UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

For the fiscal year ended December 31, 2003

OR

CORE LABORATORIES N.V.

Registrant’s telephone number, including area code: (31-20) 420-3191

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

     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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

     Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Exchange Act. Yes [X] No [  ]

     As of June 30, 2003, the number of common shares outstanding was 31,169,619. At that date, the aggregate market value of common shares held by non-affiliates of the registrant was approximately $336,632,000.

     As of March 9, 2004, the number of common shares outstanding was 27,628,245.

DOCUMENTS INCORPORATED BY REFERENCE

Table of Contents

CORE LABORATORIES N.V.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

TABLE OF CONTENTS

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PART I

ITEM 1. BUSINESS

General

     Core Laboratories N.V. (“Core Laboratories”, “we”, “our” or “us”) was established in 1936 and is one of the world’s leading providers of proprietary and patented reservoir description, production enhancement and reservoir management services to the oil and gas industry. These services are directed toward enabling our clients to improve reservoir performance and increase oil and gas recovery from their producing fields. We have over 70 offices in more than 50 countries and have approximately 4,700 employees.

Business Strategy

     Our business strategy is to provide advanced technologies that improve reservoir performance by (i) continuing the development of proprietary technologies through client-driven research and development, (ii) expanding the services and products offered throughout our global network of offices and (iii) acquiring complementary technologies that add key technologies or market presence and enhance existing products and services.

     Development of New Technologies, Services and Products

     We conduct research and development to meet the needs of our clients who are continually seeking new services and technologies to lower their costs of finding, developing and producing oil and gas. While the aggregate number of wells being drilled per year has fluctuated relative to market conditions, oil and gas producers have, on a proportional basis, increased expenditures on technology services which improve their understanding of the reservoir thereby increasing production of oil and gas from their producing fields. We intend to continue concentrating our efforts on services and technologies that improve reservoir performance and increase oil and gas recovery.

     International Expansion of Services and Products

     Another component of our business strategy is to broaden the spectrum of services and products offered to our clients on a global basis. We plan to use our worldwide network of offices to offer many of our new services and products that have been developed internally or obtained through acquisitions. This allows us to enhance our revenues through efficient utilization of our worldwide network.

     Acquisitions

     We continually review potential acquisitions to add key services and technologies, enhance market presence or complement existing businesses. In April 2003, we acquired substantially all of the assets of GOEX. The assets acquired consisted of certain machinery, inventory, receivables and exclusive oilfield rights to market and sell detonation cord manufactured by the parent company of GOEX. The addition of these assets has resulted in synergies in our Production Enhancement segment.

     More information relating to acquisitions is included in Note 3 of the Notes to Consolidated Financial Statements.

Operations

     We derive our revenues from services and product sales to clients primarily in the oil and gas industry.

     Our reservoir optimization services and technologies are interrelated and are organized into three complementary segments. Disclosure relating to the results of these business segments is included in Note 16 of the Notes to Consolidated Financial Statements.

-		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.

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     We offer our services worldwide through our global network of offices. Services accounted for approximately 81%, 83% and 81% of our revenues from operations for the years ended December 31, 2003, 2002 and 2001, respectively.

     We manufacture products primarily in four facilities for distribution on a global basis. Product sales, primarily included in our Production Enhancement segment, accounted for approximately 19%, 17% and 19% of our revenues from operations for the years ended December 31, 2003, 2002 and 2001, respectively.

     Our sales backlog of products at December 31, 2003 was approximately $7.6 million, compared to $3.6 million at December 31, 2002. Sources of raw material are readily available and our sales backlog should be completed in 2004.

     Reservoir Description

     Commercial oil and gas fields consist of porous and permeable reservoir rocks that contain natural gas, crude oil and water. Due to the density differences of the fluids, natural gas typically caps the field and overlies an oil layer, which overlies the water. We provide services that characterize the porous reservoir rock and all three reservoir fluids. Services relating to these fluids include determining quality and measuring quantity of the fluids and their derived products. This includes determining the value of different crude oil and natural gases by analyzing the individual components of complex hydrocarbons. These data sets are used by oil companies to determine the most efficient process by which to process and refine these hydrocarbons to produce the maximum value added to crude oil and natural gas.

     We analyze samples of reservoir rocks for their porosity, which determines reservoir storage capacity, and for their permeability, which defines the ability of the fluids to flow through the rock. These measurements are used to determine how much oil and gas are present in a reservoir and the rates at which the oil and gas can be produced. We also use our proprietary services and technologies to correlate the reservoir description data to wireline logs and seismic data. These data sets are also used to determine the different acoustic velocities of reservoir rocks containing water, oil and natural gas. These measurements are used in conjunction with our reservoir management services to develop programs to produce more oil and gas from the reservoir.

     Production Enhancement

     We produce data to describe a reservoir system that is used to enhance oil and gas production so that it will exceed the average oilfield recovery factor, which is approximately 40%. Two production enhancement methods commonly used are (i) hydraulic fracturing of the reservoir rock to improve flow and (ii) flooding the field with water, carbon dioxide, nitrogen or hydrocarbon gases to force more oil and gas to the wellbore. Many oilfields today are hydraulically fractured and flooded to maximize oil and gas recovery. Our services and technologies play a key role in the success of both methods.

     The hydraulic fracturing of a producing formation is achieved by pumping a proppant material in a gel slurry into the reservoir zone at extremely high pressures. This forces fractures to open in the rock and “props” or holds the fractures open so that reservoir fluids can flow to the production wellbore. Our data on rock type and strength are critical for determining the proper design of the hydraulic fracturing job. In addition, our testing indicates whether the gel slurry is compatible with the reservoir fluids so that damage does not occur to the porous rock network. Our proprietary and patented ZeroWash™ tracer technology is also used to determine that the proppant material was properly placed in the fracture to ensure effective flow and increased recovery.

     SpectraChem^SM is another proprietary and patented technology developed for optimizing hydraulic frac performance. SpectraChem^SM is used to aid operators in determining the efficiency of frac fluid performance. SpectraChem^SM tracers allow operators to evaluate the quantity of frac fluid that returns to the wellbore during the clean-up period after a hydraulic fracturing event. This technology also allows our clients to evaluate load recovery, gas breakthrough, fluid leakoff and breaker efficiency, all of which are important factors for optimizing natural gas production after the fracing event. We have also introduced SpectraFlood^™, which we developed and is used to optimize sweep efficiency in field floods.

     We conduct dynamic flow tests of the reservoir fluids through the reservoir rock, at actual reservoir pressure and temperature, to realistically simulate the actual flooding of a producing zone. We use patented technologies, such as our Saturation Monitoring by the Attenuation of X-rays (SMAX^™), to help design the enhanced recovery project. After a field flood is initiated, we are often involved in monitoring the progress of the flood to ensure the maximum amount of incremental production is being achieved.

     Our unique completion monitoring system, Completion Profiler, helps to determine flow rates from reservoir zones after they have been hydraulically fractured. This provides our clients with production information without additional well time.

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     Our PackScan^™ patented technology, which is used as a tool to monitor the wellbore in an unconsolidated reservoir, has contributed to our revenue growth. PackScan^™ measures the density changes in the area around the tool and is designed to observe the changes within the wellbore to verify the completeness of the gravel pack protection of the wellbore.

     In addition to our many patented reservoir analysis technologies, we have established ourselves as a global leader in the manufacture and distribution of high-performance perforating products. Our unique understanding of complex reservoirs supports our ability to supply perforating systems engineered to maximize well productivity by reducing, eliminating and overcoming formation damage caused during the completion of oil and gas wells. Our “Systems” approach to the perforating of an oil or gas well has resulted in numerous patented products. Our HERO^™ perforating system is quickly becoming an industry leader in enhancing reservoir performance.

     We have an experienced Technical Services team to support clients through our global network of offices for the everyday use of our perforating systems and the rapid introduction of new products. Our personnel are capable of providing client training and on-site assistance. Our patented X-SPAN casing patch is supported by the Technical Services operating group.

     Reservoir Management

     Reservoir description and production enhancement information, when applied across an entire oilfield, is used to maximize daily production and the ultimate total recovery from the reservoir. We are involved in numerous large-scale reservoir management projects, applying proprietary and state-of-the-art techniques from the earliest phases of a field development program until the last economic barrel of oil is recovered.

     These projects are of increasing importance to oil companies as the incremental barrel is often the lowest cost and most profitable barrel in the reservoir. Producing incremental barrels increases our clients’ cash flows which we believe will result in additional capital expenditures by our clients, and ultimately further opportunities for us.

     The integration of our reservoir imaging technologies has allowed us to provide a range of services and products to the geophysical industry, including velocity modeling and depth imaging to our clients. The combination of our integrated approach to reservoir characterization, our expertise in core to seismic correlation and velocity modeling and depth imaging technology gives us a unique position in the industry.

Marketing and Sales

     We market and sell our services and products through a combination of print advertising, technical seminars, trade shows and sales representatives. Direct sales and marketing are carried out by our sales force, technical experts and operating managers, as well as by sales representatives and distributors in various markets where we do not have offices.

Research and Development

     The market for our products and services is characterized by changing technology and frequent product introduction. As a result, our success is dependent upon our ability to develop or acquire new products and services on a cost-effective basis and to introduce them into the marketplace in a timely manner. Many of our acquisitions have allowed us to obtain the benefits of the acquired company’s research and development projects without the significant costs that would have been incurred if we had attempted to develop the products and services on our own. Research and development expenditures are charged to expense as incurred. We intend to continue committing substantial financial resources and effort to the development and acquisition of new products and services. Over the years, we have made a number of technological advances, including the development of key technologies utilized in our operations. Substantially all of the new technologies have resulted from requests and guidance from our clients, particularly major oil companies. While we have acquired many of our new technologies, we incur expenses relating to our ongoing research and development program.

Patents and Trademarks

     We believe our patents, trademarks and other intellectual property rights are an important factor in maintaining our technological advantage, although no one patent is considered essential to our success. Typically, we will seek to protect our intellectual technology in all jurisdictions where we believe the cost of such protection is warranted. While we have patented some of our key technologies, we do not patent all of our proprietary technology even where regarded as patentable. In addition to patents, in many instances we protect our trade secrets through confidentiality agreements with our employees and our clients.

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International Operations

     We operate facilities in more than 50 countries. Our non-U.S. operations accounted for approximately 61%, 61% and 59% of our revenues from operations during the years ended December 31, 2003, 2002 and 2001, respectively. Some of our revenues in the U.S. are generated by projects located outside the U.S.

     While we are subject to fluctuations and changes in currency exchange rates relating to our international operations, we attempt to limit our exposure to foreign currency fluctuations by limiting the amount in which our foreign contracts are denominated in a currency other than the U.S. dollar to an amount generally equal to the expenses expected to be incurred in such foreign currency. However, the ultimate decision as to the proportion of the foreign currency component within a contract usually resides with our clients. Consequently, we are not able to always match our currency exposure. We have not historically engaged in and are not currently engaged in any significant hedging or currency trading transactions designed to compensate for adverse currency fluctuations. More information on international operations is included in Notes 10 and 16 of the Notes to Consolidated Financial Statements.

Environmental Regulation

     We are subject to a variety of governmental regulations relating to the use, storage, discharge and disposal of chemicals and gases used in our analytical and manufacturing processes. Consistent with our quality assurance and control principles, we have established proactive environmental policies with respect to the handling and disposal of such chemicals, gases, emissions and waste materials. We have engaged outside consultants to audit our environmental activities and have implemented health and safety education and

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training programs. We believe that our operations are currently in material compliance with applicable environmental laws and regulations, and that continued compliance with existing requirements will not have a material adverse effect on our financial position or results of operations. Public interest in the protection of the environment, however, has increased dramatically in recent years. We anticipate that the trend toward more expansive and stricter environmental laws and regulations will continue, the occurrence of which may require us to increase capital expenditures or operating expenses.

Competition

     The businesses in which we engage are competitive. Some of our competitors are divisions or subsidiaries of companies that are larger and have greater financial and other resources than we have. While no one company competes with us in all of our product and service lines, we face competition in these lines, primarily from independent regional companies. We compete in different product and service lines to various degrees on the basis of price, technical performance, availability, quality and technical support. Our ability to compete successfully depends on elements both within and outside of our control, including successful and timely development of new products and services, performance and quality, client service, pricing, industry trends and general economic trends.

Reliance on the Oil and Gas Industry

     Our business and operations are substantially dependent upon the condition of the global oil and gas industry. Future downturns in the oil and gas industry, or in the oilfield services business, may have a material adverse effect on our financial position, results of operations or cash flows.

     The oil and gas industry is highly cyclical and has been subject to significant economic downturns at various times as a result of numerous factors affecting the supply of and demand for oil and natural gas, including the level of capital expenditures of the oil and gas industry; the level of drilling activity; the level of production activity; market prices of oil and gas; economic conditions existing in the world; interest rates and the cost of capital; environmental regulations; tax policies; political requirements of national governments; coordination by the Organization of Petroleum Exporting Countries (“OPEC”); cost of producing oil and natural gas; and technological advances.

Employees

     As of December 31, 2003, we had approximately 4,700 employees. We do not have any material collective bargaining agreements and consider relations with our employees to be good.

Web Site Access to Our Periodic SEC Reports

     Our primary Internet address is www.corelab.com. We file Forms 10-Q and Forms 10-K and current reports on Form 8-K with the Securities and Exchange Commission (“SEC”). These reports are available free of charge through our web site as soon as reasonably practicable after they are filed electronically with the SEC. We may from time to time provide important disclosures to investors by posting them in the investor relations section of our web site, as allowed by SEC rules.

     Materials we file with the SEC may be read and copied at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet Web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding our company that we file electronically with the SEC.

Risk Factors

     Our forward-looking statements are based on assumptions that we believe to be reasonable but that may not prove to be accurate. All of our forward-looking information is, therefore, subject to risks and uncertainties that could cause actual results to differ materially from the results expected. Although it is not possible to identify all factors, these risks and uncertainties include the risk factors discussed below.

     Industry risks

     The oil and gas industry is highly cyclical and there are numerous factors affecting the supply of and demand for our products and services, which include:

-		market prices of oil and gas and expectations about future prices;
-		cost of producing oil and natural gas;

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-		the level of drilling and production activity;
-		mergers, consolidations and downsizing among our clients;
-		coordination by OPEC;
-		the impact of commodity prices on the expenditure levels of our clients;
-		financial condition of our client base and their ability to fund capital expenditures;
-		adverse weather conditions;
-		civil unrest in oil producing countries; and
-		level of consumption of oil, gas and petrochemicals by consumers.

     Business risks

     Our results of operations could be adversely affected by risks and uncertainties in the business environment in which we operate, including:

-		competition in our markets;
-		the realization of anticipated synergies from acquired technologies, assets, businesses and future acquisitions;
-		our ability to continue to develop or acquire new and useful technology;
-		implementation of and compliance with the Sarbanes-Oxley Act of 2002;
-		interest rates and the cost of capital and;
-		our ability to obtain or renew contracts on a timely basis.

     International risks

     We conduct our business in over 50 countries and are subject to political and economic instability and the laws and regulations in the countries in which we operate. These include:

-		global economic conditions;
-		political actions and requirements of national governments including trade restrictions, embargos and expropriations of assets;
-		potential tax liabilities in multiple jurisdictions;
-		civil unrest;
-		acts of terrorism;
-		fluctuations and changes in currency exchange rates;
-		the impact of inflation; and
-		current conditions in Venezuela and Iraq.

     Economic downturn and political events that continue to unfold have resulted in lower demand for our products and services in certain markets. The ongoing conflict in Iraq and the potential for activity from terrorist groups that the U.S. government has cautioned against have further heightened our exposure to international risks. Our global economy is highly influenced by public

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confidence in the geopolitical environment and the situation in the Middle East continues to be highly fluid; therefore, we expect to experience heightened international risks.

     As a result of the recent political and financial situation in Venezuela, in February 2003, the Venezuelan government-mandated an exchange rate for their currency, the Bolivar (“VEB”), of 1,596 VEB per United States Dollar (“USD”). Although operations in Venezuela have stabilized, they could be negatively impacted by anticipated government-mandated devaluation of the VEB vs. the USD. At December 31, 2003, our net monetary assets denominated in VEB in Venezuela were $2.7 million. On February 9, 2004, the Venezuelan government devalued the VEB by 20% to 1,918 VEB per USD. If this devaluation had occurred on December 31, 2003, the impact would have resulted in a foreign exchange loss of approximately $0.5 million. Because of this devaluation, in the first quarter of 2004, we will incur foreign exchange losses on our net monetary assets denominated in VEB. A change of 100 VEB in the exchange rate could result in a change of approximately $0.2 million in foreign exchange gain or loss subject to the amount of the net monetary assets at that time. We recognized a foreign currency loss of $0.1 million related to our Venezuela operations during 2003. We will continue to monitor our operations and financial position in this region.

     Other risks

     Our client base could be impacted by events we cannot predict or we could be impacted by a change in the conduct of business, transportation and security measures. In addition, we are subject to other risk factors such as the impact of environmental regulations and litigation risks as well as the dependence on the oil and gas industry. Many of these risks are beyond our control. In addition, future trends for pricing, margins, revenues and profitability remain difficult to predict in the industries we serve and under current economic and political conditions.

ITEM 2. PROPERTIES

     Currently, we have over 70 offices (totaling more than one million square feet) in more than 50 countries. In these locations, we typically lease our office facilities. We serve our worldwide clients through six Advanced Technology Centers (“ATCs”) that are located in Houston, Texas; Calgary, Canada; Jakarta, Indonesia; Rotterdam, The Netherlands; Aberdeen, Scotland; and Villahermosa, Mexico. The ATCs are supported by over 50 regional specialty centers located throughout the global energy producing provinces. Our facilities are adequately utilized for current operations. However, expansion into new facilities may be required to accommodate future growth.

ITEM 3. LEGAL PROCEEDINGS

     From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of business.

     Since April 2003, several putative class action lawsuits have been filed against us and certain of our officers in the United States District Court for the Southern District of New York, alleging, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934; these cases have since been consolidated and transferred to the United States District Court for the Southern District of Texas. We understand that the complainants generally allege that the defendants overstated the company’s revenues and net income within the first three quarters of 2002. The complaints seek unspecified monetary damages. In January 2004, the U.S. District Court appointed the lead plaintiff and its counsel and we anticipate an amended complaint will be filed by the lead plaintiff in the near future. We intend to vigorously defend this suit.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     At a special meeting held on October 29, 2003, our shareholders approved the cancellation from treasury shares of 3,330,892 shares we previously repurchased under our repurchase program. Such approval is required under Dutch law before shares can be cancelled and was necessary to give us the ability to repurchase shares in the future since Dutch law allows companies to hold no more than 10% of their outstanding shares. The proposal was approved by a vote of 20,711,756 in favor, 64,114 against and 16,664 abstaining. In addition, at the special meeting, shareholders gave authorization to repurchase an additional 10% of outstanding shares in treasury until April 28, 2005 in accordance with Dutch law. The proposal was approved by a vote of 20,713,732 in favor, 64,318 against and 14,484 abstaining.

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PART II

ITEM 5. MARKET FOR THE COMMON SHARES AND RELATED SHAREHOLDER MATTERS

Price Range of Common Shares

     Our common shares trade on the New York Stock Exchange (“NYSE”) under the symbol “CLB”. The range of high and low sales prices per share of the common shares as reported by the NYSE are set in the following table for the periods indicated.

     On March 9, 2004, the closing price, as quoted by the NYSE, was $21.45 per share. As of March 9, 2004, there were 30,225,103 common shares held by approximately 140 record holders and approximately 9,200 beneficial holders.

Dividend Policy

     We have never paid dividends on our common shares and currently have no plans to pay dividends on the common shares. We expect that we will retain all available earnings generated by our operations for the development and growth of our business. Any future determination as to the payment of dividends will be made at the discretion of our Supervisory Board and will depend upon our operating results, financial condition, capital requirements, income tax treatment of payments, general business conditions and such other factors as they deem relevant. Because we are a holding company that conducts substantially all of our operations through subsidiaries, our ability to pay cash dividends on the common shares is also dependent upon the ability of our subsidiaries to pay cash dividends or otherwise distribute or advance funds to us and on the terms and conditions of our existing and future credit arrangements. See “Liquidity and Capital Resources” included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

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ITEM 6. SELECTED FINANCIAL DATA

     The selected consolidated financial information contained below is derived from our Consolidated Financial Statements and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements.

     The Consolidated Financial Statements for the fiscal years 1999 through 2001 were audited by Arthur Andersen LLP (“Andersen”) that ceased operations. A copy of the report previously issued by Andersen on our financial statements as of December 31, 2001 and 2000 and for each of the three years in the period ended December 31, 2001 is included elsewhere in the Form 10-K. Such audit report has not been reissued by Andersen.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

     Core Laboratories N.V.’s (“Core Laboratories”, “we”, “our” or “us”) Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) discusses matters we consider important in understanding the results of our operations and our capital resources and liquidity. We begin our discussion with a general overview of our industry and how it relates to our business. We then outline our critical accounting policies and estimates that have affected our consolidated financial statements. We analyze the results of our operation for the last three years, including the trends in the overall business and our operating segments, discuss our cash flows and liquidity and capital resources, list recent accounting pronouncements, and discuss inflation and income taxes. We conclude MD&A with our outlook for our future results followed by forward-looking cautionary statements.

General Overview

     Our clients’ expectations about their capital expenditure programs change in correlation to the prices of oil and natural gas. Accordingly, the changes in their capital expenditures which are focused on improving daily production from their reservoirs as well as over the entire life of those reservoirs will normally result in increased or decreased demand for our products and services.

     Commodity prices for both natural gas and crude oil rose throughout 2003. The spot price of crude oil was up just over 8% while the price of natural gas increased over 33%. Consequently, activity levels in the oilfield service sector increased during the year. Rig count improved in the U.S. markets throughout the year, and, to a lesser extent, rig count improved outside the United States.

Rig Count/Oil and Gas Prices

1)		Baker Hughes Incorporated - World-wide averages
2)		Lehman Brothers - The Original Oil Service Monthly

     The price of natural gas increased during 2003 due to a variety of factors. A major component of the increase in natural gas prices was decreased production of natural gas in 2003 as compared to the prior year. The decline was due to lower production rates from maturing fields combined with steeper decline curves from newly discovered fields. The pressure of falling supply coupled with increasing demand, due to an improving economy and a colder winter, contributed to an increase in the price of natural gas during the year. Oil prices also rose throughout the year reflecting similar factors that caused the price of natural gas to increase; primarily increasing demand, due to an improving economy, combined with a stable supply.

     Our activity levels increased in 2003 as our clients invested more of their cash flows back into developing and producing their reservoirs than they did in the prior year. These higher activity levels led to record revenues being generated in 2003. The higher customer activity levels boosted revenues in our Reservoir Description segment by 9% when compared to the prior year’s revenues and by 28% in our Production Enhancement segment.

     Given these higher revenues, in conjunction with efforts to contain our cost structure, we were able to generate operating income that was 61% greater than the prior year. Our Reservoir Description segment showed improvement in all operations, primarily as a result of the spending levels of our clients aimed at characterizing and analyzing reservoirs, crude oil, and derivative products. Operating income from our Production Enhancement segment was up almost 300% over the prior year as more wells in North America were drilled and stimulated than the prior year. The greater the number of wells drilled or stimulated is important to this segment as it provides greater opportunity for our clients to use our products and services. The operating results from our Reservoir Management group continued to be disappointing as the losses were greater than the prior year. Steps are being taken to refocus this segment that we believe will bring the segment back to profitable operating results. These steps include downsizing the scope of or eliminating specialized geophysical and seismic related services, reducing employee costs, transferring work to the most efficient offices, or selling the specialized geophysical and seismic related services business to outside parties.

     We continue our efforts to expand our market presence by opening strategic facilities and realizing synergies within our business lines. Also, as a result of the consolidation in the oil and gas industry, some of our clients have used, and may continue to use, their global presence and market influence to seek economies of scale and pricing concessions.

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Critical Accounting Policies and Estimates

     MD&A is based on financial statements prepared in conformity with generally accepted accounting principles (“GAAP”) in the U.S. and require management to make estimates and assumptions during their preparation. The application of the following critical accounting policies place significant emphasis on management’s judgments regarding:

-		revenue recognition;
-		allowance for doubtful accounts;
-		long-lived assets, intangibles and goodwill;
-		inventory valuation allowances;
-		income taxes;
-		stock options; and
-		estimates.

Revenue Recognition

     Revenues are recognized as services are completed or as product title is transferred. All advance client payments are classified as unearned revenues until services are earned or product title is transferred. We recognize revenue when we determine that the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectibility is reasonably assured. Revenues from long-term contracts are recorded as services are rendered in proportion to the work performed. All known or anticipated losses on contracts are provided for currently. Training and consulting service revenues are recognized as the services are performed.

     Sales of perpetual software licenses, net of deferred maintenance fees, are recorded as revenue once the criteria of Statement of Position 98-9, “Modification of SOP 97-2, Software Revenue Recognition With Respect to Certain Transactions” are successfully met. We primarily license our software products under perpetual licenses. Client support agreements are recorded as unearned revenues and recognized as revenue ratably over the contract period, generally one year.

Allowance for Doubtful Accounts

     We perform ongoing credit evaluations of our clients and continuously monitor collections and payments in order to maintain a provision for estimated uncollectible accounts based on our historical collection experience and our current aging of client receivables outstanding in addition to client’s representations and our understanding of the economic environment in which our clients operate. Based on our review we establish or adjust allowances for specific customers and the accounts receivable as a whole. Our allowance for doubtful accounts at December 31, 2003 was $8.5 million compared to $8.9 million at December 31, 2002.

Long-Lived Assets, Intangibles and Goodwill

     Property, plant and equipment are carried at cost. Major renewals and improvements are capitalized and depreciated over the respective asset’s remaining useful life. Maintenance and repair costs are charged to expense as incurred. When long-lived assets are sold or retired, the remaining costs and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in income.

     Property, plant and equipment held and used is reviewed for impairment whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. Indicators of possible impairment include extended periods of idle use and/or an inability to contract specific assets or groups of assets.

     We review our assets for impairment when events or changes in circumstances indicate that the net book value of property, plant and equipment may not be recovered over its remaining service life. Provisions for asset impairment are charged to income when the sum of estimated future cash flows, on an undiscounted basis, is less than the asset’s net book value. Impairment charges are recorded using discounted cash flows which requires the estimation of future cash flows, and such estimates can change based on market conditions, technological advances in the industry or changes in regulations governing the industry. There were no impairment charges related to long-lived assets held for use recorded in 2003, 2002 or 2001.

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     In June 2001, the Financial Accounting Standards Board (“FASB”) issued two statements, “Statement of Financial Accounting Standards (“SFAS”) 141, Business Combinations” (“SFAS 141”), and “SFAS 142, Goodwill and Other Intangible Assets” (“SFAS 142”), that amend Accounting Principles Board (“APB”) Opinion 16, “Business Combinations”, and supersede APB Opinion 17, “Intangible Assets.” SFAS 141 eliminates the pooling-of-interests method of accounting for business combinations and establishes the purchase method of accounting as the only acceptable method for all business combinations initiated after June 30, 2001. One of our acquisitions in 2001 was accounted for using the pooling-of-interests method of accounting and was completed prior to the adoption of SFAS 141. Goodwill resulting from a business combination or from an asset acquisition occurring after June 30, 2001 is to be recognized as an asset but not amortized, while goodwill existing at June 30, 2001 was amortized through December 31, 2001. As a result of adoption of SFAS 142, beginning January 1, 2002, we no longer amortize goodwill but will test for impairment annually or more frequently if circumstances indicate a potential impairment. The cessation of goodwill amortization under the guidelines resulted in a reduction in operating expenses of approximately $4.2 million in 2003 and 2002 based on the amortization of the goodwill balance as of the effective date of SFAS 142. Upon adoption of SFAS 142, in the first quarter of 2002, we recorded an impairment of goodwill of approximately $16.7 million, primarily related to our Reservoir Management segment, which is reflected in the consolidated statement of operations as a cumulative effect of change in accounting principle. At December 31, 2003, we evaluated our goodwill and intangible assets and determined that the fair value had not decreased below their carrying value with no adjustment to goodwill and intangible assets necessary in accordance with SFAS 142. Any subsequent impairment loss could result in a material adverse effect upon our financial position and results of operations.

Inventory Valuation Allowances

     Our valuation reserve for inventory is based on historical data, and various other assumptions and judgments including future demand for this inventory. Should these assumptions and judgments not come to fruition our valuation would change. The industry we operate in is subject to technological change and new product development that could result in obsolete inventory. Our valuation reserve for inventory at December 31, 2003 was $2.6 million compared to $0.3 million at December 31, 2002. If we over or underestimate demand for inventory, it could result in a material adverse effect upon our financial position and results of operations.

Income Taxes

     Our income tax expense includes income taxes of The Netherlands, the U.S. and other foreign countries as well as local, state and provincial income taxes. We recognize deferred tax assets or liabilities for the differences between the financial statement carrying amount and tax basis of assets and liabilities using enacted tax rates in effect for the years in which the asset is recovered or the liability is settled. Any valuation allowance recorded is based on estimates and assumptions of taxable income into the future and a determination is made of the magnitude of deferred tax assets which are more likely than not to be realized. The valuation allowances related to our net deferred tax assets were $10.0 million and $10.2 million at December 31, 2003 and 2002, respectively. If these estimates and related assumptions change in the future, we may be required to record additional valuation allowances against our deferred tax assets and our effective tax rate may increase which could result in a material adverse effect on our financial position, results of operations and cash flows.

Stock Options

     We apply APB Opinion 25, “Accounting for Stock Issued to Employees”, which does not require compensation costs to be recorded on stock options which have exercise prices at least equal to the market value of the stock on the date of grant. Accordingly, we have not recognized compensation cost for our stock options issued. We have, however, included option shares in the diluted shares outstanding calculation that is used to determine diluted earnings per share. We are not required to account for our stock-based compensation plans using the fair value recognition provision of “SFAS 123 Accounting for Stock-Based Compensation” (“SFAS 123”). Accounting for our stock based compensation plans using the fair value recognition provisions of SFAS 123 would negatively impact our financial position and results of operations. The fair value of stock options issued is estimated using pricing models that have an inherent degree of uncertainty. The FASB has indicated that it expects to issue a standard during 2004 that will require the use of a fair value method of accounting for stock based compensation. We will evaluate the provisions of that standard when issued and would expect to include a charge to our results of operations in each future reporting period after the new standard is required to be implemented.

     For a detailed discussion of our accounting policies see Note 2 of the Notes to Consolidated Financial Statements.

Estimates

     The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing

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basis and base these estimates on our historical experience as well as on various other assumptions that we believe are reasonable in a given circumstance. By nature, these judgments are subject to an inherent degree of uncertainty. We consider an accounting estimate to be critical if it is highly subjective and if changes in the estimate under different assumptions would result in a material impact on our financial condition and results of operations.

     Critical estimates include:

Off-Balance Sheet Arrangements

     We hold investments in unconsolidated affiliates whose operations are in-line with those of our core businesses. Our investment and operating percentages in these entities are included in our consolidated financial statements. These entities are not considered special purpose entities nor do we have special off-balance sheet arrangements through these entities. They are not consolidated due to the limited influence we have in making management decisions.

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Business

     Core Laboratories was established in 1936 and our common shares are traded on the New York Stock Exchange under the symbol CLB.

     We provide our products and services to the world’s major, national and independent oil companies. Our specialty services and products are designed to improve oil and gas recovery from new and existing fields through the following business segments:

-		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.

     We plan to continue the expansion of our operations by (i) continuing the development of proprietary technologies through client-driven research and development, (ii) expanding the services and products offered throughout our global network of offices and (iii) acquiring complementary businesses that add key technologies or market presence and enhance existing products and services.

Results of Operations

     Results of operations as a percentage of applicable revenues are as follows:

*Percentage based on applicable revenue rather than total revenue.

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     The discussion of operating results at the consolidated level is followed by a more detailed discussion of operating results by segment.

     Our revenues are derived from services and product sales. Services revenues in 2003 were $327.3 million as compared to $302.1 million in 2002. The increase in services revenues was due primarily to increased demand for our Reservoir Description and Production Enhancement services. North American oilfield activity accounted for approximately 36% of the increase while these services in the former Soviet Union, Europe, Africa and the Middle East accounted for approximately 54% of the increase. We also saw increased activity in the Asia Pacific region due to a new contract in 2003 while activity in Mexico was consistent with 2002. The overall increases more than offset decreased revenues as a result of the continued poor political climate in Venezuela. In 2002, lower oilfield activity levels in North America caused our services revenues to decrease $2.5 million as compared to 2001.

     Costs of services in 2003 were $261.3 million, an increase of $20.5 million as compared to 2002. Costs of services in 2002 were $240.8 million, an increase of $8.2 million from 2001. Costs of services as a percentage of services revenues in 2003 remained consistent compared to 2002. We realized increased margins on reservoir rock and fluid analysis and our services relating to the characterization of properties of oil and gas products in North America and South America. These increases were offset by margin erosion in several countries in the former Soviet Union due to increased competition as a result of maturing markets. Margins also decreased on our services for seismic technology as traditional seismic business continued to suffer. Operating costs and supplies increased due to purchases made in local currencies which strengthened against our functional currency. In addition, in spite of our efforts to manage our business in Venezuela, we were not able to sufficiently reduce the cost of services relative to the drastic decline in revenues attributable to the business disruptions experienced in that country.

     Sales revenues in 2003 increased by 25% to $78.3 million compared to $62.7 million in 2002 and decreased by 13% in 2002 as compared to 2001. The incremental revenue realized in 2003 was partially attributable to greater demand for our perforating products created by increased oilfield activity in North America in addition to the second quarter 2003 acquisition of the GOEX assets which accounted for approximately $3.1 million in revenue. A decline in drilling for natural gas and oil in the North American markets was the impetus for the reduction in sales revenues in 2002 from 2001.

     Costs of sales in 2003 were $65.6 million, an increase of $5.1 million as compared to 2002. Costs of sales in 2002 were $60.5 million, a decrease of $0.1 million from $60.6 million in 2001. The overall fixed cost structure remained consistent from prior periods which resulted in higher margins on the incremental sales revenue. A contributing factor to the decline in margins in 2002 was the currency devaluation in Venezuela of $1.8 million.

     General and administrative expenses are comprised of corporate management and centralized administrative services that benefit our operating subsidiaries. We experienced an increase of $2.6 million in 2003 from 2002 and $4.3 million in 2002 from 2001. In 2003 and 2002, general and administrative expenses as a percentage of revenue were 6% as compared to 4% in 2001. The increased expenses in 2003 and 2002 were primarily attributable to increased expenses relating to our executive retirement plans, legal fees related to class action lawsuits and costs from the implementation of our company-wide information system. We have also incurred additional expenses relating to accounting services and our compliance with the requirements of the Sarbanes-Oxley Act of 2002 which has necessitated engaging outside consultants to assist us with documenting and assessing the adequacy of our internal controls over financial reporting.

     Depreciation and amortization expense in 2003 was $23.5 million, an increase of $3.4 million as compared to 2002. In 2002 we had an increase of $1.7 million as compared to 2001. These increases were due primarily to the additional capital investments that occurred in both 2003 and 2002.

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     As a result of the adoption of SFAS 142 beginning January 1, 2002, we no longer amortize goodwill but will test for impairment annually or more frequently if circumstances indicate a potential impairment. Under these requirements, in the first quarter of 2002 we reflected impairment of goodwill of approximately $16.7 million primarily related to our Reservoir Management segment. This impairment is reflected in the consolidated statement of operations as a cumulative effect of change in accounting principle. The cessation of goodwill amortization under the guidelines resulted in a reduction in operating expenses of approximately $4.2 million in 2003 and 2002 based on the amortization of the goodwill balance as of the effective date of SFAS 142.

     During the fourth quarter of 2001, we recorded write-offs and other charges of $5.8 million. These charges were comprised of inventory write-downs of $3.9 million, charges of $0.4 million to write fixed assets down to their fair value, and other costs of $1.5 million to migrate data from legacy computer systems to a global information system database.

     During the fourth quarter of 2001, we also had several transactions that impacted certain operations that were not viewed as ongoing. We restructured certain operations in Mexico, the United Kingdom, the U.S. and other countries to improve operating efficiencies. This restructuring expense included write-offs of assets and leasehold improvements, and an accrual for facility restoration, severance benefits (for approximately 100 field employees) and lease termination costs. During 2002 we relocated a facility from Mexico City to Villahermosa, Mexico. We completed the relocation of one of our operations from Dallas to the Houston Advanced Technology Center in early 2003. The remaining accruals will be utilized by May 2005. This charge of approximately $3.0 million affected each of our operating segments as follows: Reservoir Description — $0.8 million; Production Enhancement — $0.1 million; Reservoir Management — $2.1 million. Substantially all employee terminations were completed by the end of the first quarter of 2002. Total cash required for this restructuring charge was $2.1 million which will be funded from operating activities. Cash required for the costs incurred through December 31, 2003 was $1.9 million. This charge is summarized in the following table (in thousands):

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

     Interest expense was $ 7.7 million and $7.6 million in 2003 and 2002, respectively as compared to $7.9 million in 2001. The decrease in interest expense was primarily attributable to lower borrowing costs and lower average levels of debt.

     The 2003 effective income tax rate decreased to 27% of operating income before cumulative effect of change in accounting principle from the 2002 rate of 42%. This decrease was primarily due to the non-recurring nondeductible expenses that were incurred in 2002 as well as an increase in 2003 international earnings taxed at rates lower than the Netherlands statutory rate. The 2002 effective income tax rate increased to 42% of operating income before cumulative effect of change in accounting principle from the 2001 rate of 28%. This increase was the result of an increase in expenses that are not deductible for tax purposes and an increased valuation allowance on Venezuelan deferred tax assets. For a reconciliation of the Netherlands statutory rate of 34.5% to the effective rate, see Note 9 of the Notes to Consolidated Financial Statements.

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Segment Analysis

     Our operations are managed primarily in three complementary business segments — Reservoir Description, Production Enhancement and Reservoir Management.

Segment Revenues

Segment Operating Income (Loss)

1)

“Corporate and other” represents those items that are not directly related to a particular segment.

Segment Operating Income (Loss) Margins

1)

“Margin” is calculated by dividing “Operating Income (Loss)” by “Revenue”.

Reservoir Description

     Reservoir Description revenues for 2003 were $239.6 million, an increase of $19.4 million compared to 2002. The increased North American oilfield activity in 2003 led to greater demand for our reservoir rock analysis and our fluids analysis and characterization. We saw increased activity in the former Soviet Union, Europe and Africa and new business in the Asia Pacific region. In Africa,

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revenue gains were attributable to increased activity in Nigeria in combination with revenue realized from the introduction of new technology. In Canada, we experienced revenue growth due to several large oil sand projects. Activity in Mexico was consistent with 2002. The overall increases more than offset decreased revenues as a result of the poor political climate in Venezuela. Revenues in 2002 increased $6.4 million as compared to 2001 revenues of $213.9 million. This increase was mainly attributable to increased activity levels outside North America. In addition, we experienced an increase in demand for our web-based services and penetrated new markets in the former Soviet Union.

     Operating income in 2003 was $25.8 million, an increase of $0.9 million compared to 2002. We realized increased operating income in this segment primarily in North America, particularly in Canada, and South America. The overall increase in operating income in this segment was partially reduced by margin erosion in the former Soviet Union, Europe and Africa as a result of competitive pricing as the market for oil and gas services continued to develop. Operating income in 2002 decreased $5.8 million as compared to 2001. Reduced activity levels by our clients in North America were the primary factor for our lower earnings in 2002. Other contributing factors to the decrease were political and economic instability in Venezuela along with their currency devaluation.

Production Enhancement

     Production Enhancement revenues for 2003 were $117.2 million compared to $91.8 million in 2002. The largest contributions were increased oilfield activity in North America, our second quarter 2003 acquisition and integration of the assets of GOEX, and international contracts in Mexico and Canada. Revenues in 2002 decreased $12.4 million compared to 2001 revenues of $104.3 million. Due to lower industry activity levels in 2002, we experienced decreased demand for our well completion and stimulation technologies, primarily in a depressed North American market.

     Operating income in 2003 was $12.2 million compared to $3.3 million and $12.2 million in 2002 and 2001, respectively. With a relatively fixed cost structure, we recognized higher incremental margins in 2003 compared to 2002. In 2002, sales of lower margin services and the general decline in the North American markets impacted earnings in this segment. In 2001, in an effort to improve manufacturing efficiencies, we recorded expense in cost of sales of approximately $3.3 million for several initiatives. These initiatives were implemented in the fourth quarter whereby certain processes and business practices were evaluated and improvements were undertaken. These costs were offset by income increases due to new initiatives with our downhole completion technologies and incremental margins on fracture diagnostic and field flood monitoring services as the introduction of new services and products in our production enhancement segment increased.

Reservoir Management

     Reservoir Management revenues for 2003 were $48.8 million compared to $52.6 million in 2002. Revenues in 2002 decreased $5.8 million as compared to 2001 revenues of $58.4 million. In 2003, revenues decreased as we closed our U.K. operations. We were also negatively impacted by the continuing soft market in geophysical processing.

     The operating loss in 2003 was $4.2 million compared to an operating loss of $2.7 million and $4.5 million in 2002 and 2001, respectively. The 2003 results included costs associated with the closure of the United Kingdom operation and increased expenses related to the performance of existing services. The positive results from our integrated multidisciplinary reservoir studies business, which realized operating income of approximately $1.4 million in 2003 compared to a loss of $0.8 million in 2002 were more than offset by the operating losses incurred by the geophysical and seismic-related services. In 2004, we will endeavor to take the necessary steps to provide acceptable levels of returns for the Reservoir Management segment. These steps include downsizing the scope of or eliminating specialized geophysical and seismic related services, reducing employee costs, transferring work to the most efficient offices, or selling the specialized geophysical and seismic related services business to outside parties.

     We recorded a restructuring charge of $3.0 million during 2001 primarily related to this segment to reflect our costs to restructure and refocus this segment of our business. Beginning in 2001, certain facilities were downsized or closed, causing our workforce in this segment to be reduced by 45% from the highest levels in 2001. We have taken and will continue to take actions, including, but not limited to, employee terminations and facility consolidations, when appropriate, to control our costs and generate additional service revenues in order to improve our results in this segment.

Liquidity and Capital Resources

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     General

     Cash flow from operating activities provides the primary source of funds to finance operating needs, capital expenditures and the share repurchase program. In addition, we supplement cash from operating activities with borrowings to provide funds to finance the share repurchase program, capital expenditures and acquisitions. Our overall cash position reflects a global strategy to optimize cash management while considering funding needs. We are a Netherlands holding company and we conduct substantially all of our operations through subsidiaries. Consequently, our cash flow is dependent upon the ability of our subsidiaries to pay cash dividends or otherwise distribute or advance funds to us.

     Cash from Operating Activities

     We continue to generate increasing levels of operating cash flow. In 2003, $60.9 million in cash was provided by operating activities compared with $41.4 million and $28.9 million in 2002 and 2001, respectively. In 2003, our cash from operations was positively impacted by increased profitability and improved overall working capital management. Working capital improvements include our continuing efforts to manage inventory levels, an increase in accounts payable reflecting the appropriate aging of payments and favorable changes in prepaid expenses and other current assets and the timing of payments of accrued expenses. Favorable changes in prepaid expenses in 2003 were due in part to the financing of corporate insurance premiums of approximately $3.5 million. These cash provisions were partially offset by higher year-end trade receivables resulting from record revenues in the fourth quarter of 2003. Cash from operations in 2002 was impacted by significant non-cash charges including a cumulative effect of change in accounting principle in the amount of $16.7 million for the impairment of goodwill related to our Reservoir Management segment. In 2001, cash from operations was principally a result of net income adjusted for non-cash items and changes in working capital.

     Cash from Investing Activities

     Our investing activities used $36.1 million in 2003 as compared to using $25.8 million in 2002 and $40.8 million in 2001. Investing activities in 2003 included the asset acquisition of GOEX for approximately $10.7 million and capital expenditures of approximately $23.0 million. Included in these capital expenditures were $2.1 million relating to an upgrade of our company-wide information system, and new facilities in Godley, Texas and Amsterdam totaling $4.8 million.

     During 2002, we incurred capital expenditures of $19.6 million, which included a lab and office facility in Russia for approximately $3.0 million. We also acquired certain assets from Advanced Data Solutions which provides depth-imaging and velocity modeling services for approximately $8.0 million and received proceeds from the sale of assets of approximately $1.8 million. Our investing activities for 2001 were attributable to capital expenditures of $29.0 million and the acquisition of Gris Gun, which supplies wellbore perforating gun systems and other related completion products, for $12.8 million in cash.

Cash from Financing Activities

     In 2003, our significant financing activities included repurchasing approximately 4,687,000 of our common shares for an aggregate purchase price of $58.0 million. We used $37.0 million of our cash from operating activities along with $21.0 million of additional indebtedness through our revolving credit facility to purchase these shares. This share repurchase program was activated on October 10, 2002 in accordance with authority granted by our shareholders at our annual meeting in May 2002. The program authorized the purchase of up to 10% of our outstanding shares through November 29, 2003. At our annual meeting held in May

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2003, this authority was extended through November 22, 2004. During 2002, we repurchased approximately 860,400 shares for an aggregate purchase price of approximately $9.0 million under our repurchase program. Our financing activities for 2001 included total borrowings of approximately $20.0 million, while repayments were approximately $8.7 million. These net borrowings were used primarily to fund the asset acquisition of Gris Gun.

     At our annual meeting held in May 2003, shareholders approved the authorization to purchase 10% of our outstanding shares through November 22, 2004. At a special meeting of shareholders held on October 29, 2003, shareholders approved the cancellation of 3,330,892 treasury shares with a total cost of approximately $36.4 million and authorized the repurchase of up to 10% of our issued share capital through April 28, 2005. Subsequent to December 31, 2003, we have repurchased approximately 380,000 shares at a total cost of approximately $6.6 million. As of March 9, 2004 we had authority to repurchase approximately 2.0 million additional shares. The repurchase of shares in the open market is at the discretion of management. We regard these treasury shares as a temporary investment which may be used to finance future acquisitions. However, we are incorporated in The Netherlands and under the Dutch Commercial Code (“DCC”), a corporation can hold a maximum of 10% of their outstanding shares in treasury. Therefore, it may be necessary to cancel some or all of these shares to remain in compliance with the DCC. We believe this share repurchase program has been beneficial to our shareholders as we believe that, in conjunction with other actions taken by management, it has contributed to the increase in our share price from $8.05 per share when the program was announced to $16.69 per share on December 31, 2003, a gain of approximately 107%. This compares favorably to the S&P 500 Index which gained approximately 38% over the same time period.

     Credit Facilities and Available Future Liquidity

     In June 2003, we amended the $100.0 million Credit Facility which we entered into in July 1999. The June 2003 amendment reduced the capacity of the Credit Facility to $75.0 million from $100.0 million but added an option to increase the line of credit to $125.0 million if certain conditions are met. At December 31, 2003, $26.0 million was available under our $75.0 million Credit Facility.

     In addition, we have Senior Notes, which bear interest at an average fixed interest rate of 8.16%. The Senior Notes require semi-annual interest payments, while interest payments on the Credit Facility are made based on the interest period selected. The terms of the Credit Facility and Senior Notes require us to meet certain financial and operational covenants. We believe that we are in compliance with all such covenants at December 31, 2003. All of our material wholly owned subsidiaries are guarantors or co-borrowers under both credit agreements.

     We lease certain property, primarily land and buildings as well as office equipment and vehicles that are included in our analysis of operating leases.

     The following table summarizes our future contractual obligations (in thousands):

     Additionally, we have standby letters of credit as security for bids and performance on certain contracts of approximately $11.6 million. We do not believe these letters of credit will be drawn.

     We expect our capital expenditure program to be approximately $15.0 million in 2004. In addition, we plan to continue our repurchase of shares on the open market through our stock buy-back program. Our share repurchase is dependent upon, among other things, market conditions as well as our ability to generate free cash flow.

     Our ability to maintain and increase our operating income and cash flows is dependent upon continued investing activities. We believe our future cash flows from operating activities, supplemented by our borrowing capacity and issuances of additional equity should be sufficient to meet debt requirements, capital expenditures, working capital and future acquisitions.

Accounting Pronouncements

     In December 2003, the SEC issued “Staff Accounting Bulletin (“SAB”) 104 Revenue Recognition” (“SAB 104”) which updates the previously issued revenue recognition guidance in SAB 101 “Revenue Recognition in Financial Statements” (“SAB 101”), based on the Emerging Issues Task Force (“EITF”) 00-21 “Accounting for Revenue Arrangements with Multiple Deliverables” (EITF 00-

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21”). According to EITF 00-21, if the deliverables in a sales arrangement constitute separate units of accounting, as defined, the revenue recognition policy must be determined for each identified unit. If the arrangement is a single unit of accounting under the separation criteria, as defined, the revenue recognition policy must be determined for the entire arrangement. While the wording of SAB 104 reflects changes to SAB 101 due to the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104, which was effective upon issuance. The adoption of SAB 104 and EITF 00-21 did not have a material impact on our financial position, results of operations or cash flows.

     In December 2003, the FASB revised its “SFAS 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits” (“SFAS 132”). This revision requires additional disclosures regarding the assets, obligations, cash flows and net periodic benefit cost of defined benefit pension plans. It is effective for financial statements with fiscal years ending after December 15, 2003. The adoption of SFAS 132 did not have a material impact on our financial position, results of operations or cash flows.

     In May 2003, the FASB issued “SFAS 150, Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity” (“SFAS 150”). This standard requires that certain financial instruments embodying an obligation to transfer assets or to issue equity securities be classified as liabilities. It is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective July 1, 2003. Recently, the FASB deferred for an indefinite period the provision of SFAS 150 related to non-controlling interests in finite-lived subsidiaries. The adoption of SFAS 150 did not have a material impact on our financial position, results of operations or cash flows.

     In April 2003, the FASB issued SFAS 149, “Amendment of SFAS 133 on Derivative Instruments and Hedging Activities” (“SFAS 149”). SFAS 149 amends “SFAS 133 Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”), for decisions made (1) as part of the Derivatives Implementation Group process that effectively required amendments to SFAS 133, (2) in connection with other Board projects dealing with financial instruments, and (3) in connection with implementation issues raised in relation to the application of the definition of a derivative, in particular, the meaning of an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors, the meaning of underlying, and the characteristics of a derivative that contains financing components. SFAS 149 is effective for contracts entered into or modified after September 30, 2003. The adoption of SFAS 149 did not have a material impact on our financial position, results of operations or cash flows.

     In January 2003, the Emerging Issues Task Force (“EITF”) issued EITF Issue 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables” (“EITF 00-21”). This consensus addresses certain aspects of accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities, specifically, how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. EITF Issue 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003, or entities may elect to report the change in accounting as a cumulative-effect adjustment in accordance with APB Opinion 20, Accounting Changes, and SFAS 3, Reporting Accounting Changes in Interim Financial Statements, with early application of this consensus permitted. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows.

     In January 2003, the FASB issued Interpretation (“FIN”) 46, “Consolidation of Variable Interest Entities,” which requires a business enterprise to consolidate all variable interest entities (“VIEs”) for which the business enterprise is the primary beneficiary. A VIE is an entity that does not have sufficient equity investment at risk to permit it to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest. The primary beneficiary of a VIE is the enterprise that has the majority of the risks or rewards associated with the VIE. The consolidation requirements of FIN 46 apply immediately to VIEs created after January 31, 2003. For VIEs created at an earlier date, the consolidation requirements apply in the first fiscal year or interim period beginning after June 15, 2003. Certain disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the VIE was established. In October 2003, the FASB delayed the application date of several of FIN 46’s elements for public entities until the first interim period after December 15, 2003 if certain criteria are met. We have no interests in VIEs that will require disclosure or consolidation under FIN 46 as of December 31, 2003. We will continue to evaluate our unconsolidated affiliates in the event that they qualify as VIEs.

     In December 2002, the FASB issued “SFAS 148, Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS 148”). This Statement amends SFAS 123, to provide alternative methods of transition to SFAS 123’s fair value method of accounting for stock-based employee compensation. This statement also amends the disclosure provision of SFAS 123 and APB 28, “Interim Financial Reporting”, to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements, which we have adopted as of December 31, 2002. We do not expect the remaining provisions of SFAS 148 to have a material adverse effect upon our financial position or results of operations. Additional disclosure relating to stock-based compensation is included in Notes 2 and 11 of the Notes to Consolidated Financial Statements.

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     In November 2002, the FASB issued FIN 45, “Guarantor’s Accounting and Disclosure Requirements, Including Guarantees of Indebtedness of Others.” FIN 45 requires that upon issuance of certain types of guarantees, a guarantor recognize and account for the fair value of the guarantee as a liability. FIN 45 contains exclusions to this requirement, including the exclusion of a parent’s guarantee of its subsidiaries’ debt to a third party. The initial recognition and measurement provisions of FIN 45 should be applied on a prospective basis for guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are effective for financial statements of both interim and annual periods ending after December 31, 2002. The application of the recognition and measurement provisions was insignificant. The disclosure requirements are included in Note 15 of the Notes to Consolidated Financial Statements.

Inflation

     Due to the low inflationary rates in 2003, 2002 and 2001, the impact of inflation on our results of operations was insignificant.

Income Taxes

     As more fully described in Note 9 of the Notes to Consolidated Financial Statements at December 31, 2003, we had tax net operating loss carryforwards in various tax jurisdictions of approximately $51.2 million. If unused, those carryforwards subject to expiration will expire over the years 2004 through 2023. Although realization is not assured, we anticipate taxable income in future years will allow us to fully utilize the carryforwards that have not had a valuation allowance placed against them.

Outlook

     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 2004 North American spending by our clients will increase slightly from 2003. We believe that the activity levels outside of North America will increase slightly compared to 2003 levels as we expand our international revenue base through direct product sales and technical services. However, attaining our internal targets is dependent on sustained North American and international oilfield activity. In Venezuela, although operations have stabilized, our results could be negatively impacted by government-mandated devaluation of the Venezuelan Bolivar vs. the US Dollar, as occurred on February 9, 2004. We expect to meet ongoing working capital, capital expenditure requirements and funding of our share repurchase program from a combination of cash on hand, cash flow from operating activities and available borrowings under our revolving Credit Facility.

Non-GAAP Financial Measures

     A non-GAAP financial measure is a numerical measure of a registrant’s financial position, results of operations or cash flows that 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the balance sheet, statement of income or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

     From time to time, we utilize non-GAAP financial measures in the management and evaluation of our business. The most common non-GAAP financial measures we use include free cash flow and debt to capitalization ratio.

     Free cash flow is calculated by starting with cash from operating activities and deducting capital expenditures. Management believes 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.

     Debt to capitalization is calculated as follows: debt divided by the sum of cash, debt and shareholders’ equity.

Forward-Looking Statements

     This discussion 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, concerning among other things, our expected revenues, expenses and profit, our prospects, and business strategies and development, all of which are subject to certain risks, uncertainties and assumptions. When used in this document, words such as “anticipate” “believe”, “expect”, “plan”, “intend”, “estimate”, “project”, “budget”, “forecast”, “will”, “should”, “could”, “may”, “predict” and similar expressions are intended to identify forward-looking statements. We based our statements on our current expectations, estimates, historical trends, current conditions and other factors we believe are appropriate under the circumstances. Such statements are subject to various risks and uncertainties related to the oil and gas industry, business conditions, international markets, international political climates and other factors that are beyond our control. We caution you that these statements are not guarantees of future performance. Accordingly, our actual outcomes and results may differ materially from

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what we express or forecast in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should our underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

     We are exposed to market risk, which is the potential loss arising from adverse changes in market prices and rates. We have not entered, or intend to enter, into derivative financial instruments for hedging or speculative purposes. We do not believe that our exposure to market risks, which are primarily related to interest rate changes, is material.

Interest Rate Risk

     We are exposed to interest rate risk on our Credit Facility debt, which carries a variable interest rate. At December 31, 2003, our variable rate debt outstanding of $49.0 million approximated its fair value. A one percent change in the interest rate would result in a change of approximately $0.5 million in interest expense on an annual basis. We attempt to balance the differing interest rate risks associated with fixed rate debt with variable rate debt.

Foreign Currency Risk

     We operate in a number of international areas which exposes us to foreign currency exchange rate risk. We do not currently hold or issue forward exchange contracts or other derivative instruments for hedging or speculative purposes. (A foreign exchange contract is an agreement to exchange different currencies at a given date and at a specified rate.) Foreign exchange gains and losses are the result of fluctuations in the U.S. Dollar against foreign currencies and are included in other income in the statements of operations. We recognized foreign exchange losses in countries where the USD weakened against the local currency and we had net monetary liabilities denominated in the local currency and in countries where the USD strengthened against the local currency and we had net monetary assets denominated in the local currency. We recognized foreign exchange gains in countries where the USD strengthened against the local currency and we had net monetary liabilities denominated in the local currency and in countries where the USD weakened against the local currency and we had net monetary assets denominated in the local currency. Foreign exchange gains and losses are summarized in the following table (in thousands):

     As a result of the recent political and financial situation in Venezuela, in February 2003, the Venezuelan government-mandated an exchange rate for their currency, the Bolivar (“VEB”), of 1,596 VEB per USD. At December 31, 2003, our net monetary assets denominated in VEB in Venezuela were $2.7 million. Effective February 9, 2004, the Venezuelan government devalued the VEB by 20% to 1,918 VEB per USD. If this devaluation had occurred on December 31, 2003, the impact would have resulted in a foreign exchange loss of approximately $0.5 million. Because of this devaluation, in the first quarter of 2004, we will incur foreign exchange losses on our net monetary assets denominated in VEB. A change of 100 VEB in the exchange rate could result in a change of approximately $0.2 million in foreign exchange gain or loss subject to the amount of the net monetary assets at that time.

Credit Risk

     Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. All cash and cash equivalents are on deposit at commercial banks or investment firms. Our trade receivables are with a variety of domestic, international and national oil and gas companies. We hold receivables from one customer totaling 16% of total net receivables. We have made further collections through March 9, 2004 from this client which, based on December 31, 2003 total net receivables, would have reduced this exposure to 8%. Management considers this credit risk to be limited due to the creditworthiness and financial resources of these financial institutions and companies.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     For the financial statements and supplementary data required by this Item 8, see index to Consolidated Financial Statements and Schedules at Item 15.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of the Company’s Disclosure Controls and Internal Controls

     As of the end of the period covered by this Annual Report on Form 10-K, we evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” (“Disclosure Controls”), and our “internal controls for financial reporting” (“Internal Controls”). This evaluation (the “Controls Evaluation”) was performed under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

CEO and CFO Certifications

     The CEO and CFO certifications (the Rule 302 Certifications) required by Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) are included as exhibits filed with this Annual Report. This Controls and Procedures section of this Annual Report includes the information concerning the Controls Evaluation referred to in the Rule 302 Certifications and it should be read in conjunction with the Rule 302 Certifications for a more complete understanding of the topics presented.

     Certifications pursuant to Section 906 of Sarbanes-Oxley are included as exhibits furnished with this Annual Report.

Disclosure Controls and Internal Controls

     Disclosure Controls are procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s (the “SEC”) rules and forms. Disclosure Controls are also designed to ensure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Internal Controls are procedures designed to provide reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles.

     In order to achieve compliance with Section 404 of Sarbanes-Oxley in the prescribed timeframe, we have engaged outside consultants to assist us with documenting and assessing the adequacy of our internal control over financial reporting for the U.S., United Kingdom, Mexico, Canada and The Netherlands. We are in the process of assessing our internal controls over financial reporting in conjunction with our implementation of Section 404, and plan to validate through testing that controls are functioning as expected. As a result of the annual review process and our efforts to continue to improve our deficiencies and weaknesses in our accounting controls and procedures in Mexico, we hired a new country manager and country controller as well as a new contract administrator in Mexico to improve our controls over the documentation and management of our client contracts in Mexico.

Limitations on the Effectiveness of Controls

     Our management, including the CEO and CFO, does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system 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 the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in

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conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Scope of the Controls Evaluation

     The evaluation of our Disclosure Controls and our Internal Controls included a review of the controls’ objectives and design, our implementation of the controls and the effect of the controls on the information generated for use in this Annual Report. In the course of the Controls Evaluation, we sought to identify data errors, controls problems or acts of fraud and confirm that appropriate corrective actions, including process improvements, were being undertaken. This type of evaluation is performed on a quarterly basis so that the conclusions of management, including the CEO and CFO, concerning controls effectiveness can be reported in our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. Our Internal Controls are also evaluated by other personnel in our finance organization, as well as our independent auditors who evaluate them in connection with determining their auditing procedures related to their report on our annual financial statements and not to provide assurance on our Internal Controls. The overall goals of these various evaluation activities are to monitor our Disclosure Controls and our Internal Controls, and to modify them as necessary. Our intent is to maintain the Disclosure Controls and the Internal Controls as dynamic systems that change as conditions warrant.

     Among other matters, we sought in our evaluation to determine whether there were any “significant deficiencies” or “material weaknesses” in our Internal Controls, and whether we had identified any acts of fraud involving personnel with a significant role in the our Internal Controls. In professional auditing literature, “significant deficiencies” are referred to as “reportable conditions,” which are control issues that could have a significant adverse effect on the ability to record, process, summarize and report financial data in the financial statements. Auditing literature defines “material weakness” as a particularly serious reportable condition where the internal control does not reduce to a relatively low level the risk that misstatements caused by error or fraud may occur in amounts that would be material in relation to the financial statements and the risk that such misstatements would not be detected within a timely period by employees in the normal course of performing their assigned functions. We also sought to deal with other controls matters in the Controls Evaluation, and in each case if a problem was identified, we considered what revision, improvement and/or correction to make in accordance with our ongoing procedures.

     As described below under “Changes in Disclosure Controls and Internal Controls”, and as disclosed and identified in our 2002 Form 10-K and our first, second and third quarter 2003 Form 10-Q’s, we have identified certain deficiencies in our controls and procedures. However, we believe the corrective actions we have taken and the additional procedures we have performed, as described below in more detail, provide us with reasonable assurance that the identified control weaknesses have not limited the effectiveness of our controls and procedures.

Changes in Disclosure Controls and Internal Controls

     Management and the Audit Committee became aware of conditions previously reported relating primarily to our operations primarily in Mexico, Venezuela and the US that are considered to be “material weaknesses” which were identified in our Disclosure Controls and our Internal Controls review for the year ended December 31, 2003 and 2002. In particular, the aforementioned weaknesses in both our Disclosure Controls and Internal Controls pertain to the following areas, (i) revenue cycle process, including revenue recognition in accordance with SAB 101, calculation of deferred revenue and monitoring of past due accounts, (ii) the process surrounding accurate reconciliation of account balances and (iii) regular reconciliation of general ledger accounts to supporting documentation. Management and the Audit Committee took actions during 2003 to address the specific material weaknesses identified including (1) the replacement of the head of an operating unit, the country manager, the replacement of two country controllers and the hiring of five additional accounting personnel, (2) the expansion of our financial review and internal control function by hiring three additional professional auditors for our internal audit group, and the further authorization to hire an additional auditor, (3) additional training (or re-training where necessary) of our personnel worldwide, (4) the acceleration of the installation effort of our company-wide financial accounting system, and (5) the hiring of an additional corporate controller responsible for the accounting information reported by the business units. Some of these actions had a more immediate impact than others as each action became fully implemented.

     As part of our effort to have a common system of Internal Controls applicable to our operations world-wide, in 2001, we began an implementation of an enterprise-wide general ledger software system that included an Enterprise Resource Planning (“ERP”) System for our manufacturing operations and budget and planning modules, as well as new business processes and procedures to support the software designed to provide us with a common set of Internal Controls in those locations where the new system is implemented. These changes are the result of our normal business process to evaluate and upgrade or replace our systems software and related business processes to support our evolving operational needs. At the end of 2002, approximately 62% of our business activity (as expressed in terms of consolidated revenues) was on this software system utilizing common business process and controls, primarily in the United States, Canada, the United Kingdom, and Mexico. In 2003, we installed this software and common set of Internal Controls for our operations in The Netherlands, Denmark, Venezuela, Australia and Thailand. We also upgraded our accounting software system to a more Internet capable version effective August 2003. At the end of 2003, approximately 84% of our business activity was on this software system utilizing common business process and controls. We anticipate installing this same software system and common set of Internal Controls into additional locations during 2004.

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     Further, Management believes that the corrective actions, which have been implemented, should provide us with reasonable assurance that the identified issues will not limit the effectiveness of our Disclosure Controls or Internal Controls. Management believes that we have successfully implemented procedures addressing the “material weakness” in our controls.

Conclusions

     Based upon the Controls Evaluation, our CEO and CFO have concluded that, subject to the limitations and changes noted above, our Disclosure Controls are effective to ensure that material information relating to Core Laboratories and its consolidated subsidiaries is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our Internal Controls are effective to provide reasonable assurance that our financial statements are fairly presented in conformity with generally accepted accounting principles.

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PART III

     Part III (Items 10 through 14) will be incorporated by reference pursuant to Regulation 14A under the Securities Exchange Act of 1934. The Registrant expects to file a definitive proxy statement with the SEC within 120 days after the close of the year ended December 31, 2003.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Financial Statements

     The following reports, financial statements and schedules are filed herewith on the pages indicated:

Financial Statement Schedules

     All schedules have been omitted because they are not applicable, not required under the instructions, or the information requested is set forth in the consolidated financial statements or related notes hereto.

(b) Reports on Form 8-K

     No reports on Form 8-K were filed during the quarter ended December 31, 2003.

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(c) Exhibits

     The following exhibits are incorporated by reference to the filing indicated or are filed herewith.

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1) Management contracts or compensatory plans or arrangements.

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SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, on the 14th day of March 2004.

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REPORT OF INDEPENDENT AUDITORS

To the Supervisory Board of Directors and Shareholders of Core Laboratories N.V.:

     In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations and comprehensive income (loss), of changes in shareholders’ equity and of cash flows present fairly, in all material respects, the financial position of Core Laboratories N.V. (a Netherlands corporation) and its subsidiaries (the Company) as of December 31, 2003 and 2002 and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The Company’s consolidated financial statements for the year ended December 31, 2001, prior to the revision described in Note 7 of the consolidated financial statements, were audited by other independent accountants who have ceased operations. Those independent accountants expressed an unqualified opinion on those financial statements in their report dated March 21, 2002.

     As discussed in Note 7 to the consolidated financial statements, the Company changed its method of accounting for goodwill effective January 1, 2002, in accordance with SFAS 142.

     As discussed above, the Company’s consolidated financial statements for the year ended December 31, 2001, were audited by other independent accountants who have ceased operations. As described in Note 7, those financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”. We audited the transitional disclosures for 2001 included in Note 7 that were applied to revise the 2001 financial statements. In our opinion, the 2001 transitional disclosures are appropriate and properly applied. However, we were not engaged to audit, review or apply any procedures to the 2001 financial statements of the Company other than with respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 financial statements taken as a whole.

PricewaterhouseCoopers LLP

Houston, Texas
March 14, 2004

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THE FOLLOWING IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP (ANDERSEN). THIS REPORT HAS NOT BEEN REISSUED BY ANDERSEN AND ANDERSEN IS UNABLE CONSENT TO THE INCORPORATION BY REFERENCE OF THIS REPORT (AS INCLUDED IN THIS FORM 10-K) INTO ANY OF THE COMPANY’S REGISTRATION STATEMENTS.

AS DISCUSSED IN NOTE 7, THE COMPANY HAS REVISED ITS FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2001 TO INCLUDE THE TRANSITIONAL DISCLOSURES REQUIRED BY STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 142, GOODWILL AND INTANGIBLE ASSETS. THE ANDERSEN REPORT DOES NOT EXTEND TO THESE CHANGES. THE REVISIONS TO THE 2001 FINANCIAL STATEMENTS RELATED TO THESE TRANSITIONAL DISCLOSURES WERE REPORTED ON BY PRICEWATERHOUSECOOPERS LLP, AS STATED IN THEIR REPORT APPEARING HEREIN.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Supervisory Board of Directors and Shareholders of
Core Laboratories N.V.:

     We have audited the accompanying consolidated balance sheets of Core Laboratories N.V. (a Netherlands corporation) and subsidiaries as of December 31, 2001* and 2000*, and the related consolidated statements of operations, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2001*. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Core Laboratories N.V. and subsidiaries as of December 31, 2001* and 2000*, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001*, in conformity with the accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Houston, Texas
March 21, 2002

* The consolidated balance sheets as of December 31, 2001 and 2000 as well as the consolidated statements of operations, changes in shareholders’ equity and cash flows for the years ended December 31, 2000 and 1999 are not required to be presented in the 2003 Form 10-K.

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CORE LABORATORIES N.V.
CONSOLIDATED BALANCE SHEETS
December 31, 2003 and 2002
(In thousands, except share and per share data)

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CORE LABORATORIES N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2003, 2002 and 2001
(In thousands, except per share data)

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CORE LABORATORIES N.V.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Years Ended December 31, 2003, 2002 and 2001
(In thousands, except share data)