What changed in this filing

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Item 1. Business

2021-02-26 compared with 2020-02-27 · 341 added, 235 removed, 396 unchanged (59% of the section changed)

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Also, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us, and our filings are available on the Internet at www.sec.gov and free of charge upon written request to our corporate secretary at the address shown on the cover page of this annual report.

We are a hospitality company servicing the natural resources industry in Canada, Australia and the U.S.

We provide hospitality services to the natural resources industry in Canada, Australia and the U.S.

We provide a full suite of hospitality services for our guests, including lodging, food service, housekeeping and maintenance at accommodation facilities that we or our customers own.

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We also offer 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.

We primarily operate in some of the world’s most active oil, metallurgical (met) coal and iron ore producing regions, and our customers include major and independent oil companies, mining companies, engineering companies and oilfield and mining service companies.

We primarily operate in some of the world’s most active oil, metallurgical (met) coal, liquefied natural gas (LNG) and iron ore producing regions, and our customers include major and independent oil companies, mining companies, engineering companies and oilfield and mining service companies.

Our extensive suite of services enables us to meet the unique needs of each of our customers, while providing comfortable accommodations for their employees.

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Initially, as customers assess the resource potential and determine how they will develop it, they typically need our hospitality services for a limited number of employees for an uncertain duration of time.

Our fleet of mobile accommodation assets is well-suited to support this initial exploratory stage as customers evaluate their development and construction plans.

Our 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, we are able to serve their needs through either:

(1) our fleet of mobile accommodation assets, particularly for shorter term projects such as pipeline construction and seasonal drilling programs;

(1) our fleet of mobile assets, particularly for shorter term projects such as pipeline construction and seasonal drilling programs;

(2) our scalable lodge or village model;

or (3) our service of guests in customer-owned facilities.

As projects grow and headcount needs increase, we are able to meet our customers growing needs at our accommodations facilities or with our hospitality services.

As projects grow and headcount needs increase, we are able to meet our customers growing needs at our accommodation facilities or with our hospitality services.

By providing infrastructure support and hospitality services early in the project lifecycle, we are well positioned to continue to service our customers throughout the production phase, which typically lasts decades.

Our scalable facilities provide workforce accommodations where, in many cases, traditional accommodations and related infrastructure are not accessible, sufficient or cost effective.

Our hospitality services help facilitate efficient development and production of natural resources found in areas without sufficient housing, infrastructure or local labor.

We support the development of these natural resources by providing hospitality services, including lodging, food service, housekeeping, recreation facilities, laundry and facilities management, as well as water and wastewater treatment, power generation, communications and logistics.

Our scalable facilities provide workforce accommodations where, in many cases, traditional accommodations and related housing are not accessible, sufficient or cost effective.

Our 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.

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and villages in Australia, or at facilities owned by our customers.

We own and operate 28 lodges and villages with an aggregate of approximately 30,000 rooms.

Additionally, in both Canada and the U.S., we

also offer a fleet of mobile accommodation assets.

We own and operate 28 lodges and villages with a total of approximately 30,000 rooms.

We operate approximately 9,000 rooms owned by our customers.

Additionally, in both Canada and the U.S., we also offer a fleet of mobile assets which serve shorter term projects, such as pipeline construction.

We have long-standing relationships with many of our customers, many of whom are, or are affiliates of, large, investment-grade energy and mining companies.

On July 1, 2019, we completed our acquisition of Action Industrial Catering (Action), a provider of catering and managed services to the mining industry in Western Australia.

The acquisition expands our business by providing an entry point into the growing integrated services opportunities in the Western Australian mining market.

Please see Note 7 - Acquisitions to the notes to the consolidated financial statements in Item 8 of this annual report for further discussion.

Demand for our hospitality services is influenced by four primary factors:

(1) commodity prices, (2) available infrastructure, (3) headcount requirements and (4) competition.

Current commodity prices, and our customers’ expectations for future commodity prices, influence customers’ spending on current productive assets, maintenance on and expansion of existing assets and development of greenfield, brownfield or new assets.

Current commodity prices, and our customers’ expectations for future commodity prices, influence customers’ spending and maintenance on current productive assets, expansion of existing assets and greenfield development of new assets.

In addition to commodity prices, different types of customer activity require varying workforce sizes, influencing the demand for our services.

Competing locations and services will also influence demand for our rooms and services.

In the Canadian oil sands region, demand for our hospitality services is influenced by oil prices.

In the Canadian oil sands region, demand for our hospitality services is primarily influenced by oil prices.

Spending on the construction and development of new projects has historically decreased as the outlook for oil prices decreases.

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Likewise, construction and expansion projects already underway have also been less sensitive to commodity price decreases, as customers generally focus on completion and incremental costs.

In 2020, demand for our services was impacted by the significant decline in oil prices stemming from global oversupply of oil coupled with the historic decline in oil demand due to the COVID-19 pandemic.

Canadian oil prices were also impacted by provincial oil production curtailments and continued insufficient long-term takeaway capacity.

Natural gas prices also influence oil sands activity as an input cost:

as natural gas prices fall, a significant component of our customers’ operating costs falls as well.

as natural gas prices fluctuate, a significant component of our customers’ operating costs fluctuate as well.

Another factor that influences demand for our hospitality services is the type of customer project we are supporting.

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Typically, customers prefer to first utilize their own rooms on location, and if such customer-owned rooms are insufficient, customers prefer to avoid busing their workforces to housing more than 45 kilometers away.

A number of multinational energy companies believe there is a potential to export liquefied natural gas (LNG) from Canada to meet the increasing global demand, particularly in Asia, for LNG.

A number of multinational energy companies believe there is a potential to export LNG from Canada to meet the increasing global demand, particularly in Asia, for LNG.

We expect that LNG activity in Western Canada will be influenced by the global prices for LNG, which are largely tied to global oil prices, global supply/demand dynamics for LNG and Western Canadian wellhead prices for natural gas.

Currently, Western Canada does not have any operational LNG export facilities.

On October 1, 2018, LNG Canada (LNGC), a large LNG export project proposed by a joint venture between Shell Canada Energy, an affiliate of Royal Dutch Shell plc (40 percent), and affiliates of PETRONAS, through its wholly-owned entity, North Montney LNG Limited Partnership (25 percent), PetroChina (15 percent), Mitsubishi Corporation (15 percent) and Korea Gas Corporation (5 percent), announced that a positive final investment decision (FID) had been reached on the proposed Kitimat liquefaction and export facility in Kitimat, British Columbia (Kitimat LNG Facility).

With the project moving forward, British Columbia LNG activity and related pipeline projects have become a material driver of activity for our Sitka Lodge, as well as for our mobile fleet assets, which are contracted to serve several portions of the related pipeline construction activity.

LNG Canada (LNGC), a joint venture among Shell Canada Energy, an affiliate of Royal Dutch Shell plc (40 percent), and affiliates of PETRONAS, through its wholly-owned entity, North Montney LNG Limited Partnership (25 percent), PetroChina (15 percent), Mitsubishi Corporation (15 percent) and Korea Gas Corporation (5 percent), is currently constructing a liquefaction and export facility in Kitimat, British Columbia (Kitimat LNG Facility).

LNGC activity and related pipeline projects are a material driver of activity for our Sitka Lodge, as well as for our mobile assets, which are contracted to serve several portions of the related pipeline construction activity.

See "Canada-Canadian British Columbia Lodge" for more information.

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Spending on producing assets is less sensitive to commodity price decreases in the short and medium term, assuming the projects remain cash flow positive.

However, new construction projects and expansionary projects are typically canceled or deferred during periods of lower met coal prices.

However, new construction projects and expansionary projects are typically canceled or deferred during periods of lower met coal and iron ore prices.

Similar to the Canadian market, new project construction activity typically requires larger workforces than day-to-day operations, where proximity and availability of customer-owned rooms influences the demand for our rooms and services.

During the period from mid-year 2012 to mid-year 2016, much of the previous demand for our hospitality services from new construction activity had ceased.

Subsequently, our customer service requirements were primarily driven by production, maintenance and operational activities.

Since 2017, our customer service requirements have primarily been driven by production, maintenance and operational activities.

More recently, we have seen an increase in the number of significant maintenance projects, along with customers initiating projects to optimize their operations.

This work has also included some small mine expansion projects.

The rise in met coal prices since the fourth

quarter of 2016 has improved market sentiment, and we are working closely with our existing and potential customers as they consider capital investment and expansion opportunities in the future.

We expect that customers will assess the likelihood of a period of sustained higher prices before committing capital to new projects.

Current met coal prices and global economic and political uncertainty make it unlikely that our customers will move forward with major met coal expansionary projects in 2021.

Customer growth projects for met coal could be sanctioned later in 2021 and into 2022 should the global economy and met coal prices stabilize.

However, current high iron ore prices are conducive to customer growth projects and we expect to support several such growth projects in Western Australia in 2021.

operations are primarily tied to activity in the U.S.

shale formations in the Permian Basin, the Mid-Continent, the Bakken and the Rockies, as well as activity in the Louisiana downstream and offshore Gulf of Mexico markets.

Given the shorter investment horizon and decision cycle of our U.S.

shorter investment horizon and decision cycle of our U.S.

customers, which is typically on a well-by-well basis, spending activities of U.S.

customers typically react more quickly to changes in oil and natural gas prices.

These spending dynamics were clearly demonstrated over the past several years.

With oil prices near $100 per barrel from 2012 to late 2014, drilling and completion activity levels grew.

However, as oil prices fell beginning in August 2014, and remained at relatively low levels throughout 2015 and most of 2016, activity in the U.S.

reacted swiftly, with the U.S.

rig count falling over 50% in six months from its peak in the third quarter of 2014.

After staging a significant recovery from 2017 to 2018, the U.S.

oil rig count and associated completion activity drifted lower in 2019 due to the oil price decline in late 2018 and early 2019 coupled with other market dynamics negatively impacting exploration and production (E&P) spending, finishing the year at 677 rigs.

customers normally react more quickly to changes in oil and natural gas prices.

These spending dynamics were clearly demonstrated in 2020.

With the decline in oil prices in April 2020 due to the COVID-19 pandemic and its impact on global oil demand, U.S.

drilling and completion activity reached historic lows.

By August 2020, the U.S.

drilling rig count fell to an all-time low of 172.

oil shale drilling and completion activity will continue to be dependent on sustained higher West Texas Intermediate oil prices, pipeline capacity and sufficient capital to support exploration and production (E&P) drilling and completion plans.

The Permian Basin remains the most active U.S.

unconventional play, representing 60% of the rigs in the U.S.

market at the end of 2019.

Given the U.S.

market for accommodations is primarily supported by mobile camp assets, competition is primarily driven by the availability of assets in the markets we service and pricing among our competitors.

unconventional play, representing 66% of the oil rigs active in the U.S.

at the end of 2020.

market for drilling rig accommodations is primarily supported by mobile assets, competition for well accommodations is primarily driven by the availability of permanent and temporary camp assets in the markets we service and pricing among our competitors, including hotels.

For the years ended December 31, 2020, 2019 and 2018, we generated $529.7 million, $527.6 million and $466.7 million in revenues and $147.2 million, $49.1 million and $88.1 million in operating loss, respectively.

The majority of our operations, assets and income are derived from the hospitality services provided at our lodges and villages that have historically been contracted by our customers under multi-year, take-or-pay or exclusivity contracts.

The hospitality services we provide at these facilities generate 80% of our revenue.

The majority of our operations, assets and income are derived from the hospitality services provided at lodges and villages we own that have historically been contracted by our customers under multi-year, take-or-pay or exclusivity contracts.

The hospitality services we provide at these facilities generated 66% of our revenue for the year ended December 31, 2020.

Important performance metrics include revenue related to our major properties, average daily rate and aggregate billed rooms.

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Year Ended December 31,

2020 2019 2018

(In thousands, except for room counts and average daily rate)

Accommodation Revenue (1)

Canada $ 202,534 $ 281,577 $ 266,899

Australia 144,070 126,047 117,896

United States 2,451 12,462 18,288

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Mobile Facility Rental Revenue (2)

Canada $ 33,192 $ 9,575 $ 9,316

United States 16,837 28,119 20,389

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Food Service and Other Services Revenue (3)

Canada $ 33,923 $ 33,485 $ 15,601

Australia 90,472 30,046 1,342

United States 50 145 170

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Manufacturing Revenue (4)

Canada $ — $ 1,014 $ 4,196

United States 6,200 5,085 12,595

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Average Daily Rates for Lodges and Villages (5)

Canada $ 95 $ 91 $ 89

Australia $ 73 $ 73 $ 78

Total Billed Rooms for Lodges and Villages (6)

Canada 2,095,784 3,078,727 3,007,229

Australia 1,968,284 1,717,186 1,512,030

Average Exchange Rate

Canadian dollar to U.S.

dollar $ 0.75 $ 0.75 $ 0.77

Australian dollar to U.S.

dollar 0.69 0.70 0.75

(1) Includes revenues related to lodge and village rooms and hospitality services for owned rooms for the periods presented.

Includes revenues related to mobile camps for the periods presented.

(2) Includes revenues related to mobile assets for the periods presented.

(3) Includes revenues related to food service, laundry and water and wastewater treatment services, and facilities management for the periods presented.

(4) Includes revenues related to modular construction and manufacturing services for the periods presented.

Average daily rate is based on billed rooms and accommodation revenue for the periods presented.

(5) Average daily rate is based on billed rooms and accommodation revenue for Civeo owned rooms during the periods presented.

(6) Billed rooms represents total billed days for the periods presented.

Our Canadian operations, founded in 1977, began by providing modular rental housing to energy customers, primarily supporting drilling rig crews in the Western Canadian Sedimentary Basin.

Over the next decade, we acquired a food service operation and a manufacturing facility, enabling us to provide a more comprehensive accommodation solution.

Through our experience with Syncrude’s Mildred Lake Village, a 2,100 bed facility that we built and sold to Syncrude in 1990 and operated and managed for them for nearly 20 years, we recognized a need for a premium, and more permanent, solution for workforce accommodations and hospitality services in the Canadian oil sands region.

Over the next decade, we acquired a food service operation, enabling us to provide a more comprehensive accommodation solution.

Through our experience with Syncrude’s Mildred Lake Village, a 2,100 bed facility that we operated and managed for them for nearly 20 years, we recognized a need for a premium, and more permanent, solution for workforce accommodations and hospitality services in the Canadian oil sands region.

Pursuing this strategy, we opened PTI Lodge in 1998, one of the first independent lodging facilities in the region.

Through our wide range of hospitality services, we are able to identify, solve and implement solutions and services that enhance the guests’ accommodations experience and reduce the customer’s total cost of housing a workforce in a remote operating location.

Through our experiences and service delivery model, our hospitality services have evolved to include fitness centers, water and wastewater treatment, laundry service and many other enhancements.

As our experience in the Canadian oil sands region grew, we were the first to introduce suite-style accommodations for middle and upper-level management working in the region, with our Beaver River Executive Lodge in 2005.

Since then, we have continued to innovate our service offerings to meet our customers’ growing and evolving needs.

On April 2, 2018, we acquired Noralta Lodge Ltd.

Using our experiences and service delivery model, our hospitality services have evolved to include fitness centers, water and wastewater treatment, laundry service and many other enhancements.

In 2018, we acquired Noralta Lodge Ltd.

(Noralta), which provided remote hospitality services in Alberta, Canada (the Noralta Acquisition) through eleven lodges comprising over 5,700 owned rooms and 7,900 total rooms.

From our entrepreneurial beginning, we have developed into Canada’s largest third-party provider of accommodations and hospitality services in the Canadian oil sands region.

Today, we also support customers’ logistical efforts in managing the movement of large numbers of personnel efficiently.

At our Wapasu Creek location, we have introduced services that improve efficiencies for customers in transporting personnel to mine sites on a daily basis, as well as in rotating personnel when crews change.

During 2015, we entered the Canadian LNG market with our Sitka Lodge.

On October 1, 2018, LNGC's participants announced that a positive FID had been reached on the Kitimat LNG Facility.

British Columbia LNG activity and related pipeline projects has become a material driver of activity for our Sitka Lodge, as well as for our mobile camp assets, which are contracted to serve several portions of the related pipeline construction activity.

Over time, we have developed into Canada’s largest third-party provider of accommodations and hospitality services in the Canadian oil sands region.

During 2015, we entered the Canadian LNG market with the construction of our Sitka Lodge.

In 2018, LNGC's partners announced that a positive FID had been reached on the Kitimat LNG Facility.

British Columbia LNG activity and related pipeline projects are a material driver of activity for our Sitka Lodge, as well as for our mobile assets, which are contracted to serve several portions of the related pipeline construction activity.

With the acquisition of our Australian business in December 2010, we began providing hospitality services to support the Australian natural resources industry through our villages located in Queensland, New South Wales and Western Australia.

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Our Australian business was the first to introduce resort-style accommodations to the mining sector, adding landscaping, outdoor kitchens, pools, fitness centers and, in some cases, taverns.

In 2019, we acquired Action Industrial Catering (Action), a provider of catering and managed services (which we refer to as integrated services) to the mining industry in Western Australia.

The Action acquisition enhanced our service offering, geographic footprint and exposure to new commodities in Australia and underlines our focus on pursuing growth opportunities that fit within our core competencies and strategic direction.

In all our operating regions, our business is built on a culture of continuous service improvement to enhance the guest experience and reduce customers' workforce housing costs.

On July 1, 2019, we completed the acquisition of Action, a provider of catering and managed services to the mining industry in Western Australia.

The acquisition enhances our service offering, geographic footprint and exposure to new commodities in Australia and underlines our focus on pursuing growth opportunities that fit within our core competencies and strategic direction.

We provide hospitality services for the natural resource industries.

Our 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, we also provide hospitality services such as lodging, food service, housekeeping, and maintenance, as well as day-to-day operations, such as laundry, water and wastewater treatment, power generation, communication systems, security and group logistics.

Once facilities are deployed in the field, we also provide hospitality services such as lodging, food service, housekeeping, and maintenance, as well as operations, including laundry, water and wastewater treatment, power generation, communication systems, security and logistics.

Our hospitality services can be provided at accommodation facilities we own or at facilities owned by our customers.

Demand for our services is cyclical and substantially dependent upon activity levels, particularly our customers’ willingness to spend capital on the exploration for, development and production of oil, met coal, natural gas and other resource reserves.

Our 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.

As a result, the demand for our services is sensitive to current and expected commodity prices.

We serve multiple projects and multiple customers at most of our sites, which allows those customers to share some of the costs associated with their peak accommodations needs.

Our facilities provide customers with cost efficiencies as they are

able to share the costs of accommodations related infrastructure (power, water, sewer and information technology) and central dining and recreation facilities with other customers operating projects in the same vicinity.

We serve multiple projects and multiple customers at most of our 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.

Our business is significantly influenced by:

(1) the level of production of oil sands deposits in Alberta, Canada;

(1) 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;

(2) activity levels in support of extractive industries in Australia;

(3) LNG and related pipeline activity in Canada;

(4) oil production in Canada and the U.S.;

and (5) met coal production in Australia's Bowen Basin and iron ore production in Western Australia.

Historically, oil sands developers and Australian mining companies built, owned and in some cases operated the accommodations necessary to house their personnel in these remote regions because local labor and third-party owned rooms were not available.

Over the past 20 years, and increasingly over the past 10 years, some customers have moved away from the insourcing business model for some of their accommodations as they recognize that owning accommodations and providing the hospitality services are non-core investments for their business.

and (4) oil production in the U.S.

Historically, Canadian oil sands developers and Australian mining companies built, owned and in some cases operated the accommodations necessary to house their personnel in these remote regions because local labor and third-party owned

rooms were not available.

Over the past 20 years, and increasingly over the past 10 years, some customers have moved away from the in sourcing business model for some of their accommodation needs as they recognize that owning accommodations and providing the hospitality services are non-core investments for their business.

We believe that our existing industry divides accommodations into two primary types:

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Lodges and villages typically contain a larger number of rooms and require more time and capital to develop.

These facilities typically have dining areas, meeting rooms, recreational facilities, pubs and landscaped grounds where weather permits.

These facilities typically have dining areas, meeting rooms, recreational facilities, pubs and taverns and landscaped grounds where weather permits.

Lodges and villages are generally supported by multi-year, take-or-pay or exclusivity contracts.

These facilities are designed to serve the long-term needs of customers in constructing and operating their resource developments.

Mobile camps are designed to follow customers’ activities and can be deployed rapidly to scale.

These facilities are designed to serve the long-term needs of customers in developing and producing their natural resource developments.

Mobile assets are designed to follow customers’ activities and can be deployed rapidly to scale.

They are often used to support conventional and in-situ drilling crews, as well as pipeline and seismic crews, and are contracted on a project-by-project, well-by-well or short-term basis.

Oftentimes, customers will initially require mobile accommodations as they evaluate or initially develop a field or mine.

Mobile camp projects can be dedicated and committed to a single customer or project or the camps can serve multiple customers.

The accommodations market supporting the natural resource industry is segmented into competitors that serve components of the overall value chain, but very few offer the entire suite of hospitality services to customers.

Oftentimes, customers will initially require mobile assets as they evaluate or initially develop a field or mine.

Mobile asset projects can be dedicated and committed to a single customer or project or can serve multiple customers.

The accommodation facilities market supporting the natural resource industry is segmented into competitors that serve components of the overall value chain, but very few offer the entire suite of hospitality services to customers.

We estimate that customer-owned rooms represent over 50% of the market.

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Many public and private firms, such as ATCO Structures & Logistics Ltd.

(ATCO), Horizon North Logistics Inc.

(Horizon North), Alta-Fab Structures Ltd.

(ATCO), Dexterra Group Inc.

(Dexterra), Alta-Fab Structures Ltd.

(Alta-Fab) and Northgate Industries Ltd.

(Northgate), build modular accommodations for sale.

Horizon North, Black Diamond Group Limited (Black Diamond), ATCO, Royal Camp Services Ltd.

and Target Hospitality primarily own and lease units to customers and, in some cases, provide facility management services, usually on a shorter-term basis with a more limited number of rooms, similar to our mobile camp business.

Dexterra, Black Diamond Group Limited (Black Diamond), ATCO, Royal Camp Services Ltd.

Facility service companies, such as Aramark Corporation (Aramark), Sodexo Inc.

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During the year ended December 31, 2020, we generated approximately 51% of our revenue from our Canadian operations.

We are Canada’s largest provider of hospitality services for people working in remote locations.

We are Western Canada’s largest provider of hospitality services for people working in remote locations.

We provide our services through our lodges and mobile assets and at customer-owned locations.

Our hospitality services support workforces in the Canadian LNG and oil sands markets and in a variety of oil and natural gas drilling, mining and related natural resource applications.

Our 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 Market

Demand for our hospitality services in the Canadian oil sands region is primarily influenced by the longer-term outlook for crude oil prices rather than current energy prices, given the multi-year production phase of oil sands projects and the costs associated with development of such large scale projects.

Demand for our hospitality services in the Canadian market is largely commodity price driven.

In the Canadian oil sands region, demand is primarily influenced by the longer-term outlook for crude oil prices rather than current energy prices, given the multi-year production life of oil sands projects and the capital investment associated with development of such large-scale projects.

Demand for our Canadian lodges is secondarily impacted by oil pipeline takeaway capacity;

and, in 2020, a provincial oil production curtailment policy was imposed by the Government of Alberta.

However, monthly production limits were put on hold in December 2020 until further notice, allowing operators to produce freely at their discretion while the government monitors production.

Should forecasts show storage inventories approaching maximum capacity, the government may reintroduce production limits.

Demand for hospitality services related to LNG is influenced by the global prices for LNG.

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Of Canada’s approximately 38 million residents, nearly half of the population lives in ten cities, while approximately 12% of the population lives in Alberta and less than 1% of the population lives within 100 kilometers of the oil sands activity.

municipalities, of which Fort McMurray is the largest, have limited infrastructure to respond to workforce accommodation demands and are a significant driving distance from many of the oil sands projects.

As such, the workforce accommodations market provides a cost effective solution to the problem of staffing large oil sands projects by sourcing labor largely throughout Canada to work on a rotational basis.

The local municipalities, of which Fort McMurray is the largest, have limited infrastructure to respond to workforce accommodation demands and are a significant driving distance from many of the oil sands projects.

As such, the workforce accommodations market provides a cost-effective solution to the challenge of staffing large oil sands projects by sourcing labor largely throughout Canada to work on a rotational basis.

Similarly, the LNGC project located in Kitimat, British Columbia, is expected to need as many as 7,500 workers to construct the liquefaction facilities.

The population of Kitimat and the surrounding area is approximately 9,000.

Canadian Oil Sands Lodges

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The oil sands region continues to represent one of the world’s largest reserves for heavy oil.

Our McClelland Lake, Wapasu, 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 the bitumen, or oil sands.

Our 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, very low exploration or reserve risk and relatively lower cash operating costs per barrel of bitumen produced.

Our Conklin, Anzac, Red Earth and Wabasca lodges, as well as a portion of our mobile camp assets, are focused in the southern portion of the region where we primarily serve in-situ operations and pipeline expansion activity.

Our Conklin, Anzac, Red Earth and Wabasca lodges, as well as a portion of our mobile assets, are focused in the southern portion of the region where we primarily serve in-situ operations and pipeline expansion and maintenance activity.

In-situ methods are used on reserves that are too deep for traditional mining methods.

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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.

Our oil sands lodges support construction and operating personnel for maintenance, turnaround and expansionary projects, as well as ongoing operations associated with surface mining and in-situ oil sands projects, generally under short and medium-term contracts.

Our 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 our 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.

Our leases have expiration dates that range from 2022 to 2028.

Currently, two of our Canadian lodges are on land with leases expiring prior to December 31, 2020.

In recent years, we have successfully renewed or extended all expiring land leases.

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In order to operate a lodge in Canada, we are required to obtain a development permit from the regional municipality in which the lodge resides.

The development permits are granted for a term ranging from two to ten years.

The development permits are granted for a term ranging from one to ten years.

Our development permits have expiration dates that range from 2021 to 2025.

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See “Item 1A.

Risk Factors- Risks Related to Our Business-All but three of our major Canadian lodges are located on land subject to leases.

Risk Factors-Risks Related to Our Business-The majority of our major Canadian lodges are located on land subject to leases.

If we are unable to renew a lease or obtain permits necessary to operate on such leased land, we could be materially and adversely affected.” of this annual report for further information.

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Our lodge guests receive amenities similar to a full-service hotel plus three meals a day.

During 2019 , no further rooms were added (net of retirements) to our major oil sands lodges.

Our Wapasu Creek Lodge, with more than 5,000 rooms, is equivalent in size to the largest hotels in North America.

We provide our hospitality services at the lodges we own on a day rate or monthly rental basis, and our customers typically commit for short to medium-term contracts (from several months up to several years).

Customers make a minimum nightly or monthly room commitment or an aggregate total room night commitment for the term of the contract, and the multi-year contracts typically provide for inflationary escalations in rates for increased food, labor and utilities costs.

Most customers make a minimum nightly or monthly room commitment or an aggregate total room night commitment for the term of the contract, and the multi-year contracts typically provide for inflationary escalations in rates for increased food, labor and utilities costs.

Canadian British Columbia Lodge

We began the expansion of our room count in Kitimat, British Columbia during the second half of 2015 to support LNG projects on the west coast of British Columbia.

We developed a new accommodations facility, Sitka Lodge, which includes private washrooms, recreational facilities, a pub and other amenities.

The lodge had 774 rooms as of the end of 2018.

Expansion of the lodge was completed in the third quarter of 2019, which resulted in 1,186 total available rooms.

As previously discussed, on October 1, 2018, LNGC's participants announced a positive FID on the Kitimat LNG Facility.

With the project moving forward, British Columbia LNG activity and related pipeline projects have become a material driver of activity for our Sitka Lodge, as well as for our mobile camp assets, which are contracted to serve several portions of the related pipeline construction activity.

As previously discussed, in October 2018, LNGC's partners announced a positive FID on the Kitimat LNG Facility.

British Columbia LNG activity and related Coastal GasLink (CGL) pipeline projects are a material driver of activity for our Sitka Lodge, as well as for our mobile assets, which are contracted to serve several portions of the related pipeline construction activity.

We previously announced contract awards for locations along the CGL pipeline project and room commitments for our Sitka Lodge.

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, including recent blockades that aim to delay construction.

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, including recent blockades that aim to delay construction.

Our current expectation is that our contracted commitments associated with the CGL pipeline project will be completed in early 2022.

Canadian Lodge Locations

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As of December 31,

Lodges Region Extraction

Technique 2020 2019 2018

Wapasu Creek N.

Athabasca mining 5,246 5,246 5,246

Athabasca (2)

McClelland Lake

mining/in-situ

Athabasca mining 2,005 2,005 2,005

McClelland Lake N.

Athabasca mining 1,997 1,997 1,997

Athabasca mining/in-situ — — 1,698

Beaver River (2)

Athabasca mining 1,094 1,094 1,094

Fort McMurray Village:

Buffalo (1) (3)

Athabasca mining — — 573

Black Bear (2)

Wolverine (3)

Grey Wolf (3)

Firebag (1) (3)

Wabasca (2) (3)

Athabasca mining 531 531 531

Athabasca mining 763 763 763

Athabasca mining 855 855 855

Athabasca mining 1,504 1,504 1,504

Athabasca mining 946 947 946

Athabasca in situ — — 664

Athabasca mining 624 624 624

Athabasca mining 288 288 246

Red Earth (2)

mining/in-situ

Athabasca mining 216 216 216

Athabasca mining/in-situ 616 1,012 1,032

Athabasca in-situ 526 526 526

Mariana Lake (1)

Athabasca mining — — 686

Subtotal – Oil Sands 18,066 18,463 22,061

Sitka Lodge Kitimat, BC LNG 958 1,186 646

Total Rooms 19,024 19,649 22,707

(1) Permanently closed as of December 31, 2020.

Currently closed due to low activity level in the region.

All four closed lodges are periodically assessed for impairment, in accordance with U.S.

(2) Currently closed as of December 31, 2020, due to low activity level in the region.

All seven closed lodges are periodically assessed for impairment, in accordance with U.S.

generally accepted accounting principles (U.S.

Please see Note 4 - Impairment Charges to the notes to the consolidated financial statements in Item 8 of this annual report for further discussion.

Lodges acquired in the Noralta Acquisition.

See Note 4 - Impairment Charges to the notes to the consolidated financial statements in Item 8 of this annual report for further discussion.

Hospitality Services at Third-Party Owned Facilities

We also provide hospitality services at facilities owned by our customers.

Historically, this has been focused around natural resource production-related housing facilities that are owned by the natural resource owners.

Currently, we operate camp facilities for third-party customers.

Historically, this has been focused around natural resource production-related housing facilities that are owned by oil production companies.

The facilities we manage range anywhere from 100 to 1,500 rooms.

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Hospitality services can be performed on an end-to-end basis with food service, housekeeping, maintenance and utility services included or in segments such as food service only.

Recently, we have engaged in developing a related food service brand, Red Table.

This diversification initiative targets food service and facility management opportunities outside of the natural resources industry, including educational, entertainment and health care sectors.

Currently, Red Table operates four facilities, and includes a food production facility, which began operations in the second quarter of 2018.

Canadian Mobile Accommodations

Our mobile accommodations consist of modular, skid-mounted accommodations and central facilities that can be quickly configured to serve a multitude of short to medium-term accommodation needs.

The 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, we provide hospitality services such as food service and housekeeping, as well as camp management services, including managing fresh water and sewage hauling services.

Our mobile camps 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.

The 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.

Our mobile camp assets are rented on a per unit basis based on the number of days that a customer utilizes the asset.

Canadian Mobile Assets

Our mobile assets consist of modular, skid-mounted accommodations and central facilities that can be quickly 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, we provide hospitality services such as food service and housekeeping, as well as other camp management services.

Our 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.

Our 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 we provide food service or ancillary services, the contract can provide for per unit pricing or cost-plus pricing.

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Our focus on hospitality service contracts has allowed us to successfully pursue food service only opportunities.

Due to the business nature of servicing customer-owned facilities, this business easily fits into our overall business strategy.

In addition to traditional workforce accommodations, we are expanding our target markets to areas such as institutional, educational and entertainment facilities.

Due to our experience servicing customer-owned facilities, this business easily fits into our overall strategy.

During the year ended December 31, 2020, we generated 44% of our revenue from our Australian operations.

As of December 31, 2020, we owned 9,046 rooms across nine villages, of which 7,392 rooms service the Bowen Basin region of Queensland, one of the premier met coal basins in the world.

We provide 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 five years) with minimum nightly room commitments.

In addition, we provide village operation and mine site cleaning services at eleven customer-owned locations primarily in the Pilbara region of Western Australia, one of the premier iron ore bodies in the world, and in the Kimberly and Goldfields-Esperance regions of Western Australia.

In addition, we provide integrated services to the mining industry in Western Australia.

Australian Market

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Australia is the largest exporter of met coal and iron ore in the world, in addition to being in close proximity to the largest steel producing countries in the world.

The growth of Australian natural resource commodity exports over the last decade has been largely driven by strong Asian demand for coal, iron ore and LNG.

Australia’s resources are primarily located in remote regions of the country that lack infrastructure and resident labor forces to develop these resources, as the majority of Australia’s population is located on the east coast of the country.

The growth of Australian natural resource commodity exports over the last decade has been largely driven by strong Asian demand for met coal, iron ore and LNG.

Australia’s resources are primarily located in remote regions of the country that lack infrastructure and resident labor forces to produce these resources, as the majority of Australia’s population is located on the east coast of the country.

As a result, much of the natural resources labor force works on a rotational basis, which often requires a commute from a major city or the coast to a living arrangement near the resource projects.

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In addition, we provide village operation and mine site cleaning services at six customer locations in the Pilbara and Kimberly regions of Western Australia, which are renowned for high grade iron ore production.

Met coal and iron ore are used in the steel making process and demand has largely been driven by global demand for steel finished goods and steel construction materials.

In recent years, growth in construction demand for steel products in emerging economies, particularly China, slowed significantly, negatively impacting demand for the commodity.

However, the rebounding of steel demand in 2018 and 2019 led to stabilized pricing for met coal in 2018 and 2019.

Our villages and customer-based locations are focused on the mines in the central portion of the Pilbara and Bowen Basins and are well positioned for the active mines in the region.

Currently China and Australia are in a trade dispute that has led to China implementing an unofficial trade embargo on Australian coal.

China has historically accounted for approximately 22% of Australia’s met coal exports.

The continuing uncertainty in the demand for met coal, related to the impact of Chinese bans on the importation of Australian commodities, led to a decrease in the met coal spot price to US$103 per tonne at December 31, 2020.

The softening of the met coal spot price at the end of 2020 has been exacerbated as Chinese mills and traders resell stranded Australian met coal at a discount.

As a result, there is currently a shuffling of global export trade flows, coupled with growing demand for steel with an infrastructure led recovery which may lead to near term growth in Australian met coal spot pricing.

Should this dispute continue, it could negatively impact pricing and demand for Australian met coal.

To date, we have not seen an overall material decline in occupancy at our Australian villages resulting from the COVID-19 pandemic or the Chinese trade dispute.

Beyond the Pilbara and Bowen Basins, we serve several other markets with four additional villages and five customer-owned villages.

At the end of 2020, we had two villages with over 1,000 combined rooms in the Gunnedah Basin, a thermal and met coal region in New South Wales.

In Western Australia, we serve workforces related to LNG facilities operations on the Northwest Shelf through our Karratha village and the Goldfields region through our Kambalda village.

In Western Australia, we serve workforces related to LNG facilities operations on the Northwest Shelf through our Karratha village and gold production in the Goldfields region through our Kambalda village.

In addition, we provide hospitality services in Western Australia at five customer-owned villages which support workforces related to nickel, copper, zinc, silver and gold production in the Goldfields-Esperance region and lithium production in the Pilbara region.

Australian Village Locations

Rooms in our Australian Villages

Owned Rooms in our Australian Villages

As of December 31,

met/thermal coal

Gold, lithium

LNG, iron ore

Villages Resource

Basin Commodity 2020 2019 2018

Coppabella Bowen met coal 3,048 3,048 3,048

Dysart Bowen met coal 1,798 1,798 1,798

Moranbah Bowen met coal 1,240 1,240 1,240

Middlemount Bowen met coal 816 816 816

Boggabri Gunnedah met/thermal coal 622 622 622

Narrabri Gunnedah met/thermal coal 502 502 502

Nebo Bowen met coal 490 490 490

- LNG — — 300

Kambalda - Gold, lithium 232 232 232

Karratha Pilbara LNG, iron ore 298 298 298

Total Rooms 9,046 9,046 9,346

(1) Sold in September 2019.

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Our Kambalda village supports gold and lithium mining in southern Western Australia.

Hospitality Services at Third-Party Owned Facilities

We also provide 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.

We provide village operation services at eleven customer-owned locations, which represent over 7,000 rooms, primarily in the Pilbara region of Western Australia, one of the premier iron ore bodies in the world, and in the Kimberly and Goldfields-Esperance regions of Western Australia.

The facilities we manage range anywhere from 200 to 1,750 rooms.

We work together with our customers to customize our service offerings depending on our customer’s needs.

Hospitality services can be performed on an end-to-end basis with 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 our customer-owned locations.

During the year ended December 31, 2020, our U.S.

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business has operational exposure in the U.S.

shale formations in the Permian Basin, the Bakken, the Mid-Continent and the Rockies and offshore Gulf of Mexico markets.

The business provides accommodations facilities with hospitality services and highly mobile smaller camps that follow drilling rigs and completion crews as well as accommodations, office and storage modules that are placed on offshore drilling rigs and production platforms.

shale formations in the Permian Basin, the Mid-Continent, the Bakken and the Rockies.

The business provides accommodations facilities with hospitality services and highly mobile smaller assets that follow drilling rigs and completion crews as well as accommodations, office and storage modules that are placed on offshore drilling rigs and production platforms.

business also provides lodging and hospitality services to the downstream industry through a 300-room facility near Lake Charles, Louisiana.

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has historically been supported by local workforces traveling short to moderate distances to the worksites.

With the development of substantial resources in regions such as the Bakken and Permian Basin, labor demand has exceeded the local labor supply and accommodations infrastructure to support the demand.

Consequently, demand for remote, scalable accommodations and hospitality services has developed in the U.S.

over the past several years.

With the development of substantial resources in regions such as the Bakken and Permian Basin, labor demand exceeded the local labor supply and accommodations infrastructure to support the demand.

Consequently, demand for remote, scalable accommodations and hospitality services developed in the U.S.

Demand for workforce accommodations in the U.S.

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Activity levels have been, and we expect will continue to be, highly correlated with hydrocarbon commodity prices.

Mobile Assets

Our business in the U.S.

consists primarily of mobile camps, both in the lower 48 states, including the (1) Permian Basin region, (2) Mid-Continent region, (3) Rocky Mountain corridor, and (4) Bakken region, and in the Gulf of Mexico.

consists primarily of mobile assets, both in the lower 48 states, including the (1) Permian Basin region, (2) Mid-Continent region, (3) Bakken region and (4) the Rockies region.

We provide a variety of sizes and configurations to meet the needs of E&P companies, completion companies, infrastructure construction projects and offshore drilling and completion activity.

Our mobile camps are rented on a per unit basis based on the number of days that a customer utilizes the asset.

With the recent volatility in oil prices and a resulting reduction in spending by E&P companies, we have exited the Bakken and reduced our presence in the Rockies regions for our mobile assets.

Those assets will either be sold or transported to our Permian Basin and Mid-Continent district locations.

This process is underway and we expect it to be completed during the first half of 2021.

Our mobile assets are rented on a per unit basis based on the number of days that a customer utilizes the asset.

In cases where we provide food service or other hospitality services, the contract can provide for per unit pricing or cost-plus pricing.

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As of December 31,

Acadian Acres

State 2020 2019 2018

West Permian TX 390 410 390

Acadian Acres LA 300 300 400

Killdeer ND 235 235 235

Total Rooms 925 945 1,025

We had three lodges in the U.S.

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Our West Permian Lodge supports the Permian Basin in West Texas.

Our Acadian Acres Lodge, which we acquired in February 2018, provides rooms near Lake Charles, Louisiana to support the Louisiana downstream market.

Modular Construction

The capability of our Canadian business includes the design, engineering, transportation and installation of a variety of modular buildings, predominately for our own use.

As of December 31, 2019, we owned one modular construction and manufacturing plant near Edmonton, Alberta, Canada, which is held for sale.

During the fourth quarter of 2017, we made the decision to sell this plant due to changing geographic and market needs.

In line with our Australian and U.S.

strategy, we are now subcontracting modular construction from third-party manufacturers for our Canadian business.

In Canada, we continue to retain a staff of experts who have designed and delivered large and small modular construction projects.

We are capable of taking highly replicable and well-designed manufactured buildings and our expertise in site layout, combined with site-built components including landscaping, recreational facilities and certain common facilities, to create a comfortable community within a community.

We design accommodations facilities to suit the climate, terrain and population of a specific project site.

Community Relations

Our 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, our 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.

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Our 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.

The annual value of these contracts exceeds C$23 million.

Our indigenous partnership initiatives were recognized in 2011 and 2012 with awards from the Alberta Chamber of Commerce.

In addition, in 2016, Civeo was awarded a Silver level Progressive Aboriginal Relation (PAR) certification by the Canadian Council for Aboriginal Business (CCAB), demonstrating our commitment to the principles and practices established by the CCAB.

In 2019, Civeo was awarded by a jury comprised of indigenous business people a Gold level PAR certification which is supported by an unbiased, independent, third-party verification of our performance.

In 2020, the annual value of these contracts was approximately C$40 million.

In 2019, our indigenous partnership initiatives were awarded a Gold level Progressive Aboriginal Relations (PAR) certification, by a jury comprised of indigenous business people, which was supported by an unbiased, independent, third-party verification of our performance.

In 2016, Civeo was awarded a Silver level PAR certification by the Canadian Council for Aboriginal Business (CCAB), demonstrating our commitment to the principles and practices established by the CCAB.

In addition, in 2011 and 2012, we were recognized with awards from the Alberta Chamber of Commerce.

In 2018, Civeo entered into three new indigenous partnerships in the oil sands region and two new partnerships in British Columbia.

Our partnerships in British Columbia are tied to accommodations contracts secured by Civeo for the Kitimat LNG Facility and for the Coastal Gas Link pipeline project that originates in the North Montney region of north east British Columbia.

Beyond revenue sharing, these new arrangements provide employment, training, and ancillary business opportunities for indigenous owned businesses.

Beyond revenue sharing, these arrangements provide procurement, employment, training, and ancillary business opportunities for indigenous owned businesses.

In Australia, our 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.

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These improvements provide necessary infrastructure, allowing the local communities an opportunity to expand and improve.

In addition, we have four unincorporated joint venture partnerships with indigenous land owners in Western Australia.

In addition, we have five unincorporated joint venture partnerships with indigenous landowners in Western Australia.

These agreements assist to develop the business capacity, project management skills and expertise of the indigenous joint venture members and also provide local employment opportunities and training.

Two of the four unincorporated joint venture partnerships entitle indigenous landowners to a profit distribution calculated in accordance with the unincorporated joint venture deeds.

Three of the five unincorporated joint venture partnerships entitle indigenous landowners to a profit distribution calculated in accordance with the unincorporated joint venture deeds.

The remaining two agreements incentivize the joint venture members via milestone payments for business objectives achieved.

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To a lesser extent, we also support other activities, including pipeline construction, forestry and humanitarian aid.

Our largest customers in 2019 were Imperial Oil Limited (a company controlled by ExxonMobil Corporation) and Fort Hills Energy LP (a partnership between Suncor Energy Inc., Total E&P Canada Ltd and Teck Resources Limited) who each accounted for more than 10% of our 2019 revenues.

Our primary competitors in Canada in lodge and mobile camp hospitality services include ATCO, Black Diamond, Horizon North and Clean Harbors, Inc.

Our largest customers in 2020 were Fortescue Metals Group Ltd and Imperial Oil Limited (a company controlled by ExxonMobil Corporation) who each accounted for more than 10% of our 2020 revenues.

Our primary competitors in Canada in lodge and mobile asset hospitality services include ATCO, Black Diamond, Dexterra and Clean Harbors, Inc.

Some of these competitors have one or two locations similar to our oil sands lodges;

however, based on our estimates, these competitors do not have the breadth or scale of our lodge operations.

In Canada, we also compete against Aramark and Compass Group for third-party facility management and hospitality services.

In Canada, we also compete against Aramark, Sodexo and Compass Group for third-party facility management and hospitality services.

Our primary competitors in Australia for our village hospitality services are customer-owned and operated villages as well as Ausco Modular (a subsidiary of Algeco Group) and Fleetwood Corporation.

We also compete against Sodexo, Compass Group and Cater Care for third-party facility management services.

In the U.S., we primarily offer our lodge and mobile camp hospitality services and compete against Peak Oilfield Services (a subsidiary of Select Energy Services), Stallion Oilfield Holdings, Inc., Target Hospitality, HB Rentals (a subsidiary of Superior Energy Services), Oil Patch and Black Diamond.

In the U.S., we primarily offer our lodge and mobile asset hospitality services and compete against Peak Oilfield Services (a subsidiary of Select Energy Services), Stallion Oilfield Holdings, Inc., Target Hospitality, HB Rentals (a subsidiary of Superior Energy Services), Oil Patch and Black Diamond.

Historically, many customers have invested in their own accommodations.

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Our contract terms generally provide for a rental rate for a reserved room and an occupied room rate that compensates us for hospitality services, including meals, housekeeping, utilities and maintenance for workers staying in the lodges and villages.

In multi-year contracts, our rates typically have annual contractual escalation provisions to cover expected increases in labor and consumables costs over the contract term.

In most multi-year contracts, our rates typically have annual escalation provisions to cover expected increases in labor and consumables costs over the contract term.

Over the term of a take-or-pay contract, the customer commits to either a minimum number of rooms over a specified period or an aggregate number of room nights over the period.

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In some contracts, customers have a contractual right to terminate rooms, for reasons other than a breach, in exchange for a termination fee.

As of December 31, 2019 , we had commitments for 25% of our rentable rooms for 2020 and 10% of our rentable rooms for 2021 .

As of December 31, 2020, excluding exclusivity contracts and contracts without minimum room commitments, we had commitments for 22% of our rentable rooms for 2021 and 14% of our rentable rooms for 2022.

As of December 31, 2020, we had 8,948 rooms under contract.

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Contracted Room Expiration

Thereafter 3,473

The contracts expire throughout the year, and for many of the near-term expirations, we are in the process of negotiating extensions or new commitments.

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offshore operations have historically been impacted by the Gulf of Mexico hurricane season from July through November.

Human Capital Resources

We believe that our employees are one of our greatest resources.

As of December 31, 2020, we had approximately 1,000 full-time employees and approximately 1,000 hourly employees on a consolidated basis, 54% of whom are located in Canada, 42% of whom are located in Australia and 4% of whom are located in the U.S.

We were party to collective bargaining agreements covering approximately 1,200 employees located in Canada and 550 employees located in Australia as of December 31, 2019 .

We were party to collective bargaining agreements covering 885 employees located in Canada and 588 employees located in Australia as of December 31, 2020.

Attracting, retaining and mentoring the talent required to address the needs of our business is the basis of our human capital strategy.

Not only do we provide what we believe to be a competitive and well-rounded compensation package, but we also believe that our exceptional safety record attracts and retains exceptional talent.

As a company, we recognize the importance of a diverse workforce represented by people from different backgrounds, experiences and ways of looking at the world.

During 2020, we formed a Diversity and Inclusion Committee to help us serve our employees, clients and communities better as we strive to build a culture of inclusion.

In Canada, we are committed to hiring Indigenous Peoples and expanding our Indigenous workforce, excluding corporate staff, to 10%.

In 2020, we reached 9% Indigenous employment, excluding corporate staff, in Canada despite challenging market conditions that resulted in reduced hiring in the region.

Approximately 11% of our total new hires in Canada were of Indigenous background during 2020.

In addition, our Indigenous Procurement Policy in Canada helps foster strong community relationships while ensuring a local and diverse supply chain of business partners.

In 2020, we purchased more than C$39 million in goods and services from the Indigenous business community, representing 25% of our total Canadian local spending.

In Australia, all of our food suppliers are Australian companies and, where possible, are based locally.

Through our membership with Supply Nation, a non-profit organization committed to supplier diversity and Indigenous business development, we have been able to direct approximately A$1.4 million each year into Indigenous-owned and operated companies, and we are always looking for more opportunities to partner with these businesses.

Civeo strives to offer competitive compensation, benefits and services that meet the needs of its employees, including short and long-term incentive packages, various defined contribution plans, healthcare benefits, and wellness and employee assistance programs.

Management monitors market compensation and benefits in order to attract, retain, and promote employees and reduce turnover and its associated costs.

Civeo is committed to operating in a safe, secure and responsible manner for the benefit of its employees, customers and the communities Civeo serves in Canada, Australia and the U.S.

Because we are committed to protecting the health and safety of our people, we operate in accordance with rigorous standards documented in an award-winning Health and Safety Process that has been recognized by industry associations as one of the best.

In response to the COVID-19 pandemic, we have taken measures to help ensure the health and well-being of our employees, guests and contractors, including screening of individuals that enter our facilities, social distancing practices, enhanced cleaning and deep sanitization, the suspension of nonessential employee travel and implementation of work-from-home policies, where applicable.

Our safety culture is driven by our leaders, in conjunction with active employee engagement.

At Civeo, we believe that investing in our people is an investment in our own success.

Our commitment to training and career development enables employees to grow and advance in their careers while supporting our industry-leadership position.

Committed to the continuous improvement of our team, we provide training in the technical and managerial skills needed for employees' current roles with a specific focus on safety, customer service and leadership development.

We also build competency required for future projects and positions through e-learning modules, face-to-face delivery and nationally certified programs as well as licensing training offered by external providers.

Government Regulation

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Changes in these laws, including more stringent regulations and increased levels of enforcement of these laws and regulations, and the development of new laws and regulations could significantly affect our business and result in:

• increased difficulty securing required permits, approvals, licenses or other authorizations issued by federal, provincial and local authorities needed to carry out our operations or our customers' operations;

• increased compliance costs or additional operating restrictions associated with our operations or our customers’ operations;

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To the extent that these laws and regulations impose more stringent requirements or increased costs or delays upon our customers in the performance of their operations, the resulting demand for our services by those customers may be adversely affected, which impact could be significant and long-lasting.

Moreover, climate change laws or regulations could increase the cost of consuming, and thereby reduce demand for, oil and natural gas, which could reduce our customers’ demand for our services.

We cannot predict changes in the level of enforcement of existing laws and regulations, how these laws and regulations may be interpreted or the effect changes in these laws and regulations may have on us or our customers or on our

future operations or earnings.

Moreover, climate change laws or regulations could increase the

cost of consuming, and thereby reduce demand for, oil and natural gas, which could reduce our customers’ demand for our services.

We also are not able to predict the extent to which new laws and regulations will be adopted or whether such new laws and regulations may impose more stringent or costly restrictions on our customers or our operations.

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The violation of these laws and regulations may result in the denial or revocation of permits, issuance of corrective action orders, modification or cessation of operations, assessment of administrative and civil penalties, and even criminal prosecution.

We believe that we are in substantial compliance with existing environmental laws and regulations and we do not anticipate that future compliance with existing environmental laws and regulations will have a material effect on our financial condition, results of operations or cash flows.

However, there can be no assurance that substantial costs for compliance or penalties for non-compliance with these existing requirements will not be incurred in the future by us or our customers.

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Air Quality Management

The Government of Alberta (Alberta), the Government of British Columbia (British Columbia) and the Government of Canada (Canada) each have frameworks for air quality management that may affect us and our customers.

At the federal level, the Multi-Sector Air Pollutants Regulations impose mandatory air emissions standards that limit the amount of nitrogen oxides and sulfur dioxides that can be emitted from certain boilers, heaters and gaseous-fuel-fired engines used in industrial facilities as well as from cement kilns.

These regulations may impact emission performance standards for compressors and boilers used by our customers in conventional and steam assisted gravity operations in the oil sands and may affect our customers’ operations.

The Government of Canada (Canada), the Government of Alberta (Alberta), and the Government of British Columbia (British Columbia) each have frameworks for air quality management that may affect us and our customers.

At the federal level, the Reduction in the Release of Volatile Organic Compounds Regulations (Petroleum Sector) were published in 2020 and are expected to take effect in 2021.

These regulations will require the implementation of comprehensive leak detection and repair (LDAR) programs as well as design and operating standards that prevent leaks at Canadian petroleum refineries, upgraders and certain petrochemical facilities and may affect our customers’ operations.

In addition to federal requirements, emissions from facilities in Alberta are subject to provincial regulation.

The Alberta Energy Regulator (AER), which is responsible for regulating upstream oil and gas activity in Alberta, oversees compliance with Directive 60:

Upstream Petroleum Industry Flaring, Incinerating, and Venting (Directive 60).

This Directive requires operators to eliminate or reduce flaring associated with a wide variety of energy development activities and operations.

In December 2018, the AER finalized amendments to its Directive 60 and Directive 17 as part of its role in implementing commitments from the Alberta government to reduce methane emissions from upstream oil and gas operations by 45 per cent by 2025.

These requirements, among other things, set limits on methane emissions from various facilities and require annual reporting of such emissions to the AER, with the first such report covering the 2019 calendar year and coming due on June 1, 2020.

In December 2018, the AER finalized amendments to its Directive 60 and Directive 017:

Measurement Requirements for Oil and Gas Operations (Directive 17) as part of its role in implementing commitments from the Alberta government to reduce methane emissions from upstream oil and gas operations by 45% by 2025.

These requirements, among other things, set limits on methane emissions from various facilities and require annual reporting of such emissions to the AER.

The methane reduction requirements in Directive 60 took effect in 2020 with additional restrictions on vent gas emissions taking effect in 2022.

Meeting these regulatory requirements may result in additional costs or liabilities for our customers’ operations.

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The British Columbia Oil and Gas Commission (BCOGC) is responsible for regulating oil and gas activity in British Columbia.

BCOGC oversees compliance with the Drilling and Production Regulation, among others.

BCOGC oversees compliance with the Drilling and Production Regulation, which is one of British Columbia's primary regulatory instruments governing all aspects of oil and natural gas drilling and production.

Effective January 1, 2020, that regulation was amended to require operators to eliminate or reduce natural gas leaking or venting associated with a wide variety of equipment and activities in energy development.

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Meeting these regulatory requirements may result in additional costs or liabilities for our customers’ operations.

Environmental Assessment of Major Projects

Following a review process that began in January of 2016, Canada introduced new legislation to "rebuild public trust" in Canada's environmental review process.

In August 2019, the Canadian Environmental Impact Assessment Act, 2012 (CEAA 2012) was repealed and replaced with the federal Impact Assessment Act.

The Impact Assessment Act and regulations made under that Act provide that certain new projects and expansions to existing projects – including oil sands mining and in situ projects, metallurgical mining projects, pipelines and other developments – will likely require a federal planning and assessment process to understand the environmental and social impacts of the project, as well as decision on whether those impacts are in the public interest.

There is considerable uncertainty about whether and how the Impact Assessment Act and its regulations will be administered and whether the time and cost associated with completing the planning, assessment and decision-making phases of that act will increase substantially compared to CEAA 2012.

Our customers operate in the aforementioned industries and could be considering future projects that would be subject to the Impact Assessment Act.

To the extent our customers are required to comply with this legislation, it is possible that the uncertainty regarding cost and timelines for navigating the planning, assessment, and decision-making processes may negatively impact our customers' decisions on whether to proceed with those projects.

In 2019, the Government of Alberta initiated a challenge to the constitutionality of the Impact Assessment Act and regulations made under that Act.

The Alberta Court of Appeal has not yet issued a decision in that case, and it is likely that any decision issued by that Court would be appealed to the Supreme Court of Canada.

As a result, there is significant uncertainty about the future application of Canada's federal environmental assessment legislation to our customers.

Climate Change Regulation

Scientific studies have suggested that emissions of greenhouse gases (GHG), including carbon dioxide and methane, may be contributing to warming of the Earth’s atmosphere and other climatic changes.

On January 29, 2010, Canada affirmed its desire to be associated with the Copenhagen Accord that was negotiated in December 2009 as part of the international meetings on climate change regulation in Copenhagen.

The Copenhagen Accord, which is not legally binding, allows countries

to commit to specific efforts to reduce GHG emissions, although how and when the commitments may be converted into binding emission reduction obligations, if ever, is currently uncertain.

Pursuant to the Copenhagen Accord process, Canada has indicated an economy-wide GHG emissions target that equates to a 17 percent reduction from 2005 levels by 2020, and the former Canadian Conservative federal government indicated an objective of reducing overall Canadian GHG emissions by 60 percent to 70 percent from 2006 levels by 2050.

However, it is expected that the Canadian Government will announce in 2020 that Canada did not meet its commitments under the Copenhagen Accord.

As a result, it is possible that Canada may introduce policy or regulatory measures to strengthen its efforts to reduce GHG emissions.

Any such policy or regulatory measures may adversely affect our operations and financial results as well as those of our customers with whom we conduct business.

In December 2015, 195 nations, including Canada, Australia, and the U.S., adopted the Paris Agreement at the 21st “Conference of the Parties” (COP 21).

In December 2015, 195 nations, including Canada, Australia, and the U.S., adopted the Paris Agreement at the 21st “Conference of the Parties” to the United Nations Convention on Climate Change (COP 21).

The Paris Agreement does not set legally binding emission reduction targets but does set a goal of limiting global temperature increases to less than 2° Celsius.

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The Paris Agreement also requires parties to submit Intended Nationally Determined Contributions (INDCs) which set out their emission reduction targets and to renew these INDCs, with the goal of increasing the reductions, every five years.

The Paris Agreement does not legally bind the parties to reach their INDCs, nor does it prescribe the measures it must take to achieve them.

The Paris Agreement does not legally bind the parties to reach their INDCs, nor does it prescribe the measures that must take to achieve them.

These measures are left to each participating nation.

In September 2016, the new federal government confirmed that it would not commit to a more ambitious INDC than the preceding Conservative federal government.

In September 2016, Canada's new federal government confirmed that it would not commit to a more ambitious INDC than the preceding Conservative federal government.

The government maintained this approach in 2017 revisions to Canada’s INDC submission taking into account the federal Pan-Canadian Framework on Clean Growth and Climate Change (PCF) adopted in 2016.

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In March 2016, as a further effort to meet Canada’s INDC, representatives of the federal and the majority of provincial governments committed to imposing a price on carbon pollution, beginning at $10 per tonne in 2018 and increasing at a rate of $10 annually to $50 per tonne in 2022.

In December 2020, the Canada's federal government announced that, after 2022, the price on carbon pollution would increase by $15 per tonne annually, reaching $170 per tonne in 2030.

To implement its INDC and PCF commitments, the federal government introduced the Greenhouse Gas Pollution Pricing Act , which as of its assent in June 2018 implements a federal legislative carbon pricing “backstop”.

This applies a benchmark carbon price in any province that does not establish an equivalent framework at or above the benchmark level.

This allows GHG regulation to take place at the provincial level, where provinces may choose between an explicit price-based system (as exists in British Columbia) or a cap-and-trade system (as exists in Quebec).

This allows GHG regulation to take place at the provincial level, where provinces may choose between an explicit price-based

system (as exists in British Columbia) or a cap-and-trade system (as exists in Quebec).

The federal backstop is only being applied to provinces in which no equivalent framework is in place.

In Alberta, the previous government's Climate Leadership Plan (CLP), was launched in November 2015.

In December 2020, the federal government published draft regulations referred to as the Clean Fuel Standard (CFS), which form part of its plan to reduce emissions, accelerate the use of clean technologies and fuels, and create good jobs in a diversified economy.

The CFS, which is expected to come into force in 2022, will require liquid fuel suppliers to gradually reduce the carbon intensity of the fuels they produce and sell for use in Canada over time.

Compliance with this new regulation is expected to increase the price of liquid fuels which, in turn, could increase operating costs for our customers while potentially lowering demand for some of their products.

In Alberta, the previous provincial government's Climate Leadership Plan (CLP), was launched in November 2015.

This framework was approved as meeting the PCF benchmark and exempting Alberta from the federal backstop.

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The details of this framework were set out in legislation and regulations issued after the CLP.

The previous Alberta government then passed the Climate Leadership Act , implementing the broad economy-wide levy on GHG emissions, subject to limited exceptions as well as the Oil Sands Emissions Limit Act , which imposes a 100 megaton annual limit on GHG emissions from oil sands sites.

The previous Alberta government then passed the Climate Leadership Act (CLA), implementing the broad economy-wide levy on GHG emissions, subject to limited exceptions as well as the Oil Sands Emissions Limit Act, which imposes a 100 mega-ton annual limit on GHG emissions from oil sands sites.

The CLP also targeted the phasing out of coal-generated electricity (or the emissions therefrom) by 2030.

In addition, the previous government issued the Carbon Competitiveness Incentive Regulation (CCIR) to replace the former Specified Gas Emitters Regulation .

In addition, the previous Alberta provincial government issued the Carbon Competitiveness Incentive Regulation (CCIR) to replace the former Specified Gas Emitters Regulation.

Like its predecessor, the CCIR sought to incentivize emissions reductions through the use of emissions intensity targets.

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In April 2019, the previous Alberta government was replaced with a new conservative government following a general election.

Consistent with its campaign promises, the new government repealed the Climate Leadership Act , thereby eliminating

the provincially-imposed levy on GHG emissions.

The Oil Sands Emissions Limit Act remains in force.

Consistent with its campaign promises, the new government repealed the CLA, thereby eliminating the provincially-imposed levy on GHG emissions.

As a result of those actions by the new Alberta government, features of the federal backstop took effect in Alberta in January 2020.

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Alberta, Saskatchewan and Ontario are challenging the federal backstop in court on the basis that the federal government lacks the constitutional ability to implement the measure.

The Supreme Court of Canada heard arguments on the constitutionality of the federal backstop in 2020 and is expected to release its decision in 2021.

The outcome of this litigation is uncertain and could affect our customers’ compliance requirements in provinces subject to the backstop.

While the new Alberta government eliminated the provincially-imposed economy-wide levy on GHG emissions, facilities that emit more than 100,000 tons of GHG emissions in a calendar year continue to be subject to regulations that impose costs on those emissions.

In particular, the new government replaced the CCIR with a new Technology Innovation and Emissions Reduction Regulation ("TIER Regulation"), which took effect on January 1, 2020.

In addition, the Oil Sands Emissions Limit Act remains in force.

While the current Alberta government eliminated the provincially-imposed economy-wide levy on GHG emissions, facilities that emit more than 100,000 tons of GHG emissions in a calendar year continue to be subject to regulations that impose costs on those emissions.

In particular, the current government replaced the CCIR with a new Technology Innovation and Emissions Reduction Regulation ("TIER Regulation"), which took effect on January 1, 2020.

Under the TIER Regulation, emissions from each facility are compared to either an industry-wide benchmark or a facility-specific benchmark.

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Similarly, the federal government announced in December 2019 that those activities regulated under TIER would not be subject to the federal backstop.

As noted, the federal backstop carbon price is expected to increase annually between 2021 and 2030.

In order to remain "equivalent" to the federal backstop, it is likely that the per tonne cost of carbon emissions in Alberta will need to increase at the same or similar pace.

The direct and indirect costs of these regulatory changes may adversely affect our operations and financial results as well as those of our customers with whom we conduct business.

The previous government’s CLP targeted a 45 percent reduction in methane emissions from oil and gas operations by 2025, consistent with the subsequently-issued Federal Methane Regulations described above.

The AER was assigned the task of developing Alberta’s parallel regulatory framework.

In December 2018, the AER released amended directives to require reporting of methane emissions on an annual basis, with annual recording of emissions beginning in the 2019 calendar year for a first report due to the AER on June 1, 2020, together with various facility-specific emissions limits.

Meeting these regulatory requirements may result in additional costs or liabilities for our customers’ operations.

Finally, it should be noted that some scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as higher sea levels, increased frequency and severity of storms, droughts, floods and other climatic events.

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The Canadian Species at Risk Act is intended to prevent wildlife species in Canada from disappearing and to provide for the recovery of wildlife species that no longer exist in the wild in Canada, or that are endangered or threatened as a result of human activity, and to manage species of special concern to prevent them from becoming endangered or threatened.

The designation of previously unprotected species as threatened or endangered in areas of Canada where our customers’ oil and natural gas exploration and production operations are conducted could cause them to incur increased costs arising from species protection measures or could result in limitations on their exploration and production activities, which could have an adverse impact on demand for our services.

In 2019, certain Aboriginal groups and environmental organizations commenced litigation intended to force the federal minister of environment to recommend that the federal government implement certain protections for woodland caribou habitat.

If that litigation is successful and the corresponding protections are, in fact, implemented, the protection could affect the business of our customers with operations near caribou habitat.

designation of previously unprotected species as threatened or endangered in areas of Canada where our customers’ oil and natural gas exploration and production operations are conducted could cause them to incur increased costs arising from species protection measures or could result in limitations on their exploration and production activities, which could have an adverse impact on demand for our services.

In 2019, certain First Nations groups and environmental organizations commenced litigation intended to force the federal minister of environment to recommend that the federal government implement certain protections for woodland caribou habitat.

That litigation was discontinued in 2020, with the federal and Alberta governments announcing an agreement to collaborate on developing measures to achieve woodland caribou conservation and recovery.

Woodland caribou habitat covers large portions of several Canadian provinces including British Columbia, Alberta, and Saskatchewan.

Many of our customers have existing or proposed developments in or near woodland caribou habitat.

Conservation measures imposed by the federal government or Alberta government could affect the business of our customers with operations near caribou habitat.

Alberta’s Electricity Market

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The Alberta Electric System Operator continues to honor the REP contracts from Rounds 1-3.

Funding for these contracts will now rely solely upon

the General Revenue Fund, after the Climate Change and Emissions Management Fund was folded into the General Revenue Fund in October 2019.

Funding for these contracts will now rely solely upon the General Revenue Fund, after the Climate Change and Emissions Management Fund was folded into the General Revenue Fund in October 2019.

The REP’s funding structure currently limits that program’s direct impact on electricity prices.

However, the coming-online of REP-subsidized generation could negatively affect the performance of Alberta’s current electricity market.

Alberta’s previous government further announced on November 23, 2016, that it would restructure the Alberta power market to include a parallel “capacity market” by 2021.

The effect of this change would have been to create two revenue streams for power generators in Alberta, one for energy produced (with payments structured similarly to the existing market) and the other for the provision of generating capacity itself (with payments based on outcomes in the new capacity market).

With the introduction of the capacity market, the previous Alberta government expected to achieve more stable power prices without sacrificing affordability to power consumers which would mitigate the effects of the REP subsidization.

These reforms were canceled by the new Alberta government in July 2019.

At the government’s request the Alberta Electric System Operator submitted advice on electrical market power mitigation.

There is still considerable uncertainty regarding the future of Alberta’s electricity market.

The issues of market power, the phasing out of coal-generated electricity, and the impact of the first three rounds of REP coming online, all could potentially increase costs to our customers in the form of higher electricity prices.

Negative impacts to the performance of Alberta's electricity market, should they materialize, could result in increased costs to our operations and the operations of our customers going forward.

Australian Environmental Regulations

Our Australian segment is regulated by general statutory environmental controls at both the state and federal level which may result in land use approval and compliance risk.

Our Australian segment is regulated by general statutory environmental controls at the federal, state and territory and local government levels which may result in land use approval, regulation of operations and compliance risk.

These controls include:

land use and urban design controls;

the regulation of hard and liquid waste, including the requirement for tradewaste and/or wastewater permits or licenses;

controls to protect Australia’s natural environment, iconic places and Aboriginal and Torres Strait islander native title and heritage;

the regulation of hard and liquid waste, including the requirement for trade waste and/or wastewater permits or licenses;

the regulation of water, noise, heat, and atmospheric gases emissions;

the regulation of the production, transport and storage of dangerous and hazardous materials (including asbestos);

and the regulation of pollution and site contamination.

Some specified activities, for example, sewage treatment works, may require regulation at a state level by way of environmental protection licenses which also impose monitoring and reporting obligations on the holder.

the regulation of pollution and site contamination and requirements to notify of and clean-up environmental contamination.

Federal Controls

At a federal level, the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) is Australia’s key piece of environmental legislation.

The EPBC Act protects of matters of national environmental significance, for example, threatened species and communities (e.g.

Koalas), migratory species, Ramsar wetlands and world heritage properties.

Activities that have the potential to impact matters protected by the EPBC Act trigger referral to the federal government for Environmental Impact Assessment (EIA).

In October 2020, the findings of an independent review recommended reforms of the EPBC Act including (but not limited to) introduction of legally binding ‘National Environmental Standards’ and a ‘climate change’ referral trigger, stronger compliance and enforcement powers and proposals for new bilateral agreements with the States and Territories to streamline the EPBC Act approval process.

Bills to effect many of the recommended reforms are currently before Parliament.

Notably, the recommended climate change referral trigger will assist Australia fulfils its obligations under the Paris Agreement by triggering EIA of emissions-intensive activities.

It will also introduce criminal penalties for offenses relating to emissions-intensive actions.

If assented to, our obligations under and compliance with the EPBC Act ought to be reviewed.

However, its implications for our Australian operations are not anticipated to be significant.

Ongoing awareness of these reforms is important as the policy and legislative changes may affect our customers’ operations and have impacts on the non-renewable resources sector generally.

State and Territory Controls

At a State and Territory level, our operations are authorized and regulated by layers of planning and environmental approvals.

Queensland, New South Wales and Western Australia all have multiple acts regulating matters of the environment, conservation, vegetation management and protection of aboriginal and Torres Strait island use rights which are administered by each States’ independent environment protection regulator (e.g.

Queensland’s Environmental Protection Agency).

If Parliament assents to the bill proposing to effect new bilateral agreements under EPBC Act, the States and Territories will be given further power to assess and approve actions under the EPBC Act.

Under state law, some specified activities, for example, sewage treatment works at our sites, may require regulation by way of environmental approvals.

Such approvals may also impose monitoring and reporting obligations on the holder as well as obligations to rehabilitate the subject site once the regulated activity has ceased.

We must ensure that all necessary approvals, permits and licenses are in place to authorize our operations and that the conditions of those approvals, permits and licenses are complied with until the relevant operations cease (and are cleaned-up if necessary).

Where approvals are not held and/or complied with, the operation may be unlawful and subject to penalties, including stop-work orders, remediation and financial penalties.

Our Australian operations continue to comply with our existing approvals, permits and licenses.

We have a positive obligation under state legislation to notify of an incident causing (or threatening) material environmental harm.

Examples of material environment harm include effluent overflow, chemical leaks and chemical fires.

Failure to discharge this obligation can attract significant financial penalties.

There is an increasing emphasis from state and federal regulators on sustainability and energy efficiency in business operations.

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Carbon reporting requirements currently exist for corporations which meet a reporting threshold for greenhouse gases or energy use or production for a reporting (financial) year under national legislation.

Local Government

At a local government level, our operations are subject to, and regulated by, local laws administered by local government authorities.

Local laws may cover matters such as operation of certain activities, management of vegetation and natural and anthropogenic hazards, actionable nuisance and fencing.

Local laws differ between each local government area and we must understand and operate within these laws as they apply to our operations Australia wide.

Environmental Regulations

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The EPA published a final rule outlining its position on the federal jurisdictional reach over waters of the U.S.

in June 2015, but in June 2017 proposed another rule that would initiate the first step in a two-step process intended to review and revise that definition of “waters of the United States.” Under the proposal, the first step would be to rescind the May 2015 final rule and put back into effect the narrower language defining “waters of the United States” under the Clean Water Act that existed prior to the 2015 rule.

The second step would be a notice-and-comment rule-making in which the agencies will conduct a substantive reevaluation of the definition of “waters of the United States.” In September 2019, the EPA finalized the first step in this process.

Litigation challenging the repeal of the August 2015 rule is pending.

in June 2015.

However, the EPA rescinded this rule in 2019 and promulgated the Navigable Waters Protection Rule in 2020.

The Navigable Waters Protection Rule defined what waters qualify as navigable waters of the United States and are under Clean Water Act jurisdiction and has generally been viewed as narrowing the scope of waters of the United States as compared to the 2015 rule.

Litigation in multiple federal district courts is currently challenging the rescission of the 2015 rule and the promulgation of the Navigable Waters Protection Rule.

Many of our U.S.

properties and operations require permits for discharges of wastewater and/or storm water, and we have developed a system for securing and maintaining these permits.

In April 2020 a Montana federal judge vacated the U.S.

Army Corps of Engineers (Corps) Nationwide Permit (NWP) 12 and enjoined the Corps from authorizing any dredge or fill activities under NWP 12 until the agency completed formal consultation with U.S.

Fish and Wildlife Service (USFWS) under Endangered Species Act (ESA) regarding NWP 12 generally.

The court later revised its order to vacate NWP 12 only as it relates to the construction of new oil and gas pipelines and that order is currently on appeal in the Ninth Circuit.

However, the Montana district court’s decision spawned other NWP 12-based challenges and may indicate that the rest of the NWPs, some of which are relied upon by oil and gas projects, are vulnerable to similar challenge.

The Corps has proposed a new set of NWPs, which would replace the NWPs for dredge or fill discharges into waters of the United States that the Corps last issued and made available in 2017.

However, the Corps has elected not to consult with USFWS at this time.

If this status quo does not change, when the Corp re-issues the NWPs, the NWPs could be subject to the same legal challenges unless and until the ongoing litigation resolves the questions surrounding the need for a formal ESA consultation.

The Clean Water Act and analogous state laws provide for administrative, civil and criminal penalties for unauthorized discharges and, together with the Oil Pollution Act of 1999, as amended, require the development and implementation of spill prevention and response plans and impose liability for the remedial costs and associated damages arising out of any unauthorized discharges.

GHG Emissions

The EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified large GHG emission sources in the U.S., including, offshore and onshore oil and natural gas production facilities, on an annual basis.

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On September 11, 2018, the EPA proposed targeted improvements to the rule, including amendments to the rule’s fugitive emissions monitoring requirements, and is in the process of finalizing the amendments, which it originally expected to do in late 2019.

Separately, on August 28, 2019, the EPA proposed amendments to the 2012 and 2016 NSPS for the

Oil and Natural Gas Industry which would remove all sources in the transmission and storage segment of the oil and natural gas industry from regulation under the NSPS, both for ozone-forming VOCs, and for GHGs.

The existing NSPS regulates GHGs through limitations on emissions of methane.

The amendments also would rescind the methane requirements in the 2016 NSPS that apply to sources in the production and processing segments of the industry.

As an alternative, EPA also is proposing to rescind the methane requirements that apply to all sources in the oil and natural gas industry, without removing any sources from the current source category.

Additionally, in November 2016, the Bureau of Land Management (BLM) issued new regulations to reduce “waste” of natural gas-of which methane is a primary constituent-from venting, flaring and leaks during oil and natural gas production activities on onshore federal and Indian lands, but in 2018 announced a revised rule which scaled back the waste-prevention requirements of the 2016 rule.

Environmental groups sued in federal district court a day later to challenge the legality of aspects of the revised rule, and the outcome of this litigation is currently uncertain.

Separately, in 2020, the EPA rescinded methane and volatile organic compound emissions standards for new and modified oil and gas transmission and storage infrastructure, as well as methane limits for new and modified oil and gas production and processing equipment.

The EPA also relaxed requirements for oil and gas operators to monitor emissions leaks.

Additionally, in November 2016, the Bureau of Land Management (BLM) issued new regulations to reduce “waste” of natural gas, of which methane is a primary constituent, from venting, flaring and leaks during oil and natural gas production activities on onshore federal and Indian lands.

In 2018, the BLM announced a revised rule which scaled back the waste-prevention requirements of the 2016 rule.

This revised rule was vacated by a California federal district court in 2020, a decision which BLM has appealed to the Ninth Circuit Court of Appeals.

Furthermore, separately, in October 2020, the federal district court of Wyoming vacated the original 2016 rule.

In October 2015, the EPA finalized the Clean Power Plan, which imposes additional obligations on the power generation sector to reduce GHG emissions.

However, in August 2019, the EPA finalized the repeal of the 2015 regulations and replaced them with the Affordable Clean Energy rule (“ACE”), which designates heat rate improvement, or efficiency improvement, as the best system of emissions reduction for carbon dioxide from existing coal-fired electric utility generating units.

In August 2019, the EPA finalized the repeal of the 2015 regulations and replaced them with the Affordable Clean Energy rule (ACE), which designates heat rate improvement, or efficiency improvement, as the best system of emissions reduction for carbon dioxide from existing coal-fired electric utility generating units.

Both the appropriateness of the repeal of the 2015 regulations and the adequacy of ACE are currently subject to litigation.

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While the U.S.

Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level in recent years.

Congress has from time to time considered legislation to reduce emissions of GHGs, in recent years, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level.

In the absence of federal climate legislation in the U.S., a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions, including cap and trade programs that typically require major sources of GHG emissions, such as electric power plants, to acquire and surrender emission allowances in return for emitting those GHGs.

also participated in the creation of the Paris Agreement at COP 21 in December 2015 but has formally initiated the process of withdrawing from the agreement.

participated in the creation of the Paris Agreement at COP 21 in December 2015.

Although the U.S.

had withdrawn from the Paris Agreement in November 2020, the Biden administration officially reentered the U.S.

into the agreement in February 2021.

Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact our business, any such future laws and regulations could require us or our customers to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emission allowances or comply with new regulatory or reporting requirements.

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Consequently, legislation and regulatory programs to reduce GHG emissions could have an adverse effect on our business, financial condition and results of operations.

Other Environmental Regulations

Our operations as well as the operations of our customers are also subject to various laws and regulations addressing the management, disposal and releases of regulated substances.

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If endangered species are located in areas of the U.S.

where our oil and natural gas exploration and production customers operate, such operations could be prohibited or delayed or expensive mitigation may be

The designation of previously unprotected species as threatened or endangered in areas of the U.S.

where our oil and natural gas exploration and production customers operate, such operations could be prohibited or delayed or expensive mitigation may be required.

The designation of previously unprotected species as threatened or endangered or designation of previously unprotected habitat as critical habitat in areas of the U.S.

where our customers’ oil and natural gas exploration and production operations are conducted could cause them to incur increased costs arising from species protection measures or could result in limitations on their exploration and production activities, which could have an adverse impact on demand for our services.

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In January 24, 2018, California and a coalition of environmental groups each filed lawsuits in the Northern District of California to challenge BLM’s rescission of the 2015 rule.

This litigation is pending.

The Northern District of California upheld the rescission in 2020, but this decision was then appealed to the Ninth Circuit Court of Appeals.

In addition, Congress has from time to time considered legislation to provide for federal regulation of hydraulic fracturing under the SDWA and to require disclosure of chemicals used in the hydraulic fracturing process.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business