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Core Laboratories N.V.

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Core Laboratories boasts of a unique business model, disciplined financial management and technological expertise. We also like CLB's leadership position in the reservoir optimization niche, along with its global footprint and deep portfolio of proprietary products and services. Furthermore, CLB’s low asset intensive operations and limited capex needs allow it to generate substantial free cash flows. Providing core sample and fluid analysis to oil and natural gas producers in managing their reserves, Core Labs have been able to operate profitably even in this low commodity price environment. However, we see limited upside potential for shares due to the continuing declines from U.S. land production and lower levels of new wells, which will hamper the specialized service provider’s near-term results. This accounts for our cautious stance on CLB shares.

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