What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-27 compared with 2024-02-29 · 305 added, 355 removed, 331 unchanged (67% 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 a suite of hospitality services for our guests in the natural resources industry, 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 these facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics.

We also manage 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, liquefied natural gas (LNG) and iron ore producing regions, where, in many cases, traditional accommodations and related infrastructure often are not accessible, sufficient or cost effective.

Our customers include major and independent oil companies, mining companies, engineering companies and oilfield and mining service companies.

We provide hospitality services to remote workforces in Australia and Canada, including catering and food service, lodging, housekeeping and maintenance at accommodation facilities that we or our customers own.

We 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 manage development activities for workforce accommodation facilities, including site selection, permitting, engineering and design and manufacturing and site construction management, along with providing hospitality services once the facility is constructed.

We primarily operate in some of the world’s most active met coal, oil, liquefied natural gas (LNG) and iron ore producing regions, where, in many cases, traditional hospitality accommodations and related infrastructure services often are not accessible, sufficient or cost effective.

Our customers include mining companies, major and independent oil 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.

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.

Our customers can outsource their hospitality accommodations needs to a single supplier, maintaining employee welfare and satisfaction while focusing their investment on their core resource production efforts.

Our Company is built on the foundation of the following core values:

Safety, Respect, Care, Excellence, Integrity and Collaboration.

We put the safety of our employees and guests above all other concerns.

We care about our people, guests, customers, communities and the environment, and we deliver excellent service with passion and pride.

We act with integrity and collaborate with our people, communities, customers and partners.

We take an active role working to minimize the environmental impact of our operations through a number of sustainable initiatives.

We also have a focus on water conservation and utilize alternative water supply options such as recycling and rainwater collection and use.

By building infrastructure such as wastewater treatment and water treatment facilities to recycle gray and black water on some of our sites, we are able to gain cost efficiencies as well as reduce the use of trucks related to water and wastewater hauling, which in turn, reduces our carbon footprint.

In our Australian villages, we utilize passive-solar-design principles and smart-switching systems to reduce the need for electricity related to heating and cooling.

We put the safety of our employees and guests above all.

We act with respect in all that we do.

We care about our people, guests, customers, environment and communities.

We deliver service excellence with passion and pride.

We strive to operate with integrity, earning trust and delivering on our promises.

We collaborate to share perspectives and to achieve shared success.

We firmly believe that living and integrating these values into our operations is a strategic advantage that drives innovation, builds resilience and creates lasting value for our stakeholders.

Our hospitality services span the lifecycle of customer projects, from the initial exploration and resource delineation to long-term production.

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

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:

(i) our fleet of mobile assets, particularly for shorter term projects such as pipeline construction and seasonal drilling programs, (ii) our scalable lodge or village model, or (iii) our integrated services model in customer-owned facilities.

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

As development of the resource begins, we can serve their needs through either:

(i) our integrated services model in customer-owned facilities, (ii) our scalable lodge or village model or (iii) our fleet of mobile assets, particularly for shorter term projects such as pipeline construction and seasonal drilling programs.

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.

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We own and operate 25 lodges and villages with approximately 26,000 rooms.

We operate approximately 14,200 rooms owned by our customers.

We operate approximately 19,000 rooms across 22 locations where the accommodations assets are owned by our customers.

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

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

The table below summarizes these key statistics for the periods presented in this annual report.

The following summarizes these key statistics for the periods presented in this annual report.

Year Ended December 31,

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

Accommodation Revenue (1)

Accommodation and Other Services Revenue (1)

Canada $ 214,774 $ 266,926 $ 279,455

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Other 10,079 11,205 3,058

Total Accommodation Revenue $ 455,965 $ 435,227 $ 390,298

Total Accommodation and Other Services Revenue $ 421,537 $ 455,965 $ 435,227

Mobile Facility Rental Revenue (2)

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Average Exchange Rate

Canadian dollar to U.S.

Canadian dollar to U.

dollar $ 0.73 $ 0.74 $ 0.77

Australian dollar to U.S.

Australian dollar to U.

dollar $ 0.66 $ 0.66 $ 0.69

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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.

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

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

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Our historical experience in Canada began in small, mobile camps and evolved into owning and managing large scale remote accommodations.

In Australia, our operations originated with a similar build-own-operate model as we operate in our Canadian lodges, growing up to our current eight owned villages.

In Australia, our operations originated with a similar build-own-operate model as we operate in our Canadian lodges.

Since then and with the addition of an acquisition, we have evolved our service delivery to include operating customer-owned locations with the same hospitality services that we provide at our owned villages.

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

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.

In 2018, we acquired Noralta Lodge Ltd., which provided remote hospitality services in Alberta, Canada through eleven lodges comprising over 5,700 owned rooms and 7,900 total rooms.

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

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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).

The Kitimat LNG Facility is nearing completion and expected to be operational in 2024.

Our Sitka Lodge is well positioned to serve construction activity at the Kitimat LNG facility, as well as portions of the related pipeline construction activity.

Construction activity of Phase 1 of the Kitimat LNG Facility is nearing completion, with commercial operations expected to begin in mid-2025.

The Coastal GasLink Pipeline was completed in 2024 and entered commercial operations.

The majority of our contracted commitments associated with the Coastal GasLink Pipeline were completed in the fourth quarter of 2023.

As such, we expect continued lower occupancy at our Sitka Lodge in the near-term until subsequent phases of the LNGC project are approved and commence, or additional construction activity in the region drive increased occupancy demand.

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 our integrated services business) to the mining industry in Western Australia.

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

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

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

Our Customers

We provide our hospitality services to customers in the natural resources industry.

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

Our scalable facilities provide long-term and temporary workforce accommodations where, in many cases, traditional hospitality accommodations and related infrastructure services often are not accessible, sufficient or cost effective.

Through our wide range of hospitality services offerings, 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.

In addition to lodging, catering and food service, housekeeping and maintenance at accommodation facilities that we or our customers own, our hospitality services have evolved to include fitness centers, water and wastewater treatment, laundry service and many other enhancements.

In addition to catering and food service, lodging, housekeeping and maintenance at accommodation facilities that we or our customers own, our hospitality services have evolved to include fitness centers, water and wastewater treatment, laundry service and many other enhancements.

Our customers either own their accommodations assets or outsource them.

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and/or (iii) they desire to maintain control over the supply of rooms for their project.

Where customers have chosen to own their accommodations assets, customers usually subcontract the

management of the facility and the provision of the hospitality services to a third-party provider, such as Civeo through our integrated services model in customer-owned facilities.

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

Where customers have chosen to own their accommodations assets, customers usually subcontract the management

of the facility and the provision of the hospitality services to a third-party provider, such as Civeo through our integrated services model in customer-owned facilities.

Historically, Australian mining companies and Canadian oil sands developers built and owned 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 a portion of their accommodation needs as they recognize that owning accommodations and providing the related hospitality services are non-core investments for their business.

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This allows those customers to share some of the costs associated with their peak accommodations needs, including infrastructure (power, water, sewer and information technology) and central dining and recreation facilities.

The Canadian oil sands region and the Queensland Bowen Basin region are two geographic areas that fit this market dynamic.

Initial demand for our hospitality services has historically been driven by our customers’ capital spending programs related to the construction and development of natural resource projects and associated infrastructure, as well as the exploration for oil and natural gas.

Long-term demand for our services has been driven by natural resource production, maintenance and operation of those facilities as well as expansion of those sites.

In general, industry capital spending programs are based on the outlook for commodity prices, production costs, economic growth, global commodity supply/demand, estimates of resource production and the expectations of our customers' shareholders.

As a result, demand for our hospitality services is largely sensitive to expected commodity prices, principally related to oil, met coal, LNG and iron ore, and the resultant impact of these commodity price expectations on our customers’ spending.

Other factors that can affect our business and financial results include the general global economic environment, including inflationary pressures, supply chain disruptions and labor shortages, volatility affecting the banking system and financial markets, availability of capital to the natural resource industry and regulatory changes in Canada, Australia and other markets, including governmental measures introduced to fight climate change.

The Queensland Bowen Basin region and the Canadian oil sands region are two geographic areas that fit this market dynamic.

Long-term demand for our services has been driven by natural resource production, maintenance, operation and expansion of those facilities.

In general, industry capital spending programs are based on the outlook for commodity prices, production costs, economic growth, perceived political risk, global commodity supply/demand, estimates of resource production and the expectations of our customers' shareholders.

As a result, demand for our hospitality services is largely sensitive to expected commodity prices, principally related to met coal, oil, LNG and iron ore, and the resultant impact of these commodity price expectations on our customers’ spending.

Other factors that can affect our business and financial results include the general global economic environment, including inflationary pressures, supply chain disruptions and labor shortages, instability affecting the global banking system and financial markets, availability of capital to the natural resource industry and regulatory changes in Canada, Australia and other markets, including governmental measures introduced to fight climate change.

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

(i) lodges and villages and (ii) mobile assets.

Civeo is principally focused on hospitality services at lodges and villages.

Civeo is principally focused on hospitality services at lodges and villages that are either owned by Civeo or customer-owned.

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

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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.

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 or short-term basis.

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

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

(ATCO), Dexterra Group Inc.

(Dexterra), Alta-Fab Structures Ltd.

(Alta-Fab) and Northgate Industries Ltd.

(Northgate), build modular accommodations for sale.

(ATCO), Alta-Fab Structures Ltd.

and Northgate Industries Ltd., build modular accommodations for sale.

Dexterra Group Inc.

(Dexterra), 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 assets business.

and Target Hospitality Corp.

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 assets business.

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

(Sodexo), Compass Group PLC (Compass Group) and Cater Care, typically do not invest in and own the accommodations assets, but will provide hospitality services at third-party or customer-owned facilities.

(Sodexo), Compass Group PLC (Compass Group) and Cater Care Australia Pty.

(Cater Care), typically do not invest in and own the accommodations assets but will provide hospitality services at third-party or customer-owned facilities.

During the year ended December 31, 2024, we generated 63% of our revenue from our Australian operations.

As of December 31, 2024, we owned 8,950 rooms across eight villages, of which 7,488 rooms service the Bowen Basin of central Queensland, one of the premier met coal basins in the world.

We are Australia’s largest provider of hospitality services for people

working in the Bowen Basin.

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 (from several months to six years) with minimum nightly room commitments.

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

On February 18, 2025, we entered into a definitive asset purchase agreement with a private seller to acquire four villages with 1,340 rooms in Australia’s Bowen Basin and the associated long-term customer contracts (the “Proposed Acquisition”).

Under the terms of the agreement, Civeo would acquire the assets and customer contracts for total cash consideration of A$105 million, or approximately US$67 million, funded with cash on hand and borrowings from its existing revolving credit facility.

The Proposed Acquisition is anticipated to close in the second quarter of 2025, subject to regulatory approvals and customary conditions.

Australian Market

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, iron ore, conventional and coal seam gas, base metals, copper, lithium 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, primarily in Southeast Asia and India.

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.

Consequently, there is substantial need for workforce accommodations and hospitality services to support resource production in the country.

Workforce accommodations have historically been built and owned by the resource developer/owner, with third parties providing the hospitality and facility management services, typical of an insourcing business model.

Since 1996, our Australian business has sought to change the insourcing business model through its hospitality services offering, allowing customers to outsource their accommodations needs and focus their investments on resource production operations.

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

Our customers are typically developing and producing met coal, iron ore and other minerals which have resource lives that are measured in decades.

As such, their spending levels tend to react similarly to commodity prices as the spending levels of our Canadian customers.

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 and iron ore prices.

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.

Demand for rooms at our Australian villages is primarily driven by production, maintenance and operational activities.

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

During the year ended December 31, 2024, our five villages in the Bowen Basin generated 40% of our Australian revenue, or 25% of our consolidated 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 11 customer locations in the Pilbara region, which is renowned for high grade iron ore production.

Our villages and customer-owned 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.

Beyond met coal and iron ore markets served in the Pilbara and Bowen Basins, we serve several other markets with three additional villages and ten customer-owned villages.

At the end of 2024, 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.

In addition, we provide hospitality services in Western Australia and South Australia at ten 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

Owned Rooms in our Australian Villages

As of December 31,

Villages Resource

Basin Commodity 2024 2023 2022

Coppabella Bowen met coal 3,144 3,144 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 662 622 622

Narrabri Gunnedah met/thermal coal 502 502 502

Nebo Bowen met coal 490 490 490

Karratha Pilbara LNG, iron ore 298 298 298

Total Rooms 8,950 8,910 8,814

Our Australian segment includes eight company-owned villages with 8,950 rooms as of December 31, 2024, 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.

Our growth plan for this part of our business continues to include enhanced occupancy and expansion of these properties where we believe there is durable long-term demand, as well as to provide hospitality services at customer-owned assets.

Our Coppabella, Dysart, Moranbah, Middlemount and Nebo villages are located in the Bowen Basin.

Coppabella, at over 3,100 rooms, is our largest village and provides rooms and related hospitality services to a variety of customers.

Each of these villages supports both operational workforce needs and contractor needs with resort style amenities, including swimming pools, gyms, a walking track and a tavern.

Our Narrabri and Boggabri villages in New South Wales provide rooms and related hospitality services to 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.

Australian Hospitality Services at Third-Party Owned Facilities

We also provide hospitality services at customer-owned villages to the mining industry in Western Australia and South Australia.

Historically, this has been focused on natural resource production-related village facilities that are primarily owned by iron ore production companies.

We provide village hospitality services at 21 customer-owned locations, which represent over 17,000 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.

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 catering and food service, housekeeping and site maintenance or just portions of the services offered such as food service only.

Mine site office cleaning services are also provided at some of our customer-owned locations.

During the year ended December 31, 2024, we generated approximately 36% of our revenue from our Canadian operations.

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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, pipeline 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

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However, spending on current operations and maintenance has historically reacted less quickly and less severely to changes in oil prices, as customers consider their cash operating costs, rather than overall full-cycle returns.

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.

Customers have recently focused on lowering their cash operating costs while maintaining similar levels of production, leading to lower overall customer spending and reduced personnel on site and therefore lower demand for remote accommodations, like we provide.

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

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

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Operational and maintenance headcounts are typically a fraction, 20% to 25%, of the headcounts experienced during construction.

In addition, proximity to customer activity and availability of customer-owned and competitor-owned rooms influences the rental demand of our rooms in the Canadian oil sands region.

In addition, proximity to customer activity and availability of customer-owned and competitor-owned rooms influences the demand for our rooms in the Canadian oil sands region.

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.

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Of Canada’s approximately 41 million residents, approximately 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.

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.

The local municipalities, of which the town of 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.

Civeo lodges are strategically placed near customer mining and production facilities to enhance their productivity and safety of their workforce.

With respect to LNG and related pipeline activity in Canada, a number of multinational energy companies believe there is a potential to export LNG from Canada to meet the increasing global LNG demand, particularly in Asia.

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

The Kitimat LNG Facility is nearing completion and expected to be operational in 2024.

Phase 1 of the Kitimat LNG Facility is nearing completion, with commercial operations expected to begin in mid-2025.

The population of Kitimat and the surrounding area is approximately 9,000 people, whereas the LNGC project had almost 7,500 workers at its peak to construct the Kitimat LNG Facility.

Accordingly, 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 designated portions of the related pipeline construction activity.

The majority of our contracted commitments associated with the Coastal GasLink Pipeline (CGL), the pipeline constructed to transport natural gas feedstock to LNGC, were completed in the fourth quarter of 2023.

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

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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 2024 to 2030.

Our leases have expiration dates that range from 2025 to 2030 with the exception of one lease that expires in 2049.

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

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Risk Factors - Risks Related to Our Operations - 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.

We provide a range of hospitality services at our lodges, including reservation management, check in and check out, food service, housekeeping and facilities management.

Our lodge guests receive amenities similar to a full-service, urban hotel with our service offering a room and three meals a day.

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

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 discussion.

We provide a range of hospitality services at our lodges, including reservation management, food service, housekeeping and facilities management.

Our lodge guests receive amenities similar to an economy, full-service, urban hotel with our service offering a room and three meals a day.

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 long-term contracts (from several months up to several years).

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Canadian British Columbia Lodge

As previously discussed, LNGC is currently constructing 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 designated portions of the related CGL pipeline construction activity.

The majority of our contracted commitments associated with the CGL pipeline project were completed in the fourth quarter of 2023.

Phase 1 of the Kitimat LNG Facility is nearing completion, with commercial operations expected to begin in mid-2025.

The Coastal GasLink Pipeline was completed in 2024 and entered commercial operations.

Canadian Lodge Locations

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

Athabasca (1)

Athabasca mining 2,005 2,005 2,005

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Athabasca mining 624 624 624

Athabasca mining 288 288 288

Red Earth (1)

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(1) Currently closed as of December 31, 2024, 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 United States (U.S.) generally accepted accounting principles.

All closed lodges are periodically assessed for impairment at an asset group level, in accordance with 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 expired in June 2023 and was not renewed.

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

Hospitality Services at Third-Party Owned Facilities

(2) The land lease associated with the assets expired in June 2023 and was not renewed and the assets were demobilized and completely removed from the existing site in the first quarter of 2024.

Canadian Hospitality Services at Third-Party Owned Facilities

We also provide hospitality services at customer-owned facilities.

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

During the year ended December 31, 2023, we generated 48% of our revenue from our Australian operations.

As of December 31, 2023, we owned 8,910 rooms across eight villages, of which 7,488 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 five years) with minimum nightly room commitments.

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

Australian Market

Australia has broad natural resources, including met and thermal coal, conventional and coal seam gas, base metals, iron ore, copper, lithium 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, primarily in Southeast Asia.

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.

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.

Consequently, there is substantial need for workforce accommodations and hospitality services to support resource production in the country.

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

Our Australian villages support similar activities as our Canadian lodges for the natural resources industry in Australia.

Our customers are typically developing and producing met coal, iron ore and other minerals which have resource lives that are measured in decades.

As such, their spending levels tend to react similarly to commodity prices as the spending levels of our Canadian customers.

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 and iron ore prices.

Demand for rooms at our Australian villages is primarily driven by production, maintenance and operational activities.

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

During the year ended December 31, 2023, our five villages in the Bowen Basin generated 47% of our Australian revenue, or 23% of our consolidated 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 eight customer locations in the Pilbara region, which is renowned for high grade iron ore production.

Our villages and customer-owned 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.

Beyond met coal and iron ore markets served in the Pilbara and Bowen Basins, we serve several other markets with three additional villages and ten customer-owned villages.

At the end of 2023, 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.

Australian Village Locations

Owned Rooms in our Australian Villages

As of December 31,

Villages Resource

Basin Commodity 2023 2022 2021

Coppabella Bowen met coal 3,144 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

Karratha Pilbara LNG, iron ore 298 298 298

- gold, lithium — — 232

Total Rooms 8,910 8,814 9,046

(1) Sold in the third quarter of 2022.

Our Australian segment includes eight company-owned villages with 8,910 rooms as of December 31, 2023, 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.

Our Coppabella, Dysart, Moranbah, Middlemount and Nebo villages are located in the Bowen Basin.

Coppabella, at over 3,100 rooms, is our largest village and provides rooms and related hospitality services to a variety of customers.

Each of these villages supports both operational workforce needs and contractor needs with resort style amenities, including swimming pools, gyms, a walking track and a tavern.

Our Narrabri and Boggabri villages in New South Wales provide rooms and related hospitality services to 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.

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 hospitality services at 18 customer-owned locations, which represent over 12,600 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.

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 catering and food service, housekeeping and site maintenance included or in segments such as food service only.

Mine site cleaning services are also provided at some of our customer-owned locations.

In the first quarter of 2023, we sold our accommodation assets in Louisiana.

In addition, in the second half of 2022, we sold both our U.S.

wellsite services and offshore businesses.

United States

In the first quarter of 2023, we sold our accommodation assets in Louisiana, and in the second quarter of 2024, we sold the land at our Louisiana location.

Our remaining U.S.

business consists of 235 rooms at our Killdeer Lodge, which supports completion activity in the Bakken.

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.

business, which supported completion activity in the Bakken, was closed in the fourth quarter of 2024 due to low activity levels.

Community Engagement

In Australia, our community relations program aims to build and maintain a positive social license to operate by consulting and engaging with local regional communities from project inception, through development, construction and operations.

This is a major advantage for our business model, as it facilitates consistent communication, engenders trust and builds relationships to last throughout the resource lifecycle.

There is an emphasis on developing partnerships that create a long-term sustainable outcome to address specific community needs.

To that end, we partner with local municipalities to improve and expand municipal infrastructure.

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

We also provide support to local community groups through sponsorship and in-kind contributions to local events and initiatives.

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 directed approximately A$15.3 million in 2024, up 24% from A$12.3 million in 2023, 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.

Under these agreements, we strive to develop the business capacity, project management skills and expertise of the Indigenous joint venture members, providing local employment opportunities and training.

One of the four unincorporated joint venture partnerships entitles Indigenous landowners to a profit distribution calculated in accordance with the unincorporated joint venture deeds.

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

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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Beyond these services, this partnership provided a business incubator environment for a number of Metis business ventures.

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.

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.

In 2024, we purchased more than C$31.3 million in goods and services from the Indigenous business community, representing 16% of our total Canadian local spending, compared to C$64.0 million in goods and services from the Indigenous business community, representing 27% of our total Canadian local spending in 2023.

In 2024, the Fort McMurray First Nation Economic Development Corporation awarded Civeo with the Eagle Award, for Civeo’s commitment to positively impacting and contributing to the long-term benefits of the members of the Fort McMurray First Nation.

In 2021, the Fort McKay Metis community awarded Civeo with the inaugural 2020 Fort McKay Metis National President's Award.

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

In 2023 and 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.

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

In 2023 and in 2019, our Indigenous partnership initiatives earned Civeo a Gold level Partnership Accreditation in Indigenous Relations certification, by a jury comprised of Indigenous business people, which was supported by an unbiased, independent, third-party verification of our performance.

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

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

In 2024, Civeo entered into an agreement with an Indigenous group in Ontario and is currently in the process of developing business opportunities.

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.

This is a major advantage for our business model, as it facilitates consistent communication, engenders trust and builds relationships to last throughout the resource lifecycle.

There is an emphasis on developing partnerships that create a long-term sustainable outcome to address specific community needs.

To that end, we partner with local municipalities to improve and expand municipal infrastructure.

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

We also provide support to local community groups through sponsorship and in-kind contributions to local events and initiatives.

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 directed approximately A$12.3 million in 2023, compared to 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 four unincorporated joint venture partnerships with Indigenous landowners in Western Australia.

Under these agreements, we strive to develop the business capacity, project management skills and expertise of the Indigenous joint venture members and also provide local employment opportunities and training.

One of the four unincorporated joint venture partnerships entitles Indigenous landowners to a profit distribution calculated in accordance with the unincorporated joint venture deeds.

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

Customers and Competitors

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

Our largest customers in 2023 were Suncor Energy and Fortescue Metals Group Ltd., who each accounted for more than 10% of our 2023 revenues.

Our largest customers in 2024 were Suncor Energy Inc.

and Fortescue Metals Group Ltd., who each accounted for more than 10% of our 2024 revenues.

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 Sirrom Corporation) and Cater Care for third-party facility management services.

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

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

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

Historically, many customers have invested in their own accommodations.

We estimate that our existing and potential customers own approximately 50% of the rooms available in both the Canadian oil sands and the Australian coal mining regions.

We estimate that our existing and potential customers own approximately 50% of the rooms available in both the Australian coal mining regions and Canadian oil sands.

Our Lodge and Village Contracts

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Our contract terms generally provide for a daily rate for a reserved room and an occupied room rate that compensates us for hospitality services, including food service, 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 increases in labor and consumables costs over the contract term.

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

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

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

Our customers typically contract for hospitality services under contracts with terms that 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.

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During the year ended December 31, 2024, revenues from our customer-owned locations represented 38% of our consolidated revenues.

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

Similar to our owned lodge and villages contracts, in most multi-year contracts, our rates typically have annual escalation provisions to cover 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, 2023, we billed approximately 2.6 million room nights under our integrated services exclusivity contracts.

Our contract terms generally provide a rate on a per guest per day basis for hospitality services, including food service and housekeeping.

Similar to our owned lodge and villages contracts, in most multi-year contracts, our rates typically have annual escalation provisions to cover increases in labor, food and consumables costs over the contract term.

Seasonality of Operations

Our operations are directly affected by seasonal weather.

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.

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.

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Our Canadian operations have also been impacted by forest fires and flooding in the past five years.

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.

Human Capital Resources

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

As of December 31, 2023, we had approximately 1,600 full-time employees and approximately 1,000 hourly employees on a consolidated basis, 47% of whom are located in Canada,

52% of whom are located in Australia and 1% of whom are located in the U.S.

As of December 31, 2024, we had approximately 2,000 full-time employees and approximately 600 hourly employees.

On a consolidated basis, 71% of our employees are located in Australia, 28% are located in Canada and 1% are located in the U.S.

We were party to collective bargaining agreements covering 480 employees located in Canada and 1,401 employees located in Australia as of December 31, 2024.

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We are committed to operating in a safe, secure and responsible manner for the benefit of our employees, customers and the communities we serve.

Our commitment to safeguarding employees, contractors, and guests is demonstrated through our employee-named Making Zero Count initiative, which emphasizes the importance of eliminating harm and focuses on the processes required to achieve exceptional performance.

Our commitment to safeguarding employees,

contractors, and guests is demonstrated through our employee-named Making Zero Count initiative, which emphasizes the importance of eliminating harm and focuses on the processes required to achieve exceptional performance.

At Civeo, we believe that investing in our employees is fundamental to our success.

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Government Regulation

Our business is significantly affected by Canadian, Australian and U.S.

laws and regulations at the federal, provincial, state and local levels relating to the oil, natural gas and mining industries, worker safety and environmental protection.

Our business is significantly affected by Australian and Canadian laws and regulations at the federal, provincial, state and local levels relating to the oil, natural gas and mining industries, worker safety and environmental protection.

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:

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Numerous governmental agencies issue regulations to implement and enforce these laws, for which compliance is often costly yet critical.

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.

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.

Although 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 over the short term, 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.

Moreover, it is possible that other developments, such as the adoption of stricter environmental laws, regulations and enforcement policies or more stringent enforcement of existing environmental laws and regulations, could result in additional costs or liabilities upon us or our customers that we cannot currently quantify.

Australian Environmental Regulations

Our Australian segment is regulated by statutory environmental and land use 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;

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);

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 assessment and approval.

In October 2020, the findings of an independent review of the EPBC Act (Independent Review) recommended significant reforms including (but not limited to) introduction of legally binding ‘National Environmental Standards’, a ‘climate change’ referral trigger, measures to harness and recognize the importance of indigenous knowledge, stronger compliance and enforcement powers, proposals for revised bilateral agreements with the States and Territories to streamline the assessment and approval process of some activities regulated by the EPBC Act and criminal penalties for offenses relating to emissions-intensive actions.

In December 2022 the federal government announced its response to the Independent Review.

This response proposed various changes to the EPBC Act in line with the Independent Review, for example, the introduction of ‘National Environmental Standards’, creation of a federal Environmental Protection Agency to administer the EPBC Act and the introduction of a requirement to achieve ‘net positive’ outcomes.

A comprehensive draft bill to effect these reforms was introduced before Parliament in 2024 together with a draft of the proposed National Environmental Standards.

Notably, the federal government is not presently proposing to introduce the climate change referral trigger recommended by the Independent Review;

however, there appears to be significant support for the trigger amongst opposition parties, and a federal election will occur in 2025.

If any of the recommended reforms take effect, 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 legislative and policy changes may affect our customers’ operations and have impacts on the non-renewable resources sector generally.

There is an increasing emphasis from 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.

These schemes require the tracking of specific environmental performance factors.

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

From July 1, 2023, new obligations and reporting requirements took effect with respect to the ‘Safeguard Mechanism’ – Australia’s policy for reducing emissions from facilities that emit more than 100,000t CO2-e per financial year that has been in place since 2016.

These reforms are intended to assist Australia meet its emissions reduction targets of 43% below 2005 levels by 2030 and affect large scale industry customers.

In 2024, the federal government introduced further legislation requiring companies that satisfy key threshold criteria based upon employee numbers and/or revenue, to make climate-related disclosures, including information about their GHG emissions, climate-related targets, offset contributions, transition plans, and information about strategies, plans and governance procedures/controls in place to monitor and manage climate-related risks and opportunities.

These reforms will commence with initial reporting required in 2026 for the preceding year.

Civeo meets the relevant thresholds and will be required to make these annual disclosures in Australia.

In addition to our own requirement to commence disclosure to ASIC in accordance with the new legislation, our operations represent a portion of each of our customer’s Scope 3 emissions;

we will be required by our customers to provide certain emissions information in order for our customers to meet their disclosure obligations.

Complexity and resourcing are identified as significant challenges as we navigate the new legislation.

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 Islander use rights which are administered by each States’ independent environment protection regulator (e.g.

Queensland’s Department of Environment, Science and

If amendments are made to the EPBC Act to effect new bilateral agreements, the States and Territories will likely be given further power to assess and approve certain actions regulated the EPBC Act.

Under state law, some specified activities, such as sewage treatment 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 orders 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) serious or material environmental harm.

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

Failure to discharge this obligation can attract significant sanctions and financial penalties.

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.

Canadian Environmental Regulations

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The following addresses updates to Canadian federal and provincial environmental regulations in 2024 that may affect us or our customers.

Proposed Oil Sands Mining Effluent Regulations

Oil sands mines use hot water to separate bitumen from sand.

Oil sands operators then store this process-affected water in large tailings ponds.

In the tailings ponds, the fine suspended particles separate out and fall to the bottom.

The process-affected water is then reused.

Currently, oil sands mining operators are unable to discharge treated process-affected water and must maintain such water in on-site storage facilities.

Oil sands operators have indicated a need to discharge that process-affected water as a result of storage constraints and reclamation obligations.

Regulations are being proposed to allow treated process-affected water to be released back into the Athabasca River system.

In May 2024, the Government of Canada released a preliminary report outlining proposed solutions and public concerns.

Industry representatives expressed concern that the proposed regulations would cause delays because of regulatory uncertainty and put capital decisions at risk.

Industry representatives called for regulation by 2025 to reduce uncertainty but no definitive plans have been announced by the Government of Canada.

Planning for and meeting these proposed regulations may result in additional costs or liabilities for our customers’ operations.

Proposed Emissions Cap

In November 2024, Canada announced the latest version of the proposed Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations (the Proposed Emissions Cap).

The Proposed Emissions Cap aims to use a cap-and-trade system to reduce emissions by 35% below 2019 levels by 2030.

If the Proposed Emissions Cap is approved, it will be phased in beginning in 2026.

As currently proposed, the cap-and-trade system would apply to liquified natural gas producers as well as producers in the conventional oil, offshore, oil sands and natural gas production and processing subsectors.

Producers would be required to reduce their emissions or purchase "allowances" from other facilities that have reduced their emissions.

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

The Government of Alberta and the oil and gas industry oppose the Proposed Emissions Cap and argue that it serves as a de facto production cap.

The Proposed Emissions Cap is currently undergoing a feedback period and the final and binding

regulations are not expected to be released until late 2025.

If the Proposed Emissions Cap becomes law, the Canadian oil and gas industry may be significantly harmed.

Air Quality Management

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.

At the federal level, the Reduction in the Release of Volatile Organic Compounds Regulations (Petroleum Sector) were published in 2020 and have not been amended since January 2023.

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

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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:

The Alberta Energy Regulator (AER), which is responsible for regulating upstream oil and gas activity in Alberta and oversees compliance with Directive 060:

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

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 was last updated in April 2020 and 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:

In December 2018, the AER finalized amendments to 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.

Alberta achieved this goal in 2022, three years ahead of schedule.

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, additional vent gas limits took effect on January 1, 2022 and additional vent gas limits took effect on January 1, 2023.

The methane reduction requirements in Directive 60 took effect in 2020, additional vent gas limits took effect on January 1, 2022 and further, more stringent 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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In addition, the BCER completed consultation in 2023 on proposed amendments to the Drilling and Production Regulation to maintain equivalency with federal requirements.

Regulations designed to achieve a 45% reduction in methane emissions relative to 2014 levels are now in place.

The BCER is currently conducting a regulatory review and engagement on the development of new regulations designed to achieve a 75% reduction in methane emissions from the oil and gas sector by 2030.

Regulations designed to achieve a 45% reduction in methane emissions relative to 2014 levels by 2025 are now in place.

The BCER is currently conducting a regulatory review and engagement on the development of new regulations designed to achieve a 75% reduction in methane emissions from the oil and gas sector by 2030 relative to 2014 levels.

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

Environmental Assessment of Major Projects

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.

One of the stated objectives of the Impact Assessment Act was to shorten review times for projects that are subject to review under that Act.

However, concerns about lengthy reviews that require substantial information from project proponents remain even after the implementation of the Impact Assessment Act.

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

The Impact Assessment Act (IAA) came into force in August 2019.

The IAA and its subordinate legislation apply to the development of many large projects, including oil sands mining and in situ projects, met mining projects, pipelines, and other large developments.

One of the stated objectives of the IAA was to shorten review times for projects.

However, concerns about lengthy reviews that require substantial information from project proponents remain even after the implementation of the IAA.

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

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 October of 2023, a majority of the Supreme Court of Canada (Court) concluded that a large portion of the regime created by the Impact Assessment Act was unconstitutional.

The federal government subsequently issued interim guidance on the administration of the Impact Assessment Act and advised that it intended to amend the Impact Assessment Act to align with the Court's ruling.

The federal government is expected to introduce legislation amending the Impact Assessment Act in 2024.

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

The Government of Alberta, supported by the governments of Ontario and Saskatchewan, challenged the constitutionality of the IAA.

In October 2023, the Supreme Court of Canada ruled that a large portion of the IAA was unconstitutional because it infringed upon areas of provincial jurisdiction.

In June 2024, the federal government significantly amended the IAA.

Changes included narrowing the scope of federal responsibility, increasing cooperation between federal and provincial governments and providing an interim plan to smooth the transition from the old IAA to the amended IAA.

However, despite the amendments,

there remains significant uncertainty about the future impact of Canada's federal environmental assessment legislation on 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.

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.

Canada announced that it is in favor of the decision of the COP 21 to endeavor to take action to further limit global temperature increases to less than 1.5° Celsius.

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 that must take to achieve them.

These measures are left to each participating nation.

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.

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.

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

In December 2015, 196 countries, including Canada, Australia and the U.S., adopted the Paris Agreement at the 2015 United Nations Climate Change Conference.

The stated goal of the Paris Agreement is to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.” To reach these goals, the Paris Agreement requires parties to submit Nationally Determined Contributions (NDCs) which set out their emission reduction targets.

NDCs are updated every five years with increasingly ambitious targets.

In March 2016, the government of Canada and 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 NDCs 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.

In 2018, the government introduced the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) (Federal Methane Regulations) to implement its methane commitment.

Canada is on track to meet this target.

In 2018, Canada introduced the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) (Federal Methane Regulations) to implement its methane commitment.

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, and other emissions limits are now in place for certain equipment installed on or after January 1, 2023.

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.

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

In December 2023, the federal government published proposed amendments to the Federal Methane Regulations for public comment.

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They would also impose requirements on hydrocarbon combustion systems and measures to reduce fugitive methane emissions.

Draft regulations are expected to be published in 2024.

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

As of December 2024, the proposed amendments have not been enacted.

The proposed amendments may result in additional costs or liabilities for our customers’ operations.

In 2018, the federal government enacted the Greenhouse Gas Pollution Pricing Act (GGPPA), which came into force on January 1, 2019.

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

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

As of January 1, 2024, the backstop price is $65 per tonne of CO2e.

That price will increase to $80 in April 2024 and the current government plan is to continue increasing that price by $15 each year until it reaches $170/tonne of CO2e in 2030.

As of December 2024, the backstop price is $80 per tonne of CO2e.

The current government plan is to continue increasing that price by $15 each 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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The federal government is required to support those efforts by creating a Net-Zero Advisory Body and by publishing annual reports that describe how departments and Crown corporations are considering the financial risks and opportunities of climate change in their decision-making.

At the 26th Conference of the Parties to the UNFCCC (COP 26), held in Glasgow between October 31 and November 13, 2021, Canada presented a strengthened climate plan and committed to an enhanced emissions reduction target of between 40 and 45 percent below 2005 levels by 2030.

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.

In December 2023, the federal government announced that it intended to implement a national cap-and-trade system for oil and gas emissions in Canada and published a draft regulatory framework for public comment.

Draft regulations are expected to be published in 2024.

The proposed cap-and-trade system would set oil and gas sector emissions limits, to be phased in between 2026 and 2030.

Producers would be required to reduce their emissions or purchase "allowances" from other facilities that have reduced their emissions.

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

The current 2030 Emissions Reduction Plan is an ambitious target to reduce emissions by 40% below 2005 levels by 2030.

In addition, the federal government amended the Canadian Environmental Protection Act, 1999 (CEPA) in 2023.

In particular, the preamble to CEPA now recognizes that every individual in Canada has a right to a healthy environment.

The Government of Canada must now take into consideration this right, including the principles of environmental justice, when making decisions under CEPA, including its regulation of greenhouse gas emissions in Canada.

Within two years, the Government of Canada must develop an implementation framework on how this right will be upheld while administering CEPA.

Until that framework is developed, there is significant uncertainty regarding how these changes to CEPA will be implemented, and their potential to affect our customers' operations.

In October 2024, Canada unveiled a draft framework to protect the right to a healthy environment through further modernization of the CEPA.

As of December 2024, the draft framework still has not been finalized and there remains significant uncertainty regarding how these proposed changes to the CEPA will be implemented and the potential of the proposed changes to affect our customers' operations.

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

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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.

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.

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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.

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.

protection measures or could result in limitations on their exploration and production activities, which could have an adverse impact on demand for our services.

The Canadian Species at Risk Act (SARA) 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.

Alberta’s Wildlife Act is similar legislation designed to protect wildlife in Alberta.

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.

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

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

In October 2020, Alberta and Canada signed the Agreement for the Conservation and Recovery of the Woodland Caribou in Alberta (Caribou Agreement) pursuant to the SARA.

The Caribou Agreement has not led to any concrete provincial regulations or restrictions that affect oil and gas development in Alberta.

However, certain local governments have created caribou range plans (also known as sub-regional plans) that may limit oil and gas developments by limiting the creation of right-of-ways (e.g., pipelines, electricity transmission lines, seismic lines, etc.) that break up caribou habitat and provide predators like wolves with easier access to caribou herds.

For example, the Cold Lake sub-regional plan states that all new development in caribou ranges “must be issued with a no-surface-disturbance restriction.” Wildlife protection legislation may create challenges to development that may negatively impact our customers’ operations.

Abandonment and Remediation of Oil and Gas Infrastructure

As the lifecycle regulator for energy resource activities, the AER oversees closure requirements, including the abandonment and reclamation of wells, well sites, facilities, facility sites and pipelines.

Historically, the AER discharged this role through its Liability Management Rating Program (AB LMR Program).

The AB LMR Program relied on the ratio of a company's assets and liabilities (Liability Management Ratio or LMR) to assess whether the company would be able to address closure obligations.

Where a company's liabilities exceeded their assets (resulting in a LMR of less than 1.0), the AER could require the company to post security to bring the ratio to 1.0.

The AB LMR Program was developed during a period of rapid growth in the province when companies were focused on well and infrastructure expansion.

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.

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.

In April 2020, the Government of Alberta passed the Liabilities Management Statutes Amendment Act, which places the burden of a defunct licensee's abandonment and reclamation obligations first on the defunct licensee's working interest partners, and second, the AER may order the orphan fund (Orphan Fund) established under the Oil and Gas Conservation Act (OGCA) to assume care and custody and accelerate the clean-up of wells or sites which do not have a responsible owner.

These changes will come into force on proclamation.

As a result of the changing landscape and new direction from the Redwater decision, in July 2020, the Government of Alberta began implementing changes to its liability management policy.

In particular, in July 2020, the Province released a new Liability Management Framework (AB LMF) which includes a series of mechanisms and requirements to improve and expedite reclamation efforts and to require industry to better manage clean-up of oil and gas wells, pipelines and facilities.

Notably, the AB LMF provided policy direction allowing the AER to take "Licensee Special Action" to assist operators in managing their assets and maintaining operations under certain circumstances.

The Government of Alberta followed the announcement of the AB LMF with amendments to the Oil and Gas Conservation Rules and the Pipeline Rules in late 2020.

The changes to these rules fall into three broad categories:

(i) they introduce "closure" as a defined term, which captures both abandonment and reclamation;

(ii) they expand the AER's authority to initiate and supervise closure;

and (iii) they permit qualifying third parties on whose property wells or facilities are located to request that licensees prepare a closure plan.

The AB LMF provided Government of Alberta policy direction on managing energy sector closure requirements.

The AER implements and administers that policy through directives.

Beginning in 2020, the Government of Alberta (Alberta) began implementing legislative and regulatory changes to the framework used to manage liability from oil and gas facilities within the province.

In particular, in July 2020, Alberta released a new Liability Management Framework (AB LMF) which includes a series of mechanisms and requirements to improve and expedite reclamation efforts and to require industry to better manage clean-up of wells, pipelines and facilities.

Alberta followed the announcement of the AB LMF with amendments to the Oil and Gas Conservation Rules and the Pipeline Rules in late 2020.

Those changes gave the AER additional authority to manage closure-related activity for oil and gas facilities within the province.

The AER implements and administers these policies through directives.

In April 2021, the AER made changes to Directive 067:

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.

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.

In December 2021, the AER published a new Directive 88:

Licensee Life-Cycle Management (Directive 88) and supporting guidance information to further support implementing the AB LMF.

Among other things, Directive 88 establishes the AER's authority to conduct a holistic licensee assessment to inform regulatory decisions about a given licensee, including by conducting a "Licensee Capability Assessment." Directive 88 also establishes the Licensee Management Program contemplated in the AB LMF which enables the AER to proactively monitor licensees to identify those at risk of not meeting

their regulatory obligations and to use appropriate regulatory tools to address that risk.

Eligibility Requirements for Acquiring and Holding Energy Licenses and Approvals (Directive 67) to ensure the AER closely scrutinizes those parties seeking eligibility to hold AER licenses by evaluating whether they pose an "unreasonable risk" based on a variety of factors.

In December 2021, the AER published Directive 088:

Licensee Life-Cycle Management (Directive 88) to support implementing the AB LMF.

Directive 88 establishes the AER's authority to conduct a holistic licensee assessment to inform regulatory decisions about a given licensee.

Directive 88 also establishes the Licensee Management Program which enables the AER to proactively monitor licensees to identify those at risk of not meeting their regulatory obligations and to use appropriate regulatory tools to address that risk.

Finally, Directive 88 establishes the Inventory Reduction Program and allows the AER to set licensee-specific and industry-wide closure targets.

Complementing the AB LMF Program and associated directives, Alberta's OGCA establishes an orphan fund (Orphan Fund) to help pay the costs to suspend, abandon, remediate and reclaim a well, facility or pipeline included in the AB LMR Program if a licensee or working interest participant becomes insolvent or is unable to meet its obligations.

The Orphan Fund was originally conceived to be bankrolled by licensees in the AB LMR Program who contribute to a levy administered by the AER.

However, given the increase in orphaned oil and natural gas assets, the Government of Alberta has loaned the Orphan Fund approximately $335 million to carry out abandonment and reclamation work, of which, $121 million had been paid as of May 2023.

In response to the COVID-19 pandemic, the Government of Alberta also covered $113 million in levy payments that licensees would otherwise have owed to the Orphan Fund, corresponding to the levy payments due for the first six months of the AER's fiscal year.

A separate orphan levy applies to persons holding licenses for large facilities.

Collectively, these programs, the AB LMF, and associated directives are designed to minimize the risk to the Orphan Fund posed by the unfunded liabilities of licensees and to prevent the taxpayers of Alberta from incurring costs to suspend, abandon, remediate and reclaim wells, facilities or pipelines.

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.

In British Columbia the BCER’s Comprehensive Liability Management Plan addresses liability management, improving the rate of inactive site restoration, and addressing orphan sites.

The BCER uses a Liability Management Rating (LMR) program to evaluate each company’s ability to pay for site restoration.

The BCER addresses dormant sites through the Dormancy and Shutdown Regulation, which ensures oil and natural gas producers responsibly bring their energy resource activities to regulatory closure within a reasonable time frame.

The Dormant Sites Program is used to identify permit holders that are subject to the dormant site provisions of the Energy Resource Activities Act and the Dormancy and Shutdown Regulation.

The regulation sets timelines for restoration and imposes requirements for decommissioning, site assessment, remediation and restoration.

Like in Alberta, British Columbia’s Orphan Site Reclamation Fund is a levy on oil and natural gas producers that is used to pay the cost of restoring orphan sites in BC.

In British Columbia the British Columbia Energy Regulator's (BCER) Comprehensive Liability Management Plan addresses liability management, improves the rate of inactive site restoration and addresses orphan sites.

The BCER uses a Liability Management Rating program to evaluate each company’s ability to pay for site restoration.

The BCER addresses dormant sites through the Dormancy and Shutdown Regulation , which ensures producers responsibly bring their energy resource activities to regulatory closure within a reasonable time frame.

If or when applicable to operations, any changes to the BCER’s approach to managing dormancy and closure requirements for energy resource activities may result in additional costs or liabilities for our customers’ operations.

Australian Environmental Regulations

These controls include:

land use and urban design controls;

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);

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 assessment and approval.

In December 2022 the federal government announced its response to the Independent Review.

This response proposes various changes to the EPBC Act in line with the Independent Review, for example, the introduction of ‘National Environmental Standards’, creation of a federal Environmental Protection Agency and the introduction of a requirement to

achieve ‘net positive’ outcomes.

Several bills to effect some of the recommended reforms are currently before Parliament and a comprehensive draft bill is expected to be introduced in 2024 together with a draft of the proposed National Environmental Standards.

Notably, the federal government is not presently proposing to introduce the climate change referral trigger recommended by the Independent Review.

If any of the recommended reforms take effect, 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 legislative and policy changes may affect our customers’ operations and have impacts on the non-renewable resources sector generally.

There is an increasing emphasis from 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.

These schemes require the tracking of specific environmental performance factors.

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 federal legislation.

These reforms are intended to assist Australia meet its emissions reduction targets of 43% below 2005 levels by 2030 and may affect large scale industry customers.

The federal government has also proposed further climate-related disclosure requirements that are anticipated to take effect (for some companies) from mid-2024.

These proposed disclosure requirements will oblige companies to disclose various climate-related information, including information about their greenhouse gas emissions, climate-related targets, offset contributions, transition plans, and information about strategies, plans and governance procedures/controls in place to monitor and manage climate-related risks and opportunities.

If these reforms become law, we will have corporate reporting requirements in relation to these climate related matters, likely to commence in 2026.

State and Territory Controls

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

Queensland’s Department of Environment, Science and Innovation).

If amendments are made to the EPBC Act to effect new bilateral agreements, the States and Territories will likely be given further power to assess and approve certain actions regulated 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.

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

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

Failure to discharge this obligation can attract significant sanctions and financial penalties.

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

The Clean Water Act, as amended, and analogous state laws impose restrictions and strict controls regarding the discharge of pollutants into state waters or waters of the U.S.

The discharge of pollutants into jurisdictional waters is prohibited unless the discharge is permitted by the U.S.

Environmental Protection Agency (EPA) or authorized state agencies.

In addition, 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.

In December 2023, the EPA issued a final rule updating New Source Performance Standards (NSPS) and providing emission guidelines to reduce methane and other pollutants from the oil and gas industry.

While the U.S.

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.

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.

Under the Paris Agreement, the Biden Administration has committed the U.S.

to reducing its greenhouse gas emissions by 50% to 52% from 2005 levels by 2030.

In November 2021, the U.S.

and other countries entered into the Glasgow Climate Pact, which includes a range of measures designed to address climate change, including but not limited to the phase-out of fossil fuel subsidies, reducing methane emissions 30% by 2030, and cooperating toward the advancement of the development of clean energy.

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.

Any such legislation or regulatory programs could also increase the cost of consuming, and thereby reduce demand for oil and natural gas, which could reduce our customers’ demand for our services.

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, including the federal Resource Conservation and Recovery Act, as amended (RCRA), the federal Comprehensive Environmental Response, Compensation and Liability Act, as amended (CERCLA), also known as the Superfund law, and comparable state laws.

Under such laws, we could be required to undertake response or corrective measures, which could include removal of previously disposed substances and wastes, cleanup of contaminated property or performance of remedial operations to prevent future contamination.

The federal Endangered Species Act, as amended (ESA), restricts activities in the U.S.

that may affect endangered or threatened species or their habitats.

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 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.

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

The process involves the injection of water, sand and chemicals under pressure into a formation to fracture the surrounding rock and stimulate production of hydrocarbons.

Certain environmental advocacy groups and regulatory agencies have suggested that additional federal, state and local laws and regulations may be needed to more closely regulate the hydraulic fracturing process, and have made claims that

hydraulic fracturing techniques are harmful to surface water and drinking water resources and may cause earthquakes.

Various governmental entities (within and outside the U.S.) are in the process of studying, restricting, regulating or preparing to regulate hydraulic fracturing, directly or indirectly.

In the U.S., the EPA already regulates certain hydraulic fracturing operations involving diesel under the Underground Injection Control program of the federal Safe Drinking Water Act.

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.

The adoption of legislation or regulatory programs that restrict hydraulic fracturing could adversely affect, reduce or delay well drilling and completion activities, increase the cost of drilling and production, and thereby reduce demand for our services.

There also exists the potential for the Biden Administration to pursue new or amended laws, regulations, executive actions and other regulatory initiatives that could impose more stringent restrictions on hydraulic fracturing, including potential restrictions on hydraulic fracturing by banning new oil and gas permitting on federal lands.

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.

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