Core Labs 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

International rig count has been disappointing

“clearly internationally, if you use international rig count as a measure of activity, I think everyone’s been pretty disappointed with that.”

Geopolitical tension leading to more unconventional exploration in more stable areas

“Well it’s interesting in Europe, we have actually seen an increase in our activity level and looking at unconventional plays, we’ve done some work here just in the quarter in Germany, revisited some work in Poland. So I think that the geopolitical climate may be precipitating a relook at some of these unconventional plays, especially those tied to natural gas. So early days for that, but we do have some indication that some of the operating companies are looking at that pretty hard again.”

Large supply of new rigs coming to market. Can they be absorbed?

“So keep an eye on how the — the TMS, the SCOOP, the Codell, how these other plays evolve. If they continue to evolve as they have well with some of the expectation of the some of the E&P companies that are in there, the answer is probably yes. But I think it is very contingent on what the size and the development and the success in these emerging plays would be.

Now in saying that, going to pad drilling, I think that some of the older iron is probably going to get pushed out, so does the new iron push out the old iron, if it’s 200 rigs, probably won’t push all of them out, but if you get a little acceleration, some of these developing plays, some of the old iron gets pushed out, yeah maybe those 200 rigs can go to work.”

Putting plans to expand in Kurdistan on hold with Iraq situation unstable

“we would like to address our efforts that we’ve talked about on prior calls regarding Kurdistan. If you recall prior calls, we’ve talked about putting in a mobile facility there and then finally upgrading that to a full fixed laboratory.

We’ve decided to put that on hold because of the political risk events that are occurring now and the equipment that we had acquired for that are being put in other locations that can drive revenue more currently…We’ve hoped that some day we are back in Kurdistan but there is no way to project when that might be.”