Man-camp provider Civeo Corporation is feeling the impact of the coronavirus pandemic and the oil downturn as the Houston company, with operations in Oklahoma announced it is withdrawing its previously announced 2020 guidance. It confirms it has already laid off large numbers of its workforce including most of the handful who worked in Oklahoma.
In the past week, Civeo furloughed three service techs and two drivers out of its Yukon offices, leaving only two employees in the operation. Furloughed workers were told they might be rehired if things improve in the next 30 days.
“We are concentrating on the factors within our control as we navigate the challenges ahead, including implementing cost containment initiatives. We will share a more comprehensive update on the business as part of our first quarter earnings release,” said Bradley J. Dodson, Civeo’s President and Chief Executive Officer.
In short, the company expects to take an economic hit this year as the demand for temporary housing, known in the oil and gas industry as “man camps” plunged with the drop in the number of active drilling operations in Oklahoma, Texas, New Mexico, North Dakota and other states. Civeo is considered to be a major hospitality provider in Canada’s oil sands and in Australia.
The company described the anticipated “hit” by stating, “Due to lower oil prices and the economic disruption caused by COVID-19, Civeo expects its profitability in 2020 to be negatively impacted.”
The firm said it’s taking steps, including salary and compensation reductions of up to 20% for the Board, executive leaders and other senior management. It confirms it’s already laid off 25% of its North America workforce in the past month and will cut 2020 capital spending by 25%.
Civeo had total debt outstanding as of March 31 of $315 million, down from the $359 million at the end of the year. Liquidity stood at more than $125 million under its credit facility.
Civeo continues to closely monitor the COVID-19 situation and is following safety protocols to ensure the health and well-being of its employees, guests and contractors. These measures include stringent screening for all individuals that enter its facilities, strict social distancing practices, enhanced cleaning and deep sanitization, the suspension of all nonessential employee travel, and work-from-home policies, where applicable.
Civeo currently operates a total of 28 lodges and villages in Canada, Australia and the U.S., with an aggregate of approximately 30,000 rooms.
Source: Business Wire