Teekay Offshore Partners Reports First Quarter 2017 Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 05/18/17 -- Highlights
Teekay Offshore GP LLC, the general partner of Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE: TOO), today reported the Partnership's results for the quarter ended March 31, 2017.
CEO Commentary
"The Partnership's first quarter of 2017 results were better than our expectations, driven mainly by higher cash flow generated by our shuttle tanker and FPSO fleets," commented Ingvild Saether, President and CEO of Teekay Offshore Group Ltd. "However, our results for the quarter continued to be impacted by the non-payment of charter hire on the Arendal Spirit UMS. We were recently notified by the charterer, Petrobras, of its termination of the charter contract on this unit. We are disputing the termination and are reviewing our legal options, while at the same time actively marketing the unit for alternative employment."
"We continue to be focused on project execution and are pleased to announce the delivery of our largest current project, the jointly-owned Libra FPSO," commented Ms. Saether. "Our joint venture took delivery of the Libra FPSO in late-March, which remains on time and on budget, and the unit is scheduled to arrive in Brazil within the next few days. After undergoing field installation and testing, the FPSO is scheduled to commence its 12-year charter contract with an international consortium, led by Petrobras, in late-June or early-July 2017. Our Gina Krog FSO project has experienced some delays and additional costs, with start-up currently scheduled in the third quarter of 2017. We are finalizing discussions with Statoil on a bridging solution whereby Teekay Offshore will provide shuttle tanker offloading services in the interim to ensure no delays to Statoil's start-up of the Gina Krog field. Lastly, as mentioned previously, we have also experienced delays and additional costs on the Petrojarl I FPSO upgrade and we are currently engaged in discussions with the charterer, shipyard and our lenders to deliver this unit into operation as soon as possible. We currently expect the FPSO to achieve first oil in early-2018."
"Since reporting earnings in February 2017, our business development teams have continued to successfully secure new charter contracts and extensions," commented Ms. Saether. "We finalized the previously-announced five-year shuttle tanker CoA contract and recently secured a new three-year shuttle tanker CoA contract, both done at successively higher rates. We also entered into a five-year charter contract extension on the Falcon Spirit FSO, which is operating on the Al Rayyan field in Qatar. Lastly, we entered into a customer-funded front-end engineering and design (FEED) study for the Varg FPSO with Alpha Petroleum to define the required FPSO modifications and negotiate the terms of a potential FPSO lease and operate contract for the development of the Cheviot field located in the U.K. sector of the North Sea."
Summary of Recent Events
New North Sea Shuttle Tanker Contracts
In March 2017, the Partnership finalized the previously announced five-year shuttle tanker CoA, plus extension options, with a consortium of oil companies to service a development located in the U.K. Central North Sea. This CoA is expected to commence during the first quarter of 2018 and will be serviced by the Partnership's existing CoA shuttle tanker fleet. The CoA will require the use of up to approximately 0.6 shuttle tanker equivalents per annum.
In addition, in April 2017, the Partnership was awarded a new three-year shuttle tanker CoA to service a development in the U.K. North Sea. This CoA is expected to commence during the third quarter of 2017 and will be serviced by the Partnership's existing CoA shuttle tanker fleet. The CoA will require the use of up to approximately 0.6 shuttle tanker equivalents per annum.
Petrojarl Varg (Varg) FPSO FEED Study
In March 2017, the Partnership entered into a six-month customer-funded FEED study agreement for the Varg floating production, storage and offloading (FPSO) unit with Alpha Petroleum Resources Limited, which is backed by private equity firm Petroleum Equity, for the development of the Cheviot field, formerly known as the Emerald field, located in the U.K. sector of the North Sea. The purpose of the FEED study is to define the modifications required for the Varg FPSO and to negotiate the terms of a potential FPSO lease and operate contract for the development of the Cheviot field.
Arendal Spirit UMS Charter Contract
In late-April 2017, Logitel Offshore Norway AS, a subsidiary of the Partnership, was notified by the charterer, Petroleo Brasileiro S.A. (Petrobras), of its termination of the charter contract for the Arendal Spirit unit for maintenance and safety (UMS). The Partnership is disputing the termination and is reviewing its legal options, including its ability to collect amounts under the contract. The Partnership is also in discussions with the lenders of the Arendal Spirit debt facility.
Falcon Spirit FSO Contract Extension
In May 2017, the Partnership concluded a five-year contract extension, plus extension options, for the Falcon Spirit floating storage and offtake (FSO) unit, commencing June 1, 2017. Since 2009, the Falcon Spirit FSO unit has been operating on the Al Rayyan field located offshore Qatar.
Operating Results
The following table highlights certain financial information for Teekay Offshore's six segments: the FPSO segment, the shuttle tanker segment, the FSO segment, the UMS segment, the towage segment and the conventional tanker segment (please refer to the "Teekay Offshore's Fleet" section of this release below and Appendices C through E for further details).
FPSO Segment
Income from vessel operations and cash flow from vessel operations declined for the three months ended March 31, 2017, compared to the same quarter of the prior year, primarily due to the redelivery of the Varg FPSO unit at the end of July 2016, after operating on the Varg field for almost 18 years, partially offset by lower operating expenses for the Knarr FPSO unit following the successful completion of its final performance test in August 2016, and the timing of repair and maintenance work performed on the Piranema Spirit FPSO unit.
Shuttle Tanker Segment
Income from vessel operations and cash flows from vessel operations increased for the three months ended March 31, 2017, compared to the same quarter of the prior year, primarily due to higher CoA fleet utilization, an increase in charter rates under certain contracts in the time-chartered-out fleet and lower operating expenses due to the sale of the Navion Europa in November 2016. These increases were partially offset by the redelivery of one vessel to the Partnership in June 2016 upon completion of its time-charter out contract (which vessel is now operating in the Partnership's CoA fleet in the North Sea), and higher time-charter hire expenses primarily due to the in-chartering of the Grena Knutsen from September 2016 to support the increased CoA demand.
FSO Segment
Income from vessel operations and cash flow from vessel operations for the three months ended March 31, 2017, compared to the same quarter of the prior year, were impacted by off-hire following the redelivery of the Navion Saga in October 2016 upon completion of its time-charter out contract.
UMS Segment
Income from vessel operations and cash flow from vessel operations for the three months ended March 31, 2017, compared to the same quarter of the prior year, were impacted by the operational review by Petrobras and the associated non-payment of charter hire since early-November 2016.
Towage Segment
Income from vessel operations and cash flow from vessel operations for the three months ended March 31, 2017, compared to the same quarter of the prior year, were impacted by lower towage fleet utilization, partially offset by the delivery of the towage newbuilding, the ALP Striker, in September 2016.
Conventional Tanker Segment
Income from vessel operations and cash flow from vessel operations declined for the three months ended March 31, 2017, compared to the same quarter of the prior year, primarily due a termination fee received from Teekay Corporation relating to the charter contract termination for the Kilimanjaro Spirit during the first quarter of 2016 and lower earnings after the sale-leaseback transactions related to the Fuji Spirit and Kilimanjaro Spirit during the first quarter of 2016.
Teekay Offshore's Fleet
The following table summarizes Teekay Offshore's fleet as of May 1, 2017.
Liquidity
As of March 31, 2017, the Partnership had total liquidity of $216.7 million (comprised of $193.4 million in cash and cash equivalents and $23.3 million in undrawn credit facilities), excluding $60 million included in restricted cash relating to amounts deposited in escrow to pre-fund a portion of the remaining Petrojarl I FPSO upgrade costs.
Conference Call
The Partnership plans to host a conference call on Thursday, May 18, 2017 at 12:00 p.m. (ET) to discuss the results for the first quarter of 2017. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
An accompanying First Quarter 2017 Earnings Presentation will also be available at in advance of the conference call start time.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the oil industry, primarily focusing on oil production-related activities of its customers and operating in offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Teekay Offshore is structured as a publicly-traded master limited partnership (MLP) with consolidated assets of approximately $5.6 billion, comprised of 62 offshore assets, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, units for maintenance and safety (UMS), long-distance towing and offshore installation vessels and conventional tankers. The majority of Teekay Offshore's fleet is employed on medium-term, stable contracts.
Teekay Offshore's common and Series A and B preferred units trade on the New York Stock Exchange under the symbol "TOO", "TOO PR A " and "TOO PR B", respectively.
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the U.S. Securities and Exchange Commission. Cash Flow from Vessel Operations, Adjusted Net Income, and Distributable Cash Flow are non-GAAP financial measures. These measures are intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings, and may not be comparable to similar measures presented by other companies. The Partnership believes that certain investors use this information to evaluate the Partnership's financial performance, as does management.
Cash Flow from (used for) Vessel Operations
Cash flow from (used for) vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels, and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts. CFVO from Consolidated Vessels represents CFVO from vessels that are consolidated on the Partnership's financial statements. CFVO from Equity Accounted Vessels represents the Partnership's proportionate share of CFVO from its equity-accounted vessels and has been included as a component of the Partnership's total CFVO. The Partnership does not control its equity-accounted vessels. Consequently, the Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the equity-accounted investments or distributed to the Partnership and other owners. In addition, the Partnership does not control the timing of such distributions to the Partnership and other owners. Consequently, readers are cautioned when using total CFVO as a liquidity measure as the amount contributed from CFVO - Equity Accounted Vessels may not be available to the Partnership in the periods such CFVO is generated by the equity-accounted vessels. CFVO is a non-GAAP financial measure used by certain investors, and management to measure the financial performance of companies. Please refer to Appendices D and E of this release for reconciliations of these non-GAAP financial measures to income from vessel operations, the most directly comparable GAAP measures reflected in the Partnership's consolidated financial statements.
Adjusted Net Income
Adjusted net income excludes items of income or loss from GAAP net income (loss) that are typically excluded by securities analysts in their published estimates of the Partnership's financial results. The Partnership believes that certain investors use this information to evaluate the Partnership's financial performance, as does management. Please refer to Appendix A of this release for a reconciliation of this non-GAAP financial measure to net income (loss), the most directly comparable GAAP measure reflected in the Partnership's consolidated financial statements.
Distributable Cash Flow
Distributable cash flow (DCF) represents GAAP net income adjusted for depreciation and amortization, deferred income tax expense or recovery, vessel write-downs, gains or losses on the sale of vessels, vessel and business acquisition costs, distributions relating to equity financing of newbuilding installments and conversion costs, pre-operational expenses, distributions on the Partnership's preferred units, gains on extinguishment of contingent liabilities and losses on non-cash accruals of contingent liabilities, amortization of the non-cash portion of revenue contracts, estimated maintenance capital expenditures, unrealized gains and losses from non-designated derivative instruments, ineffectiveness for derivative instruments designated as hedges for accounting purposes, adjustments to direct financing leases to a cash basis and unrealized foreign currency exchange related items, including the Partnership's proportionate share of such items in equity accounted investments. 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. DCF is a quantitative standard used in the publicly-traded partnership investment community and by management to assist in evaluating financial performance. Please refer to Appendix B of this release for a reconciliation of this non-GAAP financial measure to net income, the most directly comparable GAAP measure reflected in the Partnership's consolidated financial statements.
Teekay Offshore Partners L.P.
Summary Consolidated Statements of Income (Loss)
(in thousands of U.S. Dollars, except unit data)
Teekay Offshore Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
Teekay Offshore Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
Teekay Offshore Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of U.S. Dollars)
Teekay Offshore Partners L.P.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Distributable Cash Flow
(in thousands of U.S. Dollars, except per unit and per unit data)
Teekay Offshore Partners L.P.
Appendix C - Supplemental Segment Information
(in thousands of U.S. Dollars)
Teekay Offshore Partners L.P.
Appendix D - Reconciliation of Non-GAAP Financial Measures
Cash Flow From (Used For) Vessel Operations From Consolidated Vessels
(in thousands of U.S. Dollars)
Teekay Offshore Partners L.P.
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow From Vessel Operations From Equity Accounted Vessels
(in thousands of U.S. Dollars)
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: the Arendal Spirit UMS charter contract termination, including the outcome of the Partnership's dispute of the contract termination by Petrobras and ability to collect amounts under the contract, discussions with the lenders under the unit's related credit facility and the potential for alternative employment of the unit; the timing of start-up and the vessel equivalent requirements of the new CoAs; the Partnership's timing of delivery, start-up and costs of various newbuildings and conversion/upgrade projects and the commencement of related contracts, including potential delays and additional costs on the Petrojarl I FPSO unit and Gina Krog FSO unit; and the outcome of discussions with Statoil on the Gina Krog FSO interim shuttle tanker offloading solution and with the charterer, shipyard and lenders about delivering the Petrojarl I FPSO unit for operation. 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 oil production volumes; significant changes in oil prices; variations in expected levels of field maintenance; increased operating expenses; different-than-expected levels of oil production in the North Sea,
Brazil and East Coast of Canada offshore fields; potential early termination of contracts; shipyard delivery or vessel conversion and upgrade delays and cost overruns; changes in exploration, production and storage of offshore oil and gas, either generally or in particular regions that would impact expected future growth; the inability of the Partnership to successfully make a claim against, and collect from, Petrobras for the Arendal Spirit UMS; the inability of the Partnership to negotiate acceptable terms with the lenders of the Arendal Spirit UMS debt facility; delays in the start-up of offshore oil fields related to the CoA contracts or the actual vessel equivalent requirements of new CoAs; delays in the commencement of charter contracts; the inability of the Partnership to negotiate acceptable terms with the charterer, shipyard and lenders related to the delay of the Petrojarl I FPSO; the inability to negotiate acceptable terms on the Gina Krog FSO interim shuttle tanker offloading solution; the inability to negotiate acceptable lease and operate terms related to the Varg FPSO FEED study; the ability to fund the Partnership's remaining capital commitments and debt maturities; 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, 2016. 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:
Investor Relations Enquiries
Ryan Hamilton
+1 (604) 844-6654
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Datum: 18.05.2017 - 04:53 Uhr
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