8.7 C
Fort St. John
Sunday, August 18, 2019
9924 101 ave Fort St. John, B.C.
Home Canadian Press Workcamp providers join forces to deal with shrunken oilsands market

Workcamp providers join forces to deal with shrunken oilsands market

CALGARY — Houston-based Civeo Corp. says it is buying Noralta Lodge Ltd. of Edmonton for $367 million in a deal that unites two major providers of workforce accommodation in the oilsands region of northern Alberta.

The companies say in a joint news release they expect to save $10 million annually by 2019 through operational efficiencies.

Lower oil prices over the past three years have dried up capital availability to build new oilsands and infrastructure projects, leading to high vacancy rates in the dozens of workcamps or lodges that surround Fort McMurray, Alta.

Civeo says it was attracted by Noralta’s ongoing contracts with two major oilsands producers which are to produce annual revenues of at least $130 million during their terms.

Civeo says it owns a total of 19 lodges or villages in operation in Canada and Australia with more than 23,000 rooms, while Noralta has 11 lodges with a total of 7,900 rooms in northern Alberta.

Civeo is to pay $210 million in cash and issue 32.8 million Civeo common shares, plus issue preferred equity options to buy 29.3 million more common shares two years after closing.


The Canadian Press

get the latest news in your inbox


Local Events

Must Read

Fort Nelson expected to see summertime snow this weekend

FORT ST. JOHN, B.C. - Higher elevations in Northern British Columbia, such as the Fort Nelson area, could receive snow over the weekend. According to...