Item 2. Management’s Discussion and Analysis
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis together with our consolidated financial statements and the notes to those statements included elsewhere in this quarterly report on Form 10-Q.
Overview and Macroeconomic Environment
Demand for our hospitality services is driven primarily by ongoing operations of existing natural resource projects in Australia and Canada. Historically, initial demand for our hospitality services has been driven by our customers’ capital spending programs related to the construction and development of natural resource projects and associated infrastructure. 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, reserve replacement requirements, estimates of resource production, annual maintenance requirements and the expectations of our customers' shareholders. As a result, demand for our hospitality services is sensitive to expected commodity prices, principally related to met (metallurgical) coal, oil, iron ore and liquefied natural gas (LNG), 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, the impact of global tariff changes and other changes to trade policies, volatility affecting the banking system and financial markets, availability of capital to the natural resource industry and regulatory changes in Australia, Canada and other markets, including governmental measures introduced to mitigate climate change.
Commodity Prices
There is continued uncertainty around commodity price levels, driven by many factors including rising fears of a recession resulting from lingering inflation and higher interest rates, an economic slowdown in China and resultant economic stimulus by the Chinese government, the impact of inflationary pressures, the impact of global tariff changes and other changes
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to trade policies, actions taken by Organization of the Petroleum Exporting Countries Plus (OPEC+) to adjust oil production levels, geopolitical events such as the ongoing Russia/Ukraine and Middle East conflicts, U.S. oil production levels and regulatory implications on such prices. In particular, these items could cause our Canadian oil sands and pipeline customers to delay expansionary and maintenance spending and defer additional investments in their oil sands assets and in extreme cases reduce production.
Recent Commodity Prices.
Recent met coal, iron ore, West Texas Intermediate (WTI) crude, and Western Canadian Select (WCS) crude pricing trends are as follows:
Average Price (1)
Quarter
ended Hard
Coking Coal
(Met Coal)
(per tonne) Iron
Ore
(per tonne) WTI
Crude
(per bbl) WCS
Crude
(per bbl)
Second Quarter through April 25, 2025
182.69 94.30 63.55 53.05
3/31/2025 185.13 97.25 71.47 58.27
12/31/2024 203.50 96.00 70.42 57.50
9/30/2024 210.74 94.54 75.29 59.97
6/30/2024 242.93 106.01 80.83 67.24
3/31/2024 307.68 118.54 77.01 59.48
12/31/2023 332.24 122.24 78.60 55.31
9/30/2023 260.12 111.04 82.50 66.20
6/30/2023 243.54 106.98 73.54 60.25
3/31/2023 341.08 117.08 75.96 56.61
(1) Source: Hard coking prices are from IHS Markit, iron ore prices and WCS crude prices are from Bloomberg and WTI crude prices are from U.S. Energy Information Administration.
Met Coal. In Australia, 84% of our Australian owned rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region. Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by the level of global steel production. Following improvements in global steel production in the last quarter of 2024, production decreased during January and February of 2025 and increased into March 2025. Europe and the U.S. experienced decreased steel production during the first quarter of 2025. However, India and China continued to experience positive growth in steel production into the first quarter of 2025 with strong production in March 2025. Future steel production remains contingent on global GDP growth rates, Chinese productivity and the impact of global tariff changes and other changes to trade policies.
Global steel production increased by 2.9% during March 2025 compared to March 2024. As of April 25, 2025, met coal spot prices were $192.20 per tonne.
Met coal prices stagnated around $200 per tonne during the last quarter of 2024. In early 2025, met coal prices dropped below $200 per tonne, with prices averaging $185 per tonne in the first quarter of 2025. High met coal inventories from buyers continue to impact demand, which, along with decreased steel production in the first quarter of 2025 resulted in depressed prices. While larger producers continue to maintain production, managing costs has become a greater focus in a lower-price environment.
While high met coal inventories and lower steel production affected prices in early 2025, analysts are currently forecasting prices to improve gradually in late 2025 to $200. During 2025, met coal price movements will be driven by changes in underlying met coal production and steel demand, both of which may be impacted by ongoing changes to global tariffs and trade disputes.
Iron Ore. Iron ore prices improved to average $97.25 per tonne during the first quarter of 2025 with prices moving between $92 and $103 per tonne. Analysts expect iron ore prices to average $95-$100 per tonne through the remainder of 2025, with stable supply and subdued steel production.
WTI Crude. In an effort to support the price of oil amidst demand concerns, OPEC+ countries extended their 2023 oil production cuts throughout 2024 and into 2025. These production cuts, coupled with the rising geopolitical risks in the Middle
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East, resulted in rising oil prices during the first half of 2024. Oil prices decreased during the second half of 2024 due to increased market concerns over economic growth and demand. OPEC+ has announced that it will increase production in 2025, which is likely to put pressure on global oil prices.
WCS Crude. In Canada, WCS crude is the benchmark price for our oil sands customers. Pricing for WCS is driven by several factors, including the underlying price for WTI crude, the availability of transportation infrastructure (consisting of pipelines and crude by railcar), refinery blending requirements and governmental regulation. Historically, WCS has traded at a discount to WTI, creating a “WCS Differential,” due to transportation costs and capacity restrictions to move Canadian heavy oil production to refineries, primarily along the U.S. Gulf Coast. The WCS Differential has varied depending on the extent of transportation capacity availability.
Certain expansionary oil pipeline projects have the potential to both drive incremental demand for mobile assets and to improve take-away capacity for Canadian oil sands producers over the longer term, most notably the Trans Mountain Pipeline expansion, which began operating in the second quarter of 2024.
WCS prices in the first quarter of 2025 averaged $58.27 per barrel compared to an average of $59.48 in the first quarter of 2024 and have continued to fall since the end of the first quarter of 2025. The WCS Differential decreased from $13.49 per barrel at the end of the fourth quarter of 2024 to $10.89 at the end of the first quarter of 2025. As of April 25, 2025, the WTI price was $63.95 and the WCS price was $52.50, resulting in a WCS Differential of $11.45. Further, the U.S. Administration has announced and is in the process of implementing several new tariffs, including a 10% tariff on energy resources imported to the U. S. from Canada. Implementation of tariffs could have adverse impact on our Canadian customers profit margins, which may in turn reduce their spending on our accommodations and services.
Other
Recent Developments . 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 assets and long-term customer contracts for total cash consideration of A$105 million, or approximately US$67 million, as may be adjusted for customary purchase price adjustments set forth in the purchase agreement, to be funded with cash on hand and borrowings under the Amended Credit Agreement. The acquisition is anticipated to close in the second quarter of 2025, subject to certain regulatory approvals and customary closing conditions.
Inflationary Pressures. Since 2023 and continuing into 2025, inflationary pressures and supply chain disruptions have been, and continue to be, experienced worldwide. Price increases resulting from inflation and supply chain concerns have, and are expected to continue to have, a negative impact on our labor and food costs, as well as consumable costs such as fuel. Lingering inflation from the pandemic has recently been exacerbated by changes to global tariffs and trade policies. We are managing inflation risk with negotiated service scope changes and contractual protections.
Labor Shortages. In addition to the macro inflationary impacts on labor costs noted above, we continue to be impacted by increased staff costs as a result of hospitality labor shortages in Australia due to significantly reduced migration in and around Australia affecting labor availability, which has subsequently led to an increased reliance on more expensive temporary labor resources.
LNG. Our Sitka Lodge supports the LNG Canada (LNGC) project and related pipeline projects (specifically, the Coastal GasLink Pipeline, the pipeline constructed to transport natural gas feedstock to LNGC). 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. 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.
From a macroeconomic standpoint, LNG demand has continued to grow, reinforcing the need for the global LNG industry to expand access to natural gas. Evolving government energy policies around the world have amplified support for cleaner energy supply, creating more opportunities for natural gas and LNG. The conflicts between Russia/Ukraine and in the Middle East have further highlighted the need for secure natural gas supply globally, particularly in Europe. Accordingly, we expect additional investment in LNG supply will be needed to meet the resulting expected long-term LNG demand growth.
Foreign Currency Exchange Rates. Exchange rates between the U.S. dollar and each of the Australian dollar and the Canadian dollar influence our U.S. dollar reported financial results. Our business has historically derived the vast majority of its revenues and operating income (loss) in Canada and Australia. These revenues and profits/losses are translated into U.S. dollars
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for financial reporting purposes under U.S. Generally Accepted Accounting Principles. The following tables summarize the fluctuations in the exchange rates between the U.S. dollar and each of the Canadian dollar and the Australian dollar:
Three Months Ended
March 31,
2025 2024 Change Percentage
Average Australian dollar to U.S. dollar $0.628 $0.657 ($0.03) (4.5)%
Average Canadian dollar to U.S. dollar $0.697 $0.741 ($0.04) (6.0)%
As of
March 31, 2025 December 31, 2024 Change Percentage
Australian dollar to U.S. dollar $0.624 $0.620 $0.004 0.7%
Canadian dollar to U.S. dollar $0.696 $0.695 $0.001 0.1%
These fluctuations of the Australian and Canadian dollars have had and will continue to have an impact on the translation of earnings generated from our Australian and Canadian subsidiaries and, therefore, our financial results.
Capital Expenditures. We continue to monitor the global economy, commodity prices, demand for met coal, crude oil, LNG and iron ore, inflation, trade policy and the resultant impact on the capital spending plans of our customers in order to plan our business activities. We currently expect that our 2025 capital expenditures will be in the range of approximately $20 million to $25 million, compared to 2024 capital expenditures of $26.1 million. We may adjust our capital expenditure plans in the future as we continue to monitor customer activity.
See “Liquidity and Capital Resources ” below for further discussion of our 2025 capital expenditures.
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Results of Operations
Unless otherwise indicated, discussion of results for the three months ended March 31, 2025, is based on a comparison to the corresponding period of 2024.
Results of Operations – Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
Three Months Ended
March 31,
2025 2024 Change
($ in thousands)
Revenues:
Australia $ 103,646 $ 91,737 $ 11,909
Canada 40,398 67,160 (26,762)
Other — 7,223 (7,223)
Total revenues 144,044 166,120 (22,076)
Costs and expenses:
Cost of sales and services
Australia 76,720 66,113 10,607
Canada 37,645 57,257 (19,612)
Other 250 7,075 (6,825)
Total cost of sales and services 114,615 130,445 (15,830)
Selling, general and administrative expenses 18,185 18,640 (455)
Depreciation and amortization expense 16,253 16,770 (517)
Impairment expense — 7,823 (7,823)
Gain on sale of McClelland Lake Lodge assets, net — (6,075) 6,075
Other operating expense 507 298 209
Total costs and expenses 149,560 167,901 (18,341)
Operating loss (5,516) (1,781) (3,735)
Interest expense, net (1,593) (2,317) 724
Other income 347 453 (106)
Loss before income taxes (6,762) (3,645) (3,117)
Income tax expense (3,088) (1,551) (1,537)
Less: Net loss attributable to noncontrolling interest (9,850) (5,196) (4,654)
Less: Net loss attributable to noncontrolling interest (8) (63) 55
Net loss attributable to Civeo Corporation $ (9,842) $ (5,133) $ (4,709)
We reported net loss attributable to Civeo for the quarter ended March 31, 2025 of $9.8 million, or $0.72 per diluted share. Net loss included $1.0 million of restructuring costs initiatives in Canada related to severance and two lodge closures.
We reported net loss attributable to Civeo for the quarter ended March 31, 2024 of $5.1 million, or $0.35 per diluted share. Net loss included (i) $6.1 million of net gains associated with the sale of the McClelland Lake Lodge in Canada and (ii) a $7.8 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.
Revenues. Consolidated revenues decreased $22.1 million, or 13%, in the first quarter of 2025 compared to the first quarter of 2024. This decrease was primarily driven by (i) lower billed rooms at our Canadian oil sands lodges as producers in the region remain focused on reducing operating costs, (ii) reduced occupancy at our Canadian Sitka Lodge as the construction of the Kitimat LNG facility nears completion and (iii) a weaker Australian and Canadian dollar relative to the U.S. dollar in the first quarter of 2025 compared to the first quarter of 2024. These items were partially offset by an increase in our Australian segment driven by new business in our integrated services villages in Western Australia related to a six-year contract with an expected total contract value of A$1.4 billion that the Company previously announced. See the discussion of segment results of operations below for further information.
Cost of Sales and Services. Our consolidated cost of sales and services decreased $15.8 million, or 12%, in the first quarter of 2025 compared to the first quarter of 2024. This decrease was primarily driven by lower costs at various lodges in our Canadian segment due to reduced occupancy levels and a weaker Australian and Canadian dollar relative to the U.S. dollar
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in the first quarter of 2025 compared to the first quarter of 2024. These items were partially offset by an increase in cost of sales and services in our Australian segment largely driven by new business in our integrated services villages in Western Australia and the associated overhead costs. See the discussion of segment results of operations below for further information.
Selling, General and Administrative Expenses. SG&A expenses decreased $0.5 million, or 2%, in the first quarter of 2025 compared to the first quarter of 2024. This decrease was primarily due to lower incentive compensation cost of $0.7 million, lower travel and entertainment costs of $0.5 million and a weaker Australian and Canadian dollar relative to the U.S. dollar in the first quarter of 2025 compared to the first quarter of 2024. These items were partially offset by higher share-based compensation expense of $0.6 million. The increase in share-based compensation expense was primarily due to lower forfeitures in the first quarter of 2025 compared to the first quarter of 2024.
Depreciation and Amortization Expense. Depreciation and amortization expense decreased $0.5 million, or 3%, in the first quarter of 2025 compared to the first quarter of 2024. The decrease was primarily due to a weaker Australian and Canadian dollar relative to the U.S. dollar in the first quarter of 2025 compared to the first quarter of 2024, partially offset by additional property, plant and equipment placed in service.
Impairment Expense. We recorded pre-tax impairment expense of $7.8 million in the first quarter of 2024 associated with long-lived assets in Australia and the U.S. See Note 3 - Impairment Charges to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.
Gain on Sale of McClelland Lake Lodge Assets, net. We recorded $6.1 million in the first quarter of 2024 related to net gains associated with the sale of the McClelland Lake Lodge.
Operating Loss. Consolidated operating loss increased $3.7 million, or 210%, in the first quarter of 2025 compared to the first quarter of 2024, primarily due to lower lodge occupancy in Canada in the first quarter of 2025 compared to the first quarter of 2024 and a net gain on sale of McClelland Lake Lodge assets in the first quarter of 2024. These items were partially offset by higher activity levels in Australia in the first quarter of 2025 compared to the first quarter of 2024 and impairment expenses in the first quarter of 2024.
Interest Expense, net. Net interest expense decreased by $0.7 million, or 31%, in the first quarter of 2025 compared to the first quarter of 2024, primarily related to lower average debt levels and lower interest rates on credit facility borrowings during 2025 compared to 2024.
Income Tax Expense. Our income tax expense for the three months ended March 31, 2025 totaled $3.1 million, or (45.7)% of pretax loss, compared to an income tax expense of $1.6 million, or (42.6)% of pretax loss, for the three months ended March 31, 2024. Our effective tax rate for the three months ended March 31, 2025 and 2024 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.
Other Comprehensive Income. Other comprehensive income increased $11.3 million in the first quarter of 2025 compared to the first quarter of 2024, primarily as a result of foreign currency translation adjustments due to changes in the Australian and Canadian dollar exchange rates compared to the U.S. dollar. The Australian dollar exchange rate compared to the U.S. dollar increased 1% in the first quarter of 2025 compared to a 4% decrease in the first quarter of 2024. The Canadian dollar exchange rate compared to the U.S. dollar increased 0.1% in the first quarter of 2025 compared to a 2% decrease in the first quarter of 2024.
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Segment Results of Operations – Australian Segment
Three Months Ended
March 31,
2025 2024 Change
Revenues ($ in thousands)
Accommodation revenue (1)
$ 46,823 $ 47,107 $ (284)
Food service and other services revenue (2)
56,823 44,630 12,193
Total revenues $ 103,646 $ 91,737 $ 11,909
Cost of sales and services ($ in thousands)
Accommodation cost $ 23,071 $ 22,594 $ 477
Food service and other services cost 50,651 40,904 9,747
Indirect other cost 2,998 2,615 383
Total cost of sales and services $ 76,720 $ 66,113 $ 10,607
Gross margin as a % of revenues 26.0 % 27.9 % (2.0) %
Average daily rate for villages (3)
$ 75 $ 77 $ (2)
Total billed rooms for villages (4)
625,636 613,936 11,700
Average Australian dollar to U.S. dollar $ 0.628 $ 0.657 $ (0.030)
(1) Includes revenues related to village rooms and hospitality services for owned rooms for the periods presented.
(2) Includes revenues related to food services and other services, including facilities management for the periods presented.
(3) Average daily rate is based on billed rooms and accommodation revenue.
(4) Billed rooms represent total billed days for owned assets for the periods presented.
Our Australian segment reported revenues in the first quarter of 2025 that were $11.9 million, or 13%, higher than the first quarter of 2024. The weakening of the average exchange rate for the Australian dollar relative to the U.S. dollar by 4.5% in the first quarter of 2025 compared to the first quarter of 2024 resulted in a $4.9 million period-over-period decrease in revenues. On a constant currency basis, the Australian segment experienced a 18% period-over-period increase in revenues. Excluding the impact of the weaker Australian exchange rate, the increase in the Australian segment was driven by new business in our integrated services villages in Western Australia.
Our Australian segment cost of sales and services increased $10.6 million, or 16%, in the first quarter of 2025 compared to the first quarter of 2024. The weakening of the average exchange rate for the Australian dollar relative to the U.S. dollar by 4.5% in the first quarter of 2025 compared to the first quarter of 2024 resulted in a $3.6 million period-over-period decrease in cost of sales and services. Excluding the impact of the weaker Australian exchange rate, the increase in cost of sales and services in the Australian segment was largely driven by new business in our integrated services villages in Western Australia and the associated overhead costs.
Our Australian segment gross margin as a percentage of revenues decreased to 26.0% in the first quarter of 2025 from 27.9% in the first quarter of 2024. This was primarily driven by an increased relative revenue contribution from our integrated services business, which has a service-only business model, and generates lower overall gross margins than our accommodation business.
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Segment Results of Operations – Canadian Segment
Three Months Ended
March 31,
2025 2024 Change
Revenues ($ in thousands)
Accommodation revenue (1)
$ 33,436 $ 59,787 $ (26,351)
Mobile facility rental revenue (2)
219 994 (775)
Food service and other services revenue (3)
6,743 6,379 364
Total revenues $ 40,398 $ 67,160 $ (26,762)
Cost of sales and services ($ in thousands)
Accommodation cost $ 28,865 $ 45,720 $ (16,855)
Mobile facility rental cost — 2,651 (2,651)
Food service and other services cost 6,473 6,140 333
Indirect other costs 2,307 2,746 (439)
Total cost of sales and services $ 37,645 $ 57,257 $ (19,612)
Gross margin as a % of revenues 6.8 % 14.7 % (7.9) %
Average daily rate for lodges (4)
$ 93 $ 98 $ (5)
Total billed rooms for lodges (5)
358,697 610,032 (251,335)
Average Canadian dollar to U.S. dollar $ 0.697 $ 0.741 $ (0.045)
(1) Includes revenues related to lodge rooms and hospitality services for owned rooms for the periods presented.
(2) Includes revenues related to mobile assets for the periods presented.
(3) Includes revenues related to food services, laundry and water and wastewater treatment services for the periods presented.
(4) Average daily rate is based on billed rooms and accommodation revenue.
(5) Billed rooms represents total billed days for owned assets for the periods presented.
Our Canadian segment reported revenues in the first quarter of 2025 that were $26.8 million, or 40%, lower than the first quarter of 2024. The weakening of the average exchange rate for the Canadian dollar relative to the U.S. dollar by 6.0% in the first quarter of 2025 compared to the first quarter of 2024 resulted in a $2.6 million period-over-period decrease in revenues. On a constant currency basis, the Canadian segment experienced a 36% period-over-period decrease in revenues. Excluding the impact of the weaker Canadian exchange rate, the decrease in the Canadian segment was driven by (i) lower billed rooms at our oil sands lodges as producers in the region remain focused on reducing operating costs, (ii) reduced occupancy at our Sitka Lodge as the Kitimat LNG facility nears completion and (iii) reduced mobile asset activity from pipeline projects which were completed in early 2024.
Our Canadian segment cost of sales and services decreased $19.6 million, or 34%, in the first quarter of 2025 compared to the first quarter of 2024. The weakening of the average exchange rate for the Canadian dollar relative to the U.S. dollar by 6.0% in the first quarter of 2025 compared to the first quarter of 2024 resulted in a $2.4 million period-over-period decrease in cost of sales and services. Excluding the impact of the weaker Canadian exchange rate, the decrease in cost of sales and services in the Canadian segment was largely driven by lower costs at various lodges due to reduced occupancy levels and lower costs related to the reduced mobile asset activity from pipeline projects which were completed in early 2024.
Our Canadian segment gross margin as a percentage of revenues decreased from 14.7% in the first quarter of 2024 to 6.8% in the first quarter of 2025. This was primarily driven by reduced efficiencies at our lodges with lower occupancy levels.
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Liquidity and Capital Resources
Our primary liquidity needs are to fund capital expenditures, which in the past have included expanding and improving our hospitality services, developing new lodges and villages and purchasing or leasing land, to repurchase common shares, to pay dividends and for general working capital needs. In addition, capital has been used to repay debt and fund strategic business acquisitions. Historically, our primary sources of funds have been available cash, cash flow from operations, borrowings under our Amended Credit Agreement and proceeds from equity issuances. In the future, capital may be required to move lodges from one site to another, and we may seek to access the debt and equity capital markets from time to time to raise additional capital, increase liquidity, fund acquisitions or refinance debt.
The following table summarizes our consolidated liquidity position as of March 31, 2025 and December 31, 2024 (in thousands):
March 31, 2025 December 31, 2024
Lender commitments $ 265,000 $ 245,000
Reduction in availability (1)
(43,014) (3,635)
Borrowings against revolving credit capacity (87,367) (43,299)
Outstanding letters of credit (825) (1,100)
Unused availability 133,794 196,966
Cash and cash equivalents 28,372 5,204
Total available liquidity $ 162,166 $ 202,170
(1) As of March 31, 2025 and December 31, 2024, $43.0 million and $3.6 million, respectively, of our borrowing capacity under the Amended Credit Agreement could not be utilized in order to maintain compliance with the maximum leverage ratio financial covenant in the Amended Credit Agreement.
Cash totaling $8.4 million was used in operations during the three months ended March 31, 2025, compared to $6.0 million provided by operations during the three months ended March 31, 2024. During the three months ended March 31, 2025 and 2024, $14.7 million and $6.4 million was used in working capital, respectively. The year-over-year increase in cash used in working capital in 2025 compared to 2024 is largely due to an increase in cash taxes paid in Australia in 2025 compared to 2024 and the collection of holdbacks in Canada related to the completion of mobile asset pipeline projects during the three months ended March 31, 2024 that did not repeat in 2025, partially offset by a decrease in cash used by accounts payable and accrued liabilities during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Cash was used in investing activities during the three months ended March 31, 2025 in the amount of $5.1 million, compared to cash provided by investing activities during the three months ended March 31, 2024 in the amount of $1.2 million. The decrease in cash provided by investing activities was primarily due to lower proceeds from the sale of property, plant and equipment. We received net proceeds from the sale of property, plant and equipment of $0.2 million during the three months ended March 31, 2025 compared to $6.8 million during the three months ended March 31, 2024 related to the sale of our McClelland Lake Lodge accommodation assets in Canada. Capital expenditures totaled $5.3 million and $5.6 million during the three months ended March 31, 2025 and 2024, respectively. Capital expenditures in both periods were primarily related to maintenance. In addition, our 2024 capital expenditures included approximately $2.4 million related to customer-funded infrastructure upgrades in Australia.
We expect our capital expenditures for 2025 to be in the range of $20 million to $25 million, which excludes any unannounced and uncommitted projects, the spending for which is contingent on obtaining customer contracts or commitments or attractive risk-adjusted economics. Whether planned expenditures will actually be spent in 2025 depends on industry conditions, project approvals and schedules, customer room commitments and project and construction timing. We expect to fund these capital expenditures with available cash, cash flow from operations and revolving credit borrowings under our Amended Credit Agreement. The foregoing capital expenditure forecast does not include any funds for strategic acquisitions, which we could pursue should the transaction economics be attractive enough to us compared to the current capital allocation priorities of returning capital to shareholders. We continue to monitor the global economy, commodity prices, demand for met coal, crude oil, LNG and iron ore, inflation and the resultant impact on the capital spending plans of our customers in order to plan our business activities, and we may adjust our capital expenditure plans in the future.
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Net cash of $36.6 million was provided by financing activities during the three months ended March 31, 2025 primarily due to net borrowings under our revolving credit facilities of $44.2 million, partially offset by dividend payments of $3.4 million, repurchases of our common shares of $3.3 million, payments to settle tax obligations on vested shares under our share-based compensation plans of $0.7 million and debt issuance costs of $0.1 million. Net cash of $6.6 million was provided by financing activities during the three months ended March 31, 2024 primarily due to net borrowings under our revolving credit facilities of $14.6 million, partially offset by dividend payments of $3.7 million, repurchases of our common shares of $3.2 million and payments to settle tax obligations on vested shares under our share-based compensation plans of $1.1 million.
The following table summarizes the changes in debt outstanding during the three months ended March 31, 2025 (in thousands):
Balance at December 31, 2024 $ 43,299
Borrowings under revolving credit facilities 99,155
Repayments of borrowings under revolving credit facilities (54,989)
Translation (98)
Balance at March 31, 2025 $ 87,367
We believe that cash on hand and cash flow from operations will be sufficient to meet our anticipated liquidity needs for the next 12 months. If our plans or assumptions change, including as a result of changes in our customers' capital spending or changes in the price of and demand for natural resources, or are inaccurate, or if we make acquisitions, we may need to raise additional capital. Selectively pursuing strategic organic and inorganic growth opportunities that fit with our current capital allocation priorities of returning capital to shareholders has been, and our management believes will continue to be, an element of our long-term business strategy. The timing, size or success of any growth opportunities and the associated potential capital commitments are unpredictable and uncertain. We may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances or may issue equity directly to the sellers. Our ability to obtain capital for additional projects to implement our growth strategy over the longer term will depend on our future operating performance, financial condition and, more broadly, on the availability of equity and debt financing. Capital availability will be affected by prevailing conditions in our industry, the global economy, the global financial markets and other factors, many of which are beyond our control. In addition, any additional debt service requirements we take on could be based on higher interest rates and shorter maturities and could impose a significant burden on our results of operations and financial condition, and the issuance of additional equity securities could result in significant dilution to shareholders.
In September 2024, our Board authorized a common share repurchase program to repurchase up to 5.0% of our total common shares which are issued and outstanding at that date, or 710,556 common shares, over a twelve month period. In March 2025, our Board authorized an increase to our common share repurchase program to repurchase up to 10.0% of our total common shares which are issued and outstanding at that date, and in April 2025, our Board authorized a further increase to repurchase up to 20% of our total common shares which are issued and outstanding at that date, or approximately 2,690,000 common shares. Such share repurchase program does not expire. In addition, our Board declared quarterly dividends of $0.25 per common share to shareholders in the first quarter of 2025. These dividends were eligible dividends pursuant to the Income Tax Act (Canada). See Dividends below and Note 11 – Share Repurchase Programs and Dividends to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.
Credit Agreement
On March 24, 2025, we amended our Syndicated Facility Agreement (as amended to date, the Amended Credit Agreement) to increase the Australian revolving commitments by $20.0 million to an aggregate amount of $55.0 million.
As of March 31, 2025, the Amended Credit Agreement provided for a $265.0 million revolving credit facility scheduled to mature on August 8, 2028, allocated as follows: (A) a $10.0 million senior secured revolving credit facility in favor of certain of our U.S. subsidiaries, as borrowers; (B) a $200.0 million senior secured revolving credit facility in favor of Civeo and certain of our U.S. subsidiaries, as borrowers; and (C) a $55.0 million senior secured revolving credit facility in favor of one of our Australian subsidiaries, as borrower.
As of March 31, 2025, we had outstanding letters of credit of zero under the U.S. facility, zero under the Australian facility and $0.8 million under the Canadian facility. We also had outstanding bank guarantees of A$2.1 million under the Australian facility.
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See Note 7 – Debt to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.
Dividends
In April 2025, we announced the suspension by our Board of quarterly dividends on our common shares to prioritize returning capital to our shareholders through ongoing share repurchases. The declaration and amount of any potential future dividends will be at the discretion of our Board and will depend upon many factors, including our financial condition, results of operations, cash flows, prospects, industry conditions, capital requirements of our business, covenants associated with certain debt obligations, legal requirements, regulatory constraints, industry practice and other factors the Board deems relevant. In addition, our ability to pay cash dividends on common shares is limited by covenants in the Amended Credit Agreement. Future agreements may also limit our ability to pay dividends, and we may incur incremental taxes if we are required to repatriate foreign earnings to pay such dividends. If any dividends are declared in the future, the amount per share of our dividend payments may be changed, or dividends may again be suspended, without advance notice. The likelihood that dividends will be reduced or suspended is increased during periods of market weakness. There can be no assurance that we will pay any dividends in the future.
Critical Accounting Policies
For a discussion of the critical accounting policies and estimates that we use in the preparation of our consolidated financial statements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. These estimates require significant judgments, assumptions and estimates. We have discussed the development, selection and disclosure of these critical accounting policies and estimates with the audit committee of our Board. There have been no material changes to the judgments, assumptions and estimates upon which our critical accounting estimates are based.
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