What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-01 compared with 2022-02-28 · 176 added, 193 removed, 588 unchanged (39% 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 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, catering and food service, housekeeping and maintenance at accommodation facilities that we or our customers own.

In many cases, we provide services that support the day-to-day operations of accommodation facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics.

We provide hospitality services to the natural resources industry in Canada, Australia and the United States (U.S.) We provide a full suite of services for our guests, including lodging, catering and food service, housekeeping and maintenance at accommodation facilities that we or our customers own.

In many cases, we also provide services that support the day-to-day operations of these facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics.

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.

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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 housing are not accessible, sufficient or cost effective.

Our scalable facilities provide workforce accommodations where, in many cases, traditional accommodations or 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 27 lodges and villages with over 28,000 rooms.

We own and operate 26 lodges and villages with approximately 28,000 rooms.

We operate approximately 12,200 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.

Additionally, in Canada, 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.

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

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

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

(1) commodity prices, (2) customers' capital spending, (3) available infrastructure, (4) headcount requirements and (5) competition.

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 primarily influenced by oil prices.

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

In the Canadian oil sands region, demand for our hospitality services is primarily influenced by the longer-term outlook for 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.

Global oil demand has recovered throughout 2021 and into 2022 as COVID-19 lockdowns have begun to be lifted and other fossil fuels are experiencing supply shortages.

Oil supply did not keep up with the increase in demand in 2021, which was exacerbated by the impacts of Hurricane Ida in the Gulf of Mexico in the summer of 2021 and publicly-traded oil producers prioritizing returns of capital to shareholders over deploying capital to expand production capacity, resulting in falling inventories and a significant increase in oil prices.

Depressed oil price levels of both West Texas Intermediate (WTI) and Western Canadian Select (WCS) resulting from the initial spread of COVID-19 materially impacted 2020 maintenance and production spending and activity by Canadian operators and, therefore, demand for our hospitality services.

Customers began restoring production in the fourth quarter of 2020, reaching pre-pandemic levels in 2022.

Although oil prices reached multi-year highs in the first half of 2022 and fluctuated in the second half of 2022, there is continued uncertainty around commodity price levels, including the ongoing impact of COVID-19, inflationary pressures, actions taken by OPEC+ to adjust production levels, geopolitical events such as the ongoing Russia/Ukraine conflict, and regulatory implications on such prices, which could cause our Canadian oil sands and pipeline customers to reduce production, delay expansionary and maintenance spending and defer additional investments in their oil sands assets.

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

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

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).

LNG Canada (LNGC), a joint venture among Shell Canada Energy, an affiliate of 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).

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.

The actual timing of when revenue is realized from the Coastal GasLink (CGL) pipeline and Sitka Lodge contracts could be impacted by any delays in the construction of the Kitimat LNG Facility or the pipeline, such as protest blockades and the COVID-19 pandemic.

Our current expectation is that our contracted commitments associated with the CGL pipeline project will be completed in 2023.

Any new delays in facility or pipeline construction may result in extensions to these dates.

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

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Our customer service requirements are primarily driven by production, maintenance and operational activities.

Recently, we have seen a stabilization 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.

Current met coal prices are at a level that may induce our customers to move forward with met coal expansionary projects in 2022.

However, global economic and political uncertainty due primarily to COVID-19 pandemic conditions still cast uncertainty over whether any met coal expansion projects will be approved, notwithstanding the current favorable met coal price.

Further, coal customers are experiencing difficulty gaining funding for new projects.

After a period of high iron ore prices in 2021, prices are expected to stabilize into 2022.

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.

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

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 61% of the oil rigs active in the U.S.

at the end of 2021.

market for drilling rig accommodations is primarily supported by mobile assets, competition for wellsite 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.

Through 2022, we saw increased activity from both new and

existing customers.

With sustained met coal pricing above $200 per tonne, customers have committed to new projects and expansion projects and recommenced operations which were previously put on-hold.

Current met coal prices continue to support an optimistic outlook for the sector, though exploration and future investment in Australia could be impacted with the recent increases to the Queensland royalty scheme introduced in mid-2022.

Met coal prices have faced downward pressure in early 2023 due to falling steel demand, global economic weakness, and expected improvement in Australian supply as weather patterns and mining conditions improve.

Iron ore prices fluctuated in the second half of 2022, with prices recovering from a low of $78 per tonne to over $100 per tonne with renewed support in the Chinese property sector.

With stronger supply and a slow recovery in Chinese construction, downside pressure on current prices remains.

In the last half of 2022, we sold both our wellsite services and our offshore businesses in the U.S.

Our remaining U.S.

business supports completion activity in the Bakken and construction and turnaround work in the Louisiana industrial area.

oil completion activity will continue to be impacted by oil prices, pipeline capacity, federal energy policies and availability of capital to support exploration and production completion plans.

For the years ended December 31, 2022, 2021 and 2020, we generated $697.1 million, $594.5 million and $529.7 million in revenues and $17.0 million, $6.1 million and $(147.2) million in operating income (loss), respectively.

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Manufacturing Revenue (4)

Canada $ — $ — $ 1,014

$ 1,288 $ 2,038 $ 6,200

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

Civeo's remaining manufacturing operations in Louisiana were sold in the fourth quarter of 2022.

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

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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.

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

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.

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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.

Like Canada, our Australian business has a long-history of taking care of customers in remote regions, beginning with its initial Moranbah Village in 1996, and has grown to become Australia’s largest independent provider of hospitality services for people working in remote locations.

Like Canada, our Australian business has a long-history of taking care of customers in remote regions, beginning with our initial Moranbah Village in 1996, and has grown to become Australia’s largest independent provider of hospitality services for people working in remote locations.

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.

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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, catering and food service, housekeeping and maintenance, as well as operations, including laundry, water and wastewater treatment, power generation, communication systems, security and logistics.

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

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

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

Engineering firms such as Bechtel, Fluor and ColtAmec often design accommodations facilities.

Engineering firms such as Bechtel and Fluor often design accommodations facilities.

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

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

and, in 2018, 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 in 2021 while the government monitors production and inventory levels.

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

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Our leases have expiration dates that range from 2023 to 2030.

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

In recent years, we have successfully renewed or extended all expiring land leases which we have requested to renew or extend.

Two of our oil sands properties are located on land which we own.

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.

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

The development permits are granted for a term of five years.

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British Columbia LNG activity and related 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, such as protest blockades and the COVID-19 pandemic.

Our current expectation is that our contracted commitments associated with the CGL pipeline project will be completed in early 2023.

Our current expectation is that our contracted commitments associated with the CGL pipeline project will be completed in 2023.

Canadian Lodge Locations

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Wapasu Creek N.

Athabasca mining 5,174 5,246 5,246

Athabasca mining/in-situ 5,174 5,174 5,246

Athabasca (1)

Athabasca mining 2,005 2,005 2,005

McClelland Lake N.

McClelland Lake (2)

Athabasca mining 1,997 1,997 1,997

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Fort McMurray Village:

Athabasca mining — — —

Black Bear (1)

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Total Rooms 18,949 18,947 19,024

(1) Permanently closed as of December 31, 2021.

(1) Currently closed as of December 31, 2022, due to lodge loading strategy, seasonal activity fluctuations or low activity level in the region.

All closed lodges are periodically assessed for impairment at an asset group level, in accordance with U.S.

generally accepted accounting principles (U.S.

generally accepted accounting principles.

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

(2) The land lease associated with the asset expires in June 2023.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview and Macroeconomic Environment - Capital Expenditures” of this annual report for additional information.

Hospitality Services at Third-Party Owned Facilities

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During the year ended December 31, 2022, we generated 40% of our revenue from our Australian operations.

As of December 31, 2021, we owned 9,046 rooms across nine villages, of which 7,392 rooms service the Bowen Basin of Queensland, one of the premier met coal basins in the world.

As of December 31, 2022, we owned 8,814 rooms across eight villages, of which 7,392 rooms service the Bowen Basin of central Queensland, one of the premier met coal basins in the world.

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 three years) with minimum nightly room commitments.

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As the largest contributor to exports and a major contributor to the country’s gross domestic product and government revenue, the Australian natural resources industry plays a vital role in the Australian economy.

Australia has broad natural resources, including met and thermal coal, conventional and coal seam gas, base metals, iron ore and precious metals such as gold.

Australia has broad natural resources, including met and thermal coal, conventional and coal seam gas, base metals, iron ore, copper and precious metals such as gold.

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.

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Our Australian villages are strategically located in proximity to long-lived, low-cost mines operated by investment-grade, international mining companies.

During the year ended December 31, 2021, our five villages in the Bowen Basin of central Queensland generated 52% of our Australian revenue.

Our Australian operations primarily serve the Bowen Basin of Queensland and the Pilbara region in Western Australia.

During the year ended December 31, 2022, our five villages in the Bowen Basin generated 49% of our Australian revenue.

The Bowen Basin contains one of the largest coal deposits in Australia and is renowned for its premium met coal.

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

In addition, we provide village operation and mine site cleaning services at six customer locations in the Pilbara region, which is renowned for high grade iron ore production.

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, the Chinese embargo on certain Australian exports, including exported Australian met coal, continues without any resolution foreseeable in the near term.

However, Australian met coal producers have found new markets, including India and Europe, for their premium product.

This has led to a rebalancing of the market globally, with China relying on domestic production along with much higher volumes of imports of U.S., Canadian and Mongolian met coal in 2021.

With the backdrop of continuing strong steel demand and met coal supply constraints, the spot price for met coal surged to record highs of over $400 in October 2021 and remain at this level.

Analysts expect elevated met coal prices to persist in the short-term, while steel demand and prices remain strong and until met coal supply issues are resolved.

If the trade impasse with China remains unresolved, there remains a possibility of further volatility in the short to medium term.

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

The Chinese placed an embargo on several Australian products, including coal, in the fall of 2020.

During the embargo, Australian met coal producers found new markets, including India and Europe, for their premium product.

This led to a rebalancing of the market globally with China relying on domestic production along with increased met coal imports from the U.S., Canada and Mongolia.

With the backdrop of continuing strong steel demand and met coal supply constraints, the spot price for met coal surged to record highs through the second half of 2021 into early 2022.

The embargo was recently lifted during the first quarter of 2023.

While met coal prices have receded from their all-time highs, they still remain over $350 per tonne as of February 24, 2023.

Analysts forecast met coal prices to face downward pressure in early 2023 but to moderate during the year with supply improvement and weaker demand impacting prices.

Downward pressure on prices could accelerate in the short term if demand in China worsens.

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

At the end of 2022, 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 lithium 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.

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

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

Australian Village Locations

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Nebo Bowen met coal 490 490 490

Kambalda - Gold, lithium 232 232 232

- gold, lithium — 232 232

Karratha Pilbara LNG, iron ore 298 298 298

Total Rooms 8,814 9,046 9,046

Our Australian segment includes nine company-owned villages with 9,046 rooms as of December 31, 2021, which are strategically located near long-lived, low-cost mines operated by large mining companies.

(1) Sold in the third quarter of 2022.

Our Australian segment includes eight company-owned villages with 8,814 rooms as of December 31, 2022, which are strategically located near long-lived, low-cost mines operated by large mining companies.

Our Australian business provides hospitality services to mining and related service companies under short- and medium-term contracts.

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Our Narrabri and Boggabri villages in New South Wales service met and thermal coal mines and coal seam gas in the Gunnedah Basin.

Our Karratha village, in Western Australia, services workforces related to LNG facilities operations on the Northwest Shelf.

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

Our Karratha village, in Western Australia, services workforces related to LNG facilities operations on the

Northwest Shelf.

Our Kambalda village was sold in the third quarter of 2022 to a customer, and we continue to operate the village as a customer-owned location.

Hospitality Services at Third-Party Owned Facilities

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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 ten 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.

We provide village operation services at 13 customer-owned locations, which represent over 10,000 rooms, primarily in the Pilbara region of Western Australia, one of the premier iron ore bodies in the world, and in the Goldfields-Esperance region of Western Australia.

The facilities we manage range anywhere from 200 to over 1,900 rooms.

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business generated 3% of our revenue.

business has operational exposure in the U.S.

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.

Onshore oil and natural gas development in the U.S.

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 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.

has historically been tied to the level of oil and natural gas exploration and production activity, which is primarily driven by oil and natural gas prices.

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 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.

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

mobile assets.

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

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.

Customers are also typically responsible for mobilization and demobilization costs.

In the last half of 2022, we sold both our wellsite services and our offshore businesses.

Our remaining U.S.

business consists of two lodges - one in the Bakken region and one in Louisiana.

As of December 31,

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(1) Sold in October 2021.

We had two lodges in the U.S.

comprised of 535 rooms as of December 31, 2021.

Our Killdeer Lodge provides rooms to the Bakken Shale region in North Dakota.

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This award recognizes people or organizations who make a positive contribution to the well-being of the Metis community.

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 2019, our Indigenous partnership initiatives earned Civeo 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.

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In 2018, Civeo entered into three new Indigenous partnerships in the oil sands region and two new partnerships in British Columbia and in 2021 entered into a new partnership in British Columbia.

Our partnerships in British Columbia are tied to accommodations contracts secured by Civeo for the Kitimat LNG Facility, the CGL pipeline project that originates in the North Montney region of north-east British Columbia and the Trans Mountain expansion project that twins an existing pipeline between Edmonton, Alberta and Burnaby, British Columbia.

between Edmonton, Alberta and Burnaby, British Columbia.

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

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In addition, 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$5.7 million each year into Indigenous-owned and operated companies, and we are always looking for more opportunities to partner with these businesses.

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$9.5 million in 2022 into Indigenous-owned and operated companies, and we are always looking for more opportunities to partner with these businesses.

In addition, we have three unincorporated joint venture partnerships with Indigenous landowners in Western Australia.

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

The remaining agreement incentivizes the joint venture members via milestone payments for business objectives achieved.

Additionally, two of the three remaining agreements incentivize the joint venture members via milestone payments for business objectives achieved.

Customers and Competitors

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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, Sodexo, Compass Group and Royal Camp Services 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), Fleetwood Corporation and smaller independent village operators.

In Canada, we also compete against Aramark, Sodexo, Compass Group and Royal Camp Services 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 Modulaire Group), Fleetwood Corporation and smaller independent village operators.

We compete against ISS, Sodexo, Compass Group, Northern Rise (as a division of Delaware North) and Cater Care for third-party facility management services.

In the U.S., 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, Oil Patch and Black Diamond.

In the U.S., we primarily offer our lodge hospitality services and compete against Target Hospitality, hotels, and local mobile home and RV parks.

Historically, many customers have invested in their own accommodations.

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During the year ended December 31, 2022, revenues from our lodges and villages represented over 62% of our consolidated revenues.

Our customers typically contract for hospitality services under take-or-pay or exclusivity contracts with terms that most often range from several months to three years.

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 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.

Over the term of an exclusivity contract, rather than receiving a minimum room commitment, we are the exclusive hospitality service provider for the customer's employees working on a specific project or projects.

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

As of December 31, 2021, excluding exclusivity contracts and contracts without minimum room commitments, we had commitments for 29% of our rentable rooms for 2022 and 9% of our rentable rooms for 2023.

As of December 31, 2021, we had 8,281 rooms under contract.

The table below details the expiration of those contracts:

Contracted Room Expiration

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.

Our customers typically contract for hospitality services under contracts with terms that most often range from several months to twelve years.

The contracts expire throughout

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

We cannot assure that we can renew existing contracts or obtain new business on the same or better terms, if at all.

Long-Term Take-or-Pay Contracts .

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, generally for terms greater than 12 months.

During the year ended December 31, 2022, we billed approximately 2.5 million room nights under our long-term take-or-pay contracts, which included 0.6 million room nights in excess of the take-or-pay minimums.

For the year ended December 31, 2023, we have commitments for 1.2 million room nights under our long-term take-or-pay contracts.

Short-Term Take-or-Pay Contracts.

Customers may contract with us on a take-or-pay basis for less than 12 months, particularly for turnaround projects.

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

During the year ended December 31, 2022, we billed approximately 0.9 million room nights under our short-term take-or-pay contracts.

For the year ended December 31, 2023, we have commitments for 0.2 million room nights under our short-term take-or-pay contracts.

Exclusivity Contracts.

During the year ended December 31, 2022, we billed approximately 1.2 million room nights under our exclusivity contracts.

Casual / Walk-ins.

Customers without long-term committed contracts may utilize lodge/village rooms via short-term bookings at lodge/village casual or agreed rates.

During the year ended December 31, 2022, we billed approximately 0.2 million room nights to casual or walk-in customers.

Our Integrated Services Contracts

During the year ended December 31, 2022, revenues from our customer-owned locations represented 21% of our consolidated revenues.

Our contract terms generally provide for a per guest per day rate for hospitality services, including meals and housekeeping.

Similar to our owned lodge and villages contracts, 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.

Our customers typically contract for hospitality services under exclusivity contracts with terms that most often range from several months to five years.

During the year ended December 31, 2022, we billed approximately 2.3 million room nights under our integrated services exclusivity contracts.

Seasonality of Operations

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A portion of our Canadian operations is conducted during the winter months when the winter freeze in remote regions is required for customers’ activity to occur.

The spring thaw in these frontier regions restricts operations in the second quarter and adversely affects our operations and our ability to provide services.

The spring thaw in these frontier regions restricts operations in the second quarter and adversely affects our customers' operations and our ability to provide services.

Customers’ maintenance activities in the oil sands region, such as shutdown and turnaround activity, are typically performed in the second and third quarters annually.

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During the Australian rainy season between November and April, our operations in Queensland and the northern parts of Western Australia can be affected by cyclones, monsoons and resultant flooding.

In the U.S., winter weather in the first quarter and the resulting spring break up in the second quarter have historically negatively impacted our Bakken and Rocky Mountain operations.

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

In the U.S., winter weather in the first quarter and the resulting spring break up in the second quarter have historically negatively impacted our Bakken operations.

Human Capital Resources

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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 endeavor to hire Indigenous Peoples and expand our Indigenous workforce, excluding corporate staff, to 10%.

In 2021, we reached 7% Indigenous employment, excluding corporate staff, in Canada despite challenging market conditions that resulted in reduced hiring in the region.

We endeavor to hire Indigenous Peoples and expand our Indigenous workforce, excluding corporate staff, to 10% in Canada.

In 2022, we reached 7% Indigenous employment, excluding corporate staff, in Canada despite challenging market conditions that resulted in reduced hiring across the region.

Approximately 6% of our total new hires in Canada were of Indigenous background during 2022.

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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.

We continue to closely monitor the COVID-19 pandemic and 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.

Because we are committed to protecting the health and safety of our people, we operate in accordance with rigorous standards documented in our Making Zero Count initiative, which recognizes the importance of zero harm, while focusing on the process to achieve excellent performance.

We continue to monitor the COVID-19 pandemic to help ensure the health and well-being of our employees, guests and contractors.

Most of our previously implemented measures have been revised to reflect improved conditions, and are currently being integrated into a more comprehensive communicable illness plan.

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

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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.

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

Our learning and development program includes a mix of e-learning modules, face-to-face training and nationally certified programs as well as licensing training offered by external providers.

Government Regulation

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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

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.

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Our activities, or those of our customers, may be subject to environmental regulations imposed by these three levels of government.

The following addresses updates to Canadian environmental regulations in 2021 that may affect us or our customers.

The following addresses updates to Canadian federal and provincial environmental regulations in 2022 that may affect us or our customers.

Air Quality Management

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At the federal level, the Reduction in the Release of Volatile Organic Compounds Regulations (Petroleum Sector) were published in 2020.

Certain leak detection and repair provisions of that regulation took effect beginning in 2021 and the regulation will set additional monitoring and requirements for operators beginning in 2022 and 2023.

Certain leak detection and repair provisions of that regulation took effect beginning in 2021 and the regulation sets additional monitoring and requirements for operators beginning in 2022 and 2023.

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.

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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.

This Directive applies to all upstream petroleum industry wells, facilities and pipelines as well as all oil sands schemes and operations with the exception of oil sands mining.

Directive 60 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 017:

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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.

The methane reduction requirements in Directive 60 took effect in 2020, additional vent gas limits took effect on January 1, 2022 and additional vent gas limits took effect on January 1, 2023.

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

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Under this regulation, new requirements are imposed for facilities detecting leaks and inspecting seals as well as restrictions or prohibitions on the types of equipment used for energy development.

Some of these requirements took effect in 2021, with additional requirements set to take effect in 2022.

Some of these requirements took effect in 2022 and further requirements took effect on January 1, 2023.

In addition, the BCOGC completed consultation in 2022 on proposed amendments to the Drilling and Production Regulation to maintain equivalency with federal requirements.

Those amendments are expected to be finalized in 2023.

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

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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.

The Government of Alberta, supported by the governments of Ontario and Saskatchewan, has challenged the constitutionality of the Impact Assessment Act and requested that the federal legislation be invalidated by the Alberta Court of Appeal on the basis that it encroaches on provincial jurisdiction.

A decision on that litigation is pending, and it is likely that any decision issued by that Court would be appealed to the Supreme Court of Canada.

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.

The Government of Alberta, supported by the governments of Ontario and Saskatchewan, has challenged the constitutionality of the Impact Assessment Act.

In May of 2022, the Alberta Court of Appeal released its opinion on that challenge (Opinion), with a majority concluding that the Impact Assessment Act is beyond the constitutional authority of the federal government on the basis that it encroaches too far into areas of exclusive provincial authority.

The opinion is not binding and does not invalidate the Impact Assessment Act.

The federal government has appealed the ruling to the Supreme Court of Canada.

A decision on that appeal is expected in mid-late 2023.

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

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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.

In March 2016, Canada and the Government of the United States jointly announced their intention to take action to reduce methane emissions from the oil and gas sector in an effort to meet their respective INDCs pursuant to the Paris Agreement.

In March 2016, Canada and the Government of the U.S.

jointly announced their intention to take action to reduce methane emissions from the oil and gas sector in an effort to meet their respective INDCs pursuant to the Paris Agreement.

For its part, Canada announced its intention to reduce methane emissions from the oil and gas sector by 40-45 percent below 2012 levels by 2025.

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The Federal Methane Regulations impose various quantity-based limits on the venting of natural gas (or in the case of well completions involving hydraulic fracturing, a ban on such venting) and include associated conservation, measurement, inspection and corrective action requirements.

Certain requirements of the Federal Methane Regulations came into effect January 1, 2020, with others deferred until January 1, 2023.

Certain requirements of the Federal Methane Regulations came into effect January 1, 2020, and other emissions limits are now in place for certain equipment installed on or after January 1, 2023.

Further, in March 2022, the federal government began consultation on a proposed strategy to expand coverage and increase stringency of methane reduction obligations in the oil and gas sector specifically, and is expected to issue draft regulations in 2023.

These requirements may result in additional costs or liabilities for our customers’ operations.

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This ensures that there is a uniform price on emissions across the country.

Under current federal plans, this price will escalate by $10 per year until it reaches a price of $50/tonne of CO2e in 2022.

On December 11, 2020, however, the federal government announced its intention to continue the annual price increases beyond 2022, such that, commencing in 2023, the benchmark price per tonne of CO2e will increase by $15 per year

until it reaches $170/tonne of CO2e in 2030.

Starting April 1, 2021, the minimum price permissible under the GGPPA is $40/tonne of CO2e.

Alberta, Saskatchewan, and Ontario challenged the constitutionality of the GGPPA through separate proceedings in their respective Courts of Appeal.

Following split decisions by the provincial appellate courts, the appeals were consolidated and heard by Supreme Court of Canada.

On March 5, 2021, the Supreme Court issued its decision upholding the GGPPA as a valid exercise of federal legislative jurisdiction.

The backstop price under the GGPPA increased to $50 per tonne of CO2e in 2022.

As of January 1, 2023, the backstop price is $65 per tonne of CO2e.

The current government plan is to continue increasing that price by $15 per year until it reaches $170/tonne of CO2e in 2030.

On November 19, 2020, the federal government introduced the Canadian Net-Zero Emissions Accountability Act in Parliament.

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Following a 2021 federal election, the Government of Canada delivered a new Throne Speech in November 2021 which reiterated its intent to take action that would "go further, faster" to fight climate change.

Among other things, the federal government pledged to cap and cut oil and gas sector emissions while accelerating on the path to 100 percent net zero electricity.

Details on the implementation of these policy commitments evolve over time and are likely to continue to do so for the foreseeable future.

To the extent acting on Canada's COP 26 commitments results in additional legislative or executive action, such action could result in additional costs or liabilities for our customers’ operations.

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.

Among other things, the federal government pledged to cap and cut oil and gas sector emissions while accelerating on

the path to 100 percent net zero electricity.

In July 2022, the federal government published a discussion paper on options to “cap and cut oil and gas sector greenhouse gas emissions” to achieve its emissions targets and solicited feedback on different regulatory options.

It is expected to publish draft regulations to implement the emissions cap in 2023.

These requirements, if implemented, may result in additional costs or liabilities for our customers’ operations.

In July 2022, Canada finalized Clean Fuel Regulations (CFR), 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 CFR requires 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 GGPPA benchmark and exempting Alberta from the federal backstop.

Among other things, the CLP proposed a framework for managing GHG emissions by reducing greenhouse gas emissions, relative to total production from facilities that emit over 100,000 tons of carbon dioxide equivalent per year.

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 (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 and made the Carbon Competitiveness Incentive Regulation (CCIR) aimed at reducing emissions from large industrial emitters.

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 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.

Features of the backstop also took effect at various points in 2019 in Ontario, New Brunswick, Manitoba, Saskatchewan, Yukon, Nunavut and Prince Edward Island.

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.

Facilities with emissions that exceed the industry-wide benchmark or facility-specific benchmark, as applicable, must rely on one or more of the compliance options established by the TIER Regulation.

The compliance options under the TIER Regulation are substantially the same as those which existed under the CCIR.

Those facilities regulated under the CCIR were previously exempt from the Alberta-wide levy.

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.

In Alberta, GHGs are regulated pursuant to the Emissions Management and Climate Resilience Act and the Technology Innovation and Emissions Reduction Regulation (TIER Regulation).

In December 2019, the TIER Regulation was deemed equivalent to the backstop prescribed by the federal GGPPA, meaning that facilities within Alberta subject to the TIER Regulation are not subject to the full costs of complying with the GGPPA.

The TIER Regulation generally applies to Alberta-based facilities that emit over 100,000 tonnes of CO2e per year.

Under the TIER Regulation, emissions from each facility are compared to either an industry-wide benchmark or a facility-specific benchmark which effectively permits facilities to emit GHGs up to a certain amount without being subject to the provincial carbon price.

Those benchmarks “tighten” resulting in more onerous compliance costs, every year.

Facilities with emissions that exceed the industry-wide benchmark or facility-specific benchmark, as applicable, must rely on one or more of the compliance options established by the TIER Regulation, such as purchase credits or offsets for each tonne of CO2e in excess of their limits.

The Alberta government issues an order every year setting the price to acquire credits, which effectively dictates compliance costs.

In December 2022, the Alberta government announced changes to the administration of the TIER Regulation, including planned increases to the carbon price and increases to annual benchmark tightening rates.

These changes were announced in order to ensure that the TIER Regulation maintains equivalency with the framework established by GGPPA.

Planned increases to the cost of TIER Regulation credits and annual benchmark tightening rates may result in additional costs or liabilities for our customers’ operations.

In addition, similar increases in stringency of provincial GHG regulatory frameworks within British Columbia and Saskatchewan 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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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.

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

Abandonment and Remediation of Oil and Gas Infrastructure

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In recent years, it became clear that the LMR Program needed to be updated to reflect declining production and aging infrastructure.

As a result of the Supreme Court of Canada's decision in Orphan Well Association v Grant Thornton (also known as the Redwater decision), receivers and trustees can no longer avoid the AER's legislated authority to impose abandonment orders against licensees or to require a licensee to pay a security deposit before approving a license transfer when any such licensee is subject to formal insolvency proceedings.

against licensees or to require a licensee to pay a security deposit before approving a license transfer when any such licensee is subject to formal insolvency proceedings.

This means that insolvent estates can no longer disclaim assets that have reached the end of their productive lives (and therefore represent a net liability) in order to deal primarily with the remaining productive and valuable assets without first satisfying any abandonment and reclamation obligations associated with the insolvent estate's assets.

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Eligibility Requirements for Acquiring and Holding Energy Licenses and Approvals (Directive 67) in order to increase scrutiny the AER applies to ensure that authorization for oil and gas development is only granted to responsible parties.

Those changes include additional requirements for industry to provide updated financial information when making certain applications

to the AER and throughout the energy development lifecycle.

Those changes include additional requirements for industry to provide updated financial information when making certain applications to the AER and throughout the energy development lifecycle.

As a result of the changes to Directive 67, the AER may revoke or restrict a company's eligibility to hold AER licenses if the AER determines that the licensee poses an "unreasonable risk", taking into account a broad range of financial and operational considerations.

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These and any other changes to the AER's approach to manages closure requirements for energy resource activities may result in additional costs or liabilities for our customers’ operations.

Alberta’s Electricity Market

The previous government’s CLP set a target of 30 per cent of Alberta’s electricity generation coming from renewables by 2030.

Toward attaining this goal, on November 3, 2016, Alberta released the details of its Renewable Electricity Program (REP), which included a procurement process for renewable generation.

The first procurement process, REP Round 1, took place in 2017 and awarded long-term, indexed-price power contracts to approximately 596 MW of wind generation capacity.

The second process, REP 2, took place in 2018 and awarded contracts to 363 MW of wind capacity in 2018, with eligible projects having a minimum of 25% Indigenous equity ownership.

The third, REP 3, also in 2018, was structured similarly to REP 1 and awarded contracts to 400 MW of wind capacity.

Three out of four REP 1 projects came into commercial operation in 2019, with the fourth project, REP 2 and REP 3-procured capacity expected to come online later, in 2021 or 2022.

Funding for the REP was supposed to come from the Climate Change and Emissions Management Fund described above, backstopped by the government’s General Revenue Fund, rather than from direct electricity charges to our customers.

On June 10, 2019 the fourth REP round auction was canceled by the new conservative government.

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.

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.

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

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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.

Notably, the recommended climate change referral trigger will ensure Australia fulfills 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.

In December 2022 the federal government announced further major reforms to the EPBC Act (in response to the October 2020 review and with similar proposed reforms) and foreshadowed that a draft bill will be released mid 2023.

If any of these bills are 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.

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

Federal requirements are now in place for the mandatory disclosure of energy performance under building rating schemes.

Federal requirements are now in place for the mandatory disclosure of energy performance under building rating

These schemes require the tracking of specific environmental performance factors.

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Environmental groups have already challenged the re-issued NWP-12 in federal court.

On March 28, 2022, the Corps published notice that it is undertaking formal review of NWP-12.

The public comment period ended on May 27, 2022.

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.

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These new sources include gathering and boosting facilities as well as completions and workovers from hydraulically fractured oil wells.

In addition, the EPA has finalized new regulations that would further restrict GHG emissions, such as new standards for methane and volatile organic compound (VOC) emissions from new and modified oil and gas sources, which the EPA published in June 2016.

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.

In addition, in June 2016 the EPA published new regulations to further restrict GHG emissions, such as new standards for methane and volatile organic compound (VOC) emissions from new and modified oil and gas sources.

On September 11, 2018, the EPA proposed targeted improvements to the rule, including amendments to the rule’s fugitive emissions monitoring requirements, which were finalized in August 2020.

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.

In November 2021, the EPA proposed new NSPS updates and emission guidelines to reduce methane and other pollutants from the oil and gas industry.

In November 2021, the EPA proposed New Source Performance Standards (NSPS) updates and emission guidelines to reduce methane and other pollutants from the oil and gas industry.

In December 2022, the EPA issued a supplemental proposal to update, strengthen, and expand the November 2021 proposed standards and further reduce methane and volatile organic compound emissions from oil and natural gas facilities.

The public comment period on the proposed rule ended on January 5, 2023.

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.

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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.

This litigation is ongoing and future implementation of the BLM rules, and the Biden Administration’s reaction, is uncertain at this time.

Furthermore, separately, in October 2020, the federal district court of Wyoming vacated the original 2016 rule, a decision which BLM has appealed to the Tenth Circuit Court of Appeals.

In November 2022, the BLM proposed a new iteration of the regulations.

The public comment period on the proposed rule ended on January 30, 2023.

Litigation is ongoing and future implementation of the BLM rules, and the Biden Administration’s reaction, is uncertain at this time.

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

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Court of Appeals for the District of Columbia struck down the ACE rule but did not reinstate the former CPP regulation.

The power of EPA to reissue the CPP under Section 111(d) of the CAA will be decided by the Supreme Court in 2022.

In June 2022, the Supreme Court struck down the CPP, holding that Congress did not grant EPA the authority to devise emissions caps based on the generation-shifting approach the EPA took in the CPP.

While our operations are not directly affected by these actions, their impact on our oil and natural gas exploration and production customers could result in a decreased demand for the services that we provide.

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In the course of our operations, we generate some amounts of ordinary industrial wastes, such as paint wastes, waste solvents and waste oils that may be regulated as hazardous wastes.

Moreover, the federal Comprehensive Environmental Response, Compensation and Liability Act, as amended (CERCLA), also known as the Superfund law, and comparable state laws impose liability, without regard to fault or legality of conduct, on classes of persons considered to be responsible for the release of a “hazardous substance” into the environment.

Moreover, the federal Comprehensive Environmental Response, Compensation and Liability Act, as amended (CERCLA), also known as the Superfund law, and

comparable state laws impose liability, without regard to fault or legality of conduct, on classes of persons considered to be responsible for the release of a “hazardous substance” into the environment.

These persons include the current and past owner or operator of the site where the release occurred and anyone who transported, disposed or arranged for the transport or disposal of a hazardous substance released at the site.

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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.

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.

Hydraulic fracturing is an important and common practice in the oil and gas industry.

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However, in late 2018, the BLM under the Trump Administration published a final rule rescinding the 2016 final rule.

Litigation challenging the BLM's 2016 final rule as well as the 2018 final rule rescinding the 2016 rule has been pursued by various states, industry and environmental groups.

While the 2016 rule has been rescinded, new or more stringent regulations may be promulgated by the Biden administration.

In January 2021, President Biden announced a moratorium on new oil and gas leasing on federal lands and offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.

In August 2022, a federal district judge in Louisiana permanently enjoined the moratorium in the 13 states that filed a lawsuit against the action.

States and local governments may also seek to limit hydraulic fracturing activities through time, place, and manner restrictions on operations or ban the process altogether.

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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