Core Laboratories N.V. (CLB): PESTLE Analysis [Nov-2025 Updated]

You're looking at Core Laboratories N.V. (CLB) and seeing a company caught between two powerful forces: the immediate need for efficient oil production and the long-term pressure of the energy transition. The core issue for 2025 is volatility: while global upstream capital expenditure (CapEx) is projected for a modest increase, sustained WTI oil price swings between $75 and $95 per barrel mean clients prioritize reservoir optimization-CLB's sweet spot-over pure exploration volume. The PESTLE analysis below cuts through the noise, mapping exactly how geopolitical risks, stricter US Environmental Protection Agency (EPA) rules on methane, and the critical adoption of Digital Rock Physics will shape CLB's revenue and strategic actions this year.

Core Laboratories N.V. (CLB) - PESTLE Analysis: Political factors

US/Iran Sanctions and OPEC+ Production Quotas Directly Impact Client Spending

You can't talk about the oil and gas sector without starting with the two biggest political levers: US sanctions and OPEC+ production strategy. For Core Laboratories N.V., these factors translate directly into volatility for their clients' capital expenditure (CapEx) and, specifically, demand for their Reservoir Description services.

Regarding Iran, the US policy of 'maximum pressure' continues to create market friction. Despite sanctions, Iran has maintained significant export volumes, exceeding 2 million barrels per day during September and October 2025, primarily through a 'shadow fleet' to buyers like China. This circumvention keeps a lid on prices but introduces a massive risk premium. In October 2025, the US Treasury targeted a new group of 50 people, companies, and ships for facilitating this trade, signaling an escalation that could disrupt supply chains and tighten the market. Core Laboratories N.V. explicitly noted that 'expanded sanctions' and 'geopolitical conflicts' negatively impacted their Q1 2025 revenue for laboratory services tied to the maritime trade of crude oil.

The OPEC+ alliance, led by Saudi Arabia and Russia, is navigating a delicate balance. In 2025, the group is gradually reversing voluntary output cuts, restoring 2.2 million b/d (barrels per day) of production from April 2025 to September 2026. This phased increase is a strategic move to regain market share, but it risks creating an oversupply, which is why Brent crude was trading around $64-$65 per barrel as of October 2025. The IEA, EIA, and OPEC+ all forecast global crude oil demand growth to be between 0.7 and 1.3 million barrels per day in 2025, but the market is still hypersensitive to any deviation from the quotas. This constant tug-of-war means your clients are hesitant to commit to large, long-cycle projects until price stability is clearer.

Increased Government Support for Carbon Capture, Utilization, and Storage (CCUS) Projects

This is a clear, near-term opportunity, and Core Laboratories N.V. is well-positioned to capitalize on it with its reservoir characterization expertise. Governments globally are finally putting serious money behind Carbon Capture, Utilization, and Storage (CCUS) to meet their net-zero targets. This isn't just talk; it's policy driving billions in investment.

In the U.S., the federal 45Q tax credit is the primary driver, offering up to $85 per tonne for CO₂ stored from industrial sources and power generation. For Direct Air Capture (DAC) projects, the credit is even higher at up to $180 per tonne. This incentive structure has already spurred massive private investment. The U.S. now has over 270 publicly announced carbon capture projects in the pipeline, representing a total capital investment of $77.5 billion. Core Laboratories N.V.'s core strength is assessing the long-term storage viability of these reservoirs, which is a non-negotiable step in any CCUS project. Globally, the number of operational CCUS projects increased by a significant 54% in 2025, showing this trend is defintely international.

Geopolitical Instability in Key Oil-Producing Regions, Like the Middle East, Drives Price Volatility

Geopolitics is the wild card that overrides all fundamental supply/demand analysis. The Middle East remains the world's energy nerve center. When tensions flare, oil markets immediately price in a risk premium, often disproportionate to the actual supply disruption. This is simply market psychology at work.

In the second quarter of 2025 (2Q25), for example, Brent crude spiked from $69 per barrel to $79 per barrel in a single week (June 12 to June 19) following heightened supply risk due to strikes in the region. Similarly, in November 2025, WTI crude jumped 2.39% to settle at $60.09 per barrel, while Brent crude rose 2.19% to $64.39 per barrel, demonstrating the market's immediate reaction to supply disruption fears. Core Laboratories N.V. is exposed to this volatility because their clients' willingness to greenlight new exploration projects hinges on a stable, high-enough oil price forecast. When prices jump and crash quickly, it creates a paralyzing uncertainty for long-term investment decisions, even as the company targets long-cycle international projects in the Middle East and Africa.

US Federal Leasing and Permitting Policies Create Near-Term Uncertainty for Domestic E&P

The shift in U.S. federal policy in 2025 has created a bifurcated regulatory landscape. While the new administration has focused on slowing down renewable energy development, the policy environment for traditional oil and gas is not entirely clear either, though it is generally more favorable than for renewables.

One key action was a January 2025 memorandum that withdrew all Outer Continental Shelf (OCS) areas from new offshore wind leasing. Crucially, this withdrawal explicitly does not apply to leasing for oil, gas, or minerals. This move signals a political prioritization of fossil fuel development over offshore wind, which should, in theory, benefit domestic Exploration & Production (E&P) clients. However, the overall regulatory environment is still turbulent, with federal actions creating 'uncertainty' and 'constraints' for permitting across the energy sector. For Core Laboratories N.V.'s Production Enhancement segment, this domestic uncertainty is compounded by a continuously lower U.S. frac spread count, and the company anticipates the typical year-end seasonal decline in U.S. onshore completion activity. This means the domestic market for their completion diagnostic services remains challenged, forcing them to rely more heavily on international growth.

Core Laboratories N.V. (CLB) - PESTLE Analysis: Economic factors

You are operating in a market where the macro-economic signals are mixed, creating a unique tension between cautious capital spending and the undeniable need for reservoir optimization. For Core Laboratories N.V. (CLB), this means the international, long-cycle projects are the engine, but you still have to manage significant headwinds from currency and material costs.

Global upstream CapEx is projected to increase by a modest percentage in 2025.

The global upstream oil and gas capital expenditure (CapEx) market is estimated to reach $654.14 billion in 2025, but the growth is highly uneven. While the overall market is expanding, the pace is not a boom; it is a measured, regionalized recovery. Upstream activities are expected to command about 72.92% of this market, with a projected compound annual growth rate (CAGR) of 4.20% through 2030. That's a modest, steady increase, not a sharp spike. The key is where the money is going: the Middle East and international deepwater projects, which are Core Laboratories N.V. (CLB)'s sweet spot.

The U.S. tight oil and shale gas sector is actually expected to see an investment dip of around 10% in 2025, according to some forecasts, as producers remain disciplined and focus on shareholder returns over aggressive growth. This capital discipline is why Core Laboratories N.V. (CLB) maintains its asset-light model, projecting its own full-year 2025 capital expenditures to remain low, in the range of $14 million to $16 million.

Sustained oil price volatility (e.g., WTI fluctuating between $75 and $95 per barrel) affects exploration budgets.

Oil price volatility is the single biggest determinant of your clients' exploration and production (E&P) budgets. While the consensus forecast for the average West Texas Intermediate (WTI) crude price in 2025 is lower, around $70.31 per barrel, the market is still prone to sharp swings based on geopolitical events and OPEC+ decisions. The uncertainty itself creates a headwind for long-term project commitments, forcing operators to prioritize short-cycle, high-return projects.

Here's the quick math on the market's current view versus the upside volatility: the difference between the low-to-mid $60s consensus and the high end of the volatility range is a significant swing in potential cash flow for your clients. A sustained price above $80 unlocks a wave of deferred international projects, which directly drives demand for Core Laboratories N.V. (CLB)'s Reservoir Description services.

• WTI 2025 Average Forecast: $70.31 per barrel (EIA).
• Analyst Consensus Average: $64.65 per barrel (Reuters poll).
• Volatility Driver: Geopolitical conflicts and trade tariffs introduce uncertainty to demand and operational costs.

US Dollar strength impacts international revenue translation for the company.

The U.S. Dollar entered 2025 at a multi-year high, and for a company like Core Laboratories N.V. (CLB), which generates a substantial portion of its revenue internationally, this is a clear financial headwind. A strong dollar makes your international earnings worth less when translated back into U.S. Dollars on the income statement.

The Reservoir Description segment, which is the company's largest, is particularly exposed, with approximately 80% of its revenue sourced from projects originating outside the U.S. This currency translation risk is why management explicitly excludes gains and losses in foreign exchange from its quarterly guidance, like the Q4 2025 revenue projection of $132 million to $136 million. You have to earn more in local currency just to stay flat in USD terms.

Inflationary pressure on raw materials and labor costs affects CLB's operating margins.

Inflationary pressure, particularly on raw materials and specialized labor, continues to be a factor in the oilfield services sector. Core Laboratories N.V. (CLB) has been managing this through cost discipline and sequential margin expansion, but the risk remains. The company cited trade tariffs as a factor that may affect the cost of its products, particularly those manufactured in the U.S. and delivered internationally.

The good news is that Core Laboratories N.V. (CLB) has shown strong operating leverage. For example, in Q3 2025, the company reported operating margins (excluding items) of 12%, with impressive sequential incremental margins of 48%. This means that for every new dollar of revenue, 48 cents dropped to operating income, showing effective cost control against the backdrop of inflation.

Core Laboratories N.V. (CLB) - PESTLE Analysis: Social factors

You're operating in an energy sector where social license is now a core financial metric. The pressure from investors and the public on Environmental, Social, and Governance (ESG) performance is not slowing down; it's accelerating the shift in client demand and intensifying the competition for specialized talent. For Core Laboratories, this means your reservoir characterization expertise is now a critical asset in the low-carbon transition, but you have to staff those roles and comply with local mandates to capitalize on it.

Growing investor and public pressure for Environmental, Social, and Governance (ESG) compliance.

Investor scrutiny on ESG factors is a major social headwind for the entire oilfield services industry, but Core Laboratories has positioned itself well. The company's commitment is formalized through alignment with major frameworks like the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-Related Financial Disclosures (TCFD). This transparency is a clear risk mitigator.

The market has recognized this effort. As of the most recent public data, Core Laboratories holds an AA ESG rating from MSCI and a 20.4 Risk Rating from Sustainalytics, which places the company in the favorable 8th percentile of its Oil & Gas Equipment Subindustry peer group. That's a strong signal to institutional investors who increasingly have mandates tied to these ratings. Plus, being a constituent of the Ethibel Sustainability Index (ESI) Excellence Europe since 2015 provides a clear advantage in attracting European capital flows.

Energy transition sentiment pushes clients to favor low-carbon intensity projects.

The global energy transition is shifting client capital expenditure toward projects that either reduce carbon intensity or support new energy sources. This sentiment is a direct opportunity for Core Laboratories because your core competency-reservoir characterization-is essential for both traditional and new energy applications. You're not just an oilfield service company anymore; you're a reservoir optimization company.

The company is capitalizing on this by offering specialized services for Carbon Capture, Utilization, and Storage (CCUS). This includes services that provide crucial insights into the behavior of carbon dioxide ($\text{CO}_2$) in subsurface formations for safe and efficient storage. Furthermore, Core Laboratories is leveraging its geological and geochemical expertise to support the supply chain for critical and rare earth minerals, such as lithium, which are vital for electric vehicles and battery storage. This is a smart diversification play.

• Offer CCUS services, including a joint-industry consortium with the University of Houston.
• Provide geological and geochemical services for lithium and other critical mineral exploration.
• Enable clients to maximize resource efficiency and minimize environmental impacts through advanced reservoir analysis.

Talent shortage in specialized fields like geosciences and digital rock physics.

The 'great crew change' and the negative perception of the oil and gas industry among younger generations are creating a critical talent gap in highly technical areas. The energy industry is projected to experience a lack of up to 40,000 competent workers by 2025, according to some analyses. Specifically for Core Laboratories, which relies on a small, highly specialized workforce of approximately 3,500 employees globally as of late 2024, the loss of experienced geoscientists and engineers is a major operational risk.

The retirement of Upstream Petrotechnical Professionals (PTPs) is a real concern; their representation in the oil and gas workforce is expected to drop significantly by 2025. This shortage is particularly acute in cutting-edge areas like digital rock physics and advanced data analytics-the very skills needed to support your new CCUS and critical mineral projects. To mitigate this, Core Laboratories must continue its focus on 'People & Communities,' enhancing workforce training and engagement to retain the deep technical expertise that powers its performance.

Increased focus on local content requirements in international operating regions.

In the over 50 countries where Core Laboratories operates, national oil companies and governments are increasingly enforcing local content requirements (LCRs). These mandates require foreign companies to use a certain percentage of local labor, goods, and services to ensure knowledge transfer and economic development. Ignoring this is defintely a non-starter for securing major contracts.

The company's strategic response is to deepen its in-country capabilities. A concrete example of this is the October 1, 2025, acquisition of Brazil-based Solintec, a provider of geological services. This move immediately expands Core Laboratories' local presence and expertise along the South Atlantic Margin, directly addressing LCRs and improving its competitive position in key international markets like Brazil and West Africa. This kind of local investment is a clear action to turn a social/political risk into a competitive advantage.

Core Laboratories N.V. (CLB) - PESTLE Analysis: Technological factors

Adoption of Digital Rock Physics (DRP) and AI/ML for faster, more accurate reservoir modeling.

You are seeing a clear shift in the industry toward digital workflows, and Core Laboratories is responding by integrating machine learning (ML) and Digital Rock Physics (DRP) into its core Reservoir Description segment. This isn't just a buzzword; it's about speeding up the time-to-insight for complex reservoir characterization. The company's proprietary NITRO (Non-Invasive Technologies for Reservoir Optimizations) services are a prime example, with Digital Rock Characterization (DRC) being a key component. This allows for rapid, non-destructive analysis of core samples to determine critical parameters like porosity and permeability, which used to take much longer with traditional lab methods. Plus, a new AI technology is expected to launch in 2025 to help clients with compliance for international regulations on Sustainable Aviation Fuel, showing a pivot to new energy applications. This focus helps maintain the Reservoir Description segment's strong performance, which is projected to generate between $88 million and $90 million in revenue for the fourth quarter of 2025.

CLB's proprietary 'S.T.A.R.' technology for enhanced oil recovery remains a competitive advantage.

While the specific 'S.T.A.R.' name may be a legacy term, Core Laboratories' competitive edge in Enhanced Oil Recovery (EOR) is absolutely anchored in proprietary tracer and fluid analysis technologies. The company's SPECTRAFLOOD™ interwell tracer diagnostic service is a current, high-value offering. This technology uses unique chemical tracers to precisely track the movement of injected fluids-like gas or water-within the reservoir, which is critical for optimizing EOR projects. The goal is to maximize hydrocarbon recovery by ensuring the flood is sweeping the reservoir efficiently. Honestly, without this kind of proprietary measurement, EOR projects are just expensive guesswork. The ability to provide this level of detail is a major driver for the Production Enhancement segment, which is forecast to deliver $44 million to $46 million in revenue in Q4 2025.

Increased client demand for data integration services across the entire well lifecycle.

The sheer volume of data generated from drilling, logging, and production is overwhelming for most operators, so the demand for integrated data services is skyrocketing. Core Laboratories addresses this with its proprietary CONNECT:™ ecosystem, a global operations platform designed to capture and manage the quantitative and qualitative properties of a project's crude oil and derived products. This isn't just a database; it's a secure, streamlined system that enables faster, more reliable insights for reservoir characterization, building on the modernization of their RAPID™ petrophysical data delivery system. This integration capability is a necessary service for major international operators, like the one in Norway that partnered with Core Laboratories in Q3 2025 for a complex deepwater plug and abandonment operation.

Here is a quick look at the segments driving this technology-fueled growth:

Advancements in downhole sensing and logging tools require continuous R&D investment.

The need for continuous R&D is non-negotiable, especially as drilling moves to ultra-deep, high-pressure, and high-temperature environments. Core Laboratories' Production Enhancement segment, through its Owen Oil Tools subsidiary, is a global leader in advanced perforating systems and completion diagnostic services. These products, like the STIMGUN® enhanced propellant systems, require constant innovation to maximize well productivity and reduce formation damage. This is a capital-intensive game, and the company's quarterly capital expenditures (CapEx) reflect this commitment to maintaining a technological lead in their asset-light model.

The near-term investment picture for 2025 shows a clear commitment to funding this technology:

• Capital Expenditures for Q3 2025 were $2.0 million.
• Capital Expenditures for Q1 2025 were $2.8 million.
• Free Cash Flow (FCF) for Q3 2025 was $6.5 million, which is used to fund growth opportunities.

This consistent CapEx, which is a proxy for technology investment in their asset-light structure, is essential to keep up with competitors developing 260°C/210 MPa ultra-deep logging equipment. You need to defintely keep pushing the envelope here.

Core Laboratories N.V. (CLB) - PESTLE Analysis: Legal factors

New international trade regulations and tariffs affecting the movement of specialized equipment.

You need to pay close attention to the shifting landscape of international trade, especially since Core Laboratories N.V. (CLB) conducts business in over 50 countries and its non-U.S. operations accounted for a substantial 66% of total revenue in 2024. The imposition of new tariffs and expanded sanctions creates direct headwinds for the company's asset-light model, which relies on the smooth, cost-effective movement of specialized laboratory equipment and samples.

In the first quarter of 2025, Core Laboratories N.V. (CLB)'s CEO noted that 'expanded sanctions' and 'pending tariffs' contributed to a volatile market, impacting demand for laboratory services tied to the maritime transportation and trading of crude oil and derived products. While the company is resilient, altering global business operations to comply with new trade policies is both 'time-consuming and expensive.'

Here's the quick math: a new tariff on a key piece of proprietary rock and fluid analysis equipment shipped to a major international hub like Brazil or West Africa immediately compresses the margin in the Reservoir Description segment. That's a direct hit to profitability.

• Monitor new tariffs on specialized oilfield equipment.
• Assess geopolitical sanctions' impact on 66% of revenue.
• Factor in higher compliance costs for cross-border logistics.

Stricter US Environmental Protection Agency (EPA) rules on methane emissions from oil and gas operations.

The regulatory environment for methane emissions has been anything but stable in 2025, creating significant uncertainty for Core Laboratories N.V. (CLB)'s U.S. clients. While the initial trend was toward stricter control, the political shift has led to a major rollback in enforcement and penalties.

Specifically, the Waste Emissions Charge (WEC) under the Inflation Reduction Act, which was set to be $1,200/tonne for 2025 methane emissions, was prohibited by Congress in March 2025, with the ban extending until 2034. Furthermore, the EPA announced a plan in March 2025 to 'no longer focus on methane emissions' enforcement. Still, the underlying rules remain in flux.

For example, the compliance deadlines for certain provisions of the New Source Performance Standards (NSPS OOOOb/EG OOOOc) rule were extended in July 2025, giving operators more time to comply with requirements like continuous pilot flame monitoring on flares. This regulatory whiplash means your clients are hesitant to commit capital to new compliance technologies, which can defintely slow down adoption of Core Laboratories N.V. (CLB)'s related analytical services.

Complex international contract laws and intellectual property (IP) protection in multiple jurisdictions.

Protecting Core Laboratories N.V. (CLB)'s proprietary technology-the core of its competitive advantage-is a complex legal challenge across the more than 50 countries where it operates. The company relies on a combination of patents, trade secrets, and confidentiality agreements to safeguard its specialized laboratory equipment designs and its proprietary data management platform, RAPID™.

The difficulty lies in the varying strength of intellectual property (IP) laws globally. In strategic growth markets like Brazil, for instance, a key concern in international Research and Development agreements is the slow pace of patent examination by the National Institute of Industrial Property (INPI) and the lack of specific regulations for protecting know-how. This means a contract dispute in Rio de Janeiro will be handled very differently than one in Houston, requiring highly tailored legal strategies.

You must assume that the risk of IP infringement is higher in jurisdictions with less mature legal frameworks, which necessitates robust, proactive contractual mechanisms to differentiate between pre-existing technology (background IP) and collaboratively developed technology (foreground IP) in every joint venture or client partnership.

Permitting delays for major offshore and deepwater projects in the US Gulf of Mexico.

Permitting delays in the US Gulf of Mexico (GOM) are a critical legal and regulatory bottleneck that directly impacts demand for Core Laboratories N.V. (CLB)'s Reservoir Description services, which are heavily utilized in deepwater exploration. The primary hurdle in 2025 has been the legal challenge to the Biological Opinion (BiOp) under the Endangered Species Act, which threatened to halt all routine permits.

The American Petroleum Institute (API) noted that a new Biological Opinion was released in May 2025, which narrowly averted a significant slowdown or halt to all permits for routine, daily operations. Still, the regulatory risk remains high. For example, Shell's Perdido project saw the completion of two critical wells delayed until at least April 2025, holding up an expected 22,000 barrels of oil equivalent per day (boepd) of production.

While the overall outlook for GOM production is constructive, with new projects poised to add an estimated 231,000 B/D to output through 2025, the permitting process for major new developments is still lengthy. BP's high-profile Kaskida project, which aims for 80,000 barrels of oil per day, had its revised proposal processed in October 2025, but drilling is not scheduled to begin until 2029. That's a four-year lag from permit processing to drilling, which is a long time to wait for service demand.

Finance: Track the Bureau of Ocean Energy Management (BOEM) permit approval times quarterly.

Core Laboratories N.V. (CLB) - PESTLE Analysis: Environmental factors

You are seeing an undeniable shift in capital allocation, driven by climate mandates and investor pressure. For Core Laboratories N.V. (CLB), the environmental factor is no longer a peripheral compliance issue; it's a core revenue driver and a strategic risk that demands quantification. Your advantage is that Core Laboratories' fundamental expertise-rock and fluid analysis-is directly transferable to the high-growth, non-hydrocarbon sector of Carbon Capture, Utilization, and Storage (CCUS) and to the essential task of increasing oil and gas efficiency.

Accelerating client demand for Core Laboratories' expertise in CCUS reservoir screening and monitoring

The demand for secure, long-term geological storage of carbon dioxide is accelerating dramatically, and this is a tailwind for Core Laboratories' Reservoir Description segment. The global Carbon Capture, Utilization, and Storage (CCUS) market is projected to reach approximately $5.1 billion in 2025. This market is expected to grow at a Compound Annual Growth Rate (CAGR) of about 22.9% through 2032, a growth rate that far outpaces traditional oilfield services. Core Laboratories is positioned to capture a portion of this expansion by leveraging its decades of experience characterizing complex subsurface formations.

The company is actively involved in the CCUS value chain, specifically providing mission-critical analytical services for:

• Perform custom evaluation programs for regulatory compliance.
• Estimate seal capacity without having a seal sample.
• Monitor CO2 plumes with proprietary chemical tracers.

This is a low-capital-expenditure, high-margin opportunity since it re-uses existing laboratory infrastructure and deep technical knowledge. Core Laboratories' Q3 2025 Reservoir Description revenue of $88.2 million provides the stable base from which to aggressively pursue this multi-billion dollar adjacent market.

Focus on reducing the carbon intensity of oil and gas production, favoring CLB's efficiency services

Major oil and gas operators are under immense pressure to reduce the carbon intensity (CI) of their production-the amount of greenhouse gas emitted per barrel of oil equivalent (boe). The Oil and Gas Climate Initiative (OGCI) members, for example, have a collective target to reduce their aggregate upstream carbon intensity to 17 kg/boe by 2025, an improvement of 21% since 2017. Core Laboratories' core mission of maximizing hydrocarbon recovery is now directly aligned with this environmental goal.

The most effective way to lower CI is to extract more oil and gas from existing wells, reducing the need for new, carbon-intensive drilling. Core Laboratories' proprietary diagnostic services, such as its Non-Invasive Technologies for Reservoir Optimizations (NITRO) and inflow tracer diagnostics, directly enable this efficiency. By providing real-time data on fluid movement and fracture efficiency, these technologies help clients:

• Optimize well spacing to maximize recovery and minimize interference.
• Reduce the volume of fracturing fluids needed per stage.
• Increase the sweep efficiency of Enhanced Oil Recovery (EOR) projects.

Simply put, better reservoir intelligence means less wasted energy and lower carbon intensity. That's a clear value proposition.

Increased scrutiny on water usage and disposal practices in hydraulic fracturing operations

Water management has become a critical operational and financial bottleneck in U.S. shale basins, particularly the Permian. A single horizontal well completion can require over 12 million gallons of water. The resultant produced water-often 3 to 10 times the volume of the extracted oil-must be treated or disposed of. Stricter regulations and seismic activity linked to disposal wells are driving up costs significantly.

For operators, the cost for produced water management, including treatment and disposal, can add an estimated $1 to $3 per barrel to operating expenses in high-activity regions like Texas and New Mexico. This economic pressure makes Core Laboratories' tracer diagnostics, which track the flow of oil and water, essential. By accurately identifying the source and movement of water, the company's services help clients optimize their water recycling and reuse strategies, mitigating both environmental risk and rising operational costs.

Transition risk from long-term decline in fossil fuel demand, requiring business diversification

The long-term transition risk from a potential decline in fossil fuel demand is real, but Core Laboratories' asset-light model and strategic pivot help mitigate it. The company's Trailing Twelve Months (TTM) revenue as of Q3 2025 was approximately $517.50 million, nearly all of which is tied to the oil and gas sector. The strategic move is to transfer the core competency of reservoir characterization to the burgeoning CCUS market, a non-hydrocarbon revenue stream.

Here's a quick math: the CCUS market size alone is up to $7.85 billion in 2025. Core Laboratories' ability to secure even a small fraction of this market for its high-value-add services represents a material diversification opportunity against its total revenue base. This is the strategic hedge.

What this estimate hides is the lag between CCUS project final investment decision (FID) and the start of Core Laboratories' high-value laboratory work. You need to defintely track the FID announcements of major CCUS hubs to project the revenue inflection point.

Next Step: Strategy: Map top 10 North American and European CCUS hub projects against Core Laboratories' current laboratory footprint to identify near-term sales targets.