The purpose of this communication is to provide information regarding how we are responding to our industry’s downturn in oil prices. As Core Lab faces challenging market conditions, we are taking measures to address the uncertainty and anticipated reduction of our clients’ 2015 activity levels. As with previous downturns in our industry where we have experienced shifts of this nature, we consider a number of actions to align our cost structure to changes in activity levels to help limit the impact to the company and to our people. Just as many other companies in our industry, we will be keeping a close watch on inventory levels, capital expenditures, travel costs, overhead expenses and the timing and amount of compensation adjustments to name a few of our controllable costs.
As part of our preparation, Core Lab will defer determining when merit awards will be applied for 2014’s performance year. This decision is not a reflection of the Company’s overall performance in 2014; yet, it is solely related to our preparation in response to our industry’s outlook. We recognize that our people are our greatest asset and work to produce outstanding outcomes with our clients every day.
As in the past, we will continue striving to provide you with a positive and productive work experience. We are confident that we have the best team of employees in our industry, and stand ready to address and work through the challenges ahead of us to make 2015 a successful year.