We continue to anticipate a multiyear international recovery supported by increased spending on exploration in many regions across the globe and expanded development of existing fields to fortify crude oil and natural gas reserves. This underlies Core’s outlook for continued improvement in international onshore and offshore activity with ongoing projects around the globe, most notably across the Middle East, South Atlantic Margin, certain areas of Asia Pacific and West Africa. Turning to the U.S., onshore activity in 2023 has been lower than expected as reflected by the decreased U.S. rig and frac spread counts. Core sees sequential onshore completion activity to be slightly down due to typical yearend seasonality as operators complete their 2023 spending plans.
Based on these factors, we project reservoir description’s fourth quarter 2023 revenue to range from $84 million to $86 million, an operating income of $11.6 million to $13.3 million, while we expect reservoir description’s international revenue to increase sequentially in several geographic regions. The ongoing Russia-Ukraine conflict and more recent conflict in the Middle East are causing some disruptions to the movement and trade of crude oil. These two geopolitical situations have created uncertainties with respect to trading patterns of crude oil and derived products and the associated laboratory assay services. These situations have and may continue to adversely impact our reservoir description segment operations in Russia, Ukraine, Europe and the Middle East.
Despite these geopolitical uncertainties, client commitments on long-term international projects have improved nicely year-over-year. However, the pace at which these long-term projects are executed by Core’s clients may vary from quarter-to-quarter as momentum builds. Shifting to Production Enhancement, the segment’s fourth quarter 2023 revenue is estimated to range from $41 million to $46 million and operating income of $2.2 million to $4 million. Growth in production enhancement international sales and well-diagnostic projects in the Gulf of Mexico are expected to offset a projected decline in U.S. onshore revenue. In summary, the company’s fourth quarter 2023 revenue is projected to range from $125 million to $132 million, and operating income of $13.8 million to $17.3 million, yielding operating margins of approximately 12%.
EPS for the fourth quarter of 2023 is expected to range from $0.17 to $0.23. The company’s fourth quarter 2023 guidance is based on projections for underlying operations and excludes gains and losses in foreign exchange. Our fourth quarter 2023 guidance also assumes an effective tax rate of 20$. Now we’ll turn the discussion back over to Larry.
Larry Bruno: Thanks Gwen. First, I’d like to thank our global team of employees for providing innovative solutions, integrity, and superior service to our clients. The team’s collective dedication to servicing our clients is the foundation of Core Lab’s success. In October, the IEA updated its forecast for crude oil demand for 2023 to average a record high of 101.9 million barrels per day. That’s up by approximately 2.3 million barrels per day from 2022, even after assessing current global financial forecasts. This continues to bode well for increasing demand for the reservoir description services that will be required to grow production and replace the natural decline of existing producing fields. As we look ahead, we see the rising international rig count over the past year as a harbinger of an improving landscape for reservoir description, a trend that we project will play out for the next several years, particularly in the Middle East, North and South America, as well as most other regions.
Early movers in the oilfield service sector that are more exposed to well construction have already felt the impact of this cycle shift. Production enhancement also has growing opportunities in international areas, such as with unconventional plays in the Middle East and emerging conventional plays in a number of regions, as well as plug and abandonment programs in mature offshore basins. Now let’s review the third quarter performance of our two business segments. Turning first to reservoir description, for the third quarter of 2023, revenue came in at $85.1 million, up 2% compared to Q2, and up 8% year-over-year. Operating income for reservoir description, ex-items, was $14.1 million, and operating margins were 17% the highest margins since Q2 of 2020.
