Civeo Corporation Announces Amendment and Extension to its Credit Agreement

Rhea-AI Summary

Civeo (NYSE:CVEO), a leading provider of hospitality services in the Canadian oil sands and Australian natural resource regions, has announced an amendment and extension to its credit agreement. Key aspects include:

1. Extension of the maturity date to August 2028
2. Upsizing of total revolving credit facility capacity to $245 million from $200 million
3. Reduction in borrowing costs while maintaining previous covenant levels

This amendment provides Civeo with increased flexibility for capital allocation priorities, including share repurchases, quarterly dividends, and potential growth opportunities. Civeo currently operates 24 lodges and villages in North America and Australia, with approximately 26,000 rooms, and provides services at 22 customer-owned locations with over 18,000 rooms.

Positive

• Extension of credit agreement maturity to August 2028, providing long-term financial stability
• Increase in revolving credit facility capacity from $200 million to $245 million
• Reduction in borrowing costs, potentially improving profitability
• Maintained covenant levels, indicating lender confidence in the company's financial health
• Increased flexibility for capital allocation, including share repurchases and dividends

Negative

• None.

Financial Analyst

The amendment to Civeo's credit agreement is a positive development for the company's financial flexibility. The $45 million increase in revolving credit facility capacity to $245 million enhances Civeo's liquidity position. This, coupled with reduced borrowing costs, should improve the company's financial efficiency and potentially boost profitability. The extension of the maturity date to August 2028 provides long-term stability to Civeo's debt structure.

The maintained covenant levels suggest the company's financial health remains stable. This amendment supports Civeo's capital allocation priorities, including share repurchases and dividends, which could positively impact shareholder value. However, investors should monitor how Civeo utilizes this increased financial flexibility, especially in terms of potential growth opportunities and their impact on the company's long-term performance.

Market Research Analyst

Civeo's improved credit agreement reflects positively on its market position in the hospitality services sector for resource industries. With 26,000 owned rooms and services for 18,000 customer-owned rooms, Civeo has a substantial footprint in its niche market. The company's ability to secure favorable lending terms suggests lender confidence in its business model and future prospects.

The increased financial flexibility could allow Civeo to capitalize on potential growth opportunities in the Canadian oil sands and Australian natural resource regions. However, investors should consider the cyclical nature of these industries and how it might affect Civeo's long-term performance. The company's ability to adapt its services and expand its market share in these regions will be important for sustained growth.

HOUSTON & CALGARY, Alberta--(BUSINESS WIRE)-- Civeo Corporation (NYSE:CVEO) announced today the completion of an amendment and extension to its credit agreement which encompasses all of Civeo’s outstanding debt structure of three revolving credit facilities. The following are key aspects of the amended credit agreement:

• Extends the maturity date of the credit agreement to August 2028;
• Upsizes total revolving credit facility capacity to $245 million from $200 million; and
• Reduces borrowing costs and maintains previous max net leverage ratio and max interest coverage covenant levels.

“We are pleased to announce this amendment and extension, which allows Civeo more flexibility to execute on our capital allocation priorities such as our share repurchase program, quarterly dividend and potential growth opportunities. We would like to thank our lending group for their continued support,” stated Bradley J. Dodson, Civeo’s President and CEO.

Additional information on the terms of the amendment can be found in a separate Current Report on Form 8-K to be filed with the Securities and Exchange Commission today.

About Civeo

Civeo Corporation is a leading provider of hospitality services with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for lodging hundreds or thousands of workers with its long-term and temporary accommodations and provides food services, housekeeping, facility management, laundry, water and wastewater treatment, power generation, communications systems, security and logistics services. Civeo currently owns and operates a total of 24 lodges and villages in North America and Australia with an aggregate of approximately 26,000 rooms. In addition, Civeo operates and provides hospitality services at 22 customer-owned locations with more than 18,000 rooms. Civeo is publicly traded under the symbol CVEO on the New York Stock Exchange. For more information, please visit Civeo's website at www.civeo.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risks and uncertainties. The forward-looking statements herein, including the statements regarding Civeo’s expectations with respect to future plans, share repurchases and dividends, and liquidity needs, are based on then current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the accommodations industry, risks associated with the level of supply and demand for oil, coal, iron ore and other minerals, including the level of activity, spending and developments in the Canadian oil sands, the level of demand for coal and other natural resources from, and investments and opportunities in, Australia, and fluctuations or sharp declines in the current and future prices of oil, natural gas, coal, iron ore and other minerals, risks associated with failure by our customers to reach positive final investment decisions on, or otherwise not complete, projects with respect to which we have been awarded contracts, which may cause those customers to terminate or postpone contracts, risks associated with currency exchange rates, risks associated with inflation and volatility in the banking sector, risks associated with the company’s ability to integrate any future acquisitions, risks associated with labor shortages, risks associated with the development of new projects, including whether such projects will continue in the future, risks associated with the trading price of the company’s common shares, availability and cost of capital, risks associated with general global economic conditions, geopolitical events, inflation, global weather conditions, natural disasters, including wildfires, global health concerns, and security threats and changes to government and environmental regulations, including climate change, and other factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Civeo’s most recent annual report on Form 10-K and other reports the company may file from time to time with the U.S. Securities and Exchange Commission. Each forward-looking statement contained herein speaks only as of the date of this release. Except as required by law, Civeo expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240812358065/en/

Regan Nielsen

Civeo Corporation

Vice President, Corporate Development & Investor Relations

713-510-2400

Source: Civeo Corporation

FAQ

What are the key changes in Civeo 's (NYSE:CVEO) amended credit agreement?

The key changes in Civeo's amended credit agreement include extending the maturity date to August 2028, increasing the total revolving credit facility capacity to $245 million from $200 million, and reducing borrowing costs while maintaining previous covenant levels.

How does the credit agreement amendment benefit Civeo (NYSE:CVEO)?

The amendment benefits Civeo by providing more flexibility to execute capital allocation priorities such as share repurchases, quarterly dividends, and potential growth opportunities. It also extends their financial stability through 2028 and reduces borrowing costs.

What is Civeo 's (NYSE:CVEO) current operational capacity?

Civeo currently owns and operates 24 lodges and villages in North America and Australia with approximately 26,000 rooms. Additionally, it provides hospitality services at 22 customer-owned locations with over 18,000 rooms.

When does Civeo 's (NYSE:CVEO) amended credit agreement mature?

Civeo's amended credit agreement extends the maturity date to August 2028.