Good morning. My name is Erika and I'll be your conference operator today. At this time, I would like to welcome everyone to the Core Lab Q1 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question and answer session. (Operator Instructions) Thank you, I would now like to turn the call over to Mr. David Demshur. Mr. Demshur, you may begin your conference.

Thank you, Erika. I'd like to say good morning in North America, good afternoon in Europe and good evening in Asia Pacific. We'd like to welcome all of our shareholders, analysts, and most importantly, our employees to Core Laboratories first quarter 2012 earnings conference call. This morning I am joined by Dick Bergmark, Core's Executive Vice President and CFO. Also this morning we are again joined by Core's COO Monty Davis who'll present the detailed operational review. The call will be divided into five segments. Dick will start by making remarks regarding forward-looking statements, then we'll come back and give a brief investor update and highlight the three financial tenets by which Core's executive management executes the company's growth strategies. We believe these three tenets have produced industry leading shareholder returns and returns on investment capital. We will also discuss Core's long health philosophy of returning excess capital back to our shareholders. And then Dick will follow with a detailed financial overview and additional comments regarding building shareholder value and Core's general industry outlook for 2012, which confirm our confidence in the trends of increasing activities in unconventional oil reservoirs in North and South America and especially international and deep water activities tied to crude oil developments worldwide. Core cannot give specific Q2 revenue and earnings guidance as the company is in the process of a dual listing of our shares on the NYSE Euronext exchange in Amsterdam. We expect this listing to take place in mid May. Then Monty will go in Core's three operating segments detailing our progress and discussing the continued successful introduction of new Core Lab technologies and services and then highlighting some of Core's operations and major projects. And then we'll open the call for a Q&A session. I'll turn it over to Dick for remarks regarding forward-looking statements. Dick?

Thanks, David. Before we start the conference this morning I'll mention that some of the statements that we make during this call may include projections, estimates, and other forward-looking information. This would include any discussion of the company's business outlook. These types of forward-looking statements are subject to a number of risks and uncertainties relating to the oil and gas industry, business conditions, international markets, international political climate and other factors including those discussed in our '34 Act filings that may affect our outcome. Should one or more of these risks or uncertainties materialize or should any one of our assumptions prove incorrect actual results may vary in material respects from those projected in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. For more detailed discussion of some of the foregoing risks and uncertainties see item 1A risk factors in our annual report on Form 10-K for the fiscal year ended December 31, 2011, as well as the other reports in registration statements filed by us with the SEC. Our comments include non-GAAP financial measures, reconciliations to the most directly comparable GAAP financial measures are included in the press release announcing our first quarter results. Those non-GAAP measures can also be found on our website and with that said I'll pass the discussion back to Dave.

Okay. Thanks Dick. I'd like to give a quick investor update. Core's operations produced another solid quarter as the company continued to benefit from our continued focus on and the increase in international and deepwater offshore activities and unconventional oil plays in response to higher oil prices and dwindling global spare oil producing capacity. The focus on crude oil related projects continued to build in the 2012 as we discussed the projected decrease in natural gas drilling in North America on our three previous conference calls. Therefore, Core's revenue mix now is closer to 80% oil and 20% natural gas, a shift from the previous 70-30 mix that we had last year. Moreover, most of these natural gas projects related to an emanate from the international theater and are LNG related. This would be in the Eastern Mediterranean, East Africa, and Western Australia. Turning specifically to our operations, Core's reservoir description results reflected the focus again away from natural gas and the positive increases in both international and deepwater activities which continued to strengthen into 2012. Also our first quarter 2012 results were bolstered by North American activity levels in oil shale reservoirs and increased activities in tight sands in the Permian Basin of West Texas. This drove incremental margins for production enhancement. And finally, reservoir management posted another strong quarter reflecting additional oil company support for its joint industry projects in oil shale reservoirs and international areas of interest like deepwater East and West Africa. Our growth strategies and the execution by our operating units continued to serve our clients, our employees and our shareholders well. Core's continued focus on higher return international crude oil related developments, especially those in deepwater environments and unconventional oil resource plays and the continued internal development of new technologies and services, has led…

Thanks David. And I'd like to start by mentioning that we are excluding two items from our operational earnings that occurred in the quarter that were gains. Meaning there were items that increased our reported gap earnings. We are excluding those from operational earnings for discussion purposes because they were either a one off item like an insurance recovery or an item that was specifically excluded from our prior guidance like the financial impact caused by changes in foreign exchange rates. We have discussed in prior quarters the fire in our suppliers' steel mill that resulted in an interruption through our production enhancement manufacturing business last year. As a result we filed a claim under our business interruption insurance policy for $5 million. In the first quarter we received notification from the insurer, they agreed to pay $3.4 million of the claim and we'll continue reviewing the remainder of our claim. We have received the initial payment amount, expect the review of the remaining amount to be completed in the second quarter. We are excluding this $3.4 million pre-tax gain from our operation results as it is not indicative of the ongoing results of the company. It equals approximately $0.05 on EPS. We're also removing from our operation results of $0.02 per share after tax gain as a result of the effects of changes in foreign exchange rates, given that our prior guidance also excluded the impact of foreign exchange. Okay. Now let's look at the income statement. Revenues were $234.2 million in the first quarter and were almost midpoint of our guidance of $230 million to $240 million. Revenues in the last year's first quarter were $206.7 million. So year-over-year revenues are up 13.3%. Interestingly over the last decade our revenues on a compounded average annual basis are also…

Thanks, Dick. The first quarter of 2012 was our best first quarter ever with revenue of $234 million and operating earnings excluding the FX gains and one-time gain from business interruption insurance increased to $69.5 million with operating margins of 30%, revenue growth year-over-year was 13%, and operating margins improved 300 basis points over Q1, 2011. We commend our nearly 5000 employees around the globe for another excellent performance. Reservoir description revenue grew 8% over Q1 2011, and operating earnings grew 22% over Q1 2011 with operating margins improving by 400 basis points to 28%. We continue to receive a huge volume of work from Africa, in reservoir fluid analysis, well-site services, routine core analysis and more advanced rock properties analysis. This activity truly spans the continent with projects from Tanzania, Mozambique, Uganda, Sierra Leone, Ghana, Ivory Coast, (inaudible) and Egypt. We expect this area to continue to be very active through the year. Scientific laboratory analysis of the reservoir fluids and formation of rock from these reservoirs is critical to our clients to understand and optimally produce these reservoirs. Production enhancement revenue grew 18% over Q1 2011 and operating margins improved 300 basis points over Q1 2011 to 31%. The manpower stimulation diagnostic technologies is very strong. SpectraFlood technology is helping operators in the Middle East Africa, North America, Europe, and South America that understand the performance of their flood projects. This information is critical for optimizing flood sweeps of complex reservoirs from a maximum recovery. Core's proprietary Fracture Diagnostics are helping all companies optimize fracture stimulations in the Midland Basin, Eagle Ford, Bakken, Niobrara, Utica and other shale reservoirs across North America. The manpower perforating completion systems was at an all time high first quarter year. The HTD-Blast perforating gun systems and premium High Efficiency Reservoir Optimization, HERO…

(Operator Instructions) Your first audio question comes from the line of James West. James West – Barclays Capital: Good morning, guys.

Good morning, James. James West – Barclays Capital: David, Schlumberger recently made an announcement that they were opening a new core analysis center in Houston, and it seems like they make it a push towards your business. I know the Weatherford previously had kind of bought up all the competition you had out there. Are you seeing at this point increased competition or is this just because the markets growing so rapidly and customers are demanding this that it's kind of pulling the bigger guys into your business?

Yeah. Looking at and we did see that in announcement of their facility, it was about a 30,000 square foot facility. We have seen there is a logical extension of their purchase of TerraTek, which was I think about a decade ago and the emphasis from Schlumberger standpoint. And remember their focus they are an often say exploration-oriented company, where we are a development and production oriented company. So a little different focus on the facility, 30,000 square foot lab here in Houston compared to what we are adding right now over 40,000 square feet to total 300,000 square feet here in Houston alone. So yeah, we understand that they are in the business. As of yet we have not seen any increase in competition because we think it's a little bit of a different market focus. James West – Barclays Capital: Okay. Fair enough. And then just one other question for me, the production enhancement margins for 1Q were below what we were expecting, is this a one-time blip or should we think that margins should be in this kind of lower 38% range going forward?

James, you know we tend to look at margins on a year-over-year basis so and when – because of the typical seasonal patterns that do occur. So, we did see a nice increase in margins year-over-year. James West – Barclays Capital: Right, sir.

Yeah. Sequentially, they were down, but so were revenues and that was expected. And so if we have our fixed cost structure in place with lower revenues, naturally on a sequentially basis as you go from Q4 to Q1, you will experience lower margins, but that's why we tend to look year-over-year to make sure that we continue to execute on that fixed cost structure. And clearly year-over-year shows that we did because margins were up year-over-year. James West – Barclays Capital: Sure. So we think about it as we think about the rest of this year as revenue comes back there that 200 to 300 basis point increases year-over-year are achievable?

Yeah. James West – Barclays Capital: Okay. Great. Thanks, Dick. Thanks, David.

Your next audio question comes from the line of Rob MacKenzie. Rob MacKenzie – FBR Capital Markets: Good morning, guys.

Good morning, Rob. Rob MacKenzie – FBR Capital Markets: Question David I guess for you, a little bit of a crystal ball type question. There is certainly become a lot of chatter among some E&Ps in our space about the real ultimate potential of the Permian Basin here and some real big reserve numbers are being thrown about. Can you guys share your thoughts on how much oil might be recoverable from the Permian over time and what that means for Core's business?

Yeah. As Monty detailed, just looking at our tight sand reservoir study of the Midland Basin and Permian Basin collectively, we think that there is good potential there. Our new annual report entitled, 'New Oil from Old Places' goes in great detail talking about the potential for the additional production that come from the Midland Basin. You think about it three years ago production touched about 700,000 barrels a day that is now nearing a million barrels a day from all this increased activity. And if you just look at our facility in Midland, we have a 40,000 square foot facility, much was not at use a decade ago and we continue to expand that operation now. So Rob, yeah, we we've put a lot of poker chips into the Permian Basin not only in reservoir management but also for reservoir description and production enhancement. We think it's going to be a big winner over the next couple of years. Rob MacKenzie – FBR Capital Markets: Okay. Thanks. That basin peaked at roughly 2 million a day in the early 70s?

Yeah. I think it was about 2.1, correct. Rob MacKenzie – FBR Capital Markets: And when does it exceed that, in your mind?

We need to drill a lot more wells before we can make that kind of projection. That crystal ball is too cloudy for us. Rob MacKenzie – FBR Capital Markets: Okay. Thanks. And then coming back to your guidance, I guess I understand your inability to give numbers, but it sounds like from your qualitative comments that you guys are more bullish now than you were a quarter ago for this year, does that sound like a fair characterization?

Yeah. Rob, this is Dick. I think that's correct because we are starting to see the activity levels of the clients internationally focused on oil. We are starting to see that improvement, that's why we mentioned on our prepared comments that we are comfortable with the upper end of what we are seeing from the analysts, particularly the Main Street level. Rob MacKenzie – FBR Capital Markets: So the change is really an international one versus any moving parts of North America?

Yeah. We would see North America on the continent being rather I would say static. The pickup we see Rob would be deepwater Gulf of Mexico, which we think by the end of this year will return to pre-moratorium levels. So we do see some uptick there, but mostly the focus internationally is where we see where we expect that will carry the day for us and earnings going forward.

So Rob, when you think about Q1, $1.06, I think the Street mean is $1.15 and so that's just an observation of what Main Street is published at, and so that does suggest that we would have some upside opportunity. Rob MacKenzie – FBR Capital Markets: Okay. And then in terms of what you are seeing from your international customers that adding your bullishness, is that mostly reservoir description, is that more traction in production enhancement, can you give us feel for where it's coming from?

Yeah. As Monty detailed, certainly reservoir description, it's interesting to note that a lot of it has to do with the fluid side of the business. So a lot of pressure volume, temperature testing PBT and oil studies, a lot of those related to looking at enhanced oil recovery projects, miserable flood projects. So I know we talk a lot about core analysis, but let's remember now that we generate half of our revenue from reservoir fluids. And without a solid reservoir fluids business to go hand-in-hand with core analysis, I think you kind of missed the day by not fully describing the reservoir system because we can hold the rock static and we know the fluids are dynamic, and they change every day that we do have production. So the emphasis internationally is tilted towards reservoir description, but within reservoir description, the reservoir fluid side of that business and remember production enhancement revenues are above two-thirds North America, one-third international that continues to increase internationally, as we are looking at activities to stimulate horizontal wells that are being drilled into some of the shale reservoirs worldwide. So the uptick is going to be international, fluids for reservoir description and then production enhancement on the fracture diagnostic side and also on the HTD-BLAST side for production enhancement on the perforation side. Rob MacKenzie – FBR Capital Markets: Great. Thank you very much for the answer. I'll turn it back.

Your next audio question comes from the line of Veny Aleksandrov. Veny Aleksandrov – Pritchard Capital Partners: Good morning, guys. Hi.

Good morning, Veny. Veny Aleksandrov – Pritchard Capital Partners: My first question is from the Reservoir Management segment, great quarter and extremely strong margins. Was there anything quarter specific or can you give us a rate on the margins?

We've had a great quarter and a strong robust business there. Africa the news -- the studies that are taking off in Africa are very strong, but also the -- we mentioned the Tight Oil in the Midland Basin Study that's kicked off with 22 customers. So we've had a real strong response throughout our Marcellus continues to be a strong study for us as thus our Eagle Ford and we are doing very well in all the study areas. Veny Aleksandrov – Pritchard Capital Partners: Thank you. And my second question is Argentina, I know from the press release that you -- you are monitoring the situation and you might not go ahead with the facility he decides so, but is there further negative implications on your operation shift, the situation over there keeps deteriorating?

We don't see negative because I haven't started yet. Veny Aleksandrov – Pritchard Capital Partners: All right.

So it would be certainly, we're disappointed in the most recent developments there and it would be really a lost opportunity for us. We've had discussions with several large active clients there, and certainly they have built -- they have asked us to build dedicated facilities for the development of Vaca Muerta. As it stands right now, if events continue to go down the road where we have the government actions taking place then our appearing that they are going to take place. We would have a large pause before going in there knowing that our return on invested capital hurdles probably could not be achieved with the amount of activity we think that would be depressed there by the confiscation of assets by the government. So it won't have a negative application on our operation. It would be -- what we would see as a lost opportunity for us. So it's… Veny Aleksandrov – Pritchard Capital Partners: Well, to ask the question differently and I didn't want to go there because of the guidance and the listings and everything but was any of those (inaudible) upsides baked in the previous guidance here?

No. Because we are just starting, it would be starting off rather small, Veny. Veny Aleksandrov – Pritchard Capital Partners: Okay.

So really from the standpoint, it wouldn't be a nil movement for a couple years. Veny Aleksandrov – Pritchard Capital Partners: Okay. Okay.

Again, it just would be a lost opportunity for us. Veny Aleksandrov – Pritchard Capital Partners: Right. Right. Well, thank you so much.

Okay. Very good.

Your next audio question comes from the line of Blake Hutchinson. Blake Hutchinson – Howard Weil Inc.: Good morning, guys.

Good morning, Blake. Blake Hutchinson – Howard Weil Inc.: A lot of commentary, when you set the table for this over the last couple years but deepwater commentary really takes prominence in the current release. And I am trying to kind of gauge, as we get engaged on deepwater fields, is there sort of a multiplier effect versus initial engagement on say mature field in the Middle East that comes at being kind of -- earlier in the exploratory process and how would you couch that because it seems to me and really is there saying maybe -- maybe we get engaged on last fields year-over-year this year but the deepwater contact kind of hides a multiplier effect. Can you just explore that theme?

Yeah. Interesting point Blake, certainly the comparison that we always like to give is when we look at let's say a 1000-foot core from the deepwater offshore West Africa that's got the potential to generate between $2 million and $3 million of revenue for us. So you have a lot of these developments that are in the stage right now with our cutting core. For instance, we just received 1100 meters of core from East Africa. So when you look at the amount of core that has been cut in these developments especially in the deepwater where these wells are going to cost a 110 upwards, do $150 million per well they are going to use a lot of science. We look at a 1000-foot core that would be cut in a shale reservoir in North America or revenue potential would probably should be somewhere on the $200,000 to $300,000 level. So, you're going to multiply of about 10 fold. So that's why the concentration and you picked up on the theme at the press release certainly talking about importance of deepwater. So when we look at developments offshore West Africa all the way from gone up -- down now to the North Orange basin that Monty mentioned that reservoir management guys have starting to work on, the potential and the timing for a lot of Core to be cut is upon us, as it is in East Africa, the same thing with the Eastern Mediterranean. So the timing of this is very good for us especially when we have the arrival coming on the theme later this year, and then early next year over lot of these deep offshore rigs. So that gives us additional foundation for our optimism of expanding our business internationally along with margins where -- as we look at North America, maybe as being more static other than a pickup in the Deepwater Gulf of Mexico. Blake Hutchinson – Howard Weil Inc.: And so we should view those as you -- you not only get an upfront multiplier effect but you're still sticky kind of for the life of the field, there's no…

That is correct. Blake Hutchinson – Howard Weil Inc.: As long as it go into the development, okay.

Because if you look at just offshore Ghana, you had some production from some of those fields now that is about a year, maybe a little bit more than a year and into it. And we're still looking at rock from those fields but now we've engaged our production enhancement folks. They're in there and they're running some of their [septicum] tracers because you have some water reinjection already going back in those fields for pressure maintenance purposes. And of course, they want to -- watery injections going down into the water lake of those reservoirs and they want to make sure that they are not producing any of the water that they are injecting. So it's a very logical follow-on from reservoir description to production enhancement, and then if you look further south, some of the reservoir management projects that are going on. So we tend to stay pretty sticky and because of the incrementals that those fields generate on the margin side, that's why you're seeing some margin improvement as well. Blake Hutchinson – Howard Weil Inc.: And with that, going back to your earlier comments on the EOR projects and not to overlook those, I mean, as the business mix evolves towards that side as well, is that also a margin add?

Yeah. Our margins on a fluid -- on our high pressure, high temperature fluid business are probably the best that we have in the company. Blake Hutchinson – Howard Weil Inc.: Great. And then just one quick question, I'll (inaudible) the floor, you mentioned and have been mentioning for some time here that you have a couple of large scale or some possible large shale developments, stealth place here in North America. Is that something that's already running through? Just to clarify your reservoir management business, have consortium study started on those?

They have not started as of yet because I think our specific -- already, as we thought that there was one and possibly two large scale oil resource plays left in North America. Those plays are still in their infancy and acreage positions are being taken as we speak by operators. So until those are released by the operators, I think we probably said enough on what we can say on possibility of one being a definite and maybe as many as two. Blake Hutchinson – Howard Weil Inc.: Great. Thanks for your time. I'll turn it back.

Okay, Blake.

Your next audio question comes from the line of John Lawrence. John Lawrence – Tudor Pickering & Co.: Hey guys, good morning.

Good morning, John. John Lawrence – Tudor Pickering & Co.: Just, another quick on HTD-Blast, you talked about its use on 3,000 of 8,000 horizontal oil wells and what's realistic as far as further penetration there and then is coil tubing still bottleneck or are you starting to see market asset there?

Good question, John. We believe that we are addressing probably half the market right now for HTD-Blast. So we think that can easily go over 50% of oil wells being drilled, and we are seeing more coil tubing units out there. So that is becoming less of a bottleneck as utilization of those is becoming free and more units are coming on to the market. So I think you can look for HTD-Blast, have a very good year this year. That was originally developed to deliver eight perforating guns and talking to our guys last week, we've had a system where we delivered up to 27 guns. So that technology has worked very well for us. John Lawrence – Tudor Pickering & Co.: Further penetration I would assume.

That is correct. John Lawrence – Tudor Pickering & Co.: And then a quick one for Dick. Dick, just curious how quickly you want to pay down the debt, just given how much cash you are drilling off?

Our primary uses of capital have always been share buyback, dividends and then looking at the debt particularly when the interest rate is so low. So we think we get a very good return when we return it to our owners. John Lawrence – Tudor Pickering & Co.: Okay. Great. Thank a lot guys.

Okay, John.

(Operator Instructions)

Yeah. Eric, we'll take one more if it's out there.

There are no audio questions at this time.

Okay. Very good. In summary, Core's operations posted another solid quarter. We have never better operationally or technologically positioned to help our clients expand their existing production base. We remain in equally focused and most technologically advanced reservoir optimization company in the oil field services sector. This positions Core well for the challenges ahead in 2012 and beyond. For 2012, we continue to be encouraged by recent activity trends in international and especially deepwater activities and the growing activity in the deepwater levels of the Gulf of Mexico. We remain confident and the activity levels associated with unconventional oil plays. The company remains committed to industry leading levels of free cash generation, returns on invested capital, FX as capital being returned to our shareholder. So in closing, we like to thank all of our shareholders and the analyst that follow Core, and as already noted by Monty Davis, the Executive Management and Board of Core Laboratories who give a special thanks to our 5,000 worldwide employees that have made these outstanding results possible. We are proud to be associated with their continued achievements. So thanks for spending your morning with us and we look forward to our next update. Good bye for now.

This concludes today's conference call. You may now disconnect.