Civeo Corp

Previous wording

There is continued uncertainty around commodity price levels, including the impact of inflationary pressures, actions taken by Organization of the Petroleum Exporting Countries Plus (OPEC+) to adjust production levels, geopolitical events such as the ongoing Russia/Ukraine and Middle East conflicts and rising geopolitical risks in the Middle East, United States (U.S.) oil production levels and regulatory implications on such prices. In particular, these items could cause our Canadian oil sands and pipeline customers to reduce production, delay expansionary and maintenance spending and defer additional investments in their oil sands assets.

Current wording

There is continued uncertainty around commodity price levels, driven by many factors including rising fears of a recession resulting from severe inflation and higher interest rates, the impact of inflationary pressures, actions taken by Organization of the Petroleum Exporting Countries Plus (OPEC+) to adjust production levels, geopolitical events such as the ongoing Russia/Ukraine and Middle East conflicts and rising geopolitical risks in the Middle East, United States (U.S.) oil production levels and regulatory implications on such prices. In particular, these items could cause our Canadian oil sands and pipeline customers to reduce production, delay expansionary and maintenance spending and defer additional investments in their oil sands assets.

Previous wording

WTI Crude. After reaching historic lows in early 2020 during the start of the COVID-19 pandemic, global oil prices increased to above $100 per barrel in the second quarter 2022. In the second half of 2022 and throughout 2023, oil prices declined due to (i) rising fears of a recession resulting from severe inflation and rising interest rates, (ii) resulting lower demand growth for oil and (iii) increasing U.S. oil production. In an effort to support the price of oil amidst demand concerns, OPEC+ countries have extended their 2023 oil production cuts through the first half of 2024. These production cuts, coupled with the rising geopolitical risks in the Middle East, resulted in rising oil prices during the first quarter of 2024 following a decline in prices in the latter part of the fourth quarter of 2023.

Current wording

WTI Crude. After reaching historic lows in early 2020 during the start of the COVID-19 pandemic, global oil prices increased to above $100 per barrel in the second quarter 2022. In the second half of 2022 and throughout 2023, oil prices generally declined due to (i) rising fears of a recession resulting from severe inflation and higher interest rates, (ii) resulting lower demand growth for oil and (iii) increasing U.S. oil production. In an effort to support the price of oil amidst demand concerns, OPEC+ countries have extended their 2023 oil production cuts through the remainder of 2024 and into 2025. These production cuts, coupled with the rising geopolitical risks in the Middle East, resulted in rising oil prices during the first half of 2024 following a decline in prices in the latter part of the fourth quarter of 2023.

Previous wording

Certain expansionary oil pipeline projects have the potential to both drive incremental demand for mobile assets and to improve take-away capacity for Canadian oil sands producers over the longer term, most notably the Trans Mountain Pipeline expansion, which is expected to commence commercial operation by May 1, 2024.

Current wording

Certain expansionary oil pipeline projects have the potential to both drive incremental demand for mobile assets and to improve take-away capacity for Canadian oil sands producers over the longer term, most notably the Trans Mountain Pipeline expansion, which began operating in the second quarter of 2024.

Previous wording

WCS prices in the first quarter of 2024 averaged $59.48 per barrel compared to an average of $56.61 in the first quarter of 2023. The WCS Differential decreased from $19.35 per barrel at the end of the fourth quarter of 2023 to $13.29 at the end of the first quarter of 2024. As of April 22, 2024, the WTI price was $82.85 and the WCS price was $68.88, resulting in a WCS Differential of $13.97.

Current wording

WCS prices in the second quarter of 2024 averaged $67.24 per barrel compared to an average of $60.25 in the second quarter of 2023. The WCS Differential decreased from $19.35 per barrel at the end of the fourth quarter of 2023 to $15.27 at the end of the second quarter of 2024. As of July 26, 2024, the WTI price was $77.16 and the WCS price was $60.26, resulting in a WCS Differential of $16.90

Previous wording

Met Coal. In Australia, 84% of our rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region. Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by the level of global steel production, which decreased by 0.1% in the first quarter of 2024 compared to the first quarter of 2023. Production stability was the result of strong production from key producers in China and India particularly in the month of February 2024, which offset weaker production in the U.S., Russia and Europe. As of April 22, 2024, met coal spot prices were $250.20 per tonne. Steel demand is expected to increase by 1.2% in 2024 compared to 2023, with continued improvements in demand from India.

Current wording

Met Coal. In Australia, 84% of our rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region. Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by the level of global steel production, which remained flat through June 2024 compared to the same period of 2023. Production stability was the result of steady production in China and continued growth in India, which offset weaker production in the U.S., Japan and South Korea. As of July 26, 2024, met coal spot prices were $217.00 per tonne. Steel demand is expected to increase marginally in 2024 compared to 2023, with continued improvements in demand from India.

Previous wording

Inflationary Pressures. During 2023 and through the first quarter of 2024, inflationary pressures and supply chain disruptions have been, and are being, experienced worldwide. Price increases resulting from inflation and supply chain concerns have, and are expected to continue to have, a negative impact on our labor and food costs, as well as consumable costs such as fuel. We are managing inflation risk with negotiated service scope changes and contractual protections.

Current wording

Inflationary Pressures. During 2023 and through the second quarter of 2024, inflationary pressures and supply chain disruptions have been, and are being, experienced worldwide. Price increases resulting from inflation and supply chain concerns have, and are expected to continue to have, a negative impact on our labor and food costs, as well as consumable costs such as fuel. We are managing inflation risk with negotiated service scope changes and contractual protections.

Previous wording

Labor Shortages. In addition to the macro inflationary impacts on labor costs noted above, we continue to be impacted by increased staff costs as a result of hospitality labor shortages in Australia due to lingering government-imposed and voluntary social distancing and quarantining during the COVID-19 pandemic. This labor shortage has been exacerbated by significantly reduced migration in and around Australia affecting labor availability, which has subsequently led to an increased reliance on more expensive temporary labor resources.

Current wording

Labor Shortages. In addition to the macro inflationary impacts on labor costs noted above, we continue to be impacted by increased staff costs as a result of hospitality labor shortages in Australia due to significantly reduced migration in and around Australia affecting labor availability, which has subsequently led to an increased reliance on more expensive temporary labor resources.

Previous wording

Currently, Western Canada does not have any operational LNG export facilities. LNG Canada (LNGC), a joint venture among Shell Canada Energy, an affiliate of Shell plc (40 percent), and affiliates of PETRONAS, through its wholly-owned entity, North Montney LNG Limited Partnership (25 percent), PetroChina (15 percent), Mitsubishi Corporation (15 percent) and Korea Gas Corporation (5 percent), is currently constructing a liquefaction and export facility in Kitimat, British Columbia (Kitimat LNG Facility). The Kitimat LNG Facility is nearing completion and expected to be operational in 2024. British Columbia LNG activity and related pipeline projects are a material driver of activity for our Sitka Lodge, as well as for our mobile assets, which were contracted to serve designated portions of the related pipeline construction activity. The majority of our contracted commitments associated with the Coastal GasLink Pipeline, the pipeline constructed to transport natural gas feedstock to LNGC, were completed in the fourth quarter of 2023.

Current wording

Currently, Western Canada does not have any operational LNG export facilities. LNG Canada (LNGC), a joint venture among Shell Canada Energy, an affiliate of Shell plc (40 percent), and affiliates of PETRONAS, through its wholly-owned entity, North Montney LNG Limited Partnership (25 percent), PetroChina (15 percent), Mitsubishi Corporation (15 percent) and Korea Gas Corporation (5 percent), is currently constructing a liquefaction and export facility in Kitimat, British Columbia (Kitimat LNG Facility). The Kitimat LNG Facility is nearing completion and expected to be operational in 2024, with commercial operations beginning in 2025. British Columbia LNG activity and related pipeline projects are a material driver of activity for our Sitka Lodge, as well as for our mobile assets, which were contracted to serve designated portions of the related pipeline construction activity. The majority of our contracted commitments associated with the Coastal GasLink Pipeline, the pipeline constructed to transport natural gas feedstock to LNGC, were completed in the fourth quarter of 2023.

Previous wording

U.S. Business. In the first quarter of 2023, we sold our accommodation assets in Louisiana. Our U.S. business supports completion activity in the Bakken. U.S. oil completion activity will continue to be impacted by oil prices, pipeline capacity, federal energy policies and availability of capital to support exploration and production completion plans.

Current wording

U.S. Business. In the second quarter of 2024, we sold the land at our Louisiana location. In addition, in the first quarter of 2023, we sold our accommodation assets in Louisiana. Our U.S. business supports completion activity in the Bakken. U.S. oil completion activity will continue to be impacted by oil prices, pipeline capacity, federal energy policies and availability of capital to support exploration and production completion plans.

Previous wording

Unless otherwise indicated, discussion of results for the three months ended March 31, 2024, is based on a comparison to the corresponding period of 2023.

Current wording

Unless otherwise indicated, discussion of results for the three and six months ended June 30, 2024, is based on a comparison to the corresponding period of 2023.

Previous wording

Operating Loss. Consolidated operating loss decreased $2.1 million, or 54%, in the first quarter of 2024 compared to the first quarter of 2023, primarily due to a net gain on sale of McClelland Lake Lodge assets, higher activity levels in Australia and lower depreciation and amortization expense in the first quarter of 2024 compared to the first quarter of 2023. These items were partially offset by reduced mobile asset activity in Canada and impairment expenses in the first quarter of 2024 compared to the first quarter of 2023.

Current wording

Operating Income. Consolidated operating income increased $2.9 million, or 29%, in the second quarter of 2024 compared to the second quarter of 2023, primarily due to higher activity levels in Australia and lower depreciation and amortization expense in the second quarter of 2024 compared to the second quarter of 2023. These items were partially offset by reduced mobile asset activity in Canada in the second quarter of 2024 compared to the second quarter of 2023.

Previous wording

Interest Expense, net. Net interest expense decreased by $1.3 million, or 36%, in the first quarter of 2024 compared to the first quarter of 2023, primarily related to lower average debt levels during 2024 compared to 2023, partially offset by higher interest rates on credit facility borrowings.

Current wording

Interest Expense, net. Net interest expense decreased by $1.4 million, or 40%, in the second quarter of 2024 compared to the second quarter of 2023, primarily related to lower average debt levels during 2024 compared to 2023, partially offset by higher interest rates on credit facility borrowings.

Previous wording

Income Tax Expense. Our income tax expense for the three months ended March 31, 2024 totaled $1.6 million, or (42.6)% of pretax loss, compared to an income tax expense of $1.2 million, or (24.3)% of pretax loss, for the three months ended March 31, 2023. Our effective tax rate for each of the three months ended March 31, 2024 and 2023 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.

Current wording

Income Tax Expense. Our income tax expense for the three months ended June 30, 2024 totaled $3.8 million, or 33.6% of pretax income, compared to an income tax expense of $2.9 million, or 40.9% of pretax income, for the three months ended June 30, 2023. Our effective tax rate for each of the three months ended June 30, 2024 and 2023 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.

Previous wording

Other Comprehensive (Loss) Income. Other comprehensive loss increased $8.1 million in the first quarter of 2024 compared to the first quarter of 2023, primarily as a result of foreign currency translation adjustments due to changes in the Canadian and Australian dollar exchange rates compared to the U.S. dollar. The Canadian dollar exchange rate compared to the U.S. dollar decreased 2% in the first quarter of 2024 and remained constant in the first quarter of 2023. The Australian dollar exchange rate compared to the U.S. dollar decreased 4% in the first quarter of 2024 compared to a 1% decrease in the first quarter of 2023.

Current wording

Other Comprehensive Income. Other comprehensive income decreased $0.5 million in the second quarter of 2024 compared to the second quarter of 2023, primarily as a result of foreign currency translation adjustments due to changes in the Canadian and Australian dollar exchange rates compared to the U.S. dollar. The Canadian dollar exchange rate compared to the U.S. dollar decreased 1% in the second quarter of 2024 compared to a 2% increase in the second quarter of 2023. The Australian dollar exchange rate compared to the U.S. dollar increased 2% in the second quarter of 2024 compared to a 1% decrease in the second quarter of 2023.

Previous wording

Our Canadian segment cost of sales and services decreased $16.6 million, or 23%, in the first quarter of 2024 compared to the first quarter of 2023. The decrease in cost of sales and services was driven by lower costs related to reduced mobile asset activity from pipeline projects which were largely completed in 2023 and reduced activity at certain lodges.

Current wording

Our Canadian segment cost of sales and services decreased $13.0 million, or 18%, in the second quarter of 2024 compared to the second quarter of 2023. The cost of sales and services decrease was driven by lower costs related to reduced mobile asset activity from pipeline projects which were largely completed in 2023 and lower costs at certain lodges including the McClelland Lake Lodge resulting from the sale.

Previous wording

Our Australian segment gross margin as a percentage of revenues increased to 27.9% in the first quarter of 2024 from 24.3% in the first quarter of 2023. This was primarily driven by an increased relative gross margin contribution from our Bowen Basin accommodation business which generates higher overall gross margins than our integrated services business, which has a service-only business model.

Current wording

Our Australian segment gross margin as a percentage of revenues decreased to 25.4% in the second quarter of 2024 from 29.1% in the second quarter of 2023. This was primarily driven by an increased relative revenue contribution from our integrated services business, which has a service-only business model, and generates lower overall gross margins than our accommodation business. The reduced gross margin was partially offset by improved profitability across the integrated services villages in the second quarter of 2024.

Previous wording

We reported net loss attributable to Civeo for the quarter ended March 31, 2024 of $5.1 million, or $0.35 per diluted share. As further discussed below, net loss included (i) $6.1 million of net gains associated with the sale of the McClelland Lake Lodge in Canada and (ii) a $7.8 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

Current wording

We reported net income attributable to Civeo for six months ended June 30, 2024 of $3.1 million, or $0.21 per diluted share. As further discussed below, net income included (i) $6.0 million of net gains associated with the sale of the McClelland Lake Lodge in Canada and (ii) a $7.8 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

Previous wording

We reported net loss attributable to Civeo for the quarter ended March 31, 2023 of $6.4 million, or $0.42 per diluted share.

Current wording

We reported net loss attributable to Civeo for the six months ended June 30, 2023 of $1.9 million, or $0.13 per diluted share.

Previous wording

Cost of Sales and Services. Our consolidated cost of sales and services decreased $3.1 million, or 2%, in the first quarter of 2024 compared to the first quarter of 2023. This decrease was primarily due to (i) reduced mobile asset activity from pipeline projects in Canada which were largely completed in 2023, (ii) reduced activity at certain lodges in Canada and (iii) a weaker Australian dollar relative to the U.S. dollar in the first quarter of 2024 compared to the first quarter of 2023. These items were partially offset by the increase in cost of sales and services largely driven by (i) increased occupancy at our Bowen Basin Civeo owned villages in Australia, (ii) increased activity at our integrated services villages in Western Australia and (iii) higher other costs related to the transportation contract for the McClelland Lake Lodge assets. See the discussion of segment results of operations below for further information.

Current wording

Cost of Sales and Services. Our consolidated cost of sales and services increased $6.3 million, or 2%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was primarily due to increased occupancy at our Civeo owned villages in our Australian Bowen Basin and new business in our integrated services villages in Western Australia and the associated overhead costs. These items were partially offset by the decrease in cost of sales and services largely driven by (i) reduced mobile asset activity from pipeline projects in Canada which were largely completed in 2023, (ii) lower costs at certain lodges in Canada and (iii) a weaker Australian dollar relative to the U.S. dollar in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. See the discussion of segment results of operations below for further information.

Previous wording

Selling, General and Administrative Expenses. SG&A expenses increased $2.5 million, or 15%, in the first quarter of 2024 compared to the first quarter of 2023. This increase was primarily due to higher compensation expense of $1.7 million, higher incentive compensation costs of $0.6 million and higher professional fees of $0.6 million. The increase in compensation expense was primarily due to $1.1 million in severance costs related to the departure of our former Chief Financial Officer (CFO) and increased staff and associated recruitment costs. These items were partially offset by lower share-based compensation expense of $0.9 million and a weaker Australian dollar relative to the U.S. dollar in the first quarter of 2024 compared to the first quarter of 2023. The decrease in share-based compensation expense was due to the changes in our share price during 2024 compared to 2023 and forfeitures related to the departure of our former CFO.

Current wording

Selling, General and Administrative Expenses. SG&A expenses increased $3.4 million, or 10%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was primarily due to higher compensation expense of $3.0 million, higher travel and entertainment costs of $0.9 million and higher professional fees of $0.6 million. The increase in compensation expense was primarily due to $1.1 million in severance costs related to the departure of our former Chief Financial Officer, other severance costs and increased staff and associated recruitment costs. These items were partially offset by lower share-based compensation expense of $1.1 million and a weaker Australian dollar relative to the U.S. dollar in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in share-based compensation expense was primarily due to forfeitures during 2024 compared to 2023, partially offset by the changes in our share price during 2024 compared to 2023.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense decreased $4.9 million, or 23%, in the first quarter of 2024 compared to the first quarter of 2023. The decrease was primarily due to certain assets becoming fully depreciated in Canada, including the McClelland Lake Lodge, in the second quarter of 2023 and lower depreciation and amortization expense due to a weaker Australian dollar relative to the U.S. dollar in the first quarter of 2024 compared to the first quarter of 2023.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense decreased $8.5 million, or 20%, in six months ended June 30, 2024 compared to the six months ended June 30, 2023 The decrease was primarily due to certain assets becoming fully depreciated in Canada, including the McClelland Lake Lodge, in the six months ended June 30, 2023 and lower depreciation and amortization expense due to a weaker Australian dollar relative to the U.S. dollar in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Previous wording

Impairment Expense. We recorded pre-tax impairment expense of $7.8 million in 2024 associated with long-lived assets in Australia and the U.S. See Note 3 - Impairment Charges to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Current wording

See Note 3 - Impairment Charges to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Previous wording

Gain on Sale of McClelland Lake Lodge Assets, net. We recorded $6.1 million in the first quarter of 2024 related to net gains associated with the sale of the McClelland Lake Lodge.

Current wording

Gain on Sale of McClelland Lake Lodge Assets, net. We recorded $6.0 million in the six months ended June 30, 2024 related to net gains associated with the sale of the McClelland Lake Lodge.

Previous wording

Other Income. Consolidated other income decreased $2.0 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to higher gain on the sale of assets related to the sale of our Acadian Acres accommodation assets in the U.S. in the first quarter of 2023 compared to the first quarter of 2024.

Current wording

Other Income. Consolidated other income decreased $2.1 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to higher gain on the sale of assets related to the sale of our Louisiana accommodation assets in the U.S. in the six months ended June 30, 2023 compared to the six months ended June 30, 2024.

Previous wording

Our Canadian segment reported revenues in the first quarter of 2024 that were $22.3 million, or 25%, lower than the first quarter of 2023. The revenue decrease was driven by reduced mobile asset activity from pipeline projects which were largely completed in 2023 and lower billed rooms at our lodges.

Current wording

Our Canadian segment reported revenues in the six months ended June 30, 2024 that were $38.2 million, or 21%, lower than the six months ended June 30, 2023. The revenue decrease was driven by reduced mobile asset activity from pipeline projects which were largely completed in 2023.

Previous wording

Our Canadian segment gross margin as a percentage of revenues decreased from 17.4% in the first quarter of 2023 to 14.7% in the first quarter of 2024. This was primarily driven by reduced mobile asset activity from pipeline projects which were largely completed in 2023 and mobile camp demobilization costs of approximately $1.8 million which were incurred in the first quarter of 2024, partially offset by improved margins at our lodges due to improved efficiencies.

Current wording

Our Canadian segment gross margin as a percentage of revenues decreased from 21.2% in the six months ended June 30, 2023 to 20.8% in the six months ended June 30, 2024. This was primarily driven by reduced mobile asset activity from pipeline projects which were largely completed in 2023 and mobile camp demobilization costs of approximately $3.2 million which were incurred in the first six months of 2024, partially offset by improved margins at our lodges due to improved efficiencies and the removal of certain fixed costs with the sale of the McClelland Lake Lodge.

Previous wording

Our Australian segment reported revenues in the first quarter of 2024 that were $14.7 million, or 19%, higher than the first quarter of 2023. The weakening of the average exchange rate for Australian dollars relative to the U.S. dollar by 3.9% in the first quarter of 2024 compared to the first quarter of 2023 resulted in a $3.7 million period-over-period decrease in revenues. On a constant currency basis, the Australian segment experienced a 24% period-over-period increase in revenues. Excluding the impact of the weaker Australian exchange rate, the increase in the Australian segment was driven by increased activity at our Civeo owned villages in the Bowen Basin and our integrated services villages in Western Australia.

Current wording

Our Australian segment reported revenues in the six months ended June 30, 2024 that were $40.8 million, or 26%, higher than the six months ended June 30, 2023. The weakening of the average exchange rate for Australian dollars relative to the U.S. dollar by 2.7% in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 resulted in a $5.1 million period-over-period decrease in revenues. On a constant currency basis, the Australian segment experienced a 29% period-over-period increase in revenues. Excluding the impact of the weaker Australian exchange rate, the increase in the Australian segment was driven by increased activity at our Civeo owned villages in the Bowen Basin and new business in our integrated services villages in Western Australia. Billed rooms in Civeo owned villages were up 11.6% in the first half of 2024 due to increased activity in both the Bowen Basin and Gunnedah Basin coupled with recent contract renewals and extensions. Excluding the weakening Australian dollar, average daily rates for Civeo owned villages were up 4.4% year-over-year.

Previous wording

Our Australian segment cost of sales and services increased $7.8 million, or 13%, in the first quarter of 2024 compared to the first quarter of 2023. The weakening of the average exchange rate for Australian dollars relative to the U.S. dollar by 3.9% in the first quarter of 2024 compared to the first quarter of 2023 resulted in a $2.6 million period-over-period decrease in cost of sales and services. Excluding the impact of the weaker Australian exchange rate, the increase in cost of sales and services was largely driven by increased occupancy at our Bowen Basin owned villages and integrated services villages in Western Australia.

Current wording

Our Australian segment cost of sales and services increased $30.3 million, or 26%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The weakening of the average exchange rate for Australian dollars relative to the U.S. dollar by 2.7% in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 resulted in a $3.7 million period-over-period decrease in cost of sales and services. Excluding the impact of the weaker Australian exchange rate, the increase in the Australian segment was largely driven by increased occupancy at our Civeo owned villages in the Bowen Basin and new business in our integrated services villages in Western Australia and the associated overhead costs.

Previous wording

Cash totaling $6.0 million was provided by operations during the three months ended March 31, 2024, compared to $0.4 million provided by operations during the three months ended March 31, 2023. During the three months ended March 31, 2024 and 2023, $6.4 million and $15.6 million was used in working capital, respectively. The year-over-year decrease in cash used in working capital in 2024 compared to 2023 is largely due to the timing of collections of accounts receivable and the timing of payments and accrued liabilities during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Cash totaling $38.3 million was provided by operations during the six months ended June 30, 2024, compared to $19.8 million provided by operations during the six months ended June 30, 2023. During the six months ended June 30, 2024 and 2023, $2.4 million was provided by working capital and $25.2 million was used in working capital, respectively. The year-over-year increase in cash provided by working capital in 2024 compared to 2023 is largely due to the collection of holdbacks in Canada related to the completion of mobile asset pipeline projects during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Previous wording

Cash was provided by investing activities during the three months ended March 31, 2024 in the amount of $1.2 million, compared to cash used in investing activities during the three months ended March 31, 2023 in the amount of $2.5 million. The increase in cash provided by investing activities was primarily due to higher proceeds from the sale of property, plant and equipment. We received net proceeds from the sale of property, plant and equipment of $6.8 million during the three months ended March 31, 2024 related to the sale of our McClelland Lake Lodge accommodation assets in Canada, compared to $2.3 million during the three months ended March 31, 2023 primarily related to the sale of our Acadian Acres accommodation assets in the U.S. Capital expenditures totaled $5.6 million and $4.8 million during the three months ended March 31, 2024 and 2023, respectively. Capital expenditures in both periods were primarily related to maintenance. In addition, our 2024 capital expenditures included approximately $2.4 million related to customer-funded infrastructure upgrades in Australia.

Current wording

Cash was used in investing activities during the six months ended June 30, 2024 in the amount of $0.1 million, compared to cash used in investing activities during the six months ended June 30, 2023 in the amount of $9.0 million. The decrease in cash used in investing activities was primarily due to higher proceeds from the sale of property, plant and equipment. We received net proceeds from the sale of property, plant and equipment of $10.6 million during the six months ended June 30, 2024 related to the sale of our McClelland Lake Lodge accommodation assets in Canada and the sale of our Louisiana land in the U.S., compared to $2.7 million during the six months ended June 30, 2023 primarily related to the sale of our Louisiana accommodation assets in the U.S. Capital expenditures totaled $10.9 million and $11.7 million during the six months ended June 30, 2024 and 2023, respectively. Capital expenditures in both periods were primarily related to maintenance. In addition, our 2024 capital expenditures included approximately $2.9 million related to customer-funded infrastructure upgrades in Australia.

Previous wording

Net cash of $6.6 million was provided by financing activities during the three months ended March 31, 2024 primarily due to net borrowings under our revolving credit facilities of $14.6 million, partially offset by dividend payments of $3.7 million, repurchases of our common shares of $3.2 million and payments to settle tax obligations on vested shares under our share-based compensation plans of $1.1 million. Net cash of $6.6 million was provided by financing activities during the three months ended March 31, 2023 primarily due to net borrowings under our revolving credit facilities of $17.7 million, partially offset by term loan repayments of $7.4 million and repurchases of our common shares of $3.8 million.

Current wording

Net cash of $34.1 million was used in financing activities during the six months ended June 30, 2024 primarily due to net repayments under our revolving credit facilities of $15.8 million, repurchases of our common shares of $9.9 million, dividend payments of $7.4 million and payments to settle tax obligations on vested shares under our share-based compensation plans of $1.1 million. Net cash of $6.9 million was used in financing activities during the six months ended June 30, 2023 primarily due to term loan repayments of $14.9 million and repurchases of our common shares of $8.0 million, partially offset by net borrowings under our revolving credit facilities of $16.0 million.

Previous wording

The following table summarizes the changes in debt outstanding during the three months ended March 31, 2024 (in thousands):

Current wording

The following table summarizes the changes in debt outstanding during the six months ended June 30, 2024 (in thousands):

Previous wording

In August 2023, our Board of Directors (Board) authorized a common share repurchase program to repurchase up to 5.0% of our total common shares which are issued and outstanding, or 742,134 common shares, over a twelve month period. In addition, our Board declared a quarterly dividend on February 2, 2024 of $0.25 per common share to shareholders of record as of close of business on February 26, 2024. The total cash payment of $3.7 million was paid on March 18, 2024. The dividend is an eligible dividend pursuant to the Income Tax Act (Canada). See Note 12 – Share Repurchase Programs and Dividends to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Current wording

In August 2023, our Board of Directors (Board) authorized a common share repurchase program to repurchase up to 5.0% of our total common shares which are issued and outstanding, or 742,134 common shares, over a twelve month period. In addition, our Board declared quarterly dividends of $0.25 per common share to shareholders in the first and second quarters of 2024. The dividend is an eligible dividend pursuant to the Income Tax Act (Canada). See Note 12 – Share Repurchase Programs and Dividends to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Previous wording

As of March 31, 2024, we had outstanding letters of credit of $0.3 million under the U.S. facility, zero under the Australian facility and $1.1 million under the Canadian facility. We also had outstanding bank guarantees of A$0.8 million under the Australian facility.

Current wording

As of June 30, 2024, we had outstanding letters of credit of $0.3 million under the U.S. facility, zero under the Australian facility and $0.7 million under the Canadian facility. We also had outstanding bank guarantees of A$1.6 million under the Australian facility.