Teekay Offshore Agrees to Acquire 50 Percent Interest in the Cidade De Itajai FPSO Unit for Approximately $204 Million
May 29 2013 - 10:00AM
HAMILTON, BERMUDA--(Marketwired - May 29, 2013) -
Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership)
(NYSE: TOO) today announced that it has agreed to acquire a 50
percent interest in the Cidade de Itajai (Itajai) floating
production, storage and offloading (FPSO) unit from Teekay
Corporation (Teekay) for a purchase price of approximately $204
million. The acquisition will be financed with assumed debt and
proceeds from the recently completed equity private placement. The
acquisition is expected to be completed on June 1, 2013, subject to
customary closing conditions. The Itajai FPSO is operating on the
Bauna and Piracaba (previously named Tiro and Sidon) fields in the
Santos Basin offshore Brazil under a nine-year fixed-rate
time-charter contract (plus extension options) with Petroleo
Brasileiro SA (Petrobras). The remaining 50 percent interest in the
Itajai FPSO is owned by Brazilian-based Odebrecht Oil & Gas
S.A.
The Partnership's 50 percent interest in the
Itajai FPSO unit, which will be equity accounted for, is expected
to generate annual Cash Flow from Vessel Operations(1) of
approximately $25 million, and annual Distributable Cash Flow(2) of
approximately $14 million.
"We are pleased to be completing another strategic
FPSO acquisition, our second to-date in 2013, which will bring the
Partnership's total FPSO fleet size to five units," commented Peter
Evensen, Chief Executive Officer of Teekay Offshore GP LLC. "The
Itajai FPSO will add to our growing FPSO franchise in Brazil, where
we currently own and operate two other FPSO units, and further
builds on our strong relationship with Petrobras. In addition, the
stable fixed-rate cash flow contributed from the Itajai FPSO will
be accretive to the Partnership's distributable cash flow."
The Board of Directors of the Partnership's
general partner and its Conflicts Committee have approved the
transaction. The Conflicts Committee retained independent legal and
financial advisors to assist in evaluating the transaction.
-
Cash flow from vessel operations from equity
accounted vessels represents income from vessel operations before
depreciation and amortization expense, amortization of in-process
revenue contracts and includes adjustments for direct financing
leases to a cash basis. Cash flow from vessel operations from
equity accounted vessels is included because certain investors use
cash flow from vessel operations to measure a company's financial
performance, and to highlight this measure for the Partnership's
equity-accounted joint ventures. Cash flow from vessel operations
from equity accounted vessels is not required by United States
generally accepted accounting principles (GAAP) and should not be
considered as an alternative to equity income or any other
indicator of the Partnership's performance required by
GAAP.
-
Distributable cash flow represents net income
adjusted for depreciation and amortization expense, non-controlling
interest, non-cash items, distributions relating to equity
financing of newbuilding installments, vessel acquisition costs,
estimated maintenance capital expenditures, 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 GAAP and should not be considered as an
alternative to net income or any other indicator of the
Partnership's performance required by GAAP.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is an international
provider of marine transportation, oil production and storage
services to the offshore oil industry focusing on the fast-growing,
deepwater offshore oil regions of the North Sea and Brazil. Teekay
Offshore is structured as a publicly-traded master limited
partnership and owns interests in 35 shuttle tankers (including
four chartered-in vessels and three committed newbuildings), five
floating production, storage and offloading (FPSO) units, seven
floating storage and offtake (FSO) units (including two committed
FSO conversions) and five conventional oil tankers. The majority of
Teekay Offshore's fleet is employed on long-term, stable contracts.
In addition, Teekay Offshore has rights to participate in certain
other FPSO and shuttle tanker opportunities provided by Teekay
Corporation (NYSE: TK) and Sevan Marine ASA (Oslo Bors: SEVAN).
Teekay Offshore's 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 timing, certainty and effect of the completion of
the acquisition of a 50 percent interest in the Itajai FPSO unit,
including the form of financing the acquisition; and the effect of
the potential acquisition on the Partnership's cash flow from
vessel operations and distributable cash flow. 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: potential failure of the proposed acquisition to be
completed; potential early termination of the contract between the
Partnership and Petrobras and inability to replace this contract;
greater than expected levels of operating expenses or less than
expected oil production by the FPSO unit; 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, 2012. 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
www.teekayoffshore.com
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Teekay Offshore Partners L.P. via Thomson Reuters
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