Core Laboratories N : CORE LAB FILES JUNE 30, 2021 SEMI-ANNUAL IFRS FINANCIAL STATEMENTS

CORE LABORATORIES N.V.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

PREPARED IN ACCORDANCE WITH IAS 34,

"INTERIM FINANCIAL REPORTING"

Semi-Annual Report for 30 June 2021

Van Heuven Goedhartlaan 7 B

1181LE Amstelveen

The Netherlands

CORE LABORATORIES N.V.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEMI-ANNUAL REPORT FOR 30 JUNE 2021

TABLE OF CONTENTS

	Page
Semi-Annual Report of the Directors	2
Interim Consolidated Statement of Financial Position (Unaudited) as of 30 June 2021 and 31 December 2020	9
Interim Consolidated Statement of Profit or Loss (Unaudited) for the Six Months Ended 30 June 2021 and
2020	10
Interim Consolidated Statement of Other Comprehensive Income (Unaudited) for the Six Months Ended 30
June 2021 and 2020	11
Interim Consolidated Statement of Changes in Equity (Unaudited) for the Six Months Ended 30 June 2021
and 2020	12
Interim Consolidated Statement of Cash Flows (Unaudited) for the Six Months Ended 30 June 2021 and 2020	14
Selected Explanatory Notes to the Condensed Interim Consolidated Financial Statements	15

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Semi-Annual Report of the Directors

Currency - United States Dollars ("USD", "$")

Business review

Core Laboratories N.V. is a limited liability company incorporated in the Netherlands and publicly traded in the United States on the New York Stock Exchange ("NYSE") and in the Netherlands on the Euronext Amsterdam Stock Exchange ("Euronext Amsterdam"). We were established in 1936 and are one of the world's leading providers of proprietary and patented reservoir description and production enhancement services and products to the oil and gas industry. These services and products can enable our clients to improve reservoir performance and increase oil and gas recovery from their new and existing fields. We continue to develop new technologies that complement our existing services and products, and we disseminate these technologies throughout our global network. As of 30 June 2021, we have over 70 offices in more than 50 countries and have approximately 3,700 employees.

References to "Core Laboratories", "Core Lab", "we", "our", "us", the "Company" and similar phrases are used throughout this Semi-Annual Report and relate collectively to Core Laboratories N.V. and its consolidated affiliates.

We operate our business in two reportable segments: Reservoir Description and Production Enhancement. These complementary segments provide different services and products and utilize different technologies for improving reservoir performance and increasing oil and gas recovery from new and existing fields.

• Reservoir Description: Encompasses the characterization of petroleum reservoir rock and reservoir fluid samples to increase production and improve recovery of oil and gas from our clients' reservoirs. We provide laboratory based analytical and field services to characterize properties of crude oil and crude oil derived products to the oil and gas industry. We also provide proprietary and joint industry studies based on these types of analysis and manufacture associated laboratory equipment.
• Production Enhancement: Includes services and manufactured products relating to reservoir well completions, perforations, stimulations and production. We provide integrated diagnostic services to evaluate and monitor the effectiveness of well completions and to develop solutions aimed at increasing the effectiveness of enhanced oil recovery projects.

Industry and the Coronavirus Disease 2019 ("COVID-19")

2020 and first six months of 2021 year have proved to be a challenging time for people around the globe, and particularly for those in the oil and gas sector. Both the industry downturn and COVID-19 have created unprecedented and protracted disruption to businesses and most societies. Understanding our responsibility to our shareholders, employees and the communities in which we operate, we developed and have adhered to the following goals throughout this period:

1. Met the current challenges head-on, while acting expeditiously to ensure disruptions to operations were minimized and fulfill our obligations as a Cybersecurity and Infrastructure Security Agency ("CISA") Energy Sector, Critical Infrastructure Workforce.
2. Employed strategies to keep the Company best positioned for success when the market stabilizes.
3. Achieved these essential objectives with as little impact to our existing employees as possible.

We remained committed to maintaining our zero-incident environment, making safety a top priority in all our facilities. To achieve this, we undertook numerous safety precautions to maintain a safe environment for our employees, clients, vendors, and anyone visiting our facilities. These included:

1. Creating a Pandemic Update SharePoint site containing a COVID-19 Dashboard to track cases, responses at our facilities, and report the latest information provided by the World Health Organization ("WHO"), Centers for Disease Control and Prevention ("CDC"), and Core Lab.

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1. Updating our pandemic preparedness policy.
2. Creating a COVID-19 Symptomatic and Positive Response Plan.
3. Practicing work from home when possible, and in accordance with local health advisories.
4. Increasing the cleaning and sanitation practices at facilities and requiring mask, social distancing and hygiene protocols are followed by all employees.

To keep everyone informed, we created a global communication plan that included: email distributions, FAQ documents, CoreConnect Articles, Flyers and Notices outlining Core Lab's health and safety expectations and guidelines.

We continued focusing on our corporate responsibility efforts, participating in several initiatives to assist our employees and communities through the hardships created by COVID-19. When many were suffering from job losses, pay cuts and health concerns, our employees rallied and implemented food drives, blood drives and monetary fund-raisers to help ease the burden felt in our communities.

Financial Review

Revenue

Services Revenue

Services revenue is primarily tied to activities associated with the exploration and production of oil, gas and derived products outside the U.S. The negative impact on the industry caused by the COVID-19 pandemic began in March of 2020 and continued throughout the remainder of 2020 and in the first half of 2021. Global government mandated shut-downs, home sheltering and social distancing policies have caused a significant decline in the demand for crude oil and associated products, which has also resulted in decreased spending and disrupted activity by our clients. Activity levels outside the U.S. continue to remain depressed for the first half of 2021 and continue to experience workflow disruptions and delays. For the six months ended 30 June 2021, services revenue of $170.2 million decreased 15% year-over-year from $201.0 million for the six months ended 30 June 2020. Year-over-year, lower levels of activity have impacted services revenue in both the U.S. and international markets.

We continue to focus on large-scale core analyses and reservoir fluids characterization studies in the Eagle Ford, the Permian Basin and the Gulf of Mexico, along with Guyana, Suriname, Malaysia and other international locations such as offshore South America, Australia, and the Middle East, including Kuwait and the United Arab Emirates. Analysis of crude oil derived products also occurs in every major producing region of the world.

Product Sales Revenue

Product sales revenue is tied more to the completion of wells in North America and international markets. For the six months ended 30 June 2021, product sales revenue of $56.9 million decreased 15% year-over-year from $67.2 million in the six months ended 30 June 2020. Rig count is one indicator of activity levels associated with the exploration and production of oil and gas.

The average rig count for North America and internationally decreased from the six months ended 30 June 2020 to the six months ended 30 June 2021 by approximately 24% and 25%, respectively.

Operating expenses

Cost of Services

Cost of services expressed as a percentage of services revenue increased to 81% compared to 76% for the six months ended 30 June 2021 and 2020, respectively. Although significant cost reduction initiatives were implemented beginning in April of 2020, the cost reductions were not able to completely offset the significant decrease in revenue. The decrease in cost of services to $137.8 million for the six months ended 30 June 2021, from $153.3 million for the six months ended 30 June 2020, was primarily due to lower activity levels and cost reduction initiatives.

Cost of Product Sales

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Cost of product sales expressed as a percentage of product sales revenue was 83% for the six months ended 30 June 2021, compared to 89% for the same period in 2020. Lower cost of product sales during the six months ended 30 June 2020 was primarily due to the continued decrease in activity levels from the COVID-19 pandemic, and the benefit derived from cost reduction initiatives fully implemented in the second half of 2020 and through the first half of 2021.

Operating margin

Operating margins for the six-month period ended 30 June 2021 were 12%, compared to 2% for the same period of 2020. The lower operating margin in 2020 is primarily due to a charge of $8.2 million for impairment of certain intangible assets, and a charge of $9.9 million for inventory obsolescence and valuation write-down recorded in the six months ended 30 June 2020 associated with Production Enhancement segment.

Cash Flow

The following table summarizes cash flows (in thousands of USD):

For the Six Months Ended

30 June

2021

2020

Variance

% Change

Cash provided by (used in):
Operating activities	$	25,671	$	57,965	$	(32,294)	(55.7)%
Investing activities		(3,378)		(7,156)		3,778	(52.8)%
Financing activities		(2,482)		(40,943)		38,461	93.9%
Net change in cash and cash equivalents	$	19,811	$	9,866	$	9,945	(100.8)%

Cash flows provided by operating activities for the six months ended 30 June 2021 compared to the same period in 2020 decreased by $30.8 million primarily due to changes in working capital. For the six months ended 30 June 2020, working capital decreased $23.2 million as operating activity levels declined during the global pandemic that began in March 2020, while working capital required an investment of $12.5 million for the same period in 2021 as operating levels began to recover. The effect of changes in working capital was partially offset by higher net income for the six months ended 30 June 2021 compared to the same period in 2020.

The decrease in cash flows used in investing activities during the six months ended 30 June 2021 compared to the same period in 2020 was primarily due to: 1) lower capital expenditures of $5.7 million in 2021, a reduction of $0.8 million, 2) net cash proceeds received of $1.6 million in 2021 from company owned life insurance policies used to fund our deferred compensation program, and 3) net proceeds of $0.8 million from the sale of assets and a business in 2021.

Cash flows used in financing activities for the six months ended 30 June 2021 decreased compared to the same period in 2020. Financing activities for the six months ended 30 June 2021 reflect the lower dividend payments of $0.9 million compared to $11.6 million in 2020. Additionally, financing activities in 2021 included $59.1 million of cash raised by issuing shares through the ATM program and $58.9 million net cash raised through the issuance of the 2021 Senior Notes. Proceeds from both the ATM program and the 2021 Senior Notes were used to repay the $119.0 million of outstanding borrowings under the Company's Credit Facility.

Equity

During the six months ended 30 June 2021, we repurchased 33,863 of our common shares for $1.0 million, which includes those shares that were surrendered to us pursuant to the terms of a stock-based compensation plan in consideration of the participants' tax burdens that may result from the issuance of common shares under that plan. Such common shares, unless canceled, may be reissued for a variety of purposes such as future acquisitions, non-employee director stock awards or employee stock awards. We distributed 128,580 treasury shares upon vesting of stock-based awards during the six months ended 30 June 2021.

In February and May 2021, we paid a quarterly dividend of $0.01 per share of common stock.

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