1

Idliketoremindeveryone thattheideaImabouttopresentisanexistingpositioninour
portfolio.Wemaycloseoutourpositionatanytime.

2
CoreLabisanoilfieldservicebusinessthathelpsenergycompaniesanalyzetheirreservoirs,and
increasetheiroilandgasrecovery.

Ithasa$5 billion marketcap.

_____________
Source:BloombergLP,retrievedMay5,2017.

3
CoreLabhastwosegments:ReservoirDescriptionandProductionEnhancement.

ReservoirDescriptionisanassetlight,labbasedbusinessthatanalyzes reservoirrocksand
fluids.

Coreisconsideredthetechnologicalleaderinthefield,andin2016thissegmentaccountedfor
71%ofrevenues.

_____________
Source:BloombergLP,retrievedMay5,2017.SegmentdescriptionsfromCLB2016Form10K.Reservoir
ManagementreassignedtoothersegmentsasdescribedonSlide9.Imageusedwithpermissionof
www.cartoonstock.com.

4
MajoroilcompanieswhodomuchofthisworkinhouserelyonCoreforanalysisoftheirmost
complexreservoirs,whereCorehasearnedareputationforbeingbestinclass.

_____________
ImageusedwithpermissionofWarrenMiller;TheNewYorkerCollection/TheCartoonBank.

5
Thesegmentsrevenuesandmarginshavebeenfairlystable becauseitspecializesinmultiyear
projects,especiallyoffshoreanddeepwater.

_____________
Source:BloombergLP,retrievedMay5,2017.SegmentdescriptionsfromCLB2016Form10K.Reservoir
ManagementreassignedtoothersegmentsasdescribedonSlide9.

6
ProductionEnhancementprovidestoolsandservicesrelatedtowellcompletionandproduction.

In2016thissegmentgenerated29%ofrevenue.

_____________
Source:BloombergLP,retrievedMay5,2017.SegmentdescriptionsfromCLB2016Form10K.Reservoir
ManagementreassignedtoothersegmentsasdescribedonSlide9.ImageusedwithpermissionofZacharyKanin;
TheNewYorkerCollection/TheCartoonBank.

7
Thisbusinesssellsperforatinggunsandchargesprimarilytofrackers,andofferswelldiagnostic
servicestoglobalE&Pcompanies.

GunsandchargesareacompetitivemarketinwhichCorecompetesagainstTitan,Schlumberger
andothers.

Overtwothirdsofthissegmentsrevenuecomesfromproductsratherthanservices,which
makesProductionEnhancementatypicalcommoditypricesensitiveoilfieldbusiness.

_____________
Source:BloombergLP,retrievedMay5,2017.SegmentdescriptionsfromCLB2016Form10K.Reservoir
ManagementreassignedtoothersegmentsasdescribedonSlide9.

8
ProductionEnhancementisthesmallerandlessprofitablepartofthebusiness.

_____________
Source:BloombergLP,retrievedMay5,2017.SegmentdescriptionsfromCLB2016Form10K.Reservoir
ManagementreassignedtoothersegmentswithReservoirDescriptionreceiving75%andProductionEnhancement
receiving25%.

9
CoreLabisnotcheap.Onconsensusestimates,thestocktradesat35xnextyearsearningsand
nearly27x2019estimates.

_____________
Source:BloombergLPconsensusfigures,retrievedMay2017.

10
Andittradesatamassivepremiumtoitsoilfieldservicepeers morethantwicethemultipleof
priorpeakearnings.

TworeasonsbullsgivetojustifythisareCoresseeminglyseculargrowth,anditsindustry
leadingReturnonInvestedCapital(ROIC).

_____________
Source:BloombergLP,retrievedMay5,2017.PeerconstituentsselectedinthesolediscretionofGreenlight.2018
P/EpresentationexcludesOceaneeringIntlratioof129.5inthesolediscretionofGreenlightasthisisnota
meaningfulfigureforinvestors.

11
Thegreatthingabouthighreturnbusinessesisyoucancompoundyourearningsbyreinvesting
yourprofitsathighreturns.

Coreis anoncapitalintensivebusiness.Analytically,theROICinanoncapitalintensivebusiness
isirrelevant,becauseyoucantreinvestyourprofitstogrowyourearningsatthestatedROIC.
Corecouldhavetwiceasmuchlabequipmentwithoutgaininganynewcustomers.

ItisflawedtovaluethestockbasedonitsindustryleadingROIC.

_____________
ImagelicensedunderaCreativeCommonsAttributionNonCommercial 2.5License.

12
Asfortheseculargrowth,wethinkthisisamisunderstanding thatdatesbackto2009,andstill
persiststoday.

_____________
Bizarro usedwithpermissionofDanPiraro,KingFeaturesSyndicateandtheCartoonistGroup.Allrightsreserved.

13
Letslookatthelastcycle.

Whentheoilpricebrieflycollapsedin2008,therevenueofmostoilfieldservicecompanies
collapsedalongwithit.

Coresrevenuefelltoo,butonlybarelyandmuchlessthanothersintheindustry.
Coremanagedtomaintainsalesandevengrowmargins.
Subsequently,revenuesandmarginscontinuedtoclimb.

Faced withthisdissonance,analystsneededanexplanation.
Andtheonetheycameupwithwaswrong.

_____________
Source:BloombergLP,retrievedMay5,2017.

14
Coresstabilitythroughthedowncyclefollowedbygrowthintherecoverygavethefalse
impressionthatCoreisaseculargrowthcompany.

_____________
Bizarro usedwithpermissionofDanPiraro,KingFeaturesSyndicateandtheCartoonistGroup.Allrightsreserved.

15
Analystsbeganhypingthe companyasaseculargrowthstorygenerallyimmunetooilprice
volatility.

16
InvestorsagreedandreratedCoretoanoncyclicalgrowthstockmultiple.

Corebecameamarketdarlinganditsvaluationdivergedsharplyfromotherglobaloilfield
servicecompanies.

_____________
Source:BloombergLP,retrievedMay2017.PeerconstituentsselectedinthesolediscretionofGreenlight.

17
Analystsweresoconvincedthatatyearend2014,afteroilpriceshadalreadybeencutinhalf,
theystillprojectedthatCorecouldmaintainearningsthroughthedownturn.

_____________
Source:BloombergLP,retrievedMay2017.YE14consensusreflectsmeanestimatesasofDecember31,2014.

18
Theanalystsandtheirprojectionswerewrong.

Andthougha74%declineinearningsovertwoyearsshouldhavemadeanalystsandinvestors
reconsiderthenarrative,theyhavent.

Insteadtheycontinuetovaluethecompanyasaseculargrower.

_____________
Source:BloombergLP,retrievedMay2017.

19
Inreality,Coreisacyclicalbusinesswhoseparticularproductsuitewaslessaffectedbythe
2009downturnthanothercompaniesintheindustry.Corewasintherightplaceatthe
righttimeinthelastcycle,butnotthistime.

_____________
BibleTailscreatedbyJonHuckeby andNicholasDeYoungDaySpring Cards.UsedbyPermission.
www.dayspring.com

20
Likealloilfieldservicebusinesses,Core has twoprimaryrevenuedrivers:

One isthepriceofoil,whichwewillcomebackto later.

Theotheris theendmarketswhereinvestmentdollarsarebeingspent.

21
Readingtheannualreports,youdconcludethatCoreLabhappenstobesteepedinthehottest
partsoftheenergymarketinanygivenyear.

Letshavealook.

22
At theendof 2007,whennaturalgaspriceswerespiking,Corestimeprovenstrategywas
aboutexplorationinCanadianoilsands,tightgassand,andshalegasreservoirs.

_____________
Source:CLBannualreportsfortheyearspresented,availableathttp://www.corelab.com/investors/financial
report.

23
By 2009, Corereframeditshistory,forgotaboutnaturalgas,andsaidthatforthelastseven
yearsithadfocusedoninternationaldevelopmentandproductionrelatedcrudeoilprojects
almosttotheexclusionofmorecyclical,explorationrelatedactivities.

_____________
Source:CLBannualreportsfortheyearspresented,availableathttp://www.corelab.com/investors/financial
report.

24
Attheendof 2011whenshale wasthemarketdarling,Corescontinuedinternationalcrudeoil
focusmorphedtoincludeshale.

_____________
Source:CLBannualreportsfortheyearspresented,availableathttp://www.corelab.com/investors/financial
report.

25
A yearlatershalewasout,andCorehadalaserfocusoninternationaldeepwateroil,whichit
promisedinvestorswouldpositionthecompanyforgrowthoverthenextdecade.

_____________
Source:CLBannualreportsfortheyearspresented,availableathttp://www.corelab.com/investors/financial
report.

26
In2013,shalecamebackeverywhere.NotjustinNorthAmerica,butintheU.K.,Russia,North
Africa,theMideast,China,Australia,andotherplaces.

_____________
Source:CLBannualreportsfortheyearspresented,availableathttp://www.corelab.com/investors/financial
report.

27
In2014and2015,Corewantedustobesurethatitwasntmissingoutontheliquefiednatural
gas,orLNG,boom.

_____________
Source:CLBannualreportsfortheyearspresented,availableathttp://www.corelab.com/investors/financial
report.

28
ReadingCoresannualreportsislikeopeningatimecapsulepreservingthehistoryofenergy
markethype.

Youdalmostexpectthemtostarttalkingaboutmachinelearning.

_____________
Source:CLBannualreportsfortheyearspresented,availableathttp://www.corelab.com/investors/financial
report.

29
Oh

_____________
Source:April20,2017Q12017CLBearningscall.

30
Hypeaside,letslookatwhereCoreactuallymakesmoney.

_____________
ImageusedwithpermissionofRichardCline;TheNewYorkerCollection/TheCartoonBank.

31
The GAAPreportingunderstatesCoresforeignexposurebecausewhenCoresendsfluidsfroma
wellinoffshoreAngolatoitslabsinHouston,itcountsitasU.S.revenue.

Inearningscallsandcompanyreportsgoingbackto2009,Coresays70%ormoreofitsrevenue
originates fromreservoirsoutsidetheU.S.,andlastyearitwascloserto80%.

_____________
Source:Revenuesbyregionfrom:
October22,2009Q32009CLBearningscall
September7,2011BarclaysCEOEnergyPowerConference
December4,2012Dahlman Rose&CoUltimateOilService&E&PConference
January31,2013Q42012CLBearningscall
October23,2014Q32014CLBearningscall

32
Remember,Coreisbestpositionedinthemostcomplexreservoirs,soitisnosurprisethat
deepwaterdrillingisitsmostimportantendmarket.

_____________
Source:CEODavidDemshuratBarclaysAmericasSelectFranchiseConferenceheldonMay21,2013.

33
Coreisacompanywhose primecustomersarebigcompaniesinbigfieldsoutsidetheU.S.

_____________
Source:CEODavidDemshuratBarclaysAmericasSelectFranchiseConferenceheldonMay21,2013.

34
Fundamentally,CoreistiedtocapitalspendingoutsideofNorthAmerica.

_____________
ImageusedwithpermissionofMickStevens;TheNewYorkerCollection/TheCartoonBank.

35
Internationalcrudeoilprojectscomewithmultimilliondollarbudgetsandtypicallylastfor
severalyears,whichmakesthemlesssusceptibletotheshorttermvolatilityofcommodity
prices.

Whenoilpricescollapsedin2008,capexoutsideNorthAmericabarelyfell.Oilquickly
recoveredabove$90abarrelin2009onitswayto$100,whereithoveredforthenext
fouryears.Thisledtoaflurryofinternationalcapitalspending.

And because Coresbusinessistiedtothis,itsrevenueheldupinthedowncycleandthen

grewintherecoveryrightalongwithcapex outsideNorthAmerica.

_____________
Source:GlobalCapitalExpendituresfromEvercore ISI:The2017Evercore ISIGlobalE&PSpendingOutlook,
December9,2016.RevenuesfromBloombergLP,retrievedMay2017.

36
Inthisdowncycle,oilpriceshavefallenfurtherandstayeddownlonger.Foreigncapexhas
collapsedandthistime,sohaveCoresrevenues.

_____________
Source:GlobalCapitalExpendituresfromEvercore ISI:The2017Evercore ISIGlobalE&PSpendingOutlook,
December9,2016.RevenuesfromBloombergLP,retrievedMay2017.

37
UnlikeitsmoreU.S.focused peers,Corewasridingtheinternationalcapex cycleallalong.

Itwasneveraseculargrowthstory.

_____________
ImageusedwithpermissionofJ.B.Handelsman;TheNewYorkerCollection/TheCartoonBank.

38
Withtodaysoilpriceoutlook,therearefewernewmultimilliondollar,multiyear,international
deepwaterprojectsthatbenefittedCoreinthelastcycle.

_____________
Source:BloombergLP,retrievedMay5,2017.

39
Thesearesomecompanieswithheavyoffshoreexposure.

Clearlythemarketunderstandstheoutlookhere.

Thesecompaniesarecrawlingalongthebottom,tradingatverysmallmultiplesofpriorpeak
earnings,becausethat capitalspendingisnotpoisedtorecoveranytimesoon.

_____________
Source:GreenlightcalculationusingBloombergLPpricingdata,retrievedMay2017.Indexedconstituentsselected
inthesolediscretionofGreenlight.

40
Offshorespending,whichtodaygeneratescloseto50%ofCoresrevenuesandevenmore
ofitsprofits,islikelytodeclineforyearstocome.

AnditsherewhereCorereallyneedsarecoverytomakeitsstorywork.

_____________
Source:DouglasWestwoodWorldOFSandOFEMarketForecastReportsQ22016.

41
LeadersofSchlumbergerandHalliburtonpointoutthatonlyNorthAmericanshale
investmentisgrowing.

_____________
Source:SLBQ12017earningscallonApril4,2017;HALQ12017earningscallonApril24,2017.

42
ThisisaproblemforCorebecauseNorthAmericaisntabigopportunityinthehighmargin
ReservoirDescriptionsegment.

Shaledoesnthavecomplexreservoirssothereslittleneedfortheultrahightechservicesthat
Corespecializesin.

Whilea1,000footcorefromdeepwateroffshoreWestAfricaisa$2$3millionopportunity,a
similarcorefromNorthAmericanshalegeneratesonlyonetenth therevenue.

_____________
Source:April20,2017Q12017CLBearningscall.

43
WhatCorereallyneedsismoredeepwaterdrillingtogeneratemorehighmarginrocksto
analyze.

UnfortunatelyforCore, its opportunityinshaleismostlyinthelowermarginProduction

Enhancementsegmentwhereitsellsreallybigguns inacompetitivemarket.

_____________
ImageusedwithpermissionofDanAbromowitz andEliDreyfus;TheNewYorkerCollection/TheCartoonBank.

44
Still,Coremanagementknowsasexynumberwhenitseesone,soinCoreslastearnings
release,thecompanytrumpetedits32%sequentialgrowthintheU.S.landportionofits
ProductionEnhancementsegment.

_____________
Source:CLBQ12017earningsreleaseonApril19,2017.

45
Butthisissuchasmallpercentageofitsbusinessthat Coredoesntevendiscloseit.

Corebraggingabouta32%increaseonwhatweestimatetobe1015%ofitstotalrevenue
isabitlike Congressbraggingabouta32%increaseinitsapprovalrating.

_____________
Source:GreenlightcalculationsusingdataretrievedMay2017from
http://www.realclearpolitics.com/epolls/other/congressional_job_approval903.html.

46
Ofcourse,thesellsideisconfused.UBSmistakenly thinksU.S.shale is3035%ofrevenues.

_____________
Source:UBSInitiationofCoverage,CoreLaboratoriesNV,December13,2016.

47
Coresbusinessisnotaseculargrowthstory.

Likeeveryotheroilfieldservicecompany,Corealwayswas,andremains,acyclicalbusiness.

Andthistimearound,itsexposedtotheleastdesirablepartofthesector.

Forittorecover,itneedsmuchhigheroilprices thekindthatwillbringbackthemost
adventurousoffshoreandforeignexplorationefforts.

_____________
ImageusedwithpermissionofFrankCotham;TheNewYorkerCollection/TheCartoonBank.

48
CoreCEODavidDemshurknowsthis,andheshappytotellyouwhereoilpricesaregoing.

Asapeakoilguy,hesconvincedoilpricescanonlygooneway.

_____________
Source:February2015EnerCom OilandServicesConference.

49
InJanuary2013,hesaidthatrobusteconomicgrowthcouldpushBrentbackto$150abarrel.A
yearlater,hecalledforittostayabove$100.

InOctober2014,withoilplunging,hecalledforareturntoearly2014levelsbyearly2015.

Ninemonthslater,hecalledthebottom,addedthatoilcouldntgobelow$40andcalledfor
Brenttobeabove$80bytheendof2015.

Brentfinishedtheyearat$36.

AndinJuly2016,Demshurswitched frombeinganoilexperttoatechnicalanalyst,arguingthat
onceoilbreachedthe$50resistanceitwouldmoveintothe60dollarrange.

_____________
Source:
January31,2013Q42012CLBearningscall:Ifwegetsomerobusteconomicgrowtharoundtheworld,we're
goingtoseecrudeprices,Brentprices,rightbackat150.
January30,2015Q42014CLBearningscall:SoouroutlookisthatBrentstaysnorthof$100,andfor2014
goingforward,sparecapacitybecomeslessandless.
October23,2014Q32014CLBearningscall:Webelievecrudeoilmarketswillbalanceearlyin2015withcrude
oilpricesstrengtheningtoearlier2014levels.
July28,2015DavidDemshur interviewonMadMoney:Dontthink[sub40WTI]isadistinctpossibility;I
thinkwewillseeWTIsomewherebetween$70and$80byyearend...Wearebottomingrightnowoncrudeoil
pricesavailableathttps://www.youtube.com/watch?v=4p8tMOYDoEo.
July20,2016DavidDemshur interviewonMadMoney:Onceoilbreaksthrough$50,itwillgoto$60range
availableathttps://www.youtube.com/watch?v=G4Yk_GhMNMU.

50
Inthecompanysmostrecentearningscall,Coreclaimstohavecalledthebottomofwhatit
insistswillbeaVshapedrecovery.

_____________
Source:CLBQ12017earningsreleaseonApril19,2017.

51
Andnotforthefirsttime.

DavidDemshurhasbeencallingforaVshapedrecoverysinceearly2015whenoilwasat$48
andhesaidwedseetherecoveryinlate2015.

If hesrightthistime,hewillhavecalledsevenofthelastonebottoms.

_____________
Source:BloombergLPpricing,retrievedMay5,2017and:
January30,2015Q42014CLBearningscall:Aswasthecasein2009,CoreseesaVshapedrecoverystartingto
occurinlate2015,andthatechoescommentsfromHaroldHammmostrecently.;So,thatswhyweare
predictingaswedidbackin20082009asaVshapedrecovery.
April23,2015Q12015CLBearningscall:CoreseesaVshapedrecoveryledbyhighercommoditypricesand
thenshortlytherefollowedbyincreasedworldwidedrillingactivitiesinthestartinearly2016.
July23,2015Q22015CLBearningscall:CoreseestheVshaperecovery,ledbyhighercommoditypricesand
followedbyworldwidedrillingactivities,startingtoincreaseinearly2016.
October22,2015Q32015CLBearningscall:CorecontinuestoseeaVshapedrecoverygettingunderwayin
2016.TheindustryisstillonthelefthandsideofthisVgoingintoQ4perhapswithactivityupticksinearly2016.
April21,2016Q12016CLBearningscall:Therefore,oursecondquarter2016resultsshouldmarkthebottomof
ouranticipatedVshapedcommodityrecoverythatshouldleadtoincreasedcrudeoilpricesfollowedby
increasedindustryactivitylevels.
July21,2016Q22016CLBearningscall:Therefore,oursecondquarter2016resultsshouldmarkthebottomof
ouranticipatedVshapeworldwidecommodityrecovery,followedbyincreasedcrudeoilpricesandexpanded
industryactivitylevelsworldwide.
January26,2017Q42016CLBearningscall:AsprojectedbyCoreinearly2016,thethirdquarterof2016
markedthebottomoftheVshapedrecoverywhichisnowunderway.Thisrecoveryshouldcontinueto
strengthen,withhighercommoditypricesandsubsequentactivitylevelsas2017progresses.

52
In fact,wedontbelievethereisaVshapedrecovery certainlynotinoilprices.

_____________
Imageusedwithpermissionofwww.cartoonstock.com.

53
Sometimes,iftheVyouhopedfordoesntoccur,youcreateyourownV.Lookatthisgraphic
fromtheannualreportpublishedlastweek.Youdthinkthepriceofoilhadrecovered.

ItmightsurpriseCoretolearnthatwhenyoustartat$79andfinishat$55youarelowerthan
whereyoubegan.

_____________
Source:MessagefromtheExecutiveTeamwithinCLBs2016annualreport,availableat
http://www.corelab.com/investors/cms/docs/annual_report/2016_annual_report.pdf.

54
Followingthattheme,analystsarecallingforaVshapedrecoveryinCoresrevenuesoverthe
nextfouryears.

Wedontseeanysuchthing.

_____________
Source:BloombergLPconsensusfigures,retrievedMay2017.HistoricalCLBrevenuesfromBloombergLP,
retrievedMay2017.

55
WethinkCoreislikelytomiss.With itsdependenceonoffshoreandinternationalcapex,Core
shouldunderperformsomeofthesameNorthAmericanorientedpeersthatitoutperformed
lasttime.

_____________
Source:Greenlightestimates.CLBconsensusrevenuesandmarginfromBloombergLP,retrievedMay2017.

56
Takingallofthistogether:weexpectCoresearningstodisappointoverthenextfewyears.

Onourestimates,Coreistradingatover36x2019earnings.

_____________
Source:Greenlightestimates.CLBconsensusearningspersharefromBloombergLP,retrievedMay2017.

57
Lookingatthe10yearhistory,itsarguablethatthereisnosecularearningsgrowthhere.A
generousvaluationwouldbeamarketmultipleonmidcycleearningsof$3.50,whichwedont
thinkCoreislikelytoobtainuntil atleast2021. Thisgetsusafairvalue of$62or45%below
todaysprice.

_____________
Source:Greenlightestimates.CLBearningsandconsensusestimates,andS&P500forwardP/EfromBloombergLP,
retrievedMay2017.

58
Atcurrentpricesinvestorsarepayingapeakmultipleforearningsthatarepoised todisappoint.

Andinvestorsarenttheonlyonesoverpaying.

_____________
ImageusedwithpermissionofBruceEricKaplan;TheNewYorkerCollection/TheCartoonBank.

59
JustasKanyeloveshimself

DavidDemshur seemsto lovehisstockatanyprice.

60
Overthepastupcycle,Coreboughtbackstockeveryquarter,apparentlyregardlessofshare
priceandoperationaloutlook.Coreevenresortedtodrawingonitsrevolvertofundmore
buybacks,apracticethatcontinuedaslateas2015,evenaspeerswerepreparingtheirbalance
sheetsforaprotracteddownturn.

_____________
Source:BloombergLP,retrievedMay2017.

61
Bymid2016,CorewasforcedtoreversecourseandsellequitytoavoidtrippinganEBITDA
covenantthatcouldhaveputitsdividendatrisk.

From2012through2015,weestimateCoreissuedroughly$230millionindebttopurchase
stockatanaveragepriceof$144pershare;thenin2016Coresold$200millioninstockat$118
persharetorepaythatdebt.

_____________
Source:GreenlightestimatesandcalculationsusingBloombergdataonnetborrowings,cashspentonshare
repurchases,andCLBsaveragepriceeachquarterusingbeginningandendingprices.

62
Core alsolikestopayadividend.Forthelast5quarters,ratherthancutthedividend,the
companyhaspaidoutmorethanithasearned.

Ithasfundedtheshortfallbysellingstock.

Whenacompanyraisesfreshmoneyfromnewinvestorstosustaintheincomerequirementsof
existinginvestors,thereisanameforthat.

_____________
Source:BloombergLP,retrievedMay2017.

63