Good morning and welcome to the Core Laboratories Q2 2016 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mr. David Demshur, Chairman and President of Core Labs. Please go ahead. David M. Demshur - Chairman-Supervisory Board, President & CEO: Thanks, Harrison. 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' second quarter 2016 earnings conference call. This morning I am joined by Dick Bergmark, Core's Executive Vice President and CFO; Core's COO, Monty Davis, who'll present the detailed operation review; and Chris Hill, Core's Chief Accounting Officer. Also this morning I have the pleasure of introducing Gwen Schreffler to new participants on this call. Gwen will be helping Core with our Investor Relations efforts. Gwen has been with Core Lab for over 10 years, most recently as Vice President of Core's Human Resources based in the last three years in our Amsterdam office. Her new role in Corporate Development and Investor Relations is a logical segue from her role leading our HR efforts, as Core Lab is such a people-focused, energy technology company. Our most important assets are the skills, capabilities and technologies delivered by our employees to our clients throughout the globe. Many of our European shareholders have already met Gwen over the past few years, as she has augmented our Investor Relations efforts in Europe, while based in Amsterdam. The call will be divided into five segments. Gwen will start by making remarks regarding forward-looking statements. Then we'll come back and give a review on the current macro environment, updating U.S. and worldwide crude oil supply thoughts as related to newly-calculated net decline curve rates, and then quickly comment on Core's three financial tenets, which the company employs to build long-term shareholder value. Chris will then follow with a detailed financial overview and additional comments regarding shareholder value. That will be followed by Dick Bergmark, commenting on Core's second quarter and second half 2016 outlook and a general industry outlook, as it pertains to Core's prospects. 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 then highlighting some of Core's operations and major projects worldwide. Then we'll open the phones for a Q&A session. I'll turn it back over to Gwen for remarks regarding the forward-looking statements. Gwen?

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 market, international political climate and other factors, including those discussed in our 1934 Act filings that may affect our outcome. Should one or more of these risks or uncertainties materialize, or should any 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 a 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 end December 31, 2015, as well as other reports and registration statements filed by us with the SEC and the AFM. Our comments include non-GAAP financial measures. Reconciliation 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 Dave. David M. Demshur - Chairman-Supervisory Board, President & CEO: Thanks, Gwen. We'd like to look at the current macro view and then review our three financial tenets. Core believes that worldwide crude oil supply and demand markets are close to balancing and will balance the second half of 2016. On the crude oil supply side, U.S. unconventional production peaked at 5.5 million barrels of oil per day…

Okay. We will now begin the question and answer session. And our first question comes from Rob MacKenzie of IBERIA Capital. Please, go ahead.

Good morning, guys. David M. Demshur - Chairman-Supervisory Board, President & CEO: Good morning, Rob.

Dave, or maybe Monty, I guess my first question is, coming back to what you talked about on enhanced oil recovery and tight reservoirs. That's something you guys have talked about for a while, and I'm just curious kind of where that stands in the development process? What hurdles or what milestones you need to achieve before that becomes kind of a more material commercially? Richard L. Bergmark - CFO, Member-Supervisory Board & EVP: Yeah. Good question, Rob. We first mentioned this at the end of the first quarter of last year. We have a number of projects that continue to grow, and we are still currently in the experimental stage for specific reservoirs and specific crude oils on what is the proper cocktail, at what pressures and temperatures to inject that into the reservoir to recycle. So we do have a number of projects that are ongoing. You do have one field implementation of admissible flood out in the Eagle Ford Shale. Rob, we're still probably several quarters away before we see the field-wide implementation of these projects. But sure enough, they're coming down the pike.

Okay. So it sounds like, from my prior notes, you guys were talking recovery rates up to 12% to 14%. Now you're saying 13% to 15%. Is there something you're seeing that's making you even more optimistic about what you're able to achieve here? Richard L. Bergmark - CFO, Member-Supervisory Board & EVP: Yeah. And as we study the cocktails of which we are injecting, including miscible hydrocarbon gases, we've upped those 100 basis points on either end. We still believe that, that is doable in the field. However, taking a laboratory scale to a field scale is a big step. It's always happened before in experimental projects that we've worked on. We have no reason to believe that, that won't occur at that level. So, the more that we study these phenomena and the cycling of these various fluids through these rocks, the more we learn.

Got it. And then how would – A, how would billing for a service like this work and, B, how would you protect the intellectual property and all the work that's gone into designing these cocktails and prevent others from just simply copying you? David M. Demshur - Chairman-Supervisory Board, President & CEO: Yeah. From the aspect of billing, these are really book-price analyses that we perform, many of which are performed at reservoir temperature and pressure. So, Rob, we're looking at relative permeability testing across using water and multiple gases. So that's a very common analysis for us that runs through our price book. On protecting the proprietary side, we're using trade secrets for individuals in our facilities. Of course, once paid for by the client, they own that technology and the secrets associated with that. They're free to share that with whomever. However, we must say that the variety of cocktails of gases needed to be effective are going to vary greatly, even within single plays. So when you look at it from a standpoint of being able to share what these cocktails are, what could be very effectual in one area of the play might not be all that effectual in a county or two over. Moreover, on the proprietary side, some of these pressures and temperatures at which we are injecting, we are the only guys on the planet that have this equipment. And so that also provides a proprietary note on others being able to simulate these in their laboratories, whether they be in major oil companies or pseudo-competitors in the North America or global space.

Great. Thanks. And one final, if I may. How should we think – or how do you think about the ultimate size of this, because on its surface, it sounds like this could be a very material contributor to earnings over time. Just trying to see if we can put some benchmarks around that? David M. Demshur - Chairman-Supervisory Board, President & CEO: Yeah. It's hard to say right now, but I think you're right, Rob. In two or three years, this will be a mainstay of Reservoir Description in North America.

Great. Thanks. I'll turn it back. David M. Demshur - Chairman-Supervisory Board, President & CEO: Thanks, Rob.

Our next question comes from Sean Meakim of JPMorgan. Please go ahead.

Hey, good morning. David M. Demshur - Chairman-Supervisory Board, President & CEO: Good morning, Sean.

Thinking about North America, given the continued ramp in volumes per stage we keep hearing about from the E&Ps, how are you thinking about that trend helping your results in Production Enhancement relative to rig counts? As we think about – you've talked about a V-shaped recovery. How do you see the performance of that business relative to broader activity in the rig count, specifically? David M. Demshur - Chairman-Supervisory Board, President & CEO: Yeah. If we look at Production Enhancement, clearly outperforming by a long stretch, but the decline in the North American, especially the U.S. land rig count, has been more of that to come. Again, the mantra for continued success are longer laterals, more stages, closer clusters, more profit. If you look at our 2013 annual report, on the cover, we have what was then called the well of the future. It contained 256 stages. We've just worked on a well that had over 160 stages. So the well of the future will be here before we know it. So, and that being said, you can look at and model the recovery and the growth rate in Production Enhancement to clearly outstrip the gain back in the rigs that we've added, the 70 rigs or so that we've added from the bottom in May.

And then how do we translate that into incremental margins this cycle, do you think? David M. Demshur - Chairman-Supervisory Board, President & CEO: I'm going to let Dick answer that one because he's been working on these incrementals. Richard L. Bergmark - CFO, Member-Supervisory Board & EVP: Yeah, Sean, you think about the cost that we would need to take out to the field, as the number of stages increase, so the lateral length increases. It really doesn't change our cost structure. So, it's just the incremental cost of additional stages, so some additional chemicals, for example, still pretty much nil, so we're thinking incrementals are going to be 60%-plus, just as they have been on any recovery in a cycle. Moreover, as these new services are added though, irrespective of are you in a cycle, just the incremental nature of that revenue will generate those high incremental margins through cycles.

Right. Makes sense. And then switching gears a little bit coming back to EOR, just curious as we are at a bit of an inflection point here in terms of activity for North America, how do you expect E&P interests in those types of projects to evolve in a recovery? It's just as E&Ps are getting more cash flow, but they're also getting more interested in incremental drilling programs. Any shift in those conversations? David M. Demshur - Chairman-Supervisory Board, President & CEO: Yeah. It's interesting, Sean. We've got clients now that are talking about return on their invested capital. And certainly if you're going to just apply these numbers to their past returns, which in many cases have not been to the level that they need to be to even recapture their cost of capital, these programs will be needed to ensure that their return on invested capital is a positive with respect to their cost of capital. So, even as we drill additional wells and exploiting more of these major tight oil plays, you will see the more sophisticated clients using these technologies. Clients like Pioneer Natural Resources on the CO2 front. You've got a company like Occidental that has been very good in applying this technology out in West Texas. You will continue to see that occur and actually expand over this next rebound in the cycle, keeping in mind that our most sophisticated and technologically adept clients know that they need to increase their returns on their invested capital.

Fair enough; makes sense. Thanks a lot, gentlemen.

Our next question comes from Blake Hutchinson of Howard Weil. Please go ahead.

Good morning. David M. Demshur - Chairman-Supervisory Board, President & CEO: Hello, Blake.

First question just a kind of a point of clarification from some of the numbers that were thrown out there relating to kind of segment outlook. I think Monty said that the goal of attaining 21% margins in Reservoir Description for the coming quarter was still intact. I guess as we look at the overall numbers, that would entail that Production Enhancement margins were flat to perhaps down. Is there some mix working against maybe Gulf of Mexico or international mix? First of all, is that correct? And, I guess, is there some positive mix working against Production Enhancement that may kind of mask some of those increments from the U.S. land market, just from a quarter-to-quarter basis if that's what's at work? Monty L. Davis - Chief Operating Officer & Senior Vice President: Blake, first, let me be real clear on this. We said 20% margins for Reservoir Description for Q3. That's the same number we gave out at the end of Q1. We thought by Q3 our Reservoir Description margins would be up to 20%.

Okay. Monty L. Davis - Chief Operating Officer & Senior Vice President: We have been dealing with our cost structure for the last year and a half. And as the bottom of the B (45:09) went deeper than most people I think expected, we have continued to deal with our cost structure, including into the second quarter, and right up to the end of the second quarter, we've been making adjustments. So the full effect of those won't be in play – the later ones, of course – until the third quarter. So that's where we get our feeling of what's going to happen for us. We do see some pick-up in the Production Enhancement revenues. As I mentioned, the duct wells, we think that there will be a reduction in the number of duct wells in excess of normal process over the second half of the year. And we've got pretty good reason, talking to customers, to know that that's plans of many of our customers. So that's opportunity for us in Production Enhancement that we're pretty confident is going to happen in the second half of the year and into 2017. David M. Demshur - Chairman-Supervisory Board, President & CEO: So, Blake, if you use 20% margins in Reservoir Description, you still have room to grow Production Enhancement margins slightly in Q3 as well.

Yeah. That jibes more with what we're talking about in this conversation. Okay. I'm sorry, I misheard that 21%. Absolutely; got it. And then I guess, maybe David or Monty, just because we're kind of in the starting box here and you mentioned all the costs that you've worked out of the system on Reservoir Description, specifically, as we think about kind of cycle-to-cycle margins – I'm not asking to get granular and I understand pricing hasn't necessarily impacted the whole portfolio of projects within reservoir description, but if we look over the last 12 months to 18 months, what type of price impact, and maybe on a weighted average basis, have you felt, so that we can kind of understand what's come out from that perspective and apply that kind of to our margin understanding going forward? David M. Demshur - Chairman-Supervisory Board, President & CEO: I think you don't make a large amount of correction for pricing. Most of this is volume-related, Blake, and we've tried to reduce costs to offset the lack of volume coming out of this. Reservoir Description should model no differently than it did through 2008, 2009, 2010, and 2011. So if you use that model base, you see that you can get your Reservoir Description operating margins back into the low-30% area.

Great. That's extremely helpful. Let me sneak one more in here and I'll hang up and listen. You mentioned that the Reservoir Management section has actually seen an uptick in some demand for U.S. basins. Is that a continuation of kind of your private equity comments from the last quarter or are you starting to see some operators come back and take a look at these data sets? Monty L. Davis - Chief Operating Officer & Senior Vice President: It's both, Blake. You've had a lot of small operating companies that are getting infusions of equity as they go through the process, and this is where we're seeing people that have new interest. We're also seeing people come in and acquire management from previous operators that have plans of their own, and they're looking at these same plays that we mentioned. So it's a mix of companies that have gotten an infusion and companies that are being formulated with some expertise from their prior life.

Great. Thanks for that, guys. David M. Demshur - Chairman-Supervisory Board, President & CEO: Okay, Blake.

It appears we have no further questions at this time. David M. Demshur - Chairman-Supervisory Board, President & CEO: Okay, Harrison, thank you. So in summary, Core's operations continue to position the company for an uptick in activity levels in the second half of 2016, and we know the significant challenges await, however, we have never been better operationally and technologically positioned to help our clients to maintain and expand their existing production base. We remain uniquely focused and are the most technologically-advanced reservoir optimization company in all of oilfield services. This positions Core well for the challenges ahead. The company remains committed to industry-leading levels of free cash generation and returns on investment capital with all excess capital being returned to our shareholders via dividends and future opportunistic share repurchases. So in closing, we'd like to thank all of our shareholders and the analysts that follow Core, and as Monty Davis has already said, the executive management and board of Core Laboratories give a special thanks to our worldwide employee base that have made these results possible. We are proud to be associated with their continuing achievements. So thanks for joining us this morning, and we look forward to updating you at the end of the third quarter. Goodbye for now.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.