Teekay Offshore Partners Completes Acquisition of FPSO and Newbuilding Shuttle Tanker
October 18 2010 - 7:58PM
Marketwired
Teekay Offshore Partners L.P. (NYSE: TOO) -
Highlights
-- Completed the acquisition of the Rio das Ostras FPSO unit and
newbuilding shuttle tanker, the Amundsen Spirit, from Teekay Corporation
for a purchase price of approximately $286 million.
-- Agreed to acquire two additional newbuilding shuttle tankers, the Nansen
Spirit and the Peary Spirit, from Teekay Corporation for a total
purchase price of approximately $260 million upon commencement of their
time-charters in January and July 2011.
Teekay Offshore Partners L.P. (Teekay Offshore or the
Partnership) (NYSE: TOO) today announced that is has completed the
acquisition of the Cidade de Rio das Ostras (Rio das Ostras)
floating production storage and offloading (FPSO) unit from Teekay
Corporation (Teekay) (NYSE: TK) for a purchase price of
approximately $158 million. The Partnership also announced that its
51 percent-owned subsidiary, Teekay Offshore Operating L.P. (OPCO),
has acquired the newbuilding shuttle tanker, the Amundsen Spirit,
from Teekay for approximately $128 million and has agreed to
acquire two additional newbuilding shuttle tankers, the Nansen
Spirit and the Peary Spirit, from Teekay for a total purchase price
of $260 million.
The Partnership has financed the acquisition of the Rio das
Ostras FPSO and Amundsen Spirit newbuilding shuttle tanker through
the assumption of $187 million of debt secured by these assets,
with the remainder of the purchase price financed from available
capacity under the Partnership's revolving credit facilities.
The transactions are expected to increase the Partnership's Cash
Flow from Vessel Operations(1) by approximately $60 million per
annum in 2011, and Distributable Cash Flow(2), which includes only
51 percent of OPCO, of approximately $20 million.
The Rio das Ostras FPSO operates under a fixed-rate contract
with Petroleo Brasileiro SA (Petrobras) servicing the Aruana field,
located in Brazil's Campos Basin, through 2017. The Amundsen Spirit
operates as part of a Master Agreement with Statoil ASA (Statoil),
under a fixed-rate, life-of-field time-charter contract to service
the Tampen and Haltenbanken fields on the Norwegian Continental
Shelf.
The acquisitions of the Nansen Spirit and Peary Spirit are
expected to be completed upon the commencement of their
life-of-field, time-charter contracts, under the same Statoil
Master Agreement, which is expected to occur in January 2011 and
July 2011, respectively.
The Board of Directors of the Partnership's General Partner and
its Conflicts Committee have approved the transactions. The
Conflicts Committee retained independent legal and financial
advisors to assist it in evaluating the transactions.
(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.
(2) Distributable cash flow represents net income adjusted for
depreciation and amortization expense, non-controlling interest,
non-cash items, estimated maintenance capital expenditures, gains
and losses on vessel sales, unrealized gains and losses from
derivatives, non-cash income taxes and unrealized foreign exchange
related items. Maintenance capital expenditures represent those
capital expenditures required to maintain over the long-term the
operating capacity of, or the revenue generated by, the
Partnership's capital assets. Distributable cash flow is a
quantitative standard used in the publicly-traded partnership
investment community to assist in evaluating a partnership's
ability to make quarterly cash distributions. Distributable cash
flow is not defined by U.S. generally accepted accounting
principles (GAAP) and should not be considered as an alternative to
net income or any other indicator of the Partnership's performance
required by GAAP.
"We are excited to complete these strategically significant
acquisitions, which includes our second FPSO unit," commented Peter
Evensen, Teekay Offshore's Chief Executive Officer. "The Rio das
Ostras FPSO allows us to build on our existing franchise in Brazil,
where we currently operate 13 shuttle tankers, and the three
newbuilding shuttle tankers help to renew our shuttle tanker fleet
operating in the North Sea." Mr. Evensen continued, "These
accretive transactions further enhance the Partnership's
profitability and portfolio of fixed-rate cash flows which will
support future distribution increases. The long-term, fixed-rate
nature of these time-charters will also reduce the seasonal
variability of our cash flows going forward."
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 33
shuttle tankers (including six chartered-in vessels), four FSO
units, eleven conventional oil tankers. Teekay Offshore Operating
L.P has also agreed to acquire two newbuilding shuttle tankers from
Teekay Corporation upon the commencement of their respective
time-charter contracts in 2011. In addition, Teekay Offshore has
direct ownership interests in two shuttle tankers, two FSO units,
and two FPSO units. 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
effect of the acquisition of the Rio das Ostras FPSO unit, and
three newbuilding shuttle tankers (the Amundsen Spirit, the Nansen
Spirit and the Peary Sprit) on the amount and seasonal variability
of Partnership's future cash flows and in particular, the
established increase to the Partnership's 2011 cash flow from
vessel operations and distributable cash flow; and the purchase
price and the timing of delivery and commencement of time-charter
contracts for the Nansen Spirit and Peary Spirit. 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: variability in shuttle tanker tonnage requirements
under the Statoil Master Agreement which covers the time-charter
contracts for the Amundsen Spirit, Nansen Spirit and Peary Spirit;
different-than-expected levels of oil production in the North Sea
offshore fields where the Amundsen Spirit, Nansen Spirit and Peary
Spirit operate; potential delays in the delivery of the Nansen
Spirit and Peary Spirit from the shipyard; potential early
termination of the Rio das Ostras FPSO time-charter contract and/or
Statoil Master Agreement; increased operating expenses; 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
Teekay Offshore Partners (NYSE:TOO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Teekay Offshore Partners (NYSE:TOO)
Historical Stock Chart
From Jul 2023 to Jul 2024