Civeo Corp 10-K

ITEM 1. Business Available Information We maintain a website with the address of www.civeo.com. We are not including the information contained on our website as a part of, or incorporating it by reference into, this annual report. We file or furnish annual, quarterly and current reports, proxy statements and other documents with the Securities and Exchange Commission (the SEC). We make available free of charge through our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. 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. Our Company 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, iron ore and liquefied natural gas (LNG) 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, construction and 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 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. 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, resource delineation and construction 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 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. By providing infrastructure support and hospitality services early in the project lifecycle, we are well positioned to continue to service our customers throughout the production phase, which typically lasts decades. We own and operate 26 lodges and villages with approximately 26,500 rooms. We also operate approximately 19,500 rooms across 24 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. We have long-standing relationships with many of our customers, many of whom are, or are affiliates of, large, investment-grade energy and mining companies. 3 For the years ended December 31, 2025, 2024 and 2023, we generated $638.8 million, $682.1 million and $700.8 million in revenues and $4.1 million, $1.3 million and $39.5 million in operating income, respectively. The majority of our operations, assets and income are derived from the hospitality services provided at villages and lodges we or our customers own that have historically been contracted by our customers under multi-year, take-or-pay, exclusivity or integrated services contracts. For the year ended December 31, 2025, the hospitality services we provide at our owned facilities generated 57% of our revenue, while our integrated services offerings at customer owned facilities generated 43% of our revenue. Important performance metrics include revenue related to our major properties, average daily rates and aggregate billed rooms. The following summarizes these key statistics for the periods presented in this annual report. Year Ended December 31, 2025 2024 2023 (In thousands, except for room counts and average daily rate) Accommodation and Associated Services Revenue (1) Australia $ 211,761 $ 196,684 $ 177,834 Canada 150,651 214,774 266,926 Other — 10,079 11,205 Total Accommodation and Associated Services Revenue $ 362,412 $ 421,537 $ 455,965 Mobile Facility Rental and Associated Services Revenue (2) Canada $ 1,587 $ 1,523 $ 61,899 Total Mobile Facility Rental and Associated Sevices Revenue $ 1,587 $ 1,523 $ 61,899 Integrated Services and Other Services Revenue (3) Australia $ 248,534 $ 230,272 $ 158,929 Canada 26,316 28,790 23,970 Other — — 42 Total Integrated Services and Other Services Revenue $ 274,850 $ 259,062 $ 182,941 Total Revenue $ 638,849 $ 682,122 $ 700,805 Average Daily Rates for Owned Villages and Lodges (4) Australia $ 76 $ 78 $ 75 Canada $ 97 $ 97 $ 97 Total Billed Rooms for Owned Villages and Lodges (5) Australia 2,783,893 2,524,108 2,371,763 Canada 1,550,435 2,205,700 2,710,784 Average Exchange Rate Australian dollar to U. S. dollar $ 0.64 $ 0.66 $ 0.66 Canadian dollar to U. S. dollar $ 0.72 $ 0.73 $ 0.73 (1) Includes revenues related to village and lodge rooms and hospitality services for Civeo owned rooms for the periods presented. (2) Includes revenues related to mobile assets for the periods presented. (3) Includes revenues related to food service, laundry and water and wastewater treatment services and facilities management for the periods presented. (4) Average daily rate is based on billed rooms and accommodation and other services revenue for Civeo owned rooms during the periods presented. (5) Billed rooms represents total billed days for Civeo owned village and lodge assets for the periods presented. 4 Our History Our history is one of identifying customer and market needs and developing economic solutions. Our historical experience in Canada began in small, mobile assets 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. 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. Our Canadian operations, founded in 1977, began by providing modular rental housing to energy customers, primarily supporting drilling rig crews in the Western Canadian Sedimentary Basin. Over the next decade, we acquired a food service operation, enabling us to provide a more comprehensive accommodation solution. Through our experience with Syncrude’s Mildred Lake Village, a 2,100 bed facility that we built, operated and managed for them for nearly 20 years, we recognized the need for a premium, and more permanent, solution for workforce accommodations and hospitality services in the Canadian oil sands region. Pursuing this strategy, we opened PTI Lodge in 1998, one of the first independent lodging facilities in the region. 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. During 2015, we entered the Canadian LNG market with the construction of our Sitka Lodge. 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 has been completed and commercial operations commenced in June 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. With the acquisition of our Australian business in December 2010, we began providing hospitality services to support the Australian natural resources industry through our villages located in Queensland, New South Wales and Western Australia. Like Canada, our Australian business has a long-history of taking care of customers in remote regions, beginning with our initial Moranbah Village in 1996, and has grown to become Australia’s largest independent provider of hospitality services for people working in remote locations. Our Australian business was the first to introduce resort-style accommodations to the mining sector, adding landscaping, outdoor kitchens, pools, fitness centers and, in some cases, taverns. 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. In May 2025, we acquired Qantac Pty Ltd (Qantac), located in Queensland, Australia (the Qantac Acquisition). The Qantac Acquisition included four villages, with 1,368 rooms in Australia’s Bowen Basin and the associated accommodation assets, land and customer contracts. This acquisition expanded our existing accommodations business into the Blackwater region of the Bowen Basin, which was not previously served by our existing villages. 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 hospitality accommodations and related infrastructure services often are not accessible, sufficient or cost effective. Through our wide range of hospitality services, we are able to identify, solve and implement solutions and services that enhance the guest experience, improve workforce productivity and reduce the customer’s total cost of housing a workforce in a remote operating location. 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. Customers may choose to own their accommodations assets because (i) their natural resource project is the only source of demand for rooms in the region; (ii) they believe in the long-term nature of their resource project; and/or (iii) they desire to maintain control over the supply of rooms for 5 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, 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. The accommodations outsourcing model is effective in regions in which multiple customers have on-going or prospective projects where third-party owned and operated accommodations assets can service multiple customers. 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 Queensland Bowen Basin region and the Canadian oil sands region are two geographic areas that fit this market dynamic. 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 coal, oil, iron ore and 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. We believe that our existing industry divides accommodations into two primary types: (i) villages and lodges and (ii) mobile assets. Civeo is principally focused on hospitality services at villages and lodges that are either owned by Civeo or customer-owned. Villages and lodges typically contain a larger number of rooms and require more time and capital to develop. These facilities typically have dining areas, meeting rooms, recreational facilities, pubs and taverns and landscaped grounds where weather permits. Villages and lodges are generally supported by multi-year, take-or-pay or exclusivity contracts. These facilities are designed to serve the long-term needs of customers in developing and producing their natural resource developments. Mobile assets are designed to follow customers’ activities and can be deployed rapidly to scale. They are often used to support pipeline and infrastructure construction as well as conventional and in-situ drilling 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. Mobile asset projects can be dedicated and committed to a single customer or project or can serve multiple customers. Our largest customers in 2025 were Fortescue Metals Group Ltd. and Suncor Energy Inc., who each accounted for more than 10% of our 2025 revenues. Our Competitors The accommodation facilities market supporting the natural resource industry is segmented into competitors that serve components of the overall value chain, but very few offer the entire suite of hospitality services to customers. 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 Australian coal mining regions and Canadian oil sands. Engineering firms such as Bechtel and Fluor often design accommodations facilities. Many public and private firms, such as ATCO Structures & Logistics Ltd. (ATCO), Alta-Fab Structures Ltd., Fleetwood Australia and Northgate Industries Ltd., build modular accommodations for sale. Dexterra Group Inc., Black Diamond Group Limited, ATCO, Ausco Modular (a subsidiary of Modulaire Group) 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, Sodexo Inc., ISS, Compass Group PLC and Cater Care Australia Pty. Ltd., typically do not invest in and own the accommodations assets but will provide hospitality services at third-party or customer-owned facilities. 6 Australia Overview During the year ended December 31, 2025, we generated 72% of our revenue from our Australian operations. As of December 31, 2025, we owned 10,318 rooms across twelve villages, of which 8,856 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 May 6, 2025, we acquired the assets of Qantac, located in Queensland, Australia, for total consideration of A$105 million (or approximately US$68 million) in cash. The Qantac Acquisition included four villages, with 1,368 rooms in Australia’s Bowen Basin and the associated accommodation assets, land and customer contracts. As a result of the Qantac Acquisition, we expanded our existing accommodations business into the Blackwater region of the Bowen Basin, which was not previously served by our existing villages. 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 locations 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, 2025, our nine villages in the Bowen Basin generated 41% of our Australian revenue, or 29% of our consolidated revenue. Further, our Australian operations include provision of village operations for two customer owned sites in the Bowen Basin. 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 2025, 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 the construction of a Urea facility on the Burrup Peninsula through our Karratha village. In addition, we provide hospitality services in Western Australia and South Australia at ten customer-owned locations which support workforces related to nickel, copper, 7 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 2025 2024 2023 Coppabella Bowen met coal 3,144 3,144 3,144 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 662 662 622 Narrabri Gunnedah met/thermal coal 502 502 502 Nebo Bowen met coal 490 490 490 Karratha Pilbara LNG, iron ore 298 298 298 Rosewood Bowen met coal 734 — — Waratah Bowen met coal 494 — — Vitrinite Bowen met coal 84 — — Acacia Bowen met coal 56 — — Total Rooms 10,318 8,950 8,910 Our Australian segment includes twelve company-owned villages with 10,318 rooms as of December 31, 2025, 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, Nebo, Rosewood, Waratah, Vitrinite and Acacia 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. 8 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 locations 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 23 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 100 to over 1,900 rooms. We work together with our customers to customize our service offerings depending on our customers' 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. Canada Overview During the year ended December 31, 2025, we generated approximately 28% of our revenue from our Canadian operations. We are western Canada’s largest provider of hospitality services for people working in remote locations. We provide our services through our lodges and mobile assets and at customer-owned locations. Our hospitality services support workforces in the Canadian LNG and oil sands markets and in a variety of oil and natural gas drilling, mining, pipeline and related natural resource applications. Canadian Market Demand for our hospitality services in the Canadian market is largely driven by customer capital spending, which is greatly influenced by current and future commodity prices. In the Canadian oil sands region, demand is primarily influenced by the longer-term outlook for oil prices rather than current energy prices, given the multi-year production life of oil sands projects and the capital investment associated with development of such large-scale projects. Demand for our Canadian lodges is secondarily impacted by oil takeaway capacity which influences the net price our customers receive for their oil production. Spending on the construction and development of new projects generally decreases as the outlook for oil prices decreases. 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. 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: as natural gas prices fluctuate, a significant component of our customers’ operating costs fluctuate as well. Another factor that influences demand for our hospitality services in the Canadian oil sands region is the type of customer project we are supporting. Generally, Canadian customers require larger workforces during construction and expansionary periods, and therefore have higher demand for our rooms and services. 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 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. The Athabasca oil sands are located in northern Alberta, an area that is very remote, with a limited local labor supply. Of Canada’s approximately 42 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 9 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. Construction activity of Phase 1 of the Kitimat LNG Facility has been completed and commercial operations commenced at the end of June 2025. The Coastal GasLink Pipeline was completed in 2024. 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. See "Canada-Canadian British Columbia Lodge" for more information. LNG investment and activity in Western Canada, and related demand for hospitality services, is influenced by the global prices for LNG, which are largely tied to global oil prices, global supply/demand dynamics for LNG and Western Canadian wellhead prices for natural gas. Utilization of our existing Canadian capacity and any future expansions will largely depend on continued LNG and oil sands spending related to existing production, maintenance activities and potential future expansion of existing projects. Canadian Oil Sands Lodges During the year ended December 31, 2025, activity in the Athabasca oil sands region generated approximately 80% of our Canadian revenue, or 22% of our consolidated revenue. The oil sands region continues to represent one of the world’s largest reserves for heavy oil. Our Wapasu Creek, Athabasca, Beaver River, Fort McMurray Village, Grey Wolf, Hudson, and Borealis lodges are focused on the northern region of the Athabasca oil sands, where customers primarily utilize surface mining to extract bitumen. Oil sands mining operations are characterized by large capital requirements, large reserves, larger personnel requirements, long-term reserve lives, very low exploration or reserve risk and relatively lower cash operating costs per barrel of bitumen produced. Our Conklin and Anzac lodges are focused in the southern portion of the region where we primarily serve in-situ operations and pipeline expansion and maintenance activity. In-situ methods are used on reserves that are too deep for traditional surface mining methods. In-situ technology typically injects steam or solvents into the deep oil sands in place to separate the bitumen from the sand and pumps it to the surface where it undergoes the same upgrading treatment as the mined bitumen. Reserves requiring in-situ techniques of extraction represent 80% of the established recoverable reserves in Alberta. In comparison to surface mining operations, in-situ operations generally require lower initial capital investment, fewer personnel but produce lower volumes of bitumen per development, with higher ongoing operating expense per barrel of bitumen produced. Our oil sands lodges primarily support personnel for ongoing operations associated with surface mining and in-situ oil sands projects, as well as maintenance, turnaround and expansionary personnel, generally under short- and medium-term contracts. Most of our oil sands lodges are located on land with leases obtained from the province of Alberta, with initial terms of ten years, or subleased from the resource developer. Our leases have expiration dates that range from 2027 and 2035 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. We did not renew an expiring land lease associated with our McClelland Lake Lodge in Alberta, Canada, which expired in June 2023, in order to support our customer’s intent to mine the land where the lodge was located. In order to operate a lodge in Canada, we are required to obtain a development permit from the regional municipality in which the lodge is located. The development permits are granted for a term of five years. Our development permits have expiration dates that range from 2028 to 2032. In recent years, we have successfully renewed or extended all expiring development permits. See “Item 1A. 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 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). Most customers make a minimum nightly or monthly room commitment or an aggregate total room night commitment for the term of the contract, and the multi-year contracts typically provide for annual escalation provisions for increased food, labor and utilities costs. 10 Canadian British Columbia Lodge Construction activity of Phase 1 of the Kitimat LNG Facility has been completed and commercial operations commenced in June 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. Accordingly, we reduced the room count at Sitka in 2025 by relocating some rooms to the Canadian mobile assets for future deployment and selling other rooms to a third party. Canadian Lodge Locations 11 As of December 31, Lodges Region Extraction Technique 2025 2024 2023 Wapasu Creek N. Athabasca mining/in-situ 5,174 5,174 5,174 Athabasca (1) N. Athabasca mining 2,005 2,005 2,005 Beaver River N. Athabasca mining 1,094 1,094 1,094 Fort McMurray Village: Buffalo N. Athabasca mining 326 256 — Black Bear (1) N. Athabasca mining 531 531 531 Bighorn (1) N. Athabasca mining 763 763 763 Lynx N. Athabasca mining 855 855 855 Wolverine N. Athabasca mining 855 855 855 Borealis (1) N. Athabasca mining 1,504 1,504 1,504 Grey Wolf N. Athabasca mining 946 946 946 Hudson (1) N. Athabasca mining 624 624 624 Wabasca (1) S. Athabasca mining — 288 288 Red Earth (1) S. Athabasca mining — 216 216 Conklin (1) S. Athabasca mining/in-situ 142 610 610 Anzac (1) S. Athabasca in-situ 526 526 526 Subtotal – Oil Sands 15,345 16,247 15,991 Sitka Lodge Kitimat, BC LNG 689 961 961 Total Lodge Rooms 16,034 17,208 16,952 Mobile Assets 2,660 2,870 2,979 Total Rooms 18,694 20,078 19,931 (1) Currently closed as of December 31, 2025, due to lodge loading strategy, seasonal activity fluctuations or low activity level in the region. All closed lodges are periodically assessed for impairment at an asset group level, in accordance with U.S. generally accepted accounting principles. See Note 4 - Impairment Charges to the notes to the consolidated financial statements in Item 8 of this annual report for further discussion. Canadian Hospitality Services at Third-Party Owned Facilities We also provide hospitality services at customer-owned facilities. Historically, this has been focused around natural resource production-related housing facilities that are owned by oil production companies. The facilities we manage typically range anywhere from 500 to 1,500 rooms. We customize our service offerings depending on our customer’s needs. Hospitality services can be performed on an end-to-end basis with food service, housekeeping, maintenance and utility services included or in segments such as food service only. Our focus on hospitality service contracts has allowed us to successfully pursue food service only opportunities. Due to our experience servicing customer-owned locations, this business complements our overall strategy. Canadian Mobile Assets Our mobile assets consist of modular, skid-mounted accommodations and central facilities that can be configured to serve a multitude of short- to medium-term accommodation needs. Dormitory, kitchen and ancillary assets can be rapidly mobilized and demobilized and are scalable to support 200 to 800 people in a single location. In addition to asset rental, we provide hospitality services such as food service and housekeeping, as well as other camp management services. Our mobile assets service the traditional oil and gas sector in Alberta and British Columbia and in-situ oil sands drilling and development operations in Alberta, as well as pipeline construction crews throughout Western Canada. These assets have also been used in the past in disaster relief efforts, the 2010 Vancouver Winter Olympic Games and a variety of other non-energy related projects. Our mobile assets are rented on a per unit basis based on the number of days that a customer utilizes the asset, and, in some cases, involve standby rental arrangements. In cases where we provide food service or ancillary services, the contract can provide for per unit pricing or cost-plus pricing. Customers are also typically responsible for mobilization and demobilization costs. Our focus on hospitality service contracts has allowed us to successfully pursue food service only opportunities. Due to our experience servicing customer-owned facilities, this business easily fits into our overall strategy. 12 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, 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$17.4 million in 2025, up 14% from A$15.3 million in 2024, into Indigenous-owned and operated companies, and we are always looking for more opportunities to partner with these businesses. In addition, we have five 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 five unincorporated joint venture partnerships entitles Indigenous landowners to a retail 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. 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. For over a decade, our Canadian operations supported Buffalo Metis Catering, a partnership with three Metis communities in the Regional Municipality of Wood Buffalo. Through this partnership, food and housekeeping services were delivered to three of our lodges. 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. In 2025, we purchased more than C$20.5 million in goods and services from the Indigenous business community, representing 15% of our total Canadian local spending, compared to C$31.3 million in goods and services from the Indigenous business community, representing 16% of our total Canadian local spending in 2024. 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 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 (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. Our Village and Lodge Contracts During the year ended December 31, 2025, revenues from our villages and lodges represented over 57% of our consolidated revenues. 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, 13 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 range from several months to twelve years. The contracts expire throughout the year, and for many of the near-term expirations, we are in the process of negotiating extensions or new commitments. We cannot assure that we can renew existing contracts or obtain new business on the same or better terms, if at all. Long-Term Take-or-Pay Contracts . Over the term of a take-or-pay contract, the customer commits to either a minimum number of rooms over a specified period or an aggregate number of room nights over the period, generally for terms greater than 12 months. During the year ended December 31, 2025, we billed approximately 2.5 million room nights under our long-term take-or-pay contracts, which represented approximately 57% of our total billed rooms, which included 0.4 million room nights in excess of the take-or-pay minimums. For the year ending December 31, 2026, we have commitments for 1.9 million room nights under our long-term take-or-pay contracts. Short-Term Take-or-Pay Contracts. Customers may contract with us on a take-or-pay basis for less than 12 months, particularly for turnaround projects. Similar to long-term take-or-pay contracts, the customer commits to either a minimum number of rooms over a specified period or an aggregate number of room nights over the period. During the year ended December 31, 2025, we billed approximately 0.3 million room nights under our short-term take-or-pay contracts. For the year ending December 31, 2026, we have commitments for 0.1 million room nights under our short-term take-or-pay contracts. Exclusivity Contracts. Over the term of an exclusivity contract, rather than receiving a minimum room commitment, we are the exclusive hospitality service provider for the customer's employees working on a specific project or projects. During the year ended December 31, 2025, we billed approximately 1.3 million room nights under our exclusivity contracts. Casual / Walk-ins. Customers without long-term committed contracts may utilize lodge/village rooms via short-term bookings at lodge/village casual or agreed rates. During the year ended December 31, 2025, we billed approximately 0.3 million room nights to casual or walk-in customers. Our Integrated Services Contracts During the year ended December 31, 2025, revenues from our customer-owned locations represented 43% of our consolidated revenues. 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. The spring thaw in these frontier regions restricts operations in the second quarter and adversely affects our customers' operations and our ability to provide services. Customers’ maintenance activities in the oil sands region, such as shutdown and turnaround activity, are typically performed in the second and third quarters annually. Our Canadian operations have also been impacted by forest fires and flooding in the past five years. Human Capital Resources We believe that our employees are one of our greatest resources. As of December 31, 2025, we had approximately 2,100 full-time employees and approximately 600 hourly employees. On a consolidated basis, 76% of our employees are located in Australia, 23% are located in Canada and 1% are located in the U.S. We were party to collective bargaining agreements covering 491 employees located in Canada and 1,609 employees located in Australia as of December 31, 2025. As a company, we acknowledge the significance of a workforce composed of individuals from various backgrounds, experiences, and perspectives. As many of our projects in Canada and Australia operate in traditional territories, we work closely with Indigenous communities to actively explore mutually beneficial investment, employment and business opportunities. Our ability to cultivate and strengthen relationships with Indigenous communities is vital to the success of our business. We strive to offer competitive compensation, benefits and services that meet the needs of our employees, including short- and long-term incentive packages, various defined contribution plans, healthcare benefits, and wellness and employee assistance 14 programs. Management monitors market compensation and benefits in order to attract, retain, and promote employees and reduce turnover and its associated costs. Safety is central to Civeo’s corporate culture. 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. At Civeo, we believe that investing in our employees is fundamental to our success. Our commitment to training and career development enables employees to grow and advance in their careers while supporting our industry-leadership position. Committed to the continuous improvement of our team, we prioritize the development of our workforce’s technical and managerial competencies, with an emphasis on safety, customer service, and leadership development. Our learning and development program encompasses a range of learning modalities, including e-learning modules, in-person training sessions, nationally certified programs and licensed training provided by external partners. Government Regulation 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: • increased difficulty securing required permits, approvals, licenses or other authorizations issued by federal, provincial and local authorities needed to carry out our operations or our customers' operations; • increased compliance costs or additional operating restrictions associated with our operations or our customers’ operations; • other increased costs to our business or our customers’ business; • reduced demand for oil, natural gas, and other natural resources that our customers produce; and • reduced demand for our services. To the extent that these laws and regulations impose more stringent requirements or increased costs or delays upon our customers in the performance of their operations, the resulting demand for our services by those customers may be adversely affected, which impact could be significant and long-lasting. Moreover, climate change laws or regulations could increase the cost of consuming, and thereby reduce demand for, oil and natural gas, which could reduce our customers’ demand for our services. We cannot predict changes in the level of enforcement of existing laws and regulations, how these laws and regulations may be interpreted or the effect changes in these laws and regulations may have on us or our customers or on our future operations or earnings. We also are not able to predict the extent to which new laws and regulations will be adopted or whether such new laws and regulations may impose more stringent or costly restrictions on our customers or our operations. Our operations and the operations of our customers are subject to numerous stringent and comprehensive foreign, federal, provincial, state and local environmental laws and regulations governing the release or discharge of materials into the environment or otherwise relating to environmental protection. 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. 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. 15 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 9 types of matters of national environmental significance, including threatened species and communities (e.g. Koalas), migratory species, Ramsar wetlands and world heritage places. 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 and fundamental reforms be made to that act. In November 2025, federal Parliament passed a reform package which would effect significant amendments to the EPBC Act. These amendments are intended to implement core recommendations from the Independent Review and include amendments to: facilitate the establishment of a framework for the Minister to make, vary and revoke national environmental standards; facilitate the establishment of Australia’s first independent National Environmental Protection Agency; introduce a requirement for projects that have significant impacts on matters of national environmental significance to achieve a net positive outcome; requirements for proponents of major projects to disclose expected GHG emissions (and provide plans for how they intend to reduce those emissions); facilitate more robust and efficient project assessments, including through the introduction of bioregional plans (that provide a landscape/seascape scale approach to environmental planning) and increase penalties for individuals and corporations for breaches of the EPBC Act. The full suite of amendments are expected to take effect by the end of November 2026. The amendments do not have retrospective effect and will apply to future projects only. We have reviewed and, once the reforms take effect, will continue to review, our obligations under, and compliance with, the EPBC Act. However, the implications for our Australian operations are not anticipated to be significant. They may, however, 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 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 GHG or energy use or production for a reporting (financial) year under federal legislation. From July 1, 2023, 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 requirements are intended to assist Australia meet its emissions reduction targets of 43% below 2005 levels by 2030 and net zero by 2050 and affect large scale industry customers. We are required to comply with mandatory climate-related disclosures in compliance with Australian Accounting Standard Board S2 Climate-related Disclosures (“AASB S2”) of the Australian Sustainability Reporting Standards (“ASRS”).” 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, Tourism, Science and 16 Innovation). The States and Territories also have power to assess some larger projects in conjunction with the federal government under bilateral agreements established pursuant to 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 environmental 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 In Canada, the federal and provincial governments both have jurisdiction to regulate environmental matters. The provincial governments may also devolve jurisdiction over environmental matters to local governments. Our activities, or those of our customers, may be subject to environmental regulations imposed by these three levels of government. The following addresses updates to Canadian federal and provincial environmental regulations in 2025 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 February 2025, Environment and Climate Change Canada released a discussion paper outlining potential regulations for managing process-affected water. 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. However, as of the beginning of 2026, draft regulations have not been published. The absence of a regulatory framework permitting the release of process-affected water from oil sands operations, or a regulatory framework that is more stringent than what may be anticipated by our customers could affect their development plans or 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. 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. On November 27, 2025, the Governments of Canada and Alberta agreed to the Canada-Alberta Memorandum of Understanding (MOU). Pursuant to the MOU, Canada committed to not implement the Proposed Emissions Cap. 17 Air Quality Management The Government of Canada, the Government of Alberta, and the Government of British Columbia each have frameworks for air quality management that may affect us and our customers. At the federal level, the Reduction in the Release of Volatile Organic Compounds Regulations (Petroleum Sector) were published in 2020 and 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. These regulations require the implementation of comprehensive leak detection and repair (LDAR) programs as well as design and operating standards that prevent leaks at Canadian petroleum refineries, upgraders and certain petrochemical facilities and may affect our customers’ operations. In addition to federal requirements, emissions from facilities in Alberta are subject to provincial regulation. The Alberta Energy Regulator (AER), which is responsible for regulating upstream oil and gas activity in Alberta and oversees compliance with Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting (Directive 060). Directive 060 was last updated in June 2025 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 060 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 Directive 060 and Directive 017: Measurement Requirements for Oil and Gas Operations (Directive 017) 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. Directive 060's methane reduction requirements took effect in 2020, with additional vent gas limits introduced on January 1, 2022, followed by more stringent limits on January 1, 2023. On June 19, 2025, Directive 060 was updated to remove the solution gas flaring limit in section 4.1 while maintaining all other regulatory tools in Directive 060. Meeting these regulatory requirements may result in additional costs or liabilities for our customers’ operations. Similarly, emissions from facilities in British Columbia are also subject to provincial regulation. The British Columbia Energy Regulator (BCER) is responsible for regulating oil and gas activity in British Columbia. BCER oversees compliance with the Drilling and Production Regulation, which is one of British Columbia's primary regulatory instruments governing all aspects of oil and natural gas drilling and production. Effective January 1, 2020, the regulation was amended to require operators to eliminate or reduce natural gas leaking or venting associated with a wide variety of equipment and activities in energy development. Under this regulation, requirements are imposed for facilities detecting leaks and inspecting seals as well as restrictions or prohibitions on the types of equipment used for energy development. Some of these requirements took effect in 2022 and further requirements took effect on January 1, 2023. 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 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. The Drilling and Production Regulation was updated in 2025 to tighten natural gas venting from commodity unloading and surface casing venting and introduce stricter leak detection and repair (LDAR) standards. Meeting these increased regulatory requirements may result in additional costs or liabilities for our customers’ operations. Environmental Assessment of Major Projects 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, 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. 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. Despite the amendments, the Government of Alberta has challenged whether the amended IAA is constitutional, and the matter is currently before the courts. Accordingly, there remains significant uncertainty about the future impact of Canada's 18 federal environmental assessment legislation on our customers. 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. Climate Change Regulation 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 governments 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. 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. On December 12, 2025, Canada announced amendments to the Federal Methane Regulations which will impose stricter methane controls on regulated oil and gas facilities, including enhanced management of fugitive emissions, prohibitions on venting, limits on hydrocarbon gas destruction, and mandatory inspection and maintenance programs. The amendments will apply to new facilities beginning in 2028 and all facilities by 2030. The amendments will require the federal government to reassess its equivalency agreements with BC and Alberta. Absent new agreements, oil and gas facilities in those provinces may be subject to the federal Methane Regulations in 2028 which may negatively impact our customers' operations. In 2018, the federal government enacted the Greenhouse Gas Pollution Pricing Act (GGPPA), which came into force on January 1, 2019. This regime has two parts: a regulatory fuel charge on consumers for gasoline and diesel; and an output-based carbon pricing system for large industrial emitters. The regulatory fuel charge on consumers for gasoline and diesel was removed by the federal government effective April 1, 2025. The second part of the regime serves as a "backstop" and applies to provinces and territories that request it and to those that do not have their own carbon emissions pricing systems in place that meet the federal standards. This ensures that there is a uniform price on carbon emissions across the country. The backstop price is $95/tonne of CO2e as of December 2025. The current federal government plan is to continue increasing the backstop price each year until it reaches $170/tonne in 2030. In Alberta, the Technology Innovation and Emissions Reduction Regulation (TIER) meets the GGPPA standards for an output-based carbon pricing system and replaces the GGPPA for large industrial emitters in the province. Facilities within Alberta that are subject to the TIER Regulation are not subject to the full costs of complying with the GGPPA. The TIER Regulation applies to Alberta-based facilities that emit over 100,000 tonnes of CO2e per year. Under the TIER Regulation, emissions from each facility are compared to either an industry-wide benchmark or a facility-specific benchmark which effectively permits facilities to emit GHGs up to a certain amount without being subject to the provincial carbon price. Those benchmarks “tighten” resulting in more onerous compliance costs, every year. Facilities with emissions that exceed the industry-wide benchmark or facility-specific benchmark, as applicable, must rely on one or more of the compliance options established by the TIER Regulation, such as purchase credits or offsets for each tonne of CO2e in excess of their limits. On May 12, 2025, the Alberta government announced that it would freeze the industrial carbon price at $95/tonne of CO2e. In British Columbia, the Output-Based Pricing System is an emissions pricing system created through amendments to the Greenhouse Gas Industrial Reporting and Control Act that replaces the GGPPA for large industrial emitters in the province. The industrial carbon price is $95/tonne of CO2e as of December 2025 and is set to increase to $110/tonne of CO2e in 2026. Despite the current price freeze in Alberta, potential further increases in the cost of industrial carbon pricing and annual benchmark tightening rates may result in additional costs or liabilities for our customers’ operations. On November 19, 2020, the federal government introduced the Canadian Net-Zero Emissions Accountability Act (Net-Zero Act) in Parliament. The Net Zero Act was passed by Parliament and received Royal Assent on June 29, 2021 and binds the Government of Canada to a process intended to help Canada achieve net-zero emissions by 2050. It also establishes rolling five-year emissions-reduction targets and requires the government to develop plans to reach each target. The federal government is required to support those efforts by creating a Net-Zero Advisory Body and by publishing annual reports that describe how 19 departments and Crown corporations are considering the financial risks and opportunities of climate change in their decision-making. The Net-Zero Act was last updated in 2023. 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 GHG emissions in Canada. In October 2024, Canada unveiled a draft framework to protect the right to a healthy environment through further modernization of the CEPA. In July 2025, Canada published the Implementation Framework for the Right to a Healthy Environment under the Canadian Environmental Protection Act , 1999 (framework). The framework elaborates on the meaning of the right to a healthy environment and provides flexible and practical guidance for government decision-makers. There remains significant uncertainty regarding how these proposed changes to the CEPA will be implemented and the potential for the proposed changes to affect our customers' operations. 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 and Alberta. Many of our customers have existing or proposed developments in or near woodland caribou habitat. 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.” Effective January 1, 2026, the Upper Smoke Sub-Regional Plan will apply to resource development in northwestern Alberta and includes provisions to protect caribou while still advancing Alberta’s economic interests. 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. Beginning in 2020, the Government of 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 067) 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. Directive 067 was last updated in March 2024. In December 2021, the AER published Directive 088: Licensee Life-Cycle Management (Directive 088) to support implementing the AB LMF. Directive 088 establishes the AER's authority to conduct a holistic licensee assessment to inform regulatory decisions about a given licensee. Directive 088 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 088 establishes the Inventory Reduction Program and allows the AER to set licensee-specific and industry-wide closure targets. Directive 088 and the supplemental Manual 23 were updated in 2025 to create more flexibility for licensees regarding mandatory closure spending requirements and licensee capability assessments. Further, the AER made minor updates to Directives 001, 011 and 068 in 2025. These and any other changes to the AER's approach to managing closure requirements for energy resource 20 activities may result in additional costs or liabilities for our customers’ operations as the updated regulations place heightened focus on remediation and reclamation. 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. In November 2025, the BCER increased the Orphan Site Restoration Levy by an additional $9 million, raising the total fund to $24 million. 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. Building Canada Act In 2025, the federal government passed the Building Canada Act (BCA). The BCA aims to streamline approval processes to build major projects faster. Currently, there are a number of projects that have been designated for further review and potentially expedited approvals, including: Pathways Plus, an Alberta-based carbon capture, utilization and storage project in support of the oil and gas industry; Critical Minerals Strategy, prioritizing critical mineral development in Canada; LNG Canada Phase 2, an expansion to double the capacity of LNG Canada’s current export facility on the BC coast; and Ksi Lisims LNG, a proposed floating LNG export facility on the BC coast. Although many of these projects have yet to be confirmed, the BCA demonstrates a renewed emphasis on resource development in Alberta and BC which may lead to increased opportunities for our customers. 21