|UNITED STATES                                                                                                                                                                                                                                                                                                                                                               
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|SECURITIES AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                                          
|Washington, D.C. 20549                                                                                                                                                                                                                                                                                                                                                      
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|                                                                                                                                                                                                                                                                                                                                                                            
|FORM 10-Q                                                                                                                                                                                                                                                                                                                                                                   
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|(Mark One)                                                                                                                                                                                                                                                                                                                                                                  
|X                                                                                                                                                                                                                                                                                                                                                                           
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|For the quarterly period ended March 31, 2008                                                                                                                                                                                                                                                                                                                               
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|OR                                                                                                                                                                                                                                                                                                                                                                          
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|For the transition period from ________________ to ______________                                                                                                                                                                                                                                                                                                           
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|Commission File Number:  001-14273                                                                                                                                                                                                                                                                                                                                          
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|CORE LABORATORIES N.V.                                                                                                                                                                                                                                                                                                                                                      
|(Exact name of registrant as specified in its charter)                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                            
|The Netherlands                                                                                                                                                                                                                                                                                                                                                             
|(State of other jurisdiction of                                                                                                                                                                                                                                                                                                                                             
|incorporation or organization)                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                            
|Herengracht 424                                                                                                                                                                                                                                                                                                                                                             
|1017 BZ Amsterdam                                                                                                                                                                                                                                                                                                                                                           
|The Netherlands                                                                                                                                                                                                                                                                                                                                                             
|(Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                            
|(31-20) 420-3191                                                                                                                                                                                                                                                                                                                                                            
|(Registrant's telephone number, including area code)                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                            
|None                                                                                                                                                                                                                                                                                                                                                                        
|(Former name, former address and former fiscal year, if changed since last report)                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                            
|Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [ X ] No [   ]
|                                                                                                                                                                                                                                                                                                                                                                            
|Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ X ]	Accelerated filer  [   ]	Non-accelerated filer  [   ]	Smaller reporting company  [   ]                    
|                                                                                                                                                                                                                                                                                                                                                                            
|Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [   ] No [ X ]                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                            
|The number of common shares of the Registrant, par value EUR
0.04 per share, outstanding at May 8, 2008 was 22,987,532.                                                                                                                                                                                                                                                     












|CORE LABORATORIES N.V.                        
|----------------------------------------------
|FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2008
|                                              
|INDEX                                         
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|                                              
|PART I - FINANCIAL INFORMATION                
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|Item 1.                                       
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|Item 2.                                       
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|Item 3.                                       
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|Item 4.                                       
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|PART II - OTHER INFORMATION                   
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|Item 1.                                       
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|Item 2.                                       
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|Item 6.                                       
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PART I - FINANCIAL INFORMATION



Item 1. Financial Statements



CORE LABORATORIES N.V.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)



March 31,

December 31,2008

2007ASSETS
(Unaudited)CURRENT ASSETS:Cash and cash equivalents
$       28,527

$       25,617Accounts receivable, net of allowance for doubtful accounts of $4,463 and$4,199 at 2008 and 2007, respectively
146,736

137,231Inventories, net
31,613

29,363Prepaid expenses and other current assets
37,807

28,488TOTAL CURRENT ASSETS
244,683

220,699PROPERTY, PLANT AND EQUIPMENT, net
92,850

93,038INTANGIBLES, net
6,984

7,040GOODWILL
138,800

138,800DEFERRED TAX ASSET
20,110

26,024OTHER ASSETS
19,481

19,189TOTAL ASSETS
$     522,908

$     504,790LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Current maturities of long-term debt and capital lease obligations
$         1,906

$         3,027Accounts payable
35,690

39,861Accrued payroll and related costs
27,156

25,689Taxes other than payroll and income
8,720

8,820Unearned revenues
9,537

9,130Other accrued expenses
10,468

11,513TOTAL CURRENT LIABILITIES
93,477

98,040LONG-TERM DEBT
300,000

300,000DEFERRED COMPENSATION
14,080

14,080OTHER LONG-TERM LIABILITIES
39,182

29,041COMMITMENTS AND CONTINGENCIESMINORITY INTEREST
1,588

1,486SHAREHOLDERS' EQUITY:Preference shares, EUR 0.04 par value;3,000,000 shares authorized, none issued or outstanding
-

-Common shares, EUR 0.04 par value;100,000,000 shares authorized, 23,252,659 issued and 22,984,280 outstanding at 2008and  23,080,949 issued and 23,065,949 outstanding at 2007
1,310

1,300Additional paid-in capital
11,890

-Retained earnings
91,829

62,496Accumulated other comprehensive income
246

226Treasury shares (at cost), 268,379 at 2008 and 15,000 at 2007
(30,694)

(1,879)TOTAL SHAREHOLDERS' EQUITY
74,581

62,143TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$     522,908

$     504,790




The accompanying notes are an integral part of these consolidated financial statements.



Return to Index




CORE LABORATORIES N.V.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)



Three Months Ended
March 31,2008

2007(Unaudited)REVENUES:Services
$     138,409

$     116,965Product Sales
41,028

38,758179,437

155,723OPERATING EXPENSES:Cost of services
91,159

79,854Cost of sales
28,314

27,395General and administrative expenses
8,289

8,039Depreciation
5,097

4,486Amortization
142

92Other expense (income), net
2,168

(863)OPERATING INCOME
44,268

36,720Interest expense
644

632Income before income tax expense
43,624

36,088Income tax expense
14,291

10,826NET INCOME
$      29,333

$      25,262EARNINGS PER SHARE INFORMATION:Basic earnings per share
$          1.28

$         1.08Diluted earnings per share
$          1.22

$         1.04WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:Basic
22,982

23,430Diluted
23,998

24,322




The accompanying notes are an integral part of these consolidated financial statements.

Return to Index






CORE LABORATORIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



Three Months Ended
March 31,2008

2007(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
$     29,333

$     25,262Adjustments to reconcile income to net cash provided by operating activities:Net provision for doubtful accounts
210

361Inventory obsolescence
41

51Equity in loss (income) of affiliates
(55)

-Minority interest
103

(76)Stock-based compensation
827

1,148Depreciation and amortization
5,239

4,578Debt issuance costs amortization
370

623Gain on sale of assets
(1,284)

(48)Realization of pension obligation
20

18Increase in value of life insurance policies
725

(106)Deferred income taxes
2,863

177Changes in assets and liabilities, net of effect of dispositions:Accounts receivable
(9,714)

(11,144)Inventories
(2,292)

(2,334)Prepaid expenses and other current assets
(6,363)

59Other assets
(1,281)

(134)Accounts payable
(4,171)

(3,946)Accrued expenses
729

(608)Other long-term liabilities
10,140

5,277Net cash provided by operating activities
25,440

19,158CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
(5,618)

(3,427)Patents and other intangibles
(86)

(45)Proceeds from sale of assets
2,467

76Premiums on life insurance
(430)

(764)Net cash used in investing activities
(3,667)

(4,160)CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of debt
(6,120)

(982)Proceeds from debt borrowings
5,000

-Capital lease obligations
(1)

(1)Stock options exercised
633

16,918Excess tax benefits from stock-based compensation
10,440

2,609Debt issuance costs
-

(152)Repurchase of common shares
(28,815)

(58,624)Net cash used in financing activities
(18,863)

(40,232)NET CHANGE IN CASH AND CASH EQUIVALENTS
2,910

(25,234)CASH AND CASH EQUIVALENTS, beginning of period
25,617

54,223CASH AND CASH EQUIVALENTS, end of period
$    28,527

$    28,989The accompanying notes are an integral part of these consolidated financial statements.




Return to Index






CORE LABORATORIES N.V.

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS



1.  BASIS OF PRESENTATION



The accompanying unaudited consolidated financial statements include the accounts of Core Laboratories N.V. and its subsidiaries for which we have a controlling voting interest and/or a controlling financial interest. These financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information using the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnote disclosures required by GAAP for complete financial statements.

Core Laboratories N.V. uses the equity method of accounting for all investments in which it has less than a majority interest and over which it does not exercise control. Minority interest has been recorded to reflect outside ownership attributable to consolidated subsidiaries that are less than 100% owned.  In the opinion of management, all adjustments considered necessary for a fair presentation for the periods presented have been included in these financial statements.  Furthermore, the operating results presented for the three months ended March 31, 2008 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2008.



Core Laboratories N.V.'s balance sheet information for the year ended December 31, 2007 was derived from the 2007 audited consolidated financial statements but does not include all disclosures in accordance with GAAP.



References to "Core Lab", "we", "our", and similar phrases are used throughout this Quarterly Report on Form 10-Q and relate collectively to Core Laboratories N.V. and its consolidated subsidiaries.



These financial statements should be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2007.



2.  INVENTORIES



Inventories consist of the following (in thousands):





March 31,

December 31,2008

2007(Unaudited)Finished goods

$   22,381

$     21,795Parts and materials

8,241

6,433Work in progress

991

1,135Total inventories, net

$   31,613

$     29,363




We include freight costs incurred for shipping inventory to customers in the Cost of Sales line of the Consolidated Statement of Operations.





3. GOODWILL AND INTANGIBLES



We account for intangible assets with indefinite lives, including goodwill, in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", which requires us to evaluate these assets for impairment annually, or more frequently if an indication of impairment has occurred.  Based upon our most recent evaluation, management determined that goodwill was not impaired.  We amortize intangible assets with a defined term on a straight-line basis over their respective useful lives.  There were no significant changes related to our intangible assets for the three months ended March 31, 2008.  The composition of goodwill by business segment at March 31, 2008 is consistent with the amounts disclosed in our Annual Report on Form 10-K as of December 31, 2007.






4.  DEBT AND CAPITAL LEASE OBLIGATIONS



Debt is summarized in the following table (in thousands):





March 31,

December 31,2008

2007(Unaudited)Senior exchangeable notes

$     300,000

$        300,000Capital lease obligations

2

3Other indebtedness

1,904

3,024Total debt and capital leases obligations

301,906

303,027Less - short-term debt included in other indebtedness

1,904

3,024Less - current maturities of long-term debt and capital lease obligations

2

3Long-term debt and capital lease obligations

$     300,000

$    300,000




In 2006, Core Laboratories LP, a wholly owned subsidiary of Core Laboratories N.V., issued $300 million aggregate principal amount of Senior Exchangeable Notes due 2011 (the "Notes").  The Notes bear interest at a rate of 0.25% per year paid on a bi-annual basis and are fully and unconditionally guaranteed by Core Laboratories N.V.  The Notes are exchangeable into shares of Core Laboratories N.V. under certain circumstances at an initial conversion rate of 10.5533 per $1,000 principal amount of notes.  Upon exchange, holders will receive cash up to the principal amount, and any excess exchange value will be delivered in Core Laboratories N.V. common shares.

We maintain a revolving credit facility (the "Credit Facility") that allows for an aggregate borrowing capacity of $100.0 million. As amended, this facility provides an option to increase the commitment under the Credit Facility to $150.0 million, if certain conditions are met.  The Credit Facility bears interest at variable rates from LIBOR plus 0.5% to a maximum of LIBOR plus 1.125%.  %.  Any outstanding balance under the Credit Facility is due in December 2010 when the Credit Facility matures.   Interest payment terms are variable depending upon the specific type of borrowing under this facility. Our available capacity is reduced by outstanding unsecured letters of credit and performance guarantees and bonds totaling $11.6 million at March 31, 2008 relating to certain projects in progress. Our available borrowing capacity under the Credit Facility at March 31, 2008 was $88.4 million.





5.  PENSIONS AND OTHER POSTRETIREMENT BENEFITS



We provide a noncontributory defined benefit pension plan covering substantially all of our Dutch employees, payouts under which are determined based on years of service and final pay or career average pay, depending on when the employee began participating.  Employees are immediately vested in the benefits earned.  We fund the future obligations of this plan by purchasing investment contracts from a large insurance company.  We make annual premium payments, based on each employee's age and current salary, to the insurance company.

The following table summarizes the components of net periodic pension cost under this plan for the three months ended March 31, 2008 and 2007 (in thousands):





|                                             | Three Months EndedMarch 31,
|-------------------------------------------- | ---------------------------
|                                             | 2008                       
|                                             | (Unaudited)                
|Service cost                                 | $     286                  
|Interest cost                                | 338                        
|Expected return on plan assets               | (306)                      
|Unrecognized pension obligation/(asset), net | (25)                       
|Prior service cost                           | 45                         
|Net periodic pension cost                    | $     338                  



During the three months ended March 31, 2008, we contributed approximately $1.1 million, as determined by the insurance company, to fund the estimated 2008 premiums on investment contracts held by the plan.










On January 1, 2008, we adopted Statement of Financial Accounting Standards No. 157 ("SFAS 157") Fair Value Measurements for financial assets and liabilities. We have not adopted SFAS 157 for nonfinancial assets and nonfinancial liabilities for those measured on a nonrecurring basis as the adoption date has been deferred until January 1, 2009 pursuant to Financial Accounting Standards Board Staff Position No. 157-2.  The application of FAS 157 to the Company's nonfinancial assets and liabilities will primarily be limited to asset impairments including Goodwill and this application is not expected to have a material impact to the Company







|                                        |              |  | Fair Value Measurement at March 31, 2008
|--------------------------------------- | ------------ |  | ----------------------------------------
|                                        | Total        |  | Level 1                                 
|Assets:                                 |              |  |                                         
|Equity and other investment fund assets | $      4,562 |  | $                    -                  
|                                        |              |  |                                         
|Liabilities:                            |              |  |                                         
|Deferred compensation plan              | $    7,553   |  | $    3,740                              
|                                        |              |  |                                         



We have adopted a non-qualified deferred compensation plan that allows certain highly compensated employees to defer a portion of their salary, commission and bonus, as well as the amount of any reductions in their deferrals under the deferred compensation plan for employees in the United States (the "Deferred Compensation Plan"), due to certain limitations imposed by the U.S. Internal Revenue Code of 1986, as amended.  The Deferred Compensation Plan also provides for employer contributions to be made on behalf of participants equal in amount to certain forfeitures of, and/or reductions in, employer contributions that participants could have received under the 401(k) Plan in the absence of certain limitations imposed by the Internal Revenue Code. Employer contributions to the deferred compensation plan vest ratably over a period of five years. Contributions to the plan are invested in equity and other investment fund assets, and carried on the balance sheet at fair value.  The benefits under these contracts are fully vested and payment of benefits generally commences as soon as practicable after the last day of the calendar quarter during which the participant terminated employment





6. COMMITMENTS AND CONTINGENCIES



From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of business.  We believe that the resolution of all litigation currently pending or threatened against Core Lab or any of its subsidiaries should not have a material adverse effect on its consolidated financial condition, results of operations or liquidity; however, because of the inherent uncertainty of litigation, we cannot provide assurance that the resolution of any particular claim or proceeding to which Core Lab or any of its subsidiaries is a party will not have a material adverse effect on its consolidated results of operations or liquidity for the period in which that resolution occurs.



In 2008, we revised our estimate of a contingent liability associated with non-income related taxes, and as a result a charge to income of $5.0 million was recorded in the Consolidated Statement of Operations to Other Expense (Income), net.  This adjustment requires judgment, assumptions and estimations to quantify the uncertainties related to this contingent liability.  Management has concluded the adjustment relates to prior periods, however as the amounts are not material, no prior periods have been restated.  The contingent liability is included in Other Long-term Liabilities in the Consolidated Balance Sheet.  Management will continue to assess on a quarterly basis the probable outcome of the settlement of these taxes.  The ultimate settlement amount and timing of this contingent liability is uncertain, and could possibly expose the Company to expenses of approximately $20.0 million in excess of our current estimate.






7.  SHAREHOLDERS' EQUITY



During the three months ended March 31, 2008, we repurchased 253,379 of our common shares for $28.8 million, at an average price of $113.72 per share which included rights to 44,512 shares valued at $5.0 million, or $112.14 per share, were surrendered to the Company pursuant to the terms of a stock-based compensation plan, in consideration of their personal tax burdens that may result from the issuance of common shares under this plan. Such common shares, unless cancelled, may be reissued for a variety of purposes such as to use for future acquisitions, for settlement of employee stock awards as they vest, or possible conversion of the Notes.



For the three months ended March 31, 2008, we issued 42,160 of our common shares associated with stock option exercises for which we received proceeds of approximately $0.6 million.



During the three month period ended March 31, 2008, we recognized tax benefits of $10.4 million, relating to tax deductions in excess of book expense for stock-based compensation awards.  These tax benefits are recorded to additional paid-in capital to the extent deductions reduce current taxable income.



Comprehensive Income

The components of other comprehensive income consisted of the following (in thousands):





|                                  |  | March 31,  
|--------------------------------- |  | -----------
|                                  |  | 2008       
|                                  |  | (Unaudited)
|Net income                        |  | $   29,333 
|Realization of pension obligation |  | 20         
|Total comprehensive income        |  | $   29,353 



Accumulated Other Comprehensive Income consisted of the following (in thousands):





|                                             | March 31,         |  | December 31, 
|-------------------------------------------- | ----------------- |  | -------------
|                                             | 2008              |  | 2007         
|                                             | (Unaudited)       |  |              
|Prior service cost                           | $     (1,163)     |  | $   (1,208)  
|Transition asset                             | 494               |  | 519          
|Unrecognized net actuarial loss              | 915               |  | 915          
|Total accumulated other comprehensive income | $             246 |  | $         226



8.  EARNINGS PER SHARE

We compute basic earnings per common share by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common and potential common shares include additional shares in the weighted average share calculations associated with the incremental effect of dilutive employee stock options, restricted stock awards and contingently issuable shares, as determined using the treasury stock method. The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings per share (in thousands):





|                                                                        | Three Months EndedMarch 31, | 
|----------------------------------------------------------------------- | --------------------------- | 
|                                                                        | 2008                        | 
|                                                                        | (Unaudited)                 | 
|Weighted average basic common shares outstanding                        | 22,982                      | 
|Effect of dilutive securities:                                          |                             | 
|Stock options                                                           | 153                         | 
|Contingent shares                                                       | 64                          | 
|Restricted stock and other                                              | 137                         | 
|Senior exchangeable notes                                               | 662                         | 
|Weighted average diluted common and potential common shares outstanding | 23,998                      | 

In 2006, we sold warrants that give the holders the right to acquire approximately 3.2 million of our common shares at an exercise price of $127.56 per share.  These warrants could have a dilutive impact on our earnings per share if the share price exceeds the strike price of the warrants.



9. OTHER EXPENSE (INCOME), NET

The components of other expense (income), net, were as follows (in thousands):





|                                  | Three Months EndedMarch 31, | 
|--------------------------------- | --------------------------- | 
|                                  | 2008                        | 
|                                  | (Unaudited)                 | 
|Minority interest                 | $       103                 | 
|Gain on sale of assets            | (1,284)                     | 
|Foreign exchange (gain) loss      | (746)                       | 
|Interest income                   | (108)                       | 
|Non-income tax accrual            | 5,030                       | 
|Other                             | (827)                       | 
|Total other expense (income), net | $  2,168                    | 

In 2008, we revised our estimate of a contingent liability associated with non-income related taxes, and as a result a charge to income of $5.0 million was recorded.  Additionally, we recorded a gain of $1.1 million in connection with the sale of a small office building.

Foreign exchange (gains) losses by currency are summarized in the following table (in thousands):



|                  | Three Months Ended March 31,
|----------------- | ----------------------------
|                  | 2008                        
|                  | (Unaudited)                 
|Canadian Dollar   | $         215               
|Euro              | (586)                       
|Russian Ruble     | (157)                       
|Other currencies  | (218)                       
|Total (gain) loss | $   (746)                   





10.  SEGMENT REPORTING

Our business units have been aggregated into three complementary segments, which provide products and services for improving reservoir performance and increasing oil and gas recovery from new and existing fields.



|* | Reservoir Description: Encompasses the characterization of petroleum reservoir rock, fluid and gas samples. We provide analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry.                                                                            
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                             
|* | Production Enhancement: Includes products and services relating to reservoir well completions, perforations, stimulations and production. We provide integrated services to evaluate the effectiveness of well completions and to develop solutions aimed at increasing the effectiveness of enhanced oil recovery projects.
|  |                                                                                                                                                                                                                                                                                                                             
|* | Reservoir Management: Combines and integrates information from reservoir description and production enhancement services to increase production and improve recovery of oil and gas from our clients' reservoirs.                                                                                                           



Segment Analysis

We manage each of our business segments separately to reflect the different services and technologies provided and required by each segment. We use the same accounting policies to account for our business segments as those used to prepare our Consolidated Balance Sheets and Consolidated Statements of Operations. We evaluate the performance of our business segments on the basis of operating income.





Summarized financial information relating to our business segments is shown in the following tables (in thousands):



|                                  | (Unaudited)                                                                                                            |  | Reservoir Description |  | Production Enhancement |  | Reservoir Management |  | Corporate & Other 1 |  | Consolidated 
|--------------------------------- | ---------------------------------------------------------------------------------------------------------------------- |  | --------------------- |  | ---------------------- |  | -------------------- |  | ------------------- |  | -------------
|Three Months Ended March 31, 2008 |                                                                                                                        |  |                       |  |                        |  |                      |  |                    
|                                  | Revenues from unaffiliated customers                                                                                   |  | $   100,501           |  | $      67,024          |  | $      11,912        |  | $             -     |  | $     179,437
|                                  | Inter-segment revenues                                                                                                 |  | 233                   |  | 193                    |  | 315                  |  | (741)               |  | -            
|                                  | Segment operating income (loss)                                                                                        |  | 23,017                |  | 21,941                 |  | 4,227                |  | (4,917)             |  | 44,268       
|                                  | Total assets                                                                                                           |  | 248,200               |  | 172,796                |  | 22,385               |  | 79,527              |  | 522,908      
|                                  | Capital expenditures                                                                                                   |  | 3,315                 |  | 2,172                  |  | 97                   |  | 34                  |  | 5,618        
|                                  | Depreciation and amortization                                                                                          |  | 2,929                 |  | 1,386                  |  | 153                  |  | 771                 |  | 5,239        
|                                  |                                                                                                                        |  |                       |  |                        |  |                      |  |                     |  |              
|Three Months Ended March 31, 2007 |                                                                                                                        |  |                       |  |                        |  |                      |  |                    
|                                  | Revenues from unaffiliated customers                                                                                   |  | $   83,163            |  | $      58,807          |  | $      13,753        |  | $             -     |  | $     155,723
|                                  | Inter-segment revenues                                                                                                 |  | 167                   |  | 205                    |  | 291                  |  | (663)               |  | -            
|                                  | Segment operating income                                                                                               |  | 16,773                |  | 16,052                 |  | 3,697                |  | 198                 |  | 36,720       
|                                  | Total assets                                                                                                           |  | 219,681               |  | 166,627                |  | 19,358               |  | 82,544              |  | 488,210      
|                                  | Capital expenditures                                                                                                   |  | 2,570                 |  | 606                    |  | 89                   |  | 162                 |  | 3,427        
|                                  | Depreciation and amortization                                                                                          |  | 2,372                 |  | 1,284                  |  | 127                  |  | 795                 |  | 4,578        
|                                  |                                                                                                                        |  |                       |  |                        |  |                      |  |                     |  |              
|                                  |                                                                                                                        |  |                       |  |                        |  |                      |  |                     |  |              
|                                  | (1) "Corporate & Other" represents those items that are not directly related to a particular segment and eliminations.





11. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Core Laboratories N.V. has fully and unconditionally guaranteed all of the Notes issued by Core Laboratories LP in 2006. Core Laboratories LP is a 100% indirectly owned subsidiary of Core Laboratories N.V.

The following condensed consolidating financial information is included so that separate financial statements of Core Laboratories LP are not required to be filed with the U.S. Securities and Exchange Commission. The condensed consolidating financial statements present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

The following condensed consolidating financial information presents: condensed consolidating balance sheets as of March 31, 2008 and December 31, 2007, statements of income and the consolidating statements of cash flows for each of the quarters ended March 31, 2008 and 2007 of (a) Core Laboratories N.V., parent/guarantor, (b) Core Laboratories LP, issuer of public debt securities guaranteed by Core Laboratories N.V. and (c) the non-guarantor subsidiaries, (d) consolidating adjustments necessary to consolidate Core Laboratories N.V. and its subsidiaries and (e) Core Laboratories N.V. on a consolidated basis.








Condensed Consolidating Balance Sheets(In thousands)
March 31, 2008Core Laboratories N.V. (Parent/ Guarantor)

Core Laboratories LP (Issuer)

Other Subsidiaries (Non- Guarantors)

Consolidating Adjustments

Consolidated TotalASSETSCURRENT ASSETS:Cash and cash equivalents
$          2,137

$       12,195

$      14,195

$                -

$      28,527Accounts receivable, net
187

32,761

113,788

-

146,736Inventories, net
-

3,377

28,236

-

31,613Prepaid expenses and other current assets
589

12,979

24,239

-

37,8072,913

61,312

180,458

-

244,683PROPERTY, PLANT AND EQUIPMENT, net
-

21,362

71,488

-

92,850GOODWILL AND INTANGIBLES, net
46,986

8,573

90,225

-

145,784INTERCOMPANY RECEIVABLES
58,905

277,779

351,410

(688,094)

-INVESTMENT IN AFFILIATES
299,104

-

1,032,902

(1,331,717)

289DEFERRED TAX ASSET
2,982

20,058

-

(2,930)

20,110OTHER ASSETS
3,276

10,685

5,231

-

19,192TOTAL ASSETS
$      414,166

$      399,769

$  1,731,714

$   (2,022,741)

$           522,908LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Current maturities of long-term debt and
capital lease obligations
$          1,904

$                -

$                2

$                  -

$         1,906Accounts payable
1,221

4,525

29,944

-

35,690Other accrued expenses
3,974

10,213

41,694

-

55,8817,099

14,738

71,640

-

93,477LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS
-

300,000

-

-

300,000DEFERRED COMPENSATION
5,879

7,744

457

-

14,080DEFERRED TAX LIABILITY
-

324

2,606

(2,930)

-INTERCOMPANY PAYABLES
309,590

10,189

368,315

(688,094)

-OTHER LONG-TERM LIABILITIES
17,017

12,490

9,675

-

39,182MINORITY INTEREST
-

-

1,588

-

1,588TOTAL SHAREHOLDERS' EQUITY
74,581

54,284

1,277,433

(1,331,717)

74,581TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
$      414,166

$      399,769

$  1,731,714

$   (2,022,741)

$      522,908











Condensed Consolidating Balance Sheets(In thousands)
December 31, 2007Core Laboratories N.V. (Parent/ Guarantor)

Core Laboratories LP (Issuer)

Other Subsidiaries (Non- Guarantors)

Consolidating Adjustments

Consolidated TotalASSETSCURRENT ASSETS:Cash and cash equivalents
$          6,712

$       7,818

$      11,087

$                -

$      25,617Accounts receivable, net
114

28,782

108,335

-

137,231Inventories, net
-

2,681

26,682

-

29,363Prepaid expenses and other current assets
887

9,901

17,700

-

28,4887,713

49,182

163,804

-

220,699PROPERTY, PLANT AND EQUIPMENT, net
-

21,288

71,750

-

93,038GOODWILL AND INTANGIBLES, net
46,986

8,652

90,202

-

145,840INTERCOMPANY RECEIVABLES
25,828

334,793

327,791

(688,412)

-INVESTMENT IN AFFILIATES
267,943

-

914,018

(1,181,727)

234DEFERRED TAX ASSET
2,507

25,925

1,726

(4,134)

26,024OTHER ASSETS
3,634

11,456

3,865

-

18,955TOTAL ASSETS
$      354,611

$      451,296

$  1,573,156

$   (1,874,273)

$    504,790LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Current maturities of long-term debt and
capital lease obligations
$          3,024

$                 -

$                3

$                -

$         3,027Accounts payable
2,417

4,581

32,863

-

39,861Other accrued expenses
1,325

21,057

32,770

-

55,1526,766

25,638

65,636

-

98,040LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS
-

300,000

-

-

300,000DEFERRED COMPENSATION
5,688

7,980

412

-

14,080DEFERRED TAX LIABILITY
4,134

-

-

(4,134)

-INTERCOMPANY PAYABLES
264,976

66,550

356,886

(688,412)

-OTHER LONG-TERM LIABILITIES
10,904

8,716

9,421

-

29,041MINORITY INTEREST
-

-

1,486

-

1,486TOTAL SHAREHOLDERS' EQUITY
62,143

42,412

1,139,315

(1,181,727)

62,143TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
$      354,611

$      451,296

$  1,573,156

$   (1,874,273)

$      504,790











Condensed Consolidating Statements of Operations(In thousands)
Quarter Ended March 31, 2008Core Laboratories N.V. (Parent/ Guarantor)

Core Laboratories LP (Issuer)

Other Subsidiaries (Non- Guarantors)

Consolidating Adjustments

Consolidated TotalREVENUESOperating revenues
$                   -

$      39,665

$     139,772

$                -

$    179,437Intercompany revenues
267

3,852

32,669

(36,788)

-Earnings from consolidated affiliates
38,137

-

95,282

(133,419)

-Total revenues
38,404

43,517

267,723

(170,207)

179,437OPERATING EXPENSESOperating costs
297

21,161

98,015

-

119,473General and administrative expenses
3,520

4,766

3

-

8,289Depreciation and amortization
-

1,372

3,867

-

5,239Other expense (income), net
4,537

823

21,936

(25,128)

2,168Operating income
30,050

15,395

143,902

(145,079)

44,268Interest expense
36

608

-

-

644Income before income tax expense
30,014

14,787

143,902

(145,079)

43,624Income tax expense (benefit)
681

2,915

10,695

-

14,291NET INCOME
$         29,333

$        11,872

$     133,207

$      (145,079)

$       29,333






Condensed Consolidating Statements of Cash Flows(In thousands)
Quarter Ended March 31, 2008Core Laboratories N.V. (Parent/ Guarantor)

Core Laboratories LP (Issuer)

Other Subsidiaries (Non- Guarantors)

Consolidating Adjustments

Consolidated TotalNet cash provided by operating activities
$      14,287

$      6,238

$           4,915

$                  -

$     25,440-CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
-

(3,636)

(1,982)

-

(5,618)Patents and other intangibles
-

(22)

(64)

-

(86)Proceeds from sale of assets
-

2,227

240

-

2,467Premiums on life insurance
-

(430)

-

-

(430)Net cash used in investing activities
-

(1,861)

(1,806)

-

(3,667)CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of debt
(1,120)

(5,000)

-

-

(6,120)Proceeds from debt borrowings
-

5,000

-

-

5,000Capital lease obligations
-

-

(1)

-

(1)Stock options exercised
633

-

-

-

633Repurchase of common shares
(28,815)

-

-

-

(28,815)Excess tax benefit from stock-based payments
10,440

-

-

-

10,440Net cash used in financing activities
(18,862)

-

(1)

-

(18,863)NET CHANGE IN CASH AND CASH
EQUIVALENTS
(4,575)

4,377

3,108

-

2,910CASH AND CASH EQUIVALENTS,
beginning of period
6,712

7,818

11,087

-

25,617CASH AND CASH EQUIVALENTS,
end of period
$      2,137

$     12,195

$           14,195

$                -

$       28,527









Condensed Consolidating Statements of Operations(In thousands)
Quarter Ended March 31, 2007Core Laboratories N.V. (Parent/ Guarantor)

Core Laboratories LP (Issuer)

Other Subsidiaries (Non- Guarantors)

Consolidating Adjustments

Consolidated TotalREVENUESOperating revenues
$                  -

$       29,987

$       125,736

$                -

$    155,723Intercompany revenues
260

4,510

18,380

(23,150)

-Earnings from consolidated affiliates
30,276

-

-

(30,276)

-Total revenues
30,536

34,497

144,116

(53,426)

155,723OPERATING EXPENSESOperating costs
314

18,771

88,164

-

107,249General and administrative expenses
1,607

6,432

-

-

8,039Depreciation and amortization
-

1,301

3,277

-

4,578Other expense (income), net
45

1,852

20,380

(23,140)

(863)Operating income
28,570

6,141

32,295

(30,286)

36,720Interest expense
37

594

11

(10)

632Income before income tax expense
28,533

5,547

32,284

(30,276)

36,088Income tax expense (benefit)
3,271

3,325

4,230

-

10,826NET INCOME
$         25,262

$        2,222

$     28,054

$      (30,276)

$       25,262






Condensed Consolidating Statements of Cash Flows(In thousands)
Quarter Ended March 31, 2007Core Laboratories N.V. (Parent/ Guarantor)

Core Laboratories LP (Issuer)

Other Subsidiaries (Non- Guarantors)

Consolidating Adjustments

Consolidated TotalNet cash provided by operating activities
$       39,215

$   (18,249)

$           (1,808)

$                -

$      19,158-CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
-

(912)

(2,515)

-

(3,427)Patents and other intangibles


(9)

(36)

-

(45)Proceeds from sale of assets
-

2

74

-

76Premiums on life insurance
-

(764)

-

-

(764)Net cash used in investing activities
-

(1,683)

(2,477)

-

(4,160)CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of debt
(982)

-

-

-

(982)Capital lease obligations
-

-

(1)

-

(1)Stock options exercised
16,918

-

-

-

16,918Repurchase of common shares
(58,624)

-

-

-

(58,624)Debt issuance costs
-

(152)

-

-

(152)Excess tax benefits from stock-based payments
2,609

-

-

-

2,609Net cash used in financing activities
(40,079)

(152)

(1)

-

(40,232)NET CHANGE IN CASH AND CASH
EQUIVALENTS
(864)

(20,084)

(4,286)

-

(25,234)CASH AND CASH EQUIVALENTS,
beginning of period
1,572

35,385

17,266

-

54,223CASH AND CASH EQUIVALENTS,
end of period
$       708

$             15,301

$    12,980

$                -

$       28,989








12. RECENT ACCOUNTING PRONOUNCEMENTS



In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations ("SFAS 141R") which replaces SFAS No.141, Business Combination. SFAS 141R retains the fundamental requirements of SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. In addition, SFAS 141R's scope is broader in that it applies to all transactions and other events in which one entity obtains control over one or more other businesses. SFAS 141R is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008 and early adoption is not allowed. We are currently evaluating the effects that SFAS 141R may have on any future business combinations.



In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51 ("SFAS 160"). SFAS 160 requires companies with noncontrolling interests to disclose such interests clearly as a portion of equity separate from the parent's equity and the amount of consolidated net income attributable to these noncontrolling interests must also be clearly presented on the Consolidated Statement of Operations. In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and recorded as a gain or loss. SFAS 160 is effective for fiscal years beginning after December 15, 2008.  We are currently evaluating the effects that SFAS 160 may have on our financial position and results of operations.

Return to Index


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion summarizes the financial position of Core Laboratories N.V. and its subsidiaries as of March 31, 2008 and should be read in conjunction with (i) the unaudited consolidated interim financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

General

Core Laboratories N.V. is a Netherlands limited liability company.  It was established in 1936 and is one of the world's leading providers of proprietary and patented reservoir description, production enhancement and reservoir management products and services to the oil and gas industry.  These products and services can enable our clients to improve reservoir performance and increase oil and gas recovery from their producing fields.  Core Laboratories N.V. has over 70 offices in more than 50 countries and employs approximately 4,900 people worldwide.

References to "Core Lab", "we", "our", and similar phrases are used throughout this Quarterly Report on Form 10-Q and relate collectively to Core Laboratories N.V. and its consolidated affiliates.

Our business units have been aggregated into three complementary segments, which provide products and services for improving reservoir performance and increasing oil and gas recovery from new and existing fields.



*
Reservoir Description: Encompasses the characterization of petroleum reservoir rock, fluid and gas samples. We provide analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry.*
Production Enhancement: Includes products and services relating to reservoir well completions, perforations, stimulations and production. We provide integrated services to evaluate the effectiveness of well completions and to develop solutions aimed at increasing the effectiveness of enhanced oil recovery projects.*
Reservoir Management: Combines and integrates information from reservoir description and production enhancement services to increase production and improve recovery of oil and gas from our clients' reservoirs.


Cautionary Statement Regarding Forward Looking Statements

This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Certain of the statements contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations section, including those under the headings "Outlook" and "Liquidity and Capital Resources", and in other parts of this 10-Q, are forward looking. In addition, from time to time, we may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. Forward-looking statements can be identified by the use of forward-looking terminology such as "may", "will", "believe", "expect", "anticipate", "estimate", "continue", or other similar words, including statements as to the intent, belief, or current expectations of our directors, officers, and management with respect to our future operations, performance, or positions or which contain other forward-looking information. These forward-looking statements are predictions. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. Our actual results may differ significantly from the results discussed in the forward-looking statements. While we believe that these statements are and will be accurate, a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in our statements. Such factors include, but are not limited to, the risks and uncertainties summarized below:



|- | general and economic business conditions;                                                    
|- | ---------------------------------------------------------------------------------------------
|  |                                                                                              
|- | prices of oil and natural gas and industry expectations about future prices;                 
|  |                                                                                              
|- | foreign exchange controls and currency fluctuations;                                         
|  |                                                                                              
|- | political stability in the countries in which we operate;                                    
|  |                                                                                              
|- | the business opportunities (or lack thereof) that may be presented to and pursued by us;     
|  |                                                                                              
|- | changes in laws or regulations; and                                                          
|  |                                                                                              
|- | the validity of the assumptions used in the design of our disclosure controls and procedures.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see "Item 1A - Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as well as the other reports and registration statements filed by us with the SEC.



Outlook

We continue our efforts to expand our market presence by opening facilities in strategic areas and realizing synergies within our business lines.  We believe our market presence provides us a unique opportunity to service customers who have global operations in addition to the national oil companies.

We have established internal earnings targets that are based on current market conditions.  Based on discussions with our clients and our view of the industry, we anticipate that in 2008 spending by our international clients will increase approximately 20% while we expect North American spending to be relatively flat.  Attaining our internal targets is dependent on, among other things, oilfield activity sustained at current levels.

Results of Operations

Unaudited results of operations as a percentage of applicable revenue were as follows (in thousands):





|                                                                  | Three Months Ended March 31, |  | % Change
|----------------------------------------------------------------- | ---------------------------- |  | --------
|                                                                  | 2008                         |  | 2007    
|REVENUES:                                                         |                              |  |         
|Service                                                           | $138,409                     |  | 77%     
|Product sale                                                      | 41,028                       |  | 23%     
|Total revenue                                                     | 179,437                      |  | 100%    
|OPERATING EXPENSES:                                               |                              |  |         
|Cost of services*                                                 | 91,159                       |  | 66%     
|Cost of sales*                                                    | 28,314                       |  | 69%     
|Total cost of services and sales                                  | 119,473                      |  | 67%     
|General and administrative expenses                               | 8,289                        |  | 5%      
|Depreciation and amortization                                     | 5,239                        |  | 3%      
|Other expense (income), net                                       | 2,168                        |  | 1%      
|Operating income                                                  | 44,268                       |  | 25%     
|Interest expense                                                  | 644                          |  | -       
|Income before income tax expense                                  | 43,624                       |  | 24%     
|Income tax expense                                                | 14,291                       |  | 8%      
|NET INCOME                                                        | $  29,333                    |  | 16%     
|                                                                  |                              |  |         
|*Percentage based on applicable revenue rather than total revenue |                              |  |         



Operating Results for the Three Months Ended March 31, 2008 Compared to the Three Months Ended March 31, 2007 (unaudited)



Service Revenues

Service revenues increased to $138.4 million for the first quarter of 2008, up 18% when compared to $117.0 million for the first quarter of 2007. This increase in revenue was largely attributable to an increase in worldwide oilfield activities, acceptance of recently introduced services by our customers and continued demand for our reservoir optimizing technologies in several North American projects related to oil sands, tight-gas sands, and shale reservoirs. The revenue growth was also driven, in part, by the continued expansion of our worldwide deepwater analysis projects.

Product Sale Revenues

Revenues associated with product sales increased to $41.0 million for the first quarter of 2008, up 6% from $38.8 million for the first quarter of 2007. This increase was primarily the result of continued market acceptance and penetration of new reservoir optimizing technologies introduced in 2007 coupled with the continued increase in drilling activity on a global basis, but more specifically for natural gas in the North American markets which resulted in higher demand for our well completion products.



Cost of Services

Cost of services expressed as a percentage of service revenue improved to 66% for the quarter ended March 31, 2008, down from 68% for the corresponding quarter in 2007.  The decline in the cost of services relative to service revenue was primarily as a result of higher incremental margins earned on increased revenues over our relatively fixed cost structure.  Incremental margins are calculated as the change in operating income divided by the change in revenues.

Cost of Sales

Cost of sales as a percentage of product sale revenues was 69% for the quarter ended March 31, 2008, which was an improvement from the 71% for the same period in 2007. The decrease in cost of sales as a percentage of product sale revenues for 2008 was primarily due to the growing demand for our new technologies which are our higher margin products, from an overall increase in sales, continued efforts to enhance our manufacturing efficiencies and improved inventory management.

General and Administrative Expenses

General and administrative expenses were relatively flat at $8.3 million for the first quarter of 2008 compared to $8.0 million for the first quarter of 2007.

Depreciation and Amortization Expense

Depreciation and amortization expense of $5.2 million for the first quarter of 2008 increased $0.6 million, from $4.6 million for the first quarter of 2007. This increase in depreciation and amortization expense was primarily due to an increase in capital expenditures as we continue to grow the company.

Other Expense (Income), Net

Other expense (income), net consisted of the following at March 31, 2008 and 2007 (in thousands):



|                                  | Three Months EndedMarch 31, | 
|--------------------------------- | --------------------------- | 
|                                  | 2008                        | 
|                                  | (Unaudited)                 | 
|Minority interest                 | $       103                 | 
|Gain on sale of assets            | (1,284)                     | 
|Foreign exchange (gain) loss      | (746)                       | 
|Interest income                   | (108)                       | 
|Non-income tax accrual            | 5,030                       | 
|Other                             | (827)                       | 
|Total other expense (income), net | $  2,168                    | 

In 2008, we revised our estimate of a contingent liability associated with non-income related taxes, and as a result a charge to income of $5.0 million was recorded.  Additionally, we recorded a gain of $1.1 million in connection with the sale of a small office building.



Foreign exchange (gains) losses by currency are summarized in the following table (in thousands):





|                  | Three Months EndedMarch 31, | 
|----------------- | --------------------------- | 
|                  | 2008                        | 
|                  | (Unaudited)                 | 
|Canadian Dollar   | $     215                   | 
|Euro              | (586)                       | 
|Russian Ruble     | (157)                       | 
|Other currencies  | (218)                       | 
|Total (gain) loss | $    (746)                  | 

Income Tax Expense

The effective tax rates for the first quarter of 2008 and 2007 were 32.8% and 30.0%, respectively.

Segment Analysis

Our operations are managed primarily in three complementary segments - Reservoir Description, Production Enhancement and Reservoir Management.  The following table summarizes our results by operating segment for the quarters ended March 31, 2008 and 2007 (in thousands):



|                                                                                                        | Three Months Ended 
March 31,
|------------------------------------------------------------------------------------------------------- | -----------------------------
|                                                                                                        | 2008                         
|Revenues:                                                                                               | (Unaudited)                  
|Reservoir Description                                                                                   | $  100,501                   
|Production Enhancement                                                                                  | 67,024                       
|Reservoir Management                                                                                    | 11,912                       
|Consolidated                                                                                            | $  179,437                   
|                                                                                                        |                              
|Operating income (loss):                                                                                |                              
|Reservoir Description                                                                                   | $   23,017                   
|Production Enhancement                                                                                  | 21,941                       
|Reservoir Management                                                                                    | 4,227                        
|Corporate and Other1                                                                                    | (4,917)                      
|Consolidated                                                                                            | $   44,268                   
|                                                                                                       
|1)  "Corporate and Other" represents those items that are not directly related to a particular segment.

Reservoir Description

Revenues from the Reservoir Description segment increased $17.3 million, to $100.5 million in the first quarter of 2008, compared to $83.2 million in the first quarter of 2007. The revenue increase resulted from unprecedented demand for our reservoir rock and especially for our reservoir fluids characterization services in the Middle East, Asia and Europe and our reservoir optimizing technologies in several North American projects related to the Canadian oil sands, tight gas sands and multiple gas-shale reservoirs. The revenue growth was also driven, in part, by the continued expansion of worldwide deepwater projects.

Operating income in the first quarter of 2008 increased by 37% or $6.2 million to $23.0 million compared to $16.8 million for the first quarter of 2007.  Increases in operating income were primarily due to higher incremental margins earned from increased sales over our relatively fixed cost structure. Operating margins for the quarter ended March 31, 2008 were 23% compared to 20% for the same period in 2007.





Production Enhancement

Revenues from the Production Enhancement segment increased $8.2 million to $67.0 million in the first quarter of 2008 as compared to $58.8 million in the first quarter in 2007.  The primary reason for the increase in our revenues in this segment has been the further improvement in market penetration and client acceptance of our well perforating and completion products and fracture diagnostic services.

Operating income in the first quarter of 2008 increased by 37% or $5.9 million to $21.9 million from $16.1 million for the first quarter of 2007.  Operating margins increased to 33% in the first quarter of 2008 compared to 27% for the same period in 2007.  These margin improvements were primarily due to increased market penetration of higher-margin services and products including new enhanced recovery technology, such as our SpectraScanTM and SpectraChemTM tracer service and our new SuperHEROTM perforating charges and gun systems.



Reservoir Management

Revenues from the Reservoir Management segment decreased $1.8 million in the first quarter of 2008 as compared to the first quarter of 2007.  The decrease in revenue was a result of the culmination of several large projects in the first quarter of 2007.

Operating income in the first quarter of 2008 increased 14% to $4.2 million from $3.7 million for the first quarter of 2007.  The increase was primarily due to the continued expansion of the multi-client reservoir study sales in the U.S. and new studies being performed including a gas-shale study focused in the Appalachian region and a study on tight gas sands in the Middle East region.

Liquidity and Capital Resources

General

We have historically financed our activities through cash on hand, cash flows from operations, bank credit facilities, or the issuance of debt and equity financing.

We utilize the non-GAAP financial measure of free cash flow to evaluate our cash flows and results of operations.  Free cash flow is defined as net cash provided by operating activities (which is the most directly comparable GAAP measure) less capital expenditures.  Management believes that free cash flow provides useful information to investors as it represents the cash, in excess of capital expenditures, available to operate the business and fund non-discretionary obligations. Free cash flow is not a measure of operating performance under GAAP, and should not be considered in isolation nor construed as an alternative to operating profit, net income (loss) or cash flows from operating, investing or financing activities, each as determined in accordance with GAAP.  Moreover, since free cash flow is not a measure determined in accordance with GAAP and thus is susceptible to varying interpretations and calculations, free cash flow as presented, may not be comparable to similarly titled measures presented by other companies.  The following table reconciles this non-GAAP financial measure to the most directly comparable measure calculated and presented in accordance with U.S. GAAP for the three month period ended March 31, 2008 and 2007 (in thousands):



|                                          |  | Three Months Ended
March 31,
|----------------------------------------- |  | ----------------------------
|                                          |  | 2008                        
|Free cash flow calculation:               |  | (unaudited)                 
|Net cash provided by operating activities |  | $   25,440                  
|Less:  capital expenditures               |  | 5,618                       
|Free cash flow                            |  | $   19,822                  

The increase in free cash flow in 2008 compared to 2007 was due to a higher net income partially offset by an increase in capital expenditures. Additionally, working capital, excluding cash, increased at a reduced rate in the first quarter of 2008 as compared to first quarter of 2007, and therefore had less of an impact on cash flow in the current year. At March 31, 2008 and December 31, 2007, we had working capital of $151.2 million and $122.7 million, respectively.



Cash Flows

The following table summarizes cash flows for the three months ended March 31, 2008 and 2007 (in thousands):



|                                        |  | Three Months Ended
March 31,
|--------------------------------------- |  | ----------------------------
|                                        |  | 2008                        
|Cash provided by/(used in):             |  | (unaudited)                 
|Operating activities                    |  | $    25,440                 
|Investing activities                    |  | (3,667)                     
|Financing activities                    |  | (18,863)                    
|Net change in cash and cash equivalents |  | $      2,910                

The increase in cash flows provided by operating activities was primarily attributable to an increase in net income along with a decrease in prepaid expenses and an increase in accrued liabilities and other long-term liabilities due to timing of payments.

The decrease in cash flows used in financing activities related primarily to the number of shares repurchased under our common share repurchase program.  In the first three months of 2008, we repurchased 253,379 shares for an aggregate price of $28.8 million compared to 743,650 shares for an aggregate price of $58.6 million during the three months ended March 31, 2007.  The decrease in cash flows used in financing activities was also attributable to a decrease in stock options exercised in 2008 as compared to 2007 of $16.3 million.

We maintain a revolving credit facility (the "Credit Facility") that allows for an aggregate borrowing capacity of $100.0 million. As amended, this facility provides an option to increase the commitment under the Credit Facility to $150.0 million, if certain conditions are met.  The Credit Facility bears interest at variable rates from LIBOR plus 0.5% to a maximum of LIBOR plus 1.125%.  Any outstanding balance under the Credit Facility is due in December 2010 when the Credit Facility matures.   Interest payment terms are variable depending upon the specific type of borrowing under this facility. Our available capacity is reduced by outstanding unsecured letters of credit and performance guarantees and bonds totaling $11.6 million at March 31, 2008 relating to certain projects in progress. Our available borrowing capacity under the Credit Facility at March 31, 2008 was $88.4 million.

The terms of the Credit Facility require us to meet certain financial and operational covenants. We believe that we are in compliance with all such covenants at March 31, 2008.  All of our material, wholly owned subsidiaries are guarantors or co-borrowers under the Credit Facility.

Our ability to maintain and grow our operating income and cash flow depends, to a large extent, on continued investing activities. We are a Netherlands holding company and substantially all of our operations are conducted through subsidiaries. Consequently, our cash flow depends upon the ability of our subsidiaries to pay cash dividends or otherwise distribute or advance funds to us.  We believe our future cash flows from operations, supplemented by our borrowing capacity and issuances of additional equity should be sufficient to fund our debt requirements, capital expenditures, working capital, and future acquisitions.

Recent Accounting Pronouncements

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations ("SFAS 141R") which replaces SFAS No.141, Business Combination. SFAS 141R retains the fundamental requirements of SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. In addition, SFAS 141R's scope is broader in that it applies to all transactions and other events in which one entity obtains control over one or more other businesses. SFAS 141R is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008 and early adoption is not allowed. We are currently evaluating the effects that SFAS 141R may have on any future business combinations.



In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51 ("SFAS 160"). SFAS 160 requires companies with noncontrolling interests to disclose such interests clearly as a portion of equity separate from the parent's equity and the amount of consolidated net income attributable to these noncontrolling interests must also be clearly presented on the Consolidated Statement of Operations. In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and recorded as a gain or loss. SFAS 160 is effective for fiscal years beginning after December 15, 2008.  We are currently evaluating the effects that SFAS 160 may have on our financial position and results of operations.

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Item 3. Quantitative and Qualitative Disclosures of Market Risk

There have been no material changes in market risk from the information provided in Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K as of December 31, 2007.

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Item 4. Controls and Procedures

A complete discussion of our controls and procedures is included in our Annual Report on Form 10-K for the year ended December 31, 2007.

Disclosure Controls and Procedures

Our management, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Core Laboratories N.V.'s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this report.  Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of March 31, 2008 at the reasonable assurance level. Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.  Further, the design of disclosure controls and internal control over financial reporting must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.



Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our fiscal quarter ended March 31, 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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CORE LABORATORIES N.V.

PART II - OTHER INFORMATION



Item 1.  Legal Proceedings

See Note 6 of Consolidated Interim Financial Statements in Part I, Item 1.

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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the quarter ended March 31, 2008:





|Period                  |  | Total Number of Shares Purchased |  | Average Price Paid Per Share |  | Total Number of Shares Purchased as Part of a Publicly Announced Program |  | Maximum Number of Shares That May Yet be Purchased Under the Program
|----------------------- |  | -------------------------------- |  | ---------------------------- |  | ------------------------------------------------------------------------ |  | --------------------------------------------------------------------
|January 1-31, 2008      |  | 129,567                          |  | $ 113.86                     |  | 129,567                                                                  |  | 1,189,812                                                           
|February 1-29, 2008 (1) |  | 120,036                          |  | $ 113.33                     |  | 79,300                                                                   |  | 1,110,512                                                           
|March 1-31, 2008 (2)    |  | 3,776                            |  | $ 121.60                     |  | -                                                                        |  | 1,110,512                                                           
|Total                   |  | 253,379                          |  | $ 113.72                     |  | 208,867                                                                  |  |                                                                     
|                        |  |                                  |  |                              |  |                                                                          |  |                                                                     

(1) Contains 40,736 shares valued at $4.5 million, or $111.26 per share, surrendered to us by participants in a stock-based compensation plan to settle any personal tax liabilities which may result from the award in February 2008.

(2)  Contains 3,776 shares valued at $0.5 million, or $121.60 per share, surrendered to us by participants in a stock-based compensation plan to settle any personal tax liabilities which may result from the award in March 2008.

Under Dutch law and our articles of association, and subject to certain Dutch statutory provisions, we may repurchase up to 10% of our issued share capital in open market purchases.  In connection with our initial public offering in September 1995, our shareholders authorized our Management Board to make such repurchases for a period of 18 months.  At each annual shareholders' meeting subsequent to 1995, our shareholders have renewed that authorization.

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Item 6.  Exhibits



|Exhibit No. |   | Exhibit Title                                                                                                                                                                    |  | Incorporated by reference from the following documents               
|----------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------
|3.1         | - | Articles of Association of Core Laboratories N.V., as amended (including English translation)                                                                                    |  | Form F-1, September 20, 1995 (File No. 000-26710)                    
|3.2         | - | Amendments to the Articles of Association of Core Laboratories N.V.                                                                                                              |  | Proxy Statement dated May 17, 2006 for Annual Meeting of Shareholders
|10.1*       | - | Form of Restated Employment Agreement between Core Laboratories N.V. and David Michael Demshur dated as of December 31, 2007                                                     |  | Filed herewith                                                       
|10.2*       | - | Form of Restated Employment Agreement between Core Laboratories N.V. and Richard Lucas Bergmark dated as of December 31, 2007                                                    |  | Filed herewith                                                       
|10.3*       | - | Form of Restated Employment Agreement between Core Laboratories N.V. and Monty Lee Davis dated as of December 31, 2007                                                           |  | Filed herewith                                                       
|10.4*       | - | Form of Restated Employment Agreement between Core Laboratories N.V. and  John David Denson dated as of December 31, 2007                                                        |  | Filed herewith                                                       
|10.5*       | - | Amendment to Core Laboratories Supplement Executive Retirement Plan dated as of March 5, 2008                                                                                    |  | Filed herewith                                                       
|10.6*       | - | Amendment to Core Laboratories Supplemental Executive Retirement Plan for Monty L. Davis dated as of March 5, 2008                                                               |  | Filed herewith                                                       
|10.7*       | - | Amendment to Core Laboratories Supplemental Executive Retirement Plan for John D. Denson dated as of March 5, 2008                                                               |  | Filed herewith                                                       
|31.1        | - | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith                                                       
|31.2        | - | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith                                                       
|32.1        | - | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                |  | Furnished herewith                                                   
|32.2        | - | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                |  | Furnished herewith                                                   
|            |   |                                                                                                                                                                                  |  |                                                                      
|            | * | Management contract or compensatory plan or arrangement                                                                                                                          |  |                                                                      





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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant, Core Laboratories N.V., has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



CORE LABORATORIES N.V.By:
Core Laboratories International B.V., itsManaging DirectorDate:
May 8, 2008
By:
/s/ Richard L. BergmarkRichard L. BergmarkChief Financial OfficerDuly Authorized Officer andPrincipal Financial Officer




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