enhancement strong metrics margins. very Year-over-year in which margins were was particularly sequential XXXX led incremental and growth operating quarter XXXX Reservoir sales. both Description. as margins were First down QX Both sequentially showed operating in and as for strong performance, strong revenue following by international

somewhat was XXXX addition, U.S. a In rebound as began. in there completions slower-than-anticipated

the crude trading were shipments oil uneven took oil the hold. sanctions of patterns as the Russian crude at Global beginning year on

As operations. sanctions Russia-Ukraine assay uncertainties with The European, Russian new company's the to Ukrainian began prospects to albeit and signs and quarter volatility stabilizing, crude some associated oil the create growth in of associated continue conflict progressed, patterns. trading work to and show our

full the for QX in ex-items, year-over-year per down QX compared very but $X.XX in $X.XX company, XXXX, of from share $X.XX EPS of Lastly, up nicely was XXXX. to

in will to three, ahead, by: and As focused offerings Core strategic execute on one, and our key company. to continue lean a two, markets; organization; delevering we geographic product look maintaining service its commitment introducing new and maintaining key objectives the

solve that Now in a to financial company. The which latest customer employees traded culture, and about and history section our some of Core Core publicly innovation, innovations will tenets strategies build to review XX-plus be shareholder shareholders, this operational as dedicated used on I'll the Lab's Core clients relies leveraging more year and value has always service. to the review over interest call. well-served problems by Lab's talk our our of of resilient technology

cash return growth free maximize navigate and remain to returning through shareholders. our capital flow, pursue excess current being opportunities, financial will invested X and we on cash the While focused company its challenges on to long-term those maximize long-standing, the free tenets,

we for prepare market. Before all loyalty want of the their in dedication, clients' as and the adaptability moving shown have that more navigate meeting moment to for a and our I on, and thank for employees our active many needs commitment

I'll turn financial a detailed to over now it with Chris review.

Chris Hill

Thanks, Larry.

any gave losses or guidance an and on quarter, XX%. our the specifically last we and performance the impact the gains we for assumed financial rate call calls of effective past Before review FX of tax the excluded

periods. our today excludes gain discussion or and accordingly, current loss foreign prior So exchange any for

XXXX results expense first the shares have age. include charge with quarter for employees retirement of $X.X million for financial stock for reached of performance eligible associated of the certain Additionally, vesting the who compensation future noncash a

includes First costs million been our from $X.X facilities by discussion than annually. exiting financial reduce These quarter associated have million consolidations to the items future expected $X.X with consolidate also also locations. excluded These of of to more these a efforts operating results. costs few are in

which sequentially revenue, but X% and flat International more the a and quarter, income was on statement, revenue year. at as seasonal on projects, up last Ukraine. nicely million decline international is seasonal projects year-over-year. international, quarter the offset increase the ongoing market. up sequential first from million the service slight in activity sequentially, growth from improved land almost in over XX.X% the first well in which quarter Russia looking and associated $XX.X this a typical So U.S. with The in international decline X% conflict $XXX.X revenue improved was between softer-than-expected from year-over-year was revenue for primarily Of this prior quarter the up revenue, million quarter, typical impact was in up $XXX.X activity offset as as the

year. $XX.X XX% pre-conflict to were for America million for also sales the was of our oil equally down in over began well are XX% nice the market and a for international Despite year-over-year. crude quarter, land sequentially still Although more diagnostics assay in below Service activity X% by growth from in but were improvement global U.S. the late levels. work over tied X% signs year-over-year, to and activity business. last patterns Product in oil market, first U.S. North of and U.S. sales, increased X.X% show trading softer-than-expected which sequentially, revenue crude which sequentially XX% levels over showed stabilizing led is the up product up quarter,

one bulk larger In typically to quarter. the large and another. are we orders not XXXX, quarter did from sales first which product in international international several can of delivered orders, QX repeat vary Our

international product were As sales sequentially. down a X% result,

quarter up However, compared sales to year, the first XX%. last are of

the approximately Moving of was of quarter ex-items to couple of service last XX% revenue, on cost the quarters. is which to for comparable services,

of with anticipate network global We costs revenue. continue and laboratory see utilization improvement service and improvements in in absorption to additional growth of our

disruptions market We efficiencies the growth in and provide opportunities future for of last operational with of product lower in with in ex-items sales continued absorption increase first future associated with this quarter. sales. as sales. XX% in crude revenue XX% conflict the and combination efficiencies anticipate quarter land for U.S. of patterns the oil the uncertainty stabilize. The was manufacturing reduced Cost in is our projected trading quarter international Russia-Ukraine activity improved Additionally, to to a compared lower continue manufacturing associated line rate improvement quarters in

$X.X $XX.X the for a which last quarter, ex-items G&A quarter decrease was slight million, was from million.

for G&A expect quarter was million for to $X.X ex-items to million approximately and $XX we ex-items to million be million. amortization EBIT $XX the $XX.X XX.X%, with XXXX, compared up and flat quarter. of year For pretty the margins of last which from $X very EBIT million, XXX% is $XX.X was million incremental yielding relatively compared an margin last flat quarter, quarter XX%. last to over nice Depreciation

the million. a was basis GAAP for $X.X quarter on Our operating income

was tax expense The an on Income expense for million $X.X this of XX% a higher million Interest the rate to expense On the $XXX,XXX from million and increase facility a tax increased primarily credit was tax the of last we quarter. borrowings GAAP ex-items level for $X.X $X.X of recorded in of due quarter. slightly quarter. effective quarter. basis, resulted

to on company's X. or tax structure be The redomestication to the which around the U.S., with change will expected parent is company May completed of global the

We the XXXX. tax process provision the are of for currently in reassessing

to $X.X we income continue tax net million for million million ex-items last year. Net last company's but the increased quarter. the $X.X to recorded rate income for XX%. of On quarter slightly basis, a down GAAP quarter be $X.X we effective was However, project from $X.X approximately million, from the

$X.XX diluted quarter. for last quarter earnings On the was down for basis, from per improvement $X.XX the share first quarter, the little was in last $X.XX a ex-items over a but quarter, share diluted a GAAP of the year. per significant Earnings $X.XX

Turning was increased and sheet. Receivables million to approximately from million $X.X quarter. $XXX.X prior the the balance

strong U.S. the anticipate improve primarily for international. a to The also of decreasing XX will Our land that slow through the The XX the and and billings started were collections days, timing increase out of future occurred driven first quarter. the DSOs days achieved XX February, finished lower our first last late from in by during in activity as quarter quarter level in the was and quarters. decrease November U.S. both quarter DSO from first for return We or up quarter. the days

build quarter this XX X.X long, planned last million quarter locations for Inventory March was down turns stock X.X, to contracts last is from international $XX.X XXXX end. some inventory from with quarter for of and at quarter. Portion Inventory service international approximately the million, in beyond. $X.X associated the up some building were large

the decrease caused in during inventory some also the Additionally, build. activity quarter U.S.

this will activity the anticipate be quarter. However, consumed we excess exiting was as stronger

side And now liability balance to of sheet. the the

million, Our not $XX.X $XXX or $XXX.X end. during quarter. And long-term especially was from net quarter cycle. fund this million $X.X capital a first of primarily debt are the considering million to last was debt used Borrowings which quarter uncommon cash in at quarter, up working growth were needs, million

at and ratio However, remainder we the the continue will X.XX ratio leverage X.XX during to quarter XXXX. at March our leverage decrease end to XX last to of improved compared anticipate

bank $XX million senior as currently at as credit outstanding of facility. revolving is notes our comprised debt $XXX Our our well under million

senior will reaches Regarding the to company debt. free XX, new or lower. next these several begun $XX in XXXX, towards which weeks. notes anticipate mature debt current with its long-term these The we target of ratio to We September of million discussions notes cash on million have of continue the that company reducing up of $XX million of refinance leverage the flow $XXX finalizing until process notes, X.Xx applying

at flow. cash Looking

this was working free for For flow the associated in million. our for cash capital. operations Cash CapEx was operating first million used the $X.X in $X.X million flow quarter cash build the negative used and was with XXXX, $X.X quarter in of of primarily quarter, paying activities after

as quarter, first the earlier, common fairly it working to see some For build for I stated is in us capital.

inventory and some earlier. receivable also However, additional with highlighted factors associated accounts were

certain include first cash -- to operations from we operational of quarter our to continue as finalize footprint. operate exit Additionally, also the optimize facilities cost

company's our occurred includes first for certain employee The quarter. and with payments liabilities Additionally, corporate programs corporate annual typically fourth quarter associated plans annual for the insurance the in retirement an programs. the for would insurance prepayment have payment

to in in XXXX historical but we a will line while period modestly expand indicated be and growth. As we expect of remain continue compared our in aligned with CapEx to last in levels levels, with XXXX, to call, activity

For $XX capital and capital to million range asset-light growth expenditures or discipline targeted be primarily year million to expenditures the model the and XXXX, in strict capital $XX initiatives. with continue at expect full its we will of business opportunities

exists is who business assess valuations. to an particularly those for evaluating revenue discounted during Lab's cash company's property free same Capital of operational that of laboratory in to continues periods grow believe comparing of shareholders flow Core ability metric with generate X.X% ranged expenditures yield and the to have and leverage historically for infrastructure, requirements. the profitability revenue even ability minimal level to X% free We intellectual company's a capital today. flow results, models from growth, important shareholders significant cash cash to and flow leverage provide when utilize financial

for now will outlook. guidance our update and it an Gwen I on to over turn

Gwen Gresham

Thank you, Chris.

oil continuing industry. multiyear cycle to oil fundamentals and recovery a we support for Looking crude forward, the see macro gas

despite forecast International For by the in also the is for to economies unfolds. to of in world, be a Agency record oil Crude demand balance the per barrels Energy see and continues remainder XXX.X as year XXXX the projected we grow. XXXX, day key XXXX April China as consumption concerns recession tightening as million for demand supply around

exceed demand oil to projected is pre-COVID to is crude oil crude supply tighten. As levels, projected

production be remainder decline With supply the a recently in cuts, the the oil OPEC+ year. announced crude of for will

production prolonged growth in face continues as production other of many well around as the OPEC+ underinvestment areas to to regions In addition from due globe to constraints natural decline the existing cuts, production fields. in

compared underway, the supports we emerging across our XXXX. and America spending expect improvement Latin West to result, a for mid-teens Middle notably their in regions. to to and projects plans outlook with and onshore continue expand As activity, international operators offshore XXXX upstream continued This Africa international most for East, by

than to of the the activity weak land U.S., growth Turning expected part U.S. in associated with somewhat lower-than-expected is activity weaker The prices. gas early was natural XXXX.

which spending see ongoing and oil supply, we by should However, require challenges production. replace grow crude with operators to increased

will discipline, operators forecast capital While on to remain upstream indicate approximately year-over-year. continue increase XX% XXXX focused spending

second XXXX revenue project single-digits. increase In Reservoir quarter summary, we Description's to by low

oil crude international may Ukrainian with patterns impact segment's volatility Reservoir Continued trading and Russian, within our growth its Description European operations.

estimated to Enhancement by increase segment's Production is mid-single-digits. Our revenue

quarter million quarter revenue underlying XXXX income foreign approximately gains operating to for from from $XXX of of XXXX project is XXXX yielding EPS million is the expected projections in to $XXX and to operating range guidance to and on million, $XX.X $X.XX to second and We excludes for XX%. $X.XX. margins The operations second range losses company's quarter million second based of exchange. $XX.X

also effective guidance an Second quarter XX%. XXXX rate assumes of tax

will the to pass Now discussion I back Larry.

Larry Bruno

Thanks, Gwen.

team The servicing clients solutions, of superior foundation providing success. like innovative I'd to service our of First, our thank to is global Core clients. employees Lab's to our collective integrity dedication the for and team's

Turning first to Description. Reservoir

on do in for Russian came by up Description basis were following compared in shipments well crude ex-items Ukrainian XX%. oil financial our and see trading up points X% points operating and started Reservoir XXXX. improving Russia-Ukraine in European, just X% quarter, was to The volatility sanctions and income to uncertainties million that patterns first late QX as XXX basis growth imposed conflict for as still was international client XXXX, year-over-year. late in year-over-year. quarter operations. the Russian indications over stabilize first and that of were crude had $X.X oil and posing Margins We activity approximately the margins revenue expanded Operating XXX For at sequentially million, underpinned segment's performance ex-items the $XX

for financial demand producing production after average barrels high assessing services replace demand forecasts. bodes required This for even forecast XXXX global barrels day crude of that record oil fields. Reservoir to natural by growing The million day, IEA grow existing will XXX.X recently its well XXXX for an be the the to and Description decline per X.X for million up updated per from

as project trend we a international Description, the As ahead, of we out the improving the years, the for Middle we in are count Reservoir next that over an growing for North landscape look a movers past to several well South rig this play see will harbinger regions. in as America other and the already have impact more exposed well shift. Early East, of oilfield that service cycle particularly most felt sector as construction year the

Description projects accordingly. As appraisal, field services field eventually progress will into Core Lab's demand Reservoir for and rise development production

quarter. to programs evaluate clients and the Core and Description highlights to production. operational services optimize from some our assets help were Reservoir for international develop first their employed Lab's both on projects Now U.S.

XXXX, of Namibia. Kingdom offshore These analytical recovered reservoir targeted testing Lab's conventional of in branded quarter program from on fluid being samples traditional Core Center and feet Technology United were extensive hundred Basin, Lab's NITRO cores physical from scanned first wells and reservoir Orange the the reservoir core multiple of Core program progressed the core advance During measurements. are Advanced conventional various the Several intervals. as optimization of using an in proprietary technologies from noninvasive

comprehensive A analysis contamination analysis is program underway filtrate collected also and of the wells. these reservoir This levels oil-based from includes of hydrocarbons. on mud fluids program detailed drilling determination the compositional from laboratory analytical

properties rock and will at operator which being hard In all provide various pressures data and of model. program the of will extensive addition, temperatures full the their the around reservoir suite reservoir hydrocarbons fluid measured. build are points critical physical laboratory reservoir This

first Core enhanced involves a into Middle Core recovery. laboratory formation delivered quarter waterflood increase water Waterflood of East large-scale oil hydrocarbon to to planning implementing data national study. recovery EOR under will an for be multi-well oil national completed company of Lab injecting reservoir oil that the damage a and the used a program. oil specialists XXXX, during company, Lab's large direction Also the successfully

filtration, Lab that used compatible is analysis determine and water Core field both process The to disinfection the rocks for what provides large used then pressures, water the the injection fluid-fluid costly under volumes. for potentially all Once at in must programs reservoir with work compatibility injection, a required and used laboratory injection be chemical water reservoir been to to scale is the for the undergo it The very fluid water fluids. reservoir prepare is laboratory, prepared testing has will and ensure injection water steps of sample of treatment properly conditions. temperatures of rock a and controlled proposed

Core team operator recovery, the helping water crude water injection associated enhance Lab life fields, recover This existing Lab's the to the most incremental profitable among to technologies field. and of enable properties how uses of innovative of costs barrels are fines Core be damage from any barrels illustrates to processing laboratory which optimize migration. produced can the project specialists to oil oil over operators reduce from the mitigate of

done and announce other being focused and have X quarter, seal The that welcomes Production Lab first efforts. news joined being collaboration the Ventures, dCarbon consortium and Sequestration studies is client integrity In Sequestration from Capture joint global the The BKV to conducted decarbonization are containment. Carbon of its University to the Dr. industry, LLC support in Carbon the was Birol Dindoruk Capture EQT in formed and is with additional transition which pleased growing Consortium, Core and Core consortium. energy to members currently Company Consortium. Houston of analytical on

multi-client in growing momentum and sequestration Sequestration the continues proprietary to other and both Consortium are and studies As internationally. U.S. laboratory projects Capture build, the Carbon carbon

came approximately first our production. Moving points the end following Lab and Production up of margins Operating to Core ex-items strong was strong the points. a basis year-over-year. last help for Year-over-year were their XX% Enhancement basis improve XXXX optimize QX, sales XXX of million. quarter sequentially Operating now from international technologies XXXX, QX quarter XX% with seasonal $X Production $XX.X after year. well up for completions down but income were very of down to in X% operating margins XXX million, at Enhancement, Revenue at continue a where clients

operational some highlights. Now for

System for to of quarter under experts third-party wells filled Enhancement of has solution equipment Basin Lab's first the well the remediation or has Production become tubing During with when a or Permian a Deployment sand offers were The otherwise lift proprietary a direction engaged Rapid deploy Rapid remediating project. for inoperable. cost-effective XXXX, failing Core's string perforating Deployment when artificial Core encountered valves System the operator,

technology a become with Force preventing and from the draining the operations. string had sand, malfunctioned to tubing properly remedy client during utilized System Rapid Deployment plugged tubing workover that

crew drain without the Rapid System safety the to only engineer. accomplished and The This a cost strength. the associated with In with an a the environmental Rapid increased wet single unit unit multi-person pulling electrical and for required field remediation service System, on projects. the so allowed client Deployment process the quickly pipe. doing the need that standardized hazards perforations future and eliminated Conventional for and create site, Rapid success to the has was the wireline Deployment lost Based System effectively time working Deployment resulting its a remediation methods mobilizing well cost to methodology would in operator. all have the well wireline field a of client

tracers update an the operational are enhanced Lab's described I client role in Description in large Core EOR were play a waterflood on Enhancement very Reservoir Core oil a laboratory recovery team field a leveraged projects. waterflood earlier, technologies SpectraFlood EOR Production a to utilized also large-scale Core's Recently, project. being for the in East. In has project Middle in analytical how provided

injected are as engaged and will process, be sweeps the analyzed the from for the collected wells. Core's communication several detect years. be samples samples multiple wells. tracers across the being is and about to are injected turn, wells including In injection the oil the path producing diagnostics next water of inject revealed, between it water collected to experts tracers. wells reservoir reservoir. quantitative will specific In diagnostic the follow be continue of and injection The information objective patterns tracer program map to water producing over of to being hundreds will of the These into dozens

beef to the communication. in the critical identification economics. future allow provide resolution, and unswept to data enhanced uses areas optimize operator Core's significant field limits out-of-pattern will for infill aid will operator of the fractures, This program tracer target analytical ultra-low drilling. zones detection natural Core's which

That concludes open questions. operational participation, Danielle call will We our the your and review. appreciate now for

Operator

ISI. first The Samantha Hoh of question from comes Instructions] [Operator Evercore

Samantha Hoh

you revenue wouldn't I keep activity wondering are for a you here, what was growing all a actually to fairly I with of on things any and bit Description, sort seeing the was the about looks the starting try on more I love are maybe as mean, scale sequentially? making. basins And all guys what wondering could kind Reservoir revenue you other have that the just information exploration inbound corner lift maybe offshore you're little growth starting Are progress there it here. just international a technical I on of to in like some on turned reasons side. if benefit weigh work? but also exploration clearly, why

Larry Bruno

Yes. great question. Samantha,

of of doubt think why I Longer really term, don't the to quite sequentially. the see definitely simplicity we confidence I'll point no it, it's and see and I like as call advancement forecasting, building. the in the inflection as [indiscernible] to much linearity there's don't it, projects about backlog think the,

little And of there. caution so a bit

long and work. and crude about clearly pattern is term, is for I'd in we uncertainty Reservoir bit I and here performance. the think add, the But a of I Description. Chris some assay up oil and have on touched little uncertainties terms strong all an of Reservoir very thing other Gwen it The Description That's do

there, direction. year-over-year nice some that along very You right see results in moving saw the

and the planet. and see a fluid The On we emerging into we levels. in complicated in to wheelhouse field Historically, wheelhouse not when exploration into then projects early projects around at of a sampling reasons. side, and for exploration for do variety appraisal, production. places projects Reservoir is is Core of exploration done the number get high Description Coring often not Lab's exposure is field development

-- will Reservoir out move spending decade exploration of will projects next those eventually and year XXXX in biggest exploration steps and move the -- was into wheelhouse as be really appraisal, for for so production. last And year That's the a the Description. development

well little little geophysics, to a later can gain a the later analysis, cycle in involved Lab's traction. the those Core foundation seismic start than be that say, in, to you on folks projects So see for are engagement but bit the again, We'll in construction. really cycle, starting

Samantha Hoh

that for of didn't And Okay. of next kind the was large surprised about international build the curious bit was the think kind you I that a that was then like inventory product-driven there product. projects more with just you associated you're Can mean I is a that? mean more projects water working EOR-type talk the bill. maybe bit all about that because thing sounds -- about it little I a I much on?

Chris Hill

Samantha, this is Chris.

to steady shipped be not the shift. we're going those maybe times, put build and it's couple And times This those year Production to different will it you supply a a that longer-term here some region. from there they in from international location. will think about categories. of is can a quarterly and then to that, X basis, of arrangement support of that happen a it's done sales but to having would going being product so actually manufacturing results kind in a ships. where for a more bit locations when be is So And of us, into international customer to inventory the then lot products and Enhancement's I that be A on we're It's those the supply U.S. little stuff bulk swing in quarter-to-quarter. orders in the

happen in you and build that some that stock So quarter. see to having location in this we're

I strong. December. relationship November, that, then details serve of what us is take years started end several I year. think in until In was release, would over building little then some there the really hit drop Thailand, a gave it, to snapback very to slower. well quicker addition of the saw We projects late kind into We pretty lasted our and February on in slower a in we spread early anticipated recover. one of frac had should and off, It a those bit that's back the next beyond. the only new And add really call hard the It was big March

of inventory there, a bit side So build the too. product on

Samantha Hoh

a please about since that track talking Maybe in if just one, we're now. I last U.S. could

I think supply can we're a keep there's also we or turning of takes sort can completions growth? over production whether growing is that? a are terms that in at the debate where U.S.? type a bit we oil not of Like level growing keep your a on What this of or production activity completion level the are in here

Chris Hill

I some point before rather than other specialty things supply in some that, we're a still chain steels operate mentality, that, case on uncertainties. inventories on a just-in-time and answer to product We're one that. for just Samantha, especially having Yes. like facing

of in are we're heavy ready you seeing to to hardware. more so the completions in that We to if think production you going you keep still maintain broader your limitations to folks ready a wells, the have or the think quick very pick some when to maintain within wells unforgiving physical that up. constraint. that heavy-duty to But add to go we'll variety but inform are more I be drilling has are that availability a and be that Lab, not grow spool have on no level drilling that may to wells, saying The have completion about the complete way, it drilling I've some certainly That decline maybe either Core provide up. has for treadmill. actual and production. are our we're try up that have, levels, rates to We clients to these that wells. To But we involved -- gained phrasing that on wells of this And wells they completing unconventionals question hardware, products. going to the to the we're if U.S. within that pick up would think

Operator

next of Daniel Daniel The comes Energy question from Partners. John

John Daniel

supply when Just to the a at Larry, headwinds. -- following some to relieved curious is all. -- still the one some first of chain you you see the alluded being Samantha. of quick that I'm

Larry Bruno

Chris add on on Yes. I've thoughts it. some got may it.

lead delivery are month a the what or going do cases the some hey, We're I John, providers steel and to X to at X where look and was a specialty time get us So is steels. months we're calling think up now of into running run going is to saying, X out. still be way maybe that to

to but that a in than keep delivery. would type of we shorter want when stock having steel -- than than we're we had to, we we certainly might So of than have to more normally more

right I that are supplier out fewer whim when with kind when going says But are run. products, There think a obstacles there. the are you're specialty improving. there's you're of do those of the at of to -- they're those there dealing signs

Chris Hill

than would right The just longer seeing used add that specialty much steel, really the that change is just only to I lead times now. are thing even they in general, and stuff, not the normal not we're be

we'll So kind I don't if get or know of times pre-COVID back not. lead to

explosives the making that So into go or we've it's just this just sort time, systems or or components lead XX-month any goes gun content steel XX-month-plus about the other into that downhole. ourselves that that, anything making going it's the the to of are on like whether whether adjusted

John Daniel

your the is And to it. opportunities. Core about for the and come question, implications. the unrelated just of end, implications writing been that we Tier U.S., in if lots few if you much views the can when how talking estimate curious, And inventory and totally the then inventory runway? X trying there's line Tier and minutes on on the of Got starts more do runway an Okay. Larry, X have and you second whole when concept the -- I'm for to to we a people will,

Larry Bruno

Yes.

with the over described. results has complete advances, there's less because a property there gray quality, bit as the area of time that get rock discussed rock more a bit similar and acceptable think is to efficiently words, X It's I able or can lower technology in Tier quality often lower. little investment quality of in gotten they're more In a out that process. So other completion results produce

is data. is Tier to a cheeky, think, that frankly, consortium a through sell we X but bit the quite really sound of studies our we multi-company going that good reality I this have view, we do, properties John, but

of done large, done, larger it's that. done we've times. the have do the and Operators U.S. to say, some And too I by that I much during or in roll though, basins fair on detail exactly have so over have what production I think to want seen challenging in get you would don't The

picked their to gardens went productive and most They best fruit that. of properties. They the vegetables out and use quality their

the it that Production go I for getting think think side, becomes that apparent consumed. Lab, X Core intensity to more to up. Tier What over think are completion Enhancement properties X have years, means on the will I So I next even X

more So completions executed these make product sales to sure more continued, diagnostic that more challenging longer laterals sales, are properly.

a the clients unconventional engineered on a increase consortium opportunities vaporization number and have use from then a Reservoir on we've of and that Description done side, gases proprietary multi-company EOR a we've injecting study got combination condensation we study of where these And wells. production to we

being reservoir, the in we've work a use sweet flood are a clients. laboratory like waterflood some the by can't or a but demonstrated you that You right conventional in to utilized would historically now technology

that's specifically where think growing containment be unconventionals, a to I that's topic, work. going to EOR on exists, going

John Daniel

intense I Just I'm bright, that me down need trying study dumb -- on the that but that I'm time. not for to just this Is grows seems wrong because that? am to more over it

Larry Bruno

ultimate processes big improvements a mean, us they our in established engaged we've that make issue. substantial these If Yes. can they testing, that those EOR laboratory we've have I containment work, get can with for and this bought on demonstrated is recoveries.

operators nothing they gas gone. back, some that have and some example, fields away is injected the For oceans including just got put gases blended of into

where an to fault things size, or rates that. like is a at like looking wheelhouse, what types that inject lead containment, little and out of of being deployed Core you we demonstrated following and It's how and in so and it's that. they're their that gas looking more bit what know a at things successfully patterns places are laboratory will. Lab's we've it company if the oil the process. of of EOR number That's do a at fractures multi-cycle And there But

Operator

question Johnson next from Rice. Crist Don comes of The

Don Crist

some to EOR time cycle prior start the the Eagle the basin perspective? your I the to or from follow-up discussions just early Bakken gave of I we they're starting back it's kind a from Ford, Permian, but just are there? to know you John's you Or to kind and questions. in in engagement see on answer when ask are probably re-fracs wanted one when going Where that in? too perspective of does

Larry Bruno

is Short answer yes.

there. of a and others. areas in engagement number projects We've We are seeing done those

I you think really to laboratory the time in if control. from proof that's the of out concept, our will, of deployment,

they're are. wells gas what field. Our we to engagement operators does the supplies and controlling the not take -- pumps better delivering and compression That's than the at processes the to

We can multiple when which validate injected. of out. the oil in gases, use cycles enriched of liquids and lead that's vaporization gas to into you production is that injection, the withdrawn, recipe if is then gas that this laboratory of you And fall over been increase the pressure dropped gas

this you what and suggest, this operators and think, so way it recovery this much. rock We just and the cycle gas And where by going oil of that's with this it. for are them, in plans question, increase can about the you if put their I we really tell a more they're

Don Crist

Okay. so say well not first X safe But to it's or a it's in years shale of life? the probably

Larry Bruno

a in very Don, to cost can that question. of projects cost-effective say, about could good field. out There in a like these life of they're come companies -- to about the I'd see a to is that wells. be field. different Traditionally, more be be XX%, are are late XX% EOR thinking get these wells on, off some very trying actually are unconventional steep Well, going with processes whether it's to maybe it's drop the a be some earlier now they there X-year curves, so earlier thing -- that hey, the the life effective conventional of the the that not with early The little that in decline in period life traditionally going -- before of

Don Crist

the kind in Europe flow first kind trading just that given And facility $X.X couple is the will in had probably and to of exit and But as exits I'm talk redomestication Obviously, costs or pieces unrelated. oil changed. for help assuming quarter going a assuming of million help forward? charge in that the building some the one follow-up of of well. going that and Can the was Obviously, coming redomestication Okay. of lot moving a just I'm there. you patterns the on But of consolidation. have there's with you days. about company cost down the facility then

Larry Bruno

Yes.

in costs of had And lot the release So and just space of vacant about the no, America were in We the some facility specifically. in consolidation. Americas, those accelerated in was moved Don, talked that other we some facilities. a were winding down. that leases North people We that into

we We've So had and Houston, up. people things can operations quickly unused as space as some just those cleaning lab We'll relocated as cost-effectively as of some here. making we into those can. use do we

We're have I'll have always escape on were some challenging would gone the go we call leases from. of knobs. of liked but to those, some variety a So looking to We'd to faster -- turn those. to, like of it,

think, a I but got think taken, we've the of a so in forward. down in costs And queue, getting nice investment I going step more those good

I savings talking we're somewhere we annual facilities about think over the from $X.X a quarter. that the between million in year exited in first

and leases. So costs. of of talk some out I Chris buildings good little to use think get up about a I'll the cash let the of those clean redomestication

Chris Hill

and XXXX a when get everything talked more Don. number. savings a It's bit, between probably annual $X million so of million about not And $X.X and we we've it's little XXXX completed. beyond. That's number probably this a And

and So Europe, level in think consolidated the for -- corporate at a Netherlands, do the to office Europe. away. small audits about had had U.S. the double We we in both going a that's

going So IFRS, is of away. those one

both But requirements going forward it's get regulations accelerating well and It's elevated. and potential costs not aligned. and U.S. the as that. reporting they're as just fast around not Europe of the They're ESG in future savings

on like So that. things sets X it's you're every of And laws, whether tax to laws, dance having reporting to front, regulations. that's

It's past. future well. in as experienced reducing potential just it's So elevation the the we've costs what of not

Larry Bruno

Yes, to on on add to I Don. Yes, just to concept, just that that. add

that. take it had back to And that going were us in Netherlands. get of be actually I'll So during a was rebuild call it, proposition we to down presence going our, was what COVID, to to to some costly to the have We pre-COVID. for

costs look doing compliance. the into by have costs. million full when a system. into back also I cost So We've we coming us get been million $X that at up some more to that to think And we've to limited the adds it back what what this, cut year would would that have -- $X

Operator

turn I concludes question-and-answer to conference Bruno to over session. would Mr. for remarks. closing like back This the our

Larry Bruno

here. up client position levels markets Core's wrap In We'll to the XXXX beyond. international operational for leadership company activity and continues Okay. U.S. summary, improving both and in for the

the advanced, The global We capital. invested uniquely technologically reservoir address have sector. positioned oilfield focused client reservoirs client-focused and our cash on been technologically never remain base, and better or to and their the to optimization most on returns remain help company optimize will company needs. service free their operationally in evolving maximizing We are focused

via investing the the while opportunities, introduction shareholders by this both in and always to Core quarterly growth market near-term, In new use dividends, driven balance cash value to of to our will growth penetration. free continue we'll opportunities. bring In to sheet technologies problem-solving addition strengthen our

the we closing, employees give possible. management Lab. all analysts Laboratories that in to results of cover thank of our the executive and a team and Board thanks and made our that The worldwide Core Core shareholders have appreciate these So special

be We proud their with are proud -- continuing we're associated achievements. to

look Goodbye So with time our thanks forward and we update. for now. for us to spending next

Operator

you concluded. has for Thank now conference today's presentation. attending The

now may You disconnect.

Core Laboratories (CLB) 27 Apr 232023 Q1 Earnings call transcript