Good day, and welcome to the Core Laboratories Q2 2025 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Larry Bruno, President. Please go ahead.

Thanks, Keith. Good morning in the Americas, good afternoon in Europe, Africa and the Middle East, and good evening in evening in Asia Pacific. We'd like to welcome all of our shareholders, analysts and most importantly, our employees to Core Laboratories' Second Quarter 2025 Earnings Call. This morning, I'm joined by Chris Hill, Core's Chief Financial Officer; and Gwen Gresham, Core's Senior Vice President and Head of Investor Relations. The call will be divided into 6 segments. Gwen will start by making remarks regarding forward-looking statements. We'll then have some opening comments, including a high-level review of important factors in Core's Q2 performance. In addition, we'll review Core's strategies and the 3 financial tenets that the company employs to build long-term shareholder value. Chris will then give a detailed financial overview and have additional comments regarding shareholder value. Following Chris, Gwen will provide some comments on the company's outlook and guidance. I'll then review Core's two operating segments, detailing our progress and discussing the continued successful introduction and deployment of Core Lab's technologies, as well as highlighting some of Core's operations and major projects worldwide. Then we'll open the phones for a Q&A session. I'll now turn the call over to Gwen for remarks on forward-looking statements.

Before we start the conference this morning, I'll mention that some of the statements 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 that could cause actual results to materially differ from our forward-looking statements. These risks and uncertainties are discussed in our most recent annual report on Form 10-K, as well as other reports and registration statements filed by us with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Our comments also 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 Larry.

Thanks, Gwen. Moving now to some high-level comments about our second quarter 2025 results. Core continued to execute its strategic plan of technology investments targeted to both solve client problems and capitalize on Core's technical and geographic opportunities. Second quarter 2025 revenue was up 5% compared to Q1, and Core achieved nice sequential improvement in operating income, operating margins, free cash flow and earnings per share. Looking at Reservoir Description in more detail. Revenue in the second quarter was up 7% compared to Q1. The segment's financial performance in the second quarter reflects continued demand for rock and fluid analysis across the company's global laboratory network, along with a solid quarter of laboratory instrumentation sales. In addition, there was some rebound in the demand for laboratory services tied to the assay of crude oil and derived products as trading patterns partially reset following disruptions caused by enhanced sanctions that were announced on January 10 of this year. There is still uncertainty in the demand for these assay services due to ongoing international geopolitical conflicts and sanctions, as well as pending tariffs and the resulting volatility in commodity prices. For the second quarter, ex-items, operating margins in Reservoir Description were 13%, up from 10% in Q1. In Production Enhancement, second quarter revenue was up 3% compared to Q1. Ex-items, second quarter 2025 operating margins were 9%, up from 8% in Q1. This sequential improvement in margins reflects ongoing demand for high-margin diagnostic services in the U.S., both onshore and offshore, and improved international and domestic completion product sales. Core Lab returned excess free cash to our shareholders by repurchasing more than 237,000 shares of company stock during the second quarter, a value of $2.7 million. In line with our stated financial strategy, in addition to funding our dividend and repurchasing shares,…

Thanks, Larry. Before we review the financial performance for the quarter, the guidance we gave on our last call, and past calls, specifically excluded the impact of any FX gains or losses, and assumed an effective tax rate of 25%. So accordingly, our discussion today excludes any foreign exchange gain or loss for current and prior periods. Additionally, adjustments, which net to a gain of $800,000 have been excluded from today's discussion of the second quarter 2025 financial results. You can find a summary of those items in the tables attached to our press release for the second quarter of 2025. So looking at the income statement. Revenue was $130.2 million in the second quarter, up $6.6 million, or 5%, compared to the prior quarter and flat year-over-year. Sequentially, the primary drivers were a rebound, or restabilization, of the maritime movement and trading of crude oil and our associated laboratory assay services, which were disrupted in the first quarter after the expanded sanctions were announced in January. Additionally, we had elevated levels of international product sales for both laboratory instrumentation and completion products when compared to the first quarter. Of this revenue, service revenue, which is more international, was $96.2 million for the quarter, up 1% sequentially and flat year- over-year. As mentioned earlier, we saw a nice recovery in our laboratory assay services in the second quarter following the sanction driven disruptions in the first quarter. However, this was partially offset by a sequential decrease in our diagnostic services during the second quarter after coming off a 5-year high in the first quarter. Additionally, the noticeable decrease in success rates over the past 12 months in drilling international and offshore exploration and appraisal wells has negatively impacted some of the growth we had anticipated for reservoir rock and fluid…

Thank you, Chris. Turning to Core Lab's outlook for the third quarter. Recent and pending tariffs announced by the U.S., along with the OPEC+ decision to increase required oil production levels, have contributed to additional volatility and uncertainty for crude oil prices. Uncertainty surrounding crude oil demand, driven in part by ongoing trade negotiations and macroeconomic concerns, coupled with OPEC+ increasing required production levels, has prompted oil and gas companies to reevaluate their near-term upstream spending priorities. Despite near-term volatility, Core Lab maintains a constructive long-term outlook for international upstream activity. The IEA, EIA and OPEC+ continue to forecast global crude oil demand growth, ranging from 700,000 to 1.3 million barrels per day for 2025. This growth continues to be driven primarily by demand from the non-OECD countries, including Asia, India and emerging markets across the Middle East and Africa. Outside the U.S., large-scale international oil and gas projects are expected to be less sensitive to near-term volatility of crude oil prices. And Core Lab sees steady activity across committed long-cycle investments in the South Atlantic margin, North and West Africa, Norway, the Middle East, and certain areas of Asia Pacific. And Core views these developments as stable contributors to global activity levels. These projects, by nature of their scale and planning cycles, tend to be less attractive to near term -- reactive to near-term commodity price fluctuations. As always, Core Lab's revenue opportunity on awarded projects will remain dependent on our clients' geological success rate. In contrast, U.S. onshore activity levels tied to small-scale short-cycle crude oil development projects remains more sensitive to crude oil price volatility. As a result, Core Lab anticipates that changes in crude oil prices will have a more immediate and pronounced impact on drilling and completion activity across the U.S. onshore market. Core projects…

Thanks, Gwen. First, I'd like to thank our global team of employees for providing innovative solutions, integrity and superior service to our clients. The team's collective dedication to servicing our clients is the foundation of Core Lab's success. Looking at the macro, even after assessing current and near-term economic conditions, IEA, EIA and OPEC projections show that there will be growth in global crude oil demand in 2025 and beyond. The various estimates show growth in demand of between 0.7 million and 1.3 million barrels per day for 2025, with similar additional demand growth projected for 2026. This growth is driven mainly by strong non-OECD demand, including Asia, India, emerging markets in the Middle East and Africa. In addition to the forecasted growth in demand, new production will need to be brought online to account for the natural decline from existing producing fields. Combined, these trends will require continued investment in the development of onshore and offshore crude oil fields. Furthermore, the most recent EIA forecast for U.S. oil production is 13.4 million barrels per day in 2025, and the agency currently projects production to remain at the same level in 2026, with little or no growth in U.S. production over this time frame. Aside from the COVID period, and the transitory market reset in 2016, these forecasts for nominal year-over-year production growth would suggests the smallest annual adds to U.S. oil production in the past 15 years. U. S. tight oil production has been, by far, the largest component of non-OPEC oil production growth since 2010. Continued growth in global oil demand, combined with slowing year-over-year U.S. oil production growth supports the thesis that crude -- that future crude oil demand will be largely met from international, conventional offshore discoveries and developments, all trends that bode well for increasing…

[Operator Instructions] And the first question comes from Sean Mitchell with Daniel Energy Partners.

Any additional color around the kind of new proppant design that you've kind of partnered with the West Texas operator in the quarter. Is that really above and beyond? Is that really a new proppant design? Or is that a frac design? Or can you talk a little bit more about that?

Yes. So our engagement on that was less about the design of the proppant in this particular case, although we do engage in those types of analyses through our Stim-Lab operation. Our engagement was about them trying different designs of the proppant sort of particle size and the sorting, if you will, or the uniformity of the particles and then putting tracers into alternating zones, testing the sort of their existing proppant configuration versus the new one they were trialing. And with the tracer flowback, we were able to confirm that the new design was producing better results from those intervals that deployed the revised design of the proppant particle size and sorting.

Okay. That's helpful. That's good color. And then anything else on the new product or kind of service offering side, I know you guys are constantly coming up with new ideas that you're super excited about maybe over the next kind of 12 to 18 months, in particular, in the Middle East.

Yes. I mean the -- one of the things going back on that -- to the proppant deal. I think it's an important thing to understand about our diagnostic services. As people try new technology, they -- and just conceptualize this, think about a well with a 3-mile lateral. You're 15,000 feet from the surface, you're trying to figure out in a hole 10-inches around or less. Did I execute the completion of the way I wanted, or as I change and modify completions and by getting the desired results? And the diagnostic tracers really unravel that. So we've got a number of technologies on both sides of the business. I'd say one that we're really focused on is formation damage. We've made quite an initiative into looking at ways of laboratory testing formation damage as people are introducing various different completion fluids into the well, how is that reacting with the rock and with the fluids. So that would be something that we've made investments in the Middle East in particular. Another one in large scale that we did, and Gwen and I were over earlier in the second quarter, we opened up our unconventional laboratory in Dammam, Saudi Arabia. So we do see that there are, I'd say, growing opportunities into a game that's in the early innings of unconventional resource development throughout the region. And so we've taken a lot of the proprietary technologies that we've developed for dealing with the unconventional reservoirs in North America, and we've now replicated that equipment and those techniques and technologies. And we brought that into Saudi Arabia. We've always had a great partnership with Saudi Aramco. And we think that we can service them and others in the region as unconventionals grow in the -- along the Arabian Peninsula.

[Operator Instructions] If there's nothing else at the present time, I would like to return the floor to Larry Bruno for any closing comments.

Okay. Yes, I think we've got kind of a busy morning of earnings releases coming out, so we'll wrap up here. In summary, Core's operational leadership continues to position the company for improving client activity levels in the upcoming quarters. We have never been better operationally, or technologically positioned, to help our global client base optimize their reservoirs and to address their evolving needs. We remain uniquely focused and are the most technologically advanced, client-focused reservoir optimization company in the oilfield service sector. The company will remain focused on maximizing free cash and returns on invested capital. In addition to our quarterly dividend, we'll bring value to our shareholders, we are opportunistic through opportunities driven by both the introduction of problem-solving technologies and new market penetration. In the near term, Core will continue to use free cash to repurchase shares and strengthen its balance sheet while always investing in growth opportunities and evaluating various methods to increase shareholder value. So in closing, we thank and appreciate all of our shareholders and the analysts that cover Core Lab. The executive management team and the Board of Core Laboratories give a special thanks to our worldwide employees that have made these results possible. We're proud to be associated with their continuing achievements. So thanks for spending time with us, and we look forward to our next update. Goodbye for now.

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