Core Laboratories N : Lab Reports Fourth-Quarter 2020 Results

FOR IMMEDIATE RELEASE

CORE LAB REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS FROM CONTINUING OPERATIONS:

• COMPANY FOURTH QUARTER REVENUE OF $114 MILLION; UP 8% SEQUENTIALLY
• FOURTH QUARTER GAAP EPS OF $0.31; $0.18, EX-ITEMS; UP OVER 10% SEQUENTIALLY
• CORE GENERATES FCF FOR 19TH CONSECUTIVE YEAR; $46 MILLION FOR 2020
• CORE REDUCES NET DEBT BY $49 MILLION OR 16.5% FOR 2020
• RESERVOIR DESCRIPTION'S REVENUE UP 5% SEQUENTIALLY
• PRODUCTION ENHANCEMENT'S REVENUE UP 18% SEQUENTIALLY, LED BY U.S. ENERGETICS SALES, UP OVER 65% SEQUENTIALLY

AMSTERDAM (27 January 2021) - Core Laboratories N.V. (NYSE: "CLB US" and Euronext Amsterdam: "CLB NA") ("Core", "Core Lab", or the "Company") reported that continuing operations resulted in fourth quarter 2020 revenue of $113,700,000. Core's operating income was $23,400,000, with earnings per diluted share ("EPS") of $0.31, all in accordance with U.S. generally accepted accounting principles ("GAAP"). The financial results for the fourth quarter of 2020 include a non-cash adjustment of $11.9 million to reverse previously recognized stock compensation expense associated with performance share awards that did not fully vest and were revalued. Operating income, ex-items, a non-GAAP financial measure, was $13,000,000, yielding operating margins of 11% and EPS, ex-items, of $0.18. A full reconciliation of non-GAAP financial measures and year-over-year comparisons are included in the attached financial tables.

Core's CEO, Larry Bruno stated, "Core's fourth quarter results demonstrate the dedicated efforts of our innovative staff, the durability and adaptability of the business model, as well as the benefits of the cost reduction plans that were quickly enacted earlier this year. Despite the challenges encountered in 2020, after adjusting for non-cash impairments, Core generated sector-leading operating margins, four consecutive quarters of positive earnings, and positive free cash flow for 2020. This performance enabled the Company to reduce net debt by $48,700,000 throughout the year, while continuing to fund capital investments for growth initiatives. As we embark on 2021, Core remains well-positioned to navigate today's challenging market and capitalize on future growth opportunities, while providing innovative solutions that drive efficiency and reservoir optimization for our clients."

Liquidity, Free Cash Flow, Private Placement Notes and Dividend

Core continues to focus and generate free cash flow ("FCF"), a non-GAAP financial measure defined as cash from operations less capital expenditures. For the full year of 2020 cash from operations was $57,900,000 and capital expenditures were $11,900,000, yielding FCF of $ 46,000,000, marking the 19th consecutive year in which the Company has generated positive free cash flow. Cash flow from operations, for the fourth quarter

of 2020, included cash payments unique to the quarter, and had a negative impact on operational cash flow. These cash payments included (i) $16 million for employee post-retirement deferred compensation distributions and employment separation payments and (ii) approximately $5 million for prepaid 2021 corporate insurance programs, which resulted in lower annual premium costs. Accounting for the $21 million in cash payments ($16 million + $5 million), cash from operations was ($2,900,000) for the fourth quarter of 2020, and together with $3,300,000 in capital expenditures, FCF was ($6,200,000). Although these cash payments for employee post-retirement benefits in the fourth quarter are required to be deducted from operational cash flow and FCF, the Company had partially funded the employee post-retirement payments with $11,500,000 of cash received through previously purchased company owned life insurance ("COLI") policies. The cash received from COLI is considered investing activities, and thus, is not included in cash generated from operations or FCF. The following table summarizes the impact of these cash payments on operational cash flow.

	Quarter ended
	December 31, 2020
Net cash provided by operations, before employee post-retirement and	(in $	millions)
$	18.1
prepaid insurance payments
Cash payments for employee post-retirement and prepaid insurance	$	(21.0)
U.S. GAAP - net cash used by operations	$	(2.9)
Capital Expenditures	$	(3.3)
FCF	$	(6.2)

For the full year, free cash was used to reduce the Company's outstanding debt, and net debt was decreased by $48,700,000 or 16.5%. Core will continue applying its excess free cash flow towards debt reduction for the foreseeable future.

The following graph summarizes the maximum leverage ratio permitted over the relevant period:

Core Lab's leverage ratio of 2.82 at 31 December 2020

Leverage Ratio

		Quarter Ending
2020			2021
Dec. 31	Mar. 31	Jun. 30	Sept. 30	Dec. 31
3.00			Maximum leverage
			ratio permitted
2.75
2.50
2.25

As of 31 December 2020, Core Lab's leverage ratio was 2.82, with $101,000,000 of excess capacity under the Company's revolving credit facility. As previously disclosed, subsequent to year-end, on 12 January 2021, the Company issued $60 million of senior unsecured notes in a private placement transaction. Proceeds from the sale were exclusively used to reduce outstanding borrowings under the credit facility. The Company anticipates it will continue to generate positive cash flow and reduce net debt, while

maintaining ample liquidity and remaining in compliance with debt covenants.

On 17 December 2020, Core announced the launch of an "at-the-market offering" for the issuance and sale of up to $60.0 million of common shares. Core Lab intends to use the net proceeds from the sale of Shares, if any, for general corporate purposes, which may include, among other things, investments in the development of new products and technologies, capital expenditures, repayments of indebtedness, working capital and potential acquisitions. The Company has not sold shares under this program as of 27 January 2021.

The following table summarizes the quarterly cash dividends paid by the Company for the year ended 31 December 2020. Dutch withholding tax was deducted from each dividend at a rate of 15%.

						$ Amount per
Quarter Ending	Record Date	Payment Date	Common Share
31	March 2020	24	January 2020	14	February 2020	$0.25
30	June 2020	8 May 2020	19	May 2020	$0.01
30	September 2020	27	July 2020	10	August 2020	$0.01
31	December 2020	26	October 2020	17	November 2020	$0.01
2020 Total					$0.28

On 15 January 2021, the Board announced a quarterly cash dividend of $0.01 per share of common stock, payable on 16 February 2021 to shareholders of record on 25 January 2021. Dutch withholding tax will be deducted from the dividend at a rate of 15%.

Reservoir Description

Reservoir Description revenue in the fourth quarter of 2020 was $83,800,000, up 5% sequentially. Operating income for the fourth quarter of 2020 on a GAAP basis was $19,400,000, while operating income, ex-items, was $12,300,000, up 5% sequentially, yielding operating margins, ex-items, of 15%, which were flat sequentially. Sequential performance was associated with improved U.S. client activity and some improvement on longer-cycle international project activity. Operating margins were impacted by continued COVID-19 disruptions that included project and logistical delays in various international markets; however, the implemented cost controls in the segment helped mitigate the impact on operating margins.

During the fourth quarter of 2020, Core continued to perform highly specialized core and reservoir fluid analytical programs on samples originating from the offshore South Atlantic Margin. Additional opportunities along the South Atlantic Margin are unfolding. Several international oil companies have obtained licenses for pre-salt exploration and appraisal in Brazil, signaling that this region will be a focus of near, mid and long- term capital deployment. To support current and future programs, Core is in the final stages of commissioning a new facility in Rio de Janeiro. This laboratory will offer a wide range of testing capabilities, including many of the proprietary and patented technologies that are in high demand throughout Core's global client base. These proprietary offerings include Core's full visualization, pressure-volume-temperature ("PVT") cell instrumentation and Core's Dual Energy CT rock evaluation technologies. This new laboratory secures Core's position as the leading provider of advanced reservoir description services in the region and satisfies the growing demand for Core's patented and proprietary laboratory technologies in this growing market.

Also, in the fourth quarter of 2020, Core continued analytical programs on a variety of CO2 injection projects for both carbon capture and sequestration ("CCS") and for enhanced oil recovery ("EOR") efforts. Under the direction of The CarbonNet Project, Core continued its laboratory analysis of conventional core from the Gular-1 appraisal well, offshore southeast Australia. Data generated by Core is providing insight into seal capacity, storage capacity, geomechanical properties and the pore system properties of the target injection zones. Additionally, in the fourth quarter of 2020, Core was engaged by a national oil company in the Asia- Pacific region to evaluate CO2 injection opportunities as part of an EOR program in tight oil reservoirs. Core Lab combined its proprietary high frequency nuclear magnetic resonance technology with physical laboratory core flooding experiments to determine in-situ hydrocarbon saturations during and after CO2 injection. This comprehensive dataset is providing the operator with an understanding of fluid displacement and fluid interactions throughout the CO2 flooding process. For these EOR applications, CO2 purity, injection parameters, fluid compatibility, and rock properties all need to be measured and evaluated. These two projects are representative of the various CO2 subsurface injection opportunities that exist for Core and its clients.

Production Enhancement

Production Enhancement operations, which are focused on complex completions in unconventional, tight-oil reservoirs in the U.S., as well as conventional offshore projects across the globe, posted fourth quarter 2020 revenue of $29,900,000, up 18% sequentially. The revenue increase was primarily driven by U.S. land energetic product sales, which improved 65%, sequentially. This compares very favorably with sequential U.S. land well completion activity. Operating income on a GAAP basis was $4,500,000, and $1,170,000 ex- items, both up sequentially. Additionally, operating margins improved sequentially from near break-even to 4% for the quarter.

Core's clients are always seeking innovative technological solutions to optimize their completion techniques. Recently, several of Core's technologically sophisticated clients in North America pursued an oriented downhole perforating technology which would align the perforations in the direction of maximum principal stress. To meet this objective, Core's Production Enhancement engineering team developed the patent pending Oriented GoGunTM. Providing both very high alignment accuracy and wellsite efficiency, this technological advancement is designed to allow the frac energy to be focused in a manner that maximizes the frac while minimizing tortuosity. Core's Oriented GoGunTM also eliminates the need for orientation subassemblies, minimizing the number of connections and saving time by not having to recapture and redress orienting subs. During the fourth quarter of 2020, one of the largest E&P operators in North America conducted field trials, including various offerings from competitor's oriented systems. During the field trails, downhole cameras were used by the operator to verify orientation accuracy. Core Lab's Oriented GoGunTM proved to have the highest level of accuracy, both from perforation to perforation and from stage to stage. As a result of Core's superior product performance, the operator has adopted the Oriented GoGunTM as their preferred perforating system.

Also, during the fourth quarter of 2020, Core's proprietary completion diagnostic services were utilized in a major Gulf Coast natural gas storage project. Core was engaged by the operator to assess the effectiveness of frac pack completions performed on a number of wells in this gas storage field. Core utilized its PackScan® density logging technology to determine the competency of the annular packs that had been placed in these wells. In one of the wells, Core's PackScan® density log revealed insufficient coverage of the perforated interval and a completely uncovered sand control screen. Core's engineers identified these potential failure points and recommended a proppant "top-off" treatment to remediate the interval of concern. The operator