About Civeo

Civeo Corporation provides hospitality services to the natural resources industry in Canada, Australia and the United States (U.S.). The company provides a full suite of services for its guests, including lodging, catering and food service, housekeeping and maintenance at accommodation facilities that it or its customers own. In many cases, the company also provides services that support the day-to-day operations of these facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics. The company also offers development activities for workforce accommodation facilities, including site selection, permitting, engineering and design, manufacturing management and site construction, along with providing hospitality services once the facility is constructed. The company primarily operates in some of the world’s most active oil, metallurgical (met) coal, liquefied natural gas (LNG) and iron ore producing regions, and its customers include major and independent oil companies, mining companies, engineering companies and oilfield and mining service companies. The company’s extensive suite of services enables it to meet the unique needs of each of its customers, while providing comfortable accommodations for their employees. The company provides hospitality services that span the lifecycle of customer projects, from the initial exploration and resource delineation to long-term production. Initially, as customers assess the resource potential and determine how they will develop it, they typically need its hospitality services for a limited number of employees for an uncertain duration of time. The company’s fleet of mobile assets is well-suited to support this initial exploratory stage as customers evaluate their development and construction plans. As development of the resource begins, the company is able to serve their needs through either: its fleet of mobile assets, particularly for shorter term projects, such as pipeline construction and seasonal drilling programs; its scalable lodge or village model; or its service of guests in customer-owned facilities. The company’s scalable facilities provide workforce accommodations where, in many cases, traditional accommodations. The company’s customers are able to outsource their accommodations needs to a single supplier, maintaining employee welfare and satisfaction while focusing their investment on their core resource production efforts. The company’s primary focus is on providing these hospitality services to leading natural resource companies at its major properties, which it refers to as lodges in Canada and the U.S. and villages in Australia, or at facilities owned by its customers. The company owns and operates 26 lodges and villages with approximately 28,000 rooms. The company operates approximately 12,200 rooms owned by its customers. Additionally, in Canada, the company also offers a fleet of mobile assets which serve shorter term projects, such as pipeline construction. The company has long-standing relationships with many of its customers, many of whom are, or are affiliates of, large, investment-grade energy and mining companies. The company’s Australian villages support similar activities as its Canadian lodges for the natural resources industry in Australia. The company’s customers are typically developing and producing met coal, iron ore and other minerals which have resource lives that are measured in decades. In the last half of 2022, the company sold both its wellsite services and its offshore businesses in the U.S. The company provides hospitality services to the natural resource industry. The company’s scalable facilities provide long-term and temporary workforce accommodations where traditional accommodations and related infrastructure often are not accessible, sufficient or cost effective. Once facilities are deployed in the field, the company also provides services, such as lodging, catering and food service, housekeeping and maintenance, as well as operations of these facilities, including laundry, water and wastewater treatment, power generation, communication systems, security and logistics. The company’s hospitality services can be provided at accommodation facilities it owns or at facilities owned by its customers. Demand for the company’s services is cyclical and substantially dependent upon activity levels, particularly its customers’ willingness to spend capital on the exploration for, development and production of oil, met coal, LNG, iron ore and other natural resources. The company’s customers’ spending plans generally are based on their view of commodity supply and demand dynamics, as well as the outlook for near-term and long-term commodity prices. The company serves multiple projects and multiple customers at most of its sites, which allows those customers to share some of the costs associated with their peak accommodations needs, including infrastructure (power, water, sewer and information technology) and central dining and recreation facilities. The company’s business is significantly influenced by the level of production of oil sands deposits and associated maintenance and turnaround activities in Alberta, Canada; met coal production in Australia's Bowen Basin and iron ore production in Western Australia; activity levels in support of extractive industries in Australia; LNG and related pipeline activity in Canada; and oil production in the U.S. Canada During the year ended December 31, 2022, the company generated approximately 57% of its revenue from its Canadian operations. The company is Western Canada’s largest provider of hospitality services for people working in remote locations. The company provides its services through its lodges and mobile assets and at customer-owned locations. The company’s hospitality services support workforces in the Canadian LNG and oil sands markets and in a variety of oil and natural gas drilling, mining, pipeline and related natural resource applications. Canadian Oil Sands Lodges During the year ended December 31, 2022, activity in the Athabasca oil sands region generated approximately 62% of the company’s Canadian revenue. The oil sands region continues to represent one of the world’s largest reserves for heavy oil. The company’s McClelland Lake, Wapasu Creek, Athabasca, Beaver River, Fort McMurray Village, Grey Wolf, Hudson, and Borealis lodges are focused on the northern region of the Athabasca oil sands, where customers primarily utilize surface mining to extract bitumen. Oil sands mining operations are characterized by large capital requirements, large reserves, large personnel requirements, long-term reserve lives, very low exploration or reserve risk and relatively lower cash operating costs per barrel of bitumen produced. The company’s Conklin, Anzac, Red Earth and Wabasca lodges, as well as a portion of its mobile assets, are focused in the southern portion of the region where it primarily serves in-situ operations and pipeline expansion and maintenance activity. In-situ methods are used on reserves that are too deep for traditional mining methods. In-situ technology typically injects steam or solvents into the deep oil sands in place to separate the bitumen from the sand and pumps it to the surface where it undergoes the same upgrading treatment as the mined bitumen. Reserves requiring in-situ techniques of extraction represent 80% of the established recoverable reserves in Alberta. In-situ operations generally require less capital and personnel and produce lower volumes of bitumen per development, with higher ongoing operating expense per barrel of bitumen produced. The company’s oil sands lodges primarily support personnel for ongoing operations associated with surface mining and in-situ oil sands projects, as well as maintenance, turnaround and expansionary personnel, generally under short and medium-term contracts. Most of the company’s oil sands lodges are located on land with leases obtained from the province of Alberta, with initial terms of ten years, or subleased from the resource developer. The company’s leases have expiration dates that range from 2023 to 2030. In recent years, the company has successfully renewed or extended all expiring land leases which it has requested to renew or extend. Two of the company’s oil sands properties are located on land which it owns. In order to operate a lodge in Canada, the company is required to obtain a development permit from the regional municipality in which the lodge is located. The development permits are granted for a term of five years. The company’s development permits have expiration dates that range from 2023 to 2027. In recent years, the company has successfully renewed or extended all expiring development permits. The majority of the company’s major Canadian lodges are located on land subject to leases. The company provides a range of hospitality services at its lodges, including reservation management, check in and check out, food service, housekeeping and facilities management. The company’s lodge guests receive amenities similar to a full-service hotel plus three meals a day. The company’s Wapasu Creek Lodge, with more than 5,000 rooms, is equivalent in size to the largest hotels in North America. The company provides its hospitality services at the lodges it owns on a day rate or monthly rental basis, and its customers typically commit for short to medium-term contracts (from several months up to several years). Canadian British Columbia Lodge As previously discussed, LNGC is constructing the Kitimat LNG Facility. British Columbia LNG activity and related CGL pipeline projects are a material driver of activity for the company’s Sitka Lodge, as well as for its mobile assets, which are contracted to serve several portions of the related pipeline construction activity. The actual timing of when revenue is realized from the CGL pipeline and Sitka Lodge contracts could be impacted by any delays in the construction of the Kitimat LNG Facility or the pipeline, such as protest blockades or COVID-19. The company’s expectation is that the company’s contracted commitments associated with the CGL pipeline project will be completed in 2023. Hospitality Services at Third-Party Owned Facilities The company also provides hospitality services at facilities owned by its customers. Historically, this has been focused around natural resource production-related housing facilities that are owned by oil production companies. The facilities the company manages typically range anywhere from 500 to 1,500 rooms. The company customizes its service offerings depending on its customer’s needs. Hospitality services can be performed on an end-to-end basis with catering and food service, housekeeping, maintenance and utility services included or in segments, such as food service only. The company’s focus on hospitality service contracts has allowed it to successfully pursue food service only opportunities. Due to the company’s experience servicing customer-owned facilities, this business easily fits into its overall strategy. Canadian Mobile Assets The company’s mobile assets consist of modular, skid-mounted accommodations and central facilities that can be configured to serve a multitude of short to medium-term accommodation needs. Dormitory, kitchen and ancillary assets can be rapidly mobilized and demobilized and are scalable to support 200 to 800 people in a single location. In addition to asset rental, the company provides hospitality services, such as food service and housekeeping, as well as other camp management services. The company’s mobile assets service the traditional oil and gas sector in Alberta and British Columbia and in-situ oil sands drilling and development operations in Alberta, as well as pipeline construction crews throughout Western Canada. These assets have also been used in the past in disaster relief efforts, the 2010 Vancouver Winter Olympic Games and a variety of other non-energy related projects. The company’s mobile assets are rented on a per unit basis based on the number of days that a customer utilizes the asset, and, in some cases, involve standby rental arrangements. In cases where the company provides food service or ancillary services, the contract can provide for per unit pricing or cost-plus pricing. Customers are also typically responsible for mobilization and demobilization costs. The company’s focus on hospitality service contracts has allowed us to successfully pursue food service only opportunities. Australia During the year ended December 31, 2022, the company generated 40% of its revenue from itsAustralian operations. As of December 31, 2022, the company owned 8,814 rooms across eight villages, of which 7,392 rooms service the Bowen Basin of central Queensland, one of the premier met coal basins in the world. The company provides hospitality services on a day rate basis to mining and related service companies (including construction contractors), typically under short and medium-term contracts (one to three years) with minimum nightly room commitments. In addition, the company provides integrated services to the mining industry in Western Australia. The company’s Australian segment included eight company-owned villages with 8,814 rooms as of December 31, 2022, which are strategically located near long-lived, low-cost mines operated by large mining companies. The company’s Australian business provides hospitality services to mining and related service companies under short- and medium-term contracts. The company’s growth plan for this part of its business continues to include enhanced occupancy and expansion of these properties where we believe there is durable long-term demand, as well as to provide hospitality services at customer-owned assets. The company’s Coppabella, Dysart, Moranbah, Middlemount and Nebo villages are located in the Bowen Basin. Coppabella, at over 3,000 rooms, is its largest village and provides rooms and related hospitality services to a variety of customers. Each of these villages supports both operational workforce needs and contractor needs with resort style amenities, including swimming pools, gyms, a walking track and a tavern. The company’s Narrabri and Boggabri villages in New South Wales service met and thermal coal mines and coal seam gas in the Gunnedah Basin. The company’s Karratha village, in Western Australia, services workforces related to LNG facilities operations on theNorthwest Shelf. The company’s Kambalda village was sold in the third quarter of 2022 to a customer, and it continues to operate the village as a customer-owned location. Hospitality Services at Third-Party Owned Facilities The company also provides hospitality services at customer-owned villages to the mining industry in Western Australia. Historically, this has been focused around natural resource production-related village facilities that are primarily owned by iron ore production companies. The company provides village operation services at 13 customer-owned locations, which represent over 10,000 rooms, primarily in the Pilbara region of Western Australia, one of the premier iron ore bodies in the world, and in the Goldfields-Esperance region of Western Australia. The facilities the company manages range anywhere from 200 to over 1,900 rooms. The company works together with its customers to customize its service offerings depending on its customer’s needs. Hospitality services can be performed on an end-to-end basis with catering and food service, housekeeping and site maintenance included or in segments, such as food service only. Mine site cleaning services are also provided at some of its customer-owned locations. U.S. During the year ended December 31, 2022, the company’s U.S. business generated 3% of its revenue. In the last half of 2022, the company sold both its wellsite services and its offshore businesses. The company’s remaining U.S. business consists of two lodges - one in the Bakken region and one in Louisiana. The company’s Killdeer Lodge provides rooms to the Bakken Shale region in North Dakota. The company’s Acadian Acres Lodge provides rooms near Lake Charles, Louisiana to support the Louisiana downstream market. Community Engagement With a focus on long-term Indigenous community participation, the company’s Canadian operations continue to work closely with a number of First Nations to develop mutually beneficial partnerships focused on revenue sharing, capacity building, employment and community investment and support. For over a decade, the company’s Canadian operations supported Buffalo Metis Catering, a partnership with three Metis communities in the Regional Municipality of Wood Buffalo. Through this partnership, food and housekeeping services were delivered to three of the company’s lodges. Beyond these services, this partnership provided a business incubator environment for a number of Metis business ventures. The company’s Canadian operations also procure services from a number of other First Nations-owned, Metis-owned and member-owned businesses, including water hauling, snow removal and security services. In 2018, Civeo entered into three new Indigenous partnerships in the oil sands region and two new partnerships in British Columbia and in 2021 entered into a new partnership in British Columbia. The company’s partnerships in British Columbia are tied to accommodations contracts secured by Civeo for the Kitimat LNG Facility, the CGL pipeline project that originates in the North Montney region of north-east British Columbia and the Trans Mountain expansion project that twins an existing pipeline between Edmonton, Alberta and Burnaby, British Columbia. Beyond revenue sharing, these arrangements provide procurement, employment, training, and ancillary business opportunities for Indigenous owned businesses. In Australia, the company’s community relations program also aims to build and maintain a positive social license to operate by consulting and engaging with local regional communities from project inception, through development, construction and operations. This is a major advantage for the company’s business model, as it facilitates consistent communication, engenders trust and builds relationships to last throughout the resource lifecycle. There is an emphasis on developing partnerships that create a long-term sustainable outcome to address specific community needs. To that end, the company partners with local municipalities to improve and expand municipal infrastructure. These improvements provide necessary infrastructure, allowing the local communities an opportunity to expand and improve. The company also provides support to local community groups through sponsorship and in-kind contributions to local events and initiatives. In addition, all of its food suppliers are Australian companies and, where possible, are based locally. In addition, the company has three unincorporated joint venture partnerships with Indigenous landowners in Western Australia. Under these agreements, the company strives to develop the business capacity, project management skills and expertise of the Indigenous joint venture members and also provides local employment opportunities and training. Two of the three unincorporated joint venture partnerships entitle Indigenous landowners to a profit distribution calculated in accordance with the unincorporated joint venture deeds. Additionally, two of the three remaining agreements incentivize the joint venture members via milestone payments for business objectives achieved. Customers and Competitors The company’s customers primarily operate in oil sands mining and development, drilling, exploration and extraction of oil and natural gas and coal and other extractive industries. To a lesser extent, the company also supports other activities, including pipeline construction, forestry and humanitarian aid. The company’s largest customers in 2022 were Suncor Energy Inc, Imperial Oil Limited (a company controlled by ExxonMobil Corporation) and Fortescue Metals Group Ltd who each accounted for more than 10% of its 2022 revenues. The company’s primary competitors in Canada in lodge and mobile asset hospitality services include ATCO, Black Diamond, Dexterra and Clean Harbors, Inc. In Canada, the company also competes against Aramark, Sodexo, Compass Group and Royal Camp Services for third-party facility management and hospitality services. The company’s primary competitors in Australia for its village hospitality services are customer-owned and operated villages, as well as Ausco Modular (a subsidiary of Modulaire Group), Fleetwood Corporation and smaller independent village operators. The company competes against ISS, Sodexo, Compass Group, Northern Rise (as a division of Delaware North) and Cater Care for third-party facility management services. In the U.S., the company primarily offers its lodge hospitality services and compete against Target Hospitality, hotels, and local mobile home and RV parks. Lodge and Village Contracts During the year ended December 31, 2022, revenues from the company’s lodges and villages represented over 62% of its consolidated revenues. The company’s contract terms generally provide for a rental rate for a reserved room and an occupied room rate that compensates it for hospitality services, including meals, housekeeping, utilities and maintenance for workers staying in the lodges and villages. The company’s customers typically contract for hospitality services under contracts with terms that most often range from several months to twelve years. The contracts expire throughout the year, and for many of the near-term expirations, it is in the process of negotiating extensions or new commitments. Long-Term Take-or-Pay Contracts: During the year ended December 31, 2022, the company billed approximately 2.5 million room nights under its long-term take-or-pay contracts, which included 0.6 million room nights in excess of the take-or-pay minimums. For the year ended December 31, 2023, the company had commitments for 1.2 million room nights under our long-term take-or-pay contracts. Short-Term Take-or-Pay Contracts: Customers may contract with the company on a take-or-pay basis for less than 12 months, particularly for turnaround projects. Similar to long-term take-or-pay contracts, the customer commits to either a minimum number of rooms over a specified period or an aggregate number of room nights over the period. During the year ended December 31, 2022, the company billed approximately 0.9 million room nights under its short-term take-or-pay contracts. For the year ended December 31, 2023, the company had commitments for 0.2 million room nights under its short-term take-or-pay contracts. Exclusivity Contracts: Over the term of an exclusivity contract, rather than receiving a minimum room commitment, the comopany is the exclusive hospitality service provider for the customer's employees working on a specific project or projects. During the year ended December 31, 2022, the company billed approximately 1.2 million room nights under its exclusivity contracts. Casual / Walk-ins: Customers without long-term committed contracts may utilize lodge/village rooms via short-term bookings at lodge/village casual or agreed rates. During the year ended December 31, 2022, the company billed approximately 0.2 million room nights to casual or walk-in customers. Integrated Services Contracts During the year ended December 31, 2022, revenues from the company’s customer-owned locations represented 21% of its consolidated revenues. The company’s contract terms generally provide for a per guest per day rate for hospitality services, including meals and housekeeping. Similar to the company’s owned lodge and villages contracts, in most multi-year contracts, its rates typically have annual escalation provisions to cover expected increases in labor and consumables costs over the contract term. The company’s customers typically contract for hospitality services under exclusivity contracts with terms that most often range from several months to five years. During the year ended December 31, 2022, the company billed approximately 2.3 million room nights under our integrated services exclusivity contracts. Seasonality of Operations The company’s operations are directly affected by seasonal weather. A portion of the company’s Canadian operations is conducted during the winter months when the winter freeze in remote regions is required for customers’ activity to occur. The spring thaw in these frontier regions restricts operations in the second quarter and adversely affects the company’s customers' operations and its ability to provide services. Customers’ maintenance activities in the oil sands region, such as shutdown and turnaround activity, are typically performed in the second and third quarters annually. The company’s Canadian operations have also been impacted by forest fires and flooding in the past five years. In the U.S., winter weather in the first quarter and the resulting spring break up in the second quarter have historically negatively impacted the company’s Bakken operations. Environmental Regulations The company’s operations, as well as the operations of its customers are subject to various laws and regulations addressing the management, disposal and releases of regulated substances. For example, in the U.S., the federal Resource Conservation and Recovery Act, as amended (RCRA) and comparable state statutes regulate the generation, storage, treatment, transportation, disposal and cleanup of hazardous and non-hazardous solid wastes. In the course of the company’s operations, it generates some amounts of ordinary industrial wastes, such as paint wastes, waste solvents and waste oils that may be regulated as hazardous wastes. Moreover, the federal Comprehensive Environmental Response, Compensation and Liability Act, as amended (CERCLA), also known as the Superfund law, and comparable state laws impose liability, without regard to fault or legality of conduct, on classes of persons considered to be responsible for the release of a ‘hazardous substance’ into the environment. These persons include the current and past owner or operator of the site where the release occurred and anyone who transported, disposed or arranged for the transport or disposal of a hazardous substance released at the site. History Civeo Corporation was founded in 1977.