Good morning. My name is Kimberly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Core Lab Q2 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) I would now like to turn the call over to Mr. David Demshur. Please go ahead, sir.

Thanks, Kimberly. I’d like to say good morning to everybody in North America, good afternoon in Europe and good evening to all of the listeners in Asia-Pacific. We’d like to welcome all of our shareholders, analysts, and most importantly, our employees to Core Laboratories’ second quarter 2012 earnings conference call. This morning I’m joined by Dick Bergmark, Core’s Executive Vice President and CFO. And also again this morning we are 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. Then Dick will come and follow-up with a detailed financial overview and additional comments regarding building shareholder value and Core’s industry outlook for the third quarter of 2012, which confirm our confidence in the trends of increasing activities in unconventional oil reservoirs in North and South America, and North Africa, and especially the international deepwater activities tied to crude oil and large LNG developments. Then Monty will go over 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. Then we’ll open the phones to a Q&A session. So I’ll now turn it over to Dick for remarks regarding forward-looking statements. Dick?

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 or the AFM. Our comments include non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures is included in the press release announcing our second quarter results. Those non-GAAP measures can also be found on our website. With that said, I’ll pass the discussion back to David.

Okay. Thanks, Dick. I’d like to give a quick investor update. Core’s operation produced another solid quarter, as the company can really do benefit from our continues focus on and the increase in international and deepwater offshore activities, and unconventional oil plays in response to relatively high oil prices and dwindling global spare oil producing capacity. The focus on crude oil related projects continued to build in 2012 as we discuss the projected decrease in natural gas drilling activities in North America on our last four 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 earlier. Moreover, most of the natural gas related projects emanate from the international theaters and these LNG projects are related to major developments in the Eastern Mediterranean, East Africa and Western Australia. Turning to our ops, Core’s reservoir description results reflected the focus away from natural gas and the positive increases in both international and deepwater activities, which continued into 2012. Core Lab dominates these deepwater core analysis and reservoir fluid markets capturing virtually all outsourced projects from offshore Brazil, West Africa, East Africa that includes thousands and thousands of feet of core that has been cut in East Africa, the Eastern Mediterranean and the deepwater markets throughout Asia-Pacific. Looking at reservoir management, they posted another strong quarter reflecting additional oil company support for its worldwide joint industry projects in oil shales and international areas of interest like the deepwater areas offshore Western Brazil where Core Lab currently ops six joint industry project and Petrobras continues to be Core Laboratories largest and most important national oil company client. Also driving our second quarter results, they were bolstered by North American activity in oil shale reservoirs and increased activities in the…

Thanks, David. I’d like to start by mentioning that we are excluding non-operational items from our operational earnings that occurred in the quarter. Three of which were expenses while the other was a gain. We are excluding them from operational earnings for these discussion purposes because they were either a one-off item or an item that was specifically excluded from our prior guidance like the losses caused by changes in foreign exchange rates or benefit from a more favorable tax rate than expected. We are also removing from our operational results the fees that we incurred in listing our shares on the NYSE Euronext Amsterdam Stock Exchange, as well as the fees incurred in a restructuring of certain of our legal entities that will improve administration efficiencies, which should reduce our fixed cost structure. Now, looking at the income statement, revenues were $247 million in the second quarter versus $225.8 million in the second quarter of last year. So revenues were up 9.4% year-over-year. Of these revenues, services for the quarter $175.7 million up 12.1% when compared to $156.8 million last year an increase of $18.9 million. Product sales for the quarter were $71.3 million up about 4% when compared to $68.9 million in last year’s second quarter. Moving on to cost of services, for the quarter there were 59.1% of revenues, an improvement when compared to 65.4% in last year’s second quarter, and 63.6% for all of 2011. And in the second quarter, our cost of product sales increased slightly to 73.6% of revenues, compared to 69.3% for all of last year as our inventory costs were impacted by the cost of replacement steel as result of the fire at our steel supplier. G&A for the quarter $10.2 million in the same as last quarter which was 4% of…

Thanks, Dick. The second quarter of 2012 revenue of $247 million represents revenue growth year-over-year of 9%. Operating earnings excluding the benefit from a lower effective tax rate, losses from foreign currency translations and non-operational expense items increased to $76 million with operating margins of 31%. Operating margins improved 300 basis points over Q2 2011. We commend our nearly 5,000 employees around the globe for another excellent performance. Reservoir description revenue grew 6% over Q2 2011 and operating earnings grew 28% over Q2 2011, with operating margins improving by 500 basis points to a record 31%. Reservoir description operations continue to work on large core analysis in crude oil testing programs in addition to reservoir fluid based behavior studies from deepwater offshore West and East Africa, the Eastern Mediterranean region, the Middle East and Asia-Pacific areas. Thousands of feet of cores from Cretaceous and Tertiary-aged sedimentary fan reservoirs from both coasts of Africa are being analyzed to describe these complex petroleum systems. Hundreds of reservoir fluid samples consisting of crude oils, condensates, natural gases, and waters are being characterized for compensation and phase-behavior relationships. The data sets are being used to plan the full-scale developments of these recent discoveries. Large Middle Eastern projects include the use of advanced rock properties and reservoir fluid characterizations to increase the productive capacity of existing fields, some of which are already been in production for decades. Asia-Pacific work continues offshore Malaysia, India, Indonesia and Australia. In deepwater Gulf of Mexico, Core worked on its largest project ever in the lower Tertiary section, while providing integrated reservoir conditions reservoir rock and fluid data sets. Core also expanded the number of clients and the number of projects from deepwater to an all-time high. The company expects industry activity levels to equal or surpass pre-moratorium levels during…

Kimberly, we can go ahead and open the call.

Sure. (Operator Instructions) Your first question comes from the line of James West from Barclays. James West – Barclays: Hey. Good morning, Dave, Dick, Monty.

Good morning, James. James West – Barclays: Monty, great color on the expansion programs you have underway on the international side of the core analysis side. But I was curious on your production enhancement, which is a little more levered to North America with NGL pricing coming down, liquids pricing overall kind of pressuring E&P company cash flows? Are you considering resizing that business or has the international become enough of a growth component that there is no need to do that?

James, the rig count has been pretty flat in that area. The production enhancement revenue actually grew 12% Q2 over Q2 2011. James West – Barclays: Sure.

So we’re still seeing a pretty good growth rate. You will notice our HTD-Blast and HTD-Blast XL, that family of systems grew 27%. So we are continuing to apply the technology, where we keep the operation at the right size and I’ll say that all along which in this period and in the coming periods to us means a growth mode.

Yeah. A couple of points, James. We look our outlook for the third quarter is a flattish rig count in North America with a gain of some rig counts looking for liquids and continued drop of the rig count associated with natural gas. And most of the expansion that Monty talked about in the reservoir condition, core analysis and reservoir fluids areas are actually right here because we are capturing more and more work from the deepwater Gulf of Mexico, and our clients have come to us and told us we need expansion in both rocks and fluids. And so, in response to that, it really is the largest expansion that we’ve had in capital aimed at the deepwater Gulf of Mexico market ever, so very positive there. But in saying that, when we look at the North American market, we think we can still grow that market in that flat rig count environment, two points. Number one, additional stages done on some of these oil resource plays and then additionally, more deepwater rocks and deepwater fluids from the deepwater Gulf of Mexico. James West – Barclays: Okay. That’s very helpful. Thanks, Dave and Monty. Just one last follow-up for me. The fracturing companies, I mean, Dick alluded to kind of consensus numbers coming down a lot of that is due to problems in stimulation in the North America. Are the fracturing companies that you tend to sell to, your perforating guns and charges? Are they pressuring you now on pricing or are you have any give back anything on pricing? Do we expect any kind of margin erosion or is it because you’re at the high-end that that is not really the case?

Yeah. A couple of points, James. Just to be clear. Our sales point, our marketing point to the oil companies, not to frac companies. So we really don’t sell into that fracking process. Because remember the perforation event occurs prior to fracking. So what we have found is we are able to sell based on value that we’ve created and particularly with the HERO line of charges giving superior performance, seems to be the way for us to continue to expand margins. Remember in this last quarter, margins reached 31%. James West – Barclays: Sure.

So that group is doing very, very well. Have we seen requests? We’ve heard about requests from some operators looking to reduce costs. James West – Barclays: Sure.

Remember, we are talking about adding value. So we don’t really try to get in the middle of that chain, I guess, if you will of operators who focus on costs. We prefer to deal with operators who focus on returns on their investment. James West – Barclays: Okay. Got it. Thanks, guys.

Your next question comes from the line of Jim Crandell with Dahl Rose. Jim Crandell – Dahl Rose: Good morning, guys.

Good morning, Jim. Jim Crandell – Dahl Rose: David, this is the first time I remember reading your release and seeing you specifically say core analysis at the well site. Do you see this segment of the market growing very rapidly in today’s market?

Yeah. Jim n my 30 years at Core Laboratories, we’ve attempted to offer these services three times. They’ve all turned out not well. We look at the data quality that can be generated at the well site and what that -- what those data sets are used for, and we find this really a low margin, low return market and we choose not to address that. And so, for us going forward, we are concentrating more on reservoir condition. So, temperature and pressure measurements of rocks and fluids as opposed to the lower tech ambient condition measurements associated with maybe mud logging operations. So for us, so probably the market for that, but it would never reach what our hurdle rate is for return on invested capital for us to invest money for equipment to do that at the well site. Jim Crandell – Dahl Rose: Dave, do you see the oil companies that do use that or are they using it mainly as a correlation tool so they are getting their electric wireline or LWD or mud logging estimates and they want to correlate it with Core’s and that’s being offered as another sort of add on service to other techniques?

Yeah. I think most of the work being done at the well site. It’s actually not encore, it’s actually on cutting. Yes, you are exactly right. They are using low level correlations at the well site that can be used to help calibrate at a lower degree some Wireline logs or some other data points that might be -- that might be generated from a suite of logs. So again, really on the exploration side, really on the mud logging side, not really our bailiwick. Dick?

I was just going to reinforce it, Dave. Do you think about the data sets were used. It’s not where we approach the market. That information is valuable to the oil companies to help them decide, should I complete that well bore or not. Our data sets are all about how do I best produce from a reservoir. So as David said, that’s more of an exploration tool, do I complete the well bore or not. Our data sets are used to develop producing fields.

Yeah. Moreover, Jim, remember Core Lab in the early ‘80s used to be the largest international mud logger in the world. And this is when we attempted at one time to go ahead and provide some of these services at the well site. We sold -- actually I personally was charged with selling that business in the mid-80s to Baker Hughes. So we once visited that area, I don’t think we visit there again. Jim Crandell – Dahl Rose: So David, I think I know the answer to this but I want to ask it anyway. So you can’t see a scenario based on the measurements being offered where let’s just say a big formation evaluation company, one of the big three, that there was demand for core analysis from the oil and gas companies as a -- as one tool in their toolbox to have a better picture of the well at the well site, could you envision if that was the case you possibly forming some kind of strategic alliance with another major service company where you would provide them core analysis tools they needed and probably may -- and be able to make your return on capital requirements?

Yeah. Interesting question, Jim. We view the addition of mud logging in some of these lower tech availability of data sets for correlation primarily revolving around the need to offer a full package for these IPM projects. Jim Crandell – Dahl Rose: Right.

Core has chosen not to participate in these integrated project management type projects because we just have found them over the years is to the operators trying to get bundled services for the lowest possible price ever. We don’t believe we’ve ever lost a job because we’ve not had a cooperative agreement with any of the big three. And so, we’ll continue to go our own way. Jim Crandell – Dahl Rose: Okay. David was that you I saw at a pirates game in the front row leading the cheering for the bucks the other night?

That was me. Jim Crandell – Dahl Rose: You must be delighted.

First time in 20 years. Jim Crandell – Dahl Rose: Thank you very much.

Okay, Jim.

Your next question comes from the line of Kurt Hallead with RBC Capital. Kurt Hallead – RBC Capital: Hey, good morning, guys.

Good morning, Kurt. Kurt Hallead – RBC Capital: A couple of quick follow-ups for you. I know you indicated a number of times here in your prepared commentary about your capital discipline and your return on invested capital and so on and so forth. Can you just give us a quick reference point where your current hurdle rates are for investment and whether those hurdle rates -- I know when I talked a number of companies here recently given the fact that cost of capital has come down pretty significantly. Some of those have kind of dropped the hurdle rates a tad. So I just to want get a general sense whether or not you’ve maintained your hurdle rates, what those hurdle rates are? I know you pushing the envelope even harder now than ever before?

We haven’t really adjusted them downward. We’re still in the 30% to 40% range and while that may seem high to what you hear from others, that’s where we think it’s an effective use of our capital and to be able to continue to service our clients and generate our internal growth. And it seems to be a nice balance of having industry leading revenue growth and industry leading margins. So, we like that 30% to 40% range. Kurt Hallead – RBC Capital: Okay. Great. And then second thing I had for you was can you give us an update on how you may be thinking about redeploying cash to shareholders. I know, you’ve indicated that you have, I think in recent times, been more favoring dividends over share repurchase. And can you give us an update on whether or not that’s shifting at all?

Yeah, Kurt. If we go back in history, we started the program back in 2002. It was principally share buy backs. And then we did begin a regular quarterly dividend and kicked it off with some special dividends. And we did those for three years. And we found over time that some of our discounted cash flow model type investors could not put that special dividend in the model to create value for it. So that’s when we rolled in, I believe as a year ago our special dividend into our regular quarterly. And then this last year we increased that by 12%. So, we’ve taken a view that probably not going to do special dividends because they are hard to value but we are cognizant that good companies do increase their dividends over time. Other than that I think it would be predominant share buy back for use of capital because of our view going forward on the value of the company is clearly in front of us. Kurt Hallead – RBC Capital: Okay. In the context -- I appreciate that answer and color. In the context of the dividend increases, is this something that you are thinking about Core Labs being able to do it on an annual basis or is the business still too volatile and your opportunity is more fluid than that, that you would necessary go out to guarantee an annual dividend increase but something that’s little bit more dependent on the dynamics of business.

The year that we combined our special with our regular, the payout ratio was about 30%. That is about the highest in the group. I think Schlumberger’s payout ratio was also 30% at that time. We have chosen not to target a payout ratio but that just shows you the -- I’ll use vernacular of spare capacity that we have in our free cash flow to be able to continue to raise that dividend. Will it be done annually? I don’t think we’re going to commit to that but we will say that quality companies do increase their dividends overtime. Kurt Hallead – RBC Capital: Right. That’s fantastic. And then the last thing, guys, last time you brought kind of a full year guidance number was, I think, back in January or February after the fourth quarter earnings. I know you provided a third quarter. Do you want to take a stab at how you see the full year now that we got three quarters in?

Yeah. The reason why we didn’t put in the full year, Kurt, is we still do have some concern with some of the softness in North America and if we still can see economic softness certainly in Europe and maybe Asia-Pacific, maybe we get a little softening. Our crystal ball can’t view the fourth quarter. But if we don’t have any big disruption, those numbers should be fairly accurate on the way we should rollout for the year. Kurt Hallead – RBC Capital: Very good. I think you said here that you expect North America activity be kind of flat but you would improve your business on top of that. So, that would give at least an indication that on the surface, right, we can assume the fourth quarter could be higher than the third quarter at a very minimum if the activity levels remain flat?

Correct because as Monty said, in looking at the deployment of some of the newer technologies like HTD-Blast XL and the increased number of completion stages and the complexity of those, we should be able to in a flat rig environment, read that a little bit up in oil, a little bit down in natural gal, continue to grow production enhancement even though 66% of that business is still U.S. and now 34% is outside the U.S. Kurt Hallead – RBC Capital: That’s great. That’s it for me. Thank you.

All right, Curt.

Your next question comes from the line of Rob MacKenzie with FB. Rob MacKenzie – FB: Hey, guys.

Good morning, Rob. Rob MacKenzie – FB: Dick, question for you. One of the regions I didn’t hear you guys talk about for international and unconventional that others have is unconventional gas in Saudi Arabia. Is that because you are not as bullish on as some or you not involved there or what’s the rationale?

No, Rob, good question on your behalf. An oversight for us, we have done extensive work there on oil shales and natural gas shales and actually have an internal project on a proprietary basis done for Saudi Aramco looking at some of the deeper related natural gas there. So an oversight on our behalf and you are absolutely correct. We are fully engaged in gas shales, oil shales and some of the deeper gas deposits there. Rob MacKenzie – FB: Fair enough. And then, kind of, along those lines, how would you say your outlook for development of international unconventional has changed in terms of the pace and magnitude of that development now versus say six months ago?

About the same with the caveat that we probably see a slowing now in Argentina due to the naturalization of YPF. That could be offset because I read with interest this morning that Shell and Exxon and Mobil have signed agreements with Sonatrach for the development of unconventional resources there. You remember over the last several years that we talked about that Gotland and Silurian shale there to have great potential, not only from a natural gas standpoint but also from a liquid standpoint. So those two might offset, so I would say we would still be equal.

Let me also add Australia is an area that’s going to be developing in this and I left that off of the second quarter talk that we will talk about that more in the third quarter. But that’s an area, we’re going to see a big expansion in unconventional. Rob MacKenzie – FB: Okay. Thanks, Monty. And switching to the deepwater a bit, one of the things you guys have talked about a lot in the past and a little bit here at South Atlantic margins and the potential off of west Africa for substantial pre-salt in addition to conventional reserves, how much growth do you think is left there for future studies, for analysis work and like it seems like it’s quite early.

Yeah. Absolutely right, Rob. If you look, we are doing work from some of the more recent discoveries rice. Cobalt has had a pre-salt tested. It’s been positive. Maersk has had a pre-salt test that is positive. We have wells being drilled now by Petrobras and BP coalition and then also there is a Cobalt test that will be done in just a bit. So I think very early days for that. Looking at the past call, we had mentioned a Reservoir Management group has initiated a study further south of there in the Orange Basin where we are looking at a post salt reservoirs now but as wells start to go pre-salt, no doubt we will have industry interest in those. So I think you are right, very early days for joint industry projects there. Rob MacKenzie – FB: Okay. I guess my last question, it comes back to the U.S. There is some worry among investors that prices and differentials into the Bakken may hamper or reduce activity there. Are you seeing any signs of reduced spending on the frac diagnostics work there at all?

We have not. Rob MacKenzie – FB: Okay.

As a matter of fact, I think we are seeing clients more interested in employing that technology because of some of the complexities there of those completions. Rob MacKenzie – FB: Great. Thank you. I will turn it back.

Okay, Bob.

Your next question comes from the line of John Daniel with Simmons. John Daniel – Simmons: Hey, guys.

Good morning, John.

Hey, John. Good morning. John Daniel – Simmons: Just a couple for me. Within the production enhancement business have you seen any customer shifts on your higher technology products to lower technology products in North America in order to save money and is that something you’d expect to see?

Not really. The value proposition is still very great towards the higher technology products and for the cost differential compared to the well, the cost and the value that’s generated by using the higher technology products, it’s usually a slam dunk if we can get them into the higher products. They love the high technology and the value it brings. John Daniel – Simmons: Okay. And then, Monty, you listed it, all sorts of expansion opportunities. They sound exciting. I wasn’t able to write them all down but obviously it sounds like a lot. Can you help us translate what all of that means into incremental revenue opportunities?

The things that I listed are expansions of our laboratories here in the U.S. That’s only part of our expansion opportunity. As far as revenue dollars, it will be generated, I haven’t added those up. But it’s each of those projects meets those hurdles we talked about. So that’s a compilation of only the major items we’re doing. We expect to see continued growth going incrementally just like we’ve seen in the past going into the future. Obviously with the deepwater Gulf of Mexico as it continues to build some steam, we’ll see more incremental growth in that area. John, I think you’ve seen the effects of the expansion of this higher technology level of products and services that we’re offering because you’ve seen in Reservoir Description, the highest margins we’ve ever had in Reservoir Description and that relates directly to us doing more and more work from these deepwater cores not only in the deepwater Gulf of Mexico but also worldwide. John Daniel – Simmons: Right. I guess, I mean, the one that I was able to catch was the first one, Monty had listed, just, for example, for x-ray detection units. I didn’t know, is that on a basis of 40, 10, 100 and I’m just trying to understand the magnitude of this, that’s all?

That increases that particular capacity in our U.S. lab by about a third. John Daniel – Simmons: Okay. And so generally speaking the capacity expansion would be in that 25% to 50% range?

Yeah. That is correct. It varies to each area but, yes. John Daniel – Simmons: Sounds pretty good. Okay, guys. Good quarter.

All right, John.

Your next question comes from the line of Blake Hutchison with Howard Weil. Blake Hutchison – Howard Weil: Good morning, guys.

Hello, Blake. Blake Hutchison – Howard Weil: I just wanted to kind of hone in on the Reservoir Description margins. Obviously, it really stands out performance wise for the quarter. And David, you just mentioned that a good portion of that performance is driven by, certainly by mix. But I guess maybe more specifically is there a portion of that that is driven simply by absorption. So you kind of keep that higher margin level as long as you have this level of through put and then the quality -- how much is the qualitative versus just the pure level of business at this point?

Remember its two things that drives that force. Its incremental revenues but it’s also managing that fixed cost structure. And so, you know each quarter, we talk about each of those components. And I think what you saw was the benefit of some restructuring efforts we did last year in Reservoir Description to improve that cost structure and then throw on top of that the higher tech services that both David and Monty have talked about and your incrementals are going to cause the absolute margins to expand. And that’s exactly what happened this quarter.

Let me add to that, we stick real strongly in operational management to a discipline of going where we make the money. We work on these margins all the time. We don’t enter into areas where we cannot make a margin that helps us out here. So, we try to avoid those areas and as Dick mentioned last year, we had some underperforming areas internationally and we addressed them pretty strongly, and that’s the way we get there and that’s the way we stay there. Blake Hutchison – Howard Weil: And I guess qualitatively, we wouldn’t expect to take any steps backward in terms of where the mix -- where this positive mix influences has been going?

No. I think as Monty commented, we don’t go there. Blake Hutchison – Howard Weil: Right. Right. And then again, I think historically, you guys have pointed to the fixed cost structure and the ability as a franchise in its entirety to handle maybe upwards of $1.2 billion in revenue with this similar fixed cost structure. I mean, does that change as we get more business specific here in Reservoir Description? Is there a level of revenue that you feel like you’d have to start making more major investment or is what we outline today representative of a more major investment at this point?

What you are seeing is our year end and year out approach to our growth capital. Not maintenance but growth, and every year we spend about two thirds of our capital program on that growth to drive our revenues. And so, you are just seeing the expansion of capacity based on that $33 million that we are going to spend this year. So, we would expect that $1.2 billion in capacity is going to go up. So it’s not a step function that we need to now do something significantly larger. That’s not the case. This is what we’ve done for the last decade, every year spending about two thirds of our capital program on growth. Blake Hutchison – Howard Weil: Great. And then just a couple of quick once on the inter divisions production enhancement. Dick, you mentioned that you are still dealing with some higher cost inventory. Is there a point where that rolls off and we see kind of a little bit of a margin benefit?

We are going to see that roll off this year for the most part. Each quarter, you should expect to see that come down, say $4 million each quarter. Blake Hutchison – Howard Weil: Okay.

Through the end of the year. Blake Hutchison – Howard Weil: Great. And then is there a timeframe set for the deployment of the HTD XL where we will start going from coil deployment and into the horizontal well bores?

Working on that now, we will just give -- [Mike] will just give quarterly updates on that. Blake Hutchison – Howard Weil: Okay. Great. And then just finally, I wanted to kind of gauge the Reservoir Management business at this point. It has become so, I think and rightfully so focused on the consortium studies and other portion of that business. As we try to model that business, at this point is that 70% or 80% dominated by consortium studies versus the other offerings within that group?

Yeah. Blake Hutchison – Howard Weil: Okay.

I would say yes. We don’t talk about the proprietary studies we do in general because they are proprietary. And there is not a whole lot we can say about those. That’s not of a very general nature and that’s why we focus on the consortium. But at this time the consortium studies are the huge share of that business. Blake Hutchison – Howard Weil: So we should start seeing kind of less variability around the numbers of the quarter, is that kind of takes over the mass of the segment?

It still has variability depending on the progress in those studies and new members joining those studies. We’re constantly working on new areas of study to keep that pipeline growing, but it is somewhat still up and down, just the size of that business can make big transactions, have big difference in the quarter. Blake Hutchison – Howard Weil: Okay. Thanks for the color, guys. I’ll turn it over.

Okay. Blake.

Your next question comes from the line of Stephen Gengaro with Sterne, Agee. Stephen Gengaro – Sterne, Agee: Thanks. Good morning, gentlemen.

Good morning, Stephen. Stephen Gengaro – Sterne, Agee: Two things. One, you did say in the release that you expect to generate over $200 million of free cash and that’s the same thing you said when you provided the initial guidance range?

I think -- no, Stephen, there was one word changed. It was over to approximately. Stephen Gengaro – Sterne, Agee: Okay.

If you look in the original release on that, the company expects to generate over $200 million. That has been changed now to approximately $200 million. So it still might be over, but we did downgrade that commitment. Stephen Gengaro – Sterne, Agee: And I think you commented on, okay. That’s helpful. And you commented on the last call, I think about the consensus being reasonable. The 480 consensus that we currently see now, you have any comments on it.

Well, the reason why we didn’t put a paragraph in there about yearly consensus is, again, our crystal ball not being as clear in the fourth quarter. So, again, we didn’t want to commit to that until we look at activity levels, especially here in North America. If we have a continuing economic weakness in Europe and in Asia-Pacific, you might have a disruption in crude oil prices which would affect the operational activities of our clients and certainly in these unconventional oil plays. And so that’s really kind of our hedge that we removed that paragraph. Stephen Gengaro – Sterne, Agee: Okay. No. That’s fair. And then just as one follow-up and you’ve given a lot of color, when we think about the three segments and maybe you can either give a general or a segment-by-segment response. But when we think about that, is there any reason to think your incrementals should not kind of continue to be in that 30% plus range in a different segment as we go forward here? And I was thinking to compare it on a year-over-year basis?

Stephen, yeah and we do as well. It is the year-over-year comparison when we disclose that information. And we agree prior guidance has been mid-30s to 40, and we don’t know of any reason why that would not be the case going forward. Stephen Gengaro – Sterne, Agee: Okay. Thank you, gentlemen.

Hey, Kim, we will take one additional question.

Your final question comes from the line of John Lawrence with Tudor, Pickering. John Lawrence – Tudor, Pickering: Hey, guys. Good morning.

Good morning, John. John Lawrence – Tudor, Pickering: Just one quick one. Deepwater as a percentage of revenue, what is that number and then how would you expect that to change over the next two or three years?

Okay. When we look at all offshore, 30% of all oil is produced offshore, 40% of our revenue comes from offshore. About half of that is deepwater. John Lawrence – Tudor, Pickering: Okay.

We look for that percentage to go up actually significantly as we find, as Dick had made mention of additional floaters in ultra deepwater drillships coming on. So, we think that demographic works for us nicely. Moreover, we like that work because it is very data intensive and it generates higher incremental margins. So, we like the whole deepwater demographic because we think that works very nicely for us. And if we look at some of these markets, virtually every foot of Core that has come out of East Africa and these are thousands and thousands of meters of Core. Core Lab has been able to capture and did all four reservoirs off of West Africa. So these deepwater plays are incredibly important to us because they do generate higher incremental margins and push our margins. And then Monty has already detailed our expansion plans for the amount of work that we think we are going to be capturing from the deepwater Gulf of Mexico, which we just saw our most successful quarter there and certainly, we’ve been told by our clients to expect a lot more of that work. So all in all, when you look at the rocks and fluids environment in deepwater worldwide, that works very nicely for us. John Lawrence – Tudor, Pickering: Great. That’s very helpful. Thanks a lot, Dave.

Okay. John, I’d like to thank everybody for participating this morning. So in summary, Core’s operations posted another solid quarter. We have never been better operationally or technologically positioned to help our clients expand their existing production base. We remain uniquely focused in the most technologically advanced reservoir optimization company in the oilfield service sector. This positions Core well for the challenges that lie ahead in 2012 and then in 2013. For 2012, we continue to be encouraged by the recent activities trends in international and especially deepwater activities. The growing activity in the deepwater Gulf of Mexico and remain confident in activity levels associated with unconventional oil plays, especially in North America and also worldwide. The company remains committed to industry leading levels of free cash flow generation and returns on invested capital, with all excess capital being returned to our shareholders. So in closing, we would like to thank all of our shareholders and the analysts that follow Core. And as Monty Davis has already pointed out, the executive management and Board of Core Laboratories gives a special thanks to our 5,000 worldwide employees that have made all these outstanding results possible. We are proud to be associated with their continuing achievements. So, thanks for spending your time with us this morning, and we look forward to our next update. So goodbye for now.

Thank you. That does conclude today’s Core Lab Q2 2012 earnings conference call. You may now disconnect.