TOO Teekay Offshore Partners LP

Teekay Offshore Acquires ALP Maritime Services and Orders Four Long-Haul Towage Newbuildings

HAMILTON, BERMUDA--(Marketwired - Feb 21, 2014) -

Editors Note: There is one photo associated with this press release.

Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE:TOO) today announced that it has agreed to acquire ALP Maritime Services B.V. (ALP), a Netherlands-based provider of long-haul ocean towage and offshore installation services to the global offshore oil and gas industry. ALP currently provides these services through a fleet of third-party owned vessels. As part of the transaction, Teekay Offshore and ALP have ordered four state-of-the-art towing and anchor handling vessel newbuildings, which will be capable of ultra-long distance towing, offshore installation and decommissioning of large floating production, storage and offloading (FPSO) units, floating liquefied natural gas (FLNG) units and floating drill rigs.

Transaction Summary

• Teekay Offshore and ALP have entered into an agreement with Niigata Shipbuilding & Repair of Japan for the construction of four state-of-the-art SX-157 Ulstein Design ultra-long distance towing and anchor handling vessel newbuildings, which will be equipped with dynamic positioning capability, for a fully built-up cost of approximately $260 million, which includes the cost of acquiring ALP.
• The Partnership intends to finance the ALP acquisition and initial newbuilding payments through its existing liquidity and expects to secure long-term debt financing for the vessels prior to their deliveries in 2016.

"The strong fundamentals in offshore oil and gas, combined with the large orderbook of floating offshore assets including FPSOs, FLNGs and drill rigs, are expected to result in strong demand for the services of long-haul towing and anchoring handling vessels," commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. "We believe ALP's operational capabilities and customer relationships in the growing long-haul ocean towage and offshore unit installation segment is a natural complement to Teekay Offshore's existing offshore project offering, which will provide the Partnership with another channel for accretive cash flow growth."

"We are excited to bring the next generation of versatile, ultra-powerful offshore vessels to the world-wide long distance towage market," commented Paul Mulder, Chief Executive Officer of ALP. "As part of the Teekay family, ALP will be better positioned for the future growth we anticipate in our core towage and installation business and to develop new tailor-made service offerings that provide value for our customers."

The proposed acquisition, which is expected to close during the first quarter of 2014, has been approved by the Teekay Offshore and ALP boards of directors, and remains subject to customary closing conditions. Teekay Offshore and ALP were advised on this transaction by ABN AMRO Bank N.V.

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 (MLP) and currently owns interests in 34 shuttle tankers (including two chartered-in vessels), five floating production, storage and offloading (FPSO) units, six floating storage and offtake (FSO) units (including one committed FSO conversion unit), four conventional oil tankers and one HiLoad Dynamic Positioning (DP) unit. 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, shuttle tanker and HiLoad DP opportunities provided by Teekay Corporation (NYSE:TK), Sevan Marine ASA (Oslo Bors:SEVAN) and Remora AS.

Teekay Offshore's common units trade on the New York Stock Exchange under the symbol "TOO".

About ALP Maritime Services B.V.

ALP Maritime Services B.V., a private company based in Rotterdam, the Netherlands, is an international provider of commercial and operational services in the towage and installation market to the offshore oil and gas industry. ALP provides engineering, commercial and operational support and conforms to the highest industry safety standards.

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 and certainty of completion of the Partnership's acquisition of ALP; the timing and certainty of completion of Teekay Offshore and ALP's four towing and anchor handling vessel newbuildings; the effect of the acquisition and newbuildings on the Partnership's future cash flows; the timing and certainty of entering into long-term financing for the vessels prior to their deliveries; and the anticipated increase in demand for towing and anchor handling vessels due to strong fundamentals in offshore oil and gas and the orderbook of floating offshore assets. 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: less than anticipated revenues or higher than anticipated costs or capital requirements related to the newbuildings in which the Partnership and ALP have agreed to construct; shipyard construction delays; increased cost to construct the four towing and anchor handling vessel newbuildings; failure to satisfy the closing conditions of the Partnership's acquisition of ALP; failure by the Partnership to secure financing for the newbuildings prior to their deliveries; change in exploration, production and storage of offshore oil and gas, either generally or in particular regions that would impact the expected future growth in the global long-haul towing and offshore unit installation and decommissioning industry; changes in trading patterns; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; and other factors discussed in Teekay Offshore Partners' filings from time to time with the SEC, including its Report on Form 20-F/A for the fiscal year ended December 31, 2012. The Partnership expressly disclaims any obligation 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.

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Teekay Offshore Partners L.P.Ryan HamiltonInvestor Relations+1 (604) 609-6442www.teekayoffshore.com