Teekay Offshore Partners Signs Shuttle Tanker Contracts and Receives Offer to Acquire One FPSO and Three Shuttle Tankers
August 31 2010 - 7:11PM
Marketwired
Teekay Offshore Partners L.P. (NYSE: TOO) -
Highlights
-- Signed master agreement with Statoil ASA that replaces an existing
volume-dependent, life-of-field contract of affreightment, and covers
fixed-rate, life-of-field time-charter contracts for seven shuttle
tankers.
-- Signed new time-charter contracts for two shuttle tankers with Petroleo
Brasileiro SA.
-- Renewed contracts for two shuttle tankers serving the Heidrun field in
the North Sea.
-- The Partnership's consolidated cash flow from vessel operations is
expected to increase by approximately $20 million in 2011 as a result of
new and renewed contracts.
-- Received offer from Teekay Corporation to acquire the Cidade de Rio das
Ostras FPSO unit and three newbuilding shuttle tankers.
Teekay Offshore Partners L.P. (Teekay Offshore or the
Partnership) today announced that its 51 percent-owned subsidiary,
Teekay Offshore Operating L.P. (OPCO), signed a master agreement
with Statoil ASA (Statoil) that replaces an existing
volume-dependent, life-of-field contract of affreightment (CoA),
and covers fixed-rate, life-of-field time-charter contracts for
seven dedicated shuttle tankers. This new master agreement is
effective September 1, 2010.
Under the terms of the master agreement:
-- the vessels will be chartered under individual fixed-rate, life-of-field
time-charter contracts to service Tampen and Haltenbanken fields on the
Norwegian Continental Shelf;
-- the number of shuttle tankers covered by the master agreement may be
adjusted annually, mirroring the adjustments in tonnage under the
existing CoA;
-- the fixed-rate nature of time-charter contracts is expected to provide
OPCO with more seasonally stable and predictable cash flows compared to
the CoA arrangement; and
-- the vessels chartered under this agreement would include the three
newbuilding shuttle tankers that Teekay Corporation has recently offered
to OPCO.
In addition, OPCO recently signed new time-charter contracts
with Petroleo Brasileiro SA (Petrobras) for two shuttle tankers for
periods of five years and two years, bringing the total number of
Teekay Offshore shuttle tankers operating in Brazil to 13. OPCO
also renewed a contract for two shuttle tankers serving the
Statoil-operated Heidrun field in the North Sea for an additional
four years at a higher charter rate.
The new master agreement with Statoil (before including any
contribution from the three newbuilding shuttle tankers), the two
new shuttle tankers redeployed in Brazil to Petrobras and the
renewed Heidrun contract, in aggregate, are expected to increase
the Partnership's consolidated cash flow from vessel operations(1)
by approximately $20 million in 2011, of which approximately $10
million is attributable to Teekay Offshore based on its 51 percent
interest in OPCO.
(1) Cash flow from vessel operations represents income from
vessel operations before depreciation and amortization expense,
vessel/goodwill write-downs, gains and losses on the sale of
vessels and unrealized gains and losses relating to derivatives,
but includes realized gains and losses on the settlement of foreign
currency forward contracts. Cash flow from vessel operations is a
non-GAAP financial measure used by certain investors to measure the
financial performance of shipping companies.
The Partnership today also announced that it received an offer
from Teekay Corporation to acquire:
-- the Cidade de Rio das Ostras (Rio das Ostras) floating production
storage and offloading (FPSO) unit, which is on a long-term charter to
Petrobras, at fair market value; and
-- three newbuilding shuttle tankers at fully built-up cost, for
acquisition by OPCO, which would be used to service the new master
agreement with Statoil.
If Teekay Corporation's offer for the three newbuilding shuttle
tankers is accepted by the Partnership, the purchases of the
Amundsen Spirit, the Nansen Spirit and the Peary Spirit are
expected to coincide with the commencement of their time-charter
contracts under the Statoil master agreement in October 2010,
January 2011 and July 2011, respectively. If Teekay Corporation's
offer of the Rio das Ostras FPSO is accepted by the Partnership,
the acquisition of this unit is expected to take place in the
fourth quarter of 2010. These offers are currently being reviewed
by the Board of Directors of the Partnership's general partner and
its conflicts committee.
"We are very pleased to announce these significant positive
contract developments, which will further increase Teekay
Offshore's profitability and the stability of its cash flows,"
commented Peter Evensen, Chief Executive Officer, Teekay Offshore
GP LLC. "The offer to acquire the Rio das Ostras FPSO and three of
the most sophisticated and eco-friendly shuttle tankers ever built
highlights the built-in fleet growth opportunities available to
Teekay Offshore from our sponsor, Teekay Corporation. As a result
of our recently completed $130 million follow-on equity offering,
we have sufficient liquidity to acquire these assets without the
need to raise additional equity."
About Teekay Offshore
Teekay Offshore Partners L.P., a publicly-traded master limited
partnership formed by Teekay Corporation (NYSE: TK), is an
international provider of marine transportation, production and
storage services to the offshore oil industry. Teekay Offshore owns
a 51 percent interest in and controls Teekay Offshore Operating
L.P., a Marshall Islands limited partnership with a fleet of 32
shuttle tankers (including six chartered-in vessels), four FSO
units, nine conventional oil tankers and two lightering vessels. In
addition, Teekay Offshore has direct ownership interests in two
shuttle tankers, two FSO units, and one FPSO unit. Teekay Offshore
also has rights to participate in certain other FPSO and FSO
opportunities of Teekay Corporation.
Teekay Offshore Partners' common units trade on the New York
Stock Exchange under the symbol "TOO".
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in
Section 21E of the Securities Exchange Act of 1934, as amended)
which reflect management's current views with respect to certain
future events and performance, including statements regarding: the
effects of the new master agreement with Statoil, the new
time-charter contracts with Petrobras and renewed contracts with
Statoil for the two shuttle tankers serving the Statoil-operated
Heidrun fields on the Partnership's profitability, as well as
amount and stability of its cash flows, including during the fiscal
year ended December 31, 2011; the effect of the acquisition of the
Rio das Ostras FPSO and the three newbuilding shuttle tankers on
the Partnership's profitability, as well as amount and stability of
its cash flows, and the sufficiency of the Partnership's liquidity
to complete these acquisitions; the potential for Teekay
Corporation to offer additional vessels to the Partnership and
effect of potential acquisitions on the Partnership's
profitability, as well as amount and stability of its cash flows;
and the delivery dates of vessels. The following factors are among
those that could cause actual results to differ materially from the
forward-looking statements, which involve risks and uncertainties,
and that should be considered in evaluating any such statement:
vessel operations and production volumes; different-than-expected
levels of field maintenance; increased operating expenses; failure
of Teekay Corporation to offer to the Partnership additional
vessels; failure to acquire vessels offered by Teekay Corporation
as a result of the determination by Teekay Offshore's general
partner's Board of Directors that they are unsuitable or not
sufficiently profitable to the Partnership; required approvals by
the conflicts committee of Teekay Offshore's general partner to
acquire vessels from Teekay Corporation, including approvals for
the Rio das Ostras FPSO and the three newbuilding shuttle tankers;
the Partnership's ability to raise financing to purchase additional
vessels; and other factors discussed in Teekay Offshore's filings
from time to time with the SEC, including its Report on Form 20-F
for the fiscal year ended December 31, 2009. The Partnership
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Partnership's
expectations with respect thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Contacts: Teekay Offshore Partners L.P. Kent Alekson Investor
Relations Enquiries + 1 (604) 609-6442 Teekay Offshore Partners
L.P. Alana Duffy Media Enquiries + 1 (604) 844-6631
www.teekayoffshore.com
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