Teekay Offshore Partners Reports Third Quarter Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwire) -- 11/10/11 -- Teekay Offshore Partners L.P. (NYSE: TOO) -
Highlights
Teekay Offshore GP L.L.C., 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 September 30, 2011. During the third quarter of 2011, the Partnership generated distributable cash flow(1) of $52.1 million, compared to $20.8 million in the same period of the prior year. The increase is mainly related to the Partnership's acquisition of the remaining 49 percent interest in Teekay Offshore Operating L.P. (OPCO) in March 2011, the acquisition of the Cidade de Rio Das Ostras floating production storage and offloading (FPSO) unit in October 2010, and the acquisition of three newbuilding shuttle tankers during the past three quarters.
On October 18, 2011, the Partnership declared a cash distribution of $0.50 per unit for the quarter ended September 30, 2011. The cash distribution is payable on November 14, 2011 to all unitholders of record on November 2, 2011.
"The Partnership reported very strong operating results for the third quarter, primarily due to lower operating costs and higher shuttle tanker revenues resulting from a number of short-term transportation and storage contracts at higher rates," commented Peter Evensen, Teekay Offshore GP LLC's Chief Executive Officer. "While we do not expect the results for the fourth quarter to be as strong, we are pleased with the continued growth of the Partnership through the recent acquisitions of two newbuilding shuttle tankers and the announcement earlier today to acquire the Piranema FPSO from Sevan Marine."
Summary of Recent Transactions
In connection with Teekay Corporation's (Teekay) previously announced transaction to acquire three FPSO units from Sevan Marine ASA (Sevan), the Partnership today announced today that Teekay and Teekay Offshore intend for Teekay Offshore to acquire the Piranema FPSO unit directly from Sevan Marine ASA (Sevan) for approximately $165 million, subject to certain working capital adjustments. The 2007-built Piranema FPSO is currently operating under a long-term charter to Petrobras S.A. on the Piranema field located offshore Brazil. The charter includes a firm contract period through March 2018, with up to 11 one-year extension options and includes cost escalation clauses.
The remaining two Sevan FPSOs, the Sevan Hummingbird (which is currently operating under a short-term charter contract), and the Sevan Voyageur (which is currently undergoing an upgrade) initially would be acquired by Teekay. If acquired by Teekay, both FPSO units would be eligible to be acquired by Teekay Offshore upon commencement of charter contracts with a firm period of greater than three years in duration.
In addition, the Partnership announced today that it has agreed to sell approximately 7.1 million common units in a private placement to a group of institutional investors for proceeds of approximately $170 million (excluding its general partner's proportionate capital contribution). The Partnership intends to use the proceeds from the sale of common units to partially finance the acquisition of the Piranema FPSO and to partially fund the Partnership's previously announced acquisition of four newbuilding shuttle tankers that are scheduled to deliver in mid-2013.
On August 2, 2011 the Partnership completed the acquisition of a newbuilding shuttle tanker, the Peary Spirit, for a cost of $134.5 million. The purchase price was financed through the assumption of debt of $96.8 million and $37.7 million in cash.
On October 1, 2011, the Partnership completed the acquisition of another newbuilding shuttle tanker, the Scott Spirit, for a cost of $116 million, including $93.3 million of debt which was assumed by Teekay Offshore. The purchase price is subject to adjustment for up to an additional $12 million based upon incremental shuttle tanker revenues generated during the two years following acquisition.
Teekay Offshore's Fleet
The following table summarizes Teekay Offshore's fleet as of November 1, 2011 and excludes the Piranema FPSO unit.
In early August 2011, the Partnership sold its 1993-built conventional Aframax tanker, the Scotia Spirit, to a third party buyer for net proceeds of $8.3 million. As a result of the early termination of the time-charter for this vessel, the Partnership received a termination fee of $2.1 million.
Future Growth Opportunities
Pursuant to an omnibus agreement that Teekay Offshore entered into in connection with its initial public offering in December 2006, Teekay is obligated to offer to the Partnership its interest in certain shuttle tankers, floating storage and offtake (FSO) units, FPSO units and joint ventures Teekay may acquire in the future, provided the vessels are servicing contracts with remaining durations of greater than three years. The Partnership may also acquire other vessels that Teekay may offer it from time to time.
Shuttle Tankers
Teekay Offshore recently acquired three Aframax shuttle tanker newbuildings (the Amundsen Spirit, the Nansen Spirit and the Peary Spirit). The Partnership acquired a fourth shuttle tanker newbuilding, the Scott Spirit, from Teekay on October 1, 2011 for a cost of $116 million. The purchase price is subject to adjustment for up to an additional $12 million based upon incremental shuttle tanker revenues generated during the two years following acquisition.
In June 2011, the Partnership entered into a new long-term contract with a subsidiary of BG to provide shuttle tanker services in Brazil. The contract with BG will be serviced by four Suezmax newbuilding shuttle tankers to be constructed by Samsung Heavy Industries for an estimated total delivered cost of approximately $480 million. Upon their scheduled delivery in mid- to late-2013, the vessels will commence operations under ten-year, fixed-rate time-charter contracts. The contract with BG also includes certain extension options and vessel purchase options.
FPSO Units
In October 2011, Teekay announced that it has entered into an agreement with Sevan and holders of more than two-thirds of each of Sevan's bond loans for Teekay to acquire three FPSO units from Sevan, including the Piranema FPSO described above, and to make an equity investment in a recapitalized Sevan. Under Teekay's existing omnibus agreement and as further agreed between Teekay and the Partnership, following the proposed upgrading of the Voyageur FPSO unit and its acquisition by Teekay from Sevan, this unit would be eligible for sale to the Partnership upon commencement of its contract with the charterer, which is expected to occur during the third quarter of 2012. Following the proposed acquisition of the Hummingbird FPSO unit by Teekay, this unit would be eligible for sale to the Partnership upon commencement of a new charter contract with a firm period of greater than three years.
Pursuant to the omnibus agreement and a subsequent agreement, Teekay is obligated to offer to sell the Petrojarl Foinaven FPSO unit, an existing unit owned by Teekay and operating under a long-term contract in the North Sea, to Teekay Offshore prior to July 9, 2012. The purchase price for the Petrojarl Foinaven FPSO unit would be at its fair market value plus any additional tax or other costs to Teekay that would be required to transfer the FPSO unit to the Partnership.
In October 2010, Teekay signed a long-term contract with Petrobras to provide a FPSO unit for the Tiro and Sidon fields located in the Santos Basin offshore Brazil. The contract with Petrobras will be serviced by a newly converted FPSO unit, named Petrojarl Cidade de Itajai. The new FPSO unit is scheduled to deliver in mid-2012, when it will commence operations under a nine-year, fixed-rate time-charter contract to Petrobras with six additional one-year extension options. Pursuant to the omnibus agreement, Teekay is obligated to offer to the Partnership its 50 percent interest in this FPSO project at Teekay's fully built-up cost, within 365 days after the commencement of the charter with Petrobras.
In May 2011, Teekay entered into a joint venture agreement with Odebrecht Oil & Gas S.A. (a member of the Odebrecht group) to jointly pursue FPSO projects in Brazil. Odebrecht is a well-established Brazil-based company that operates in the engineering and construction, petrochemical, bioenergy, energy, oil and gas, real estate and environmental engineering sectors, with over 120,000 employees and a presence in over 20 countries. As part of the joint venture agreement, Odebrecht is a 50 percent partner in the Tiro Sidon FPSO project and Teekay is currently working with Odebrecht on other FPSO project opportunities which, if awarded, may result in the future sale of new FPSO units to the Partnership pursuant to the omnibus agreement.
In June 2011, Teekay entered into a new contract with BG Norge Limited to provide a harsh weather FPSO unit for the Knarr oil and gas field located in the North Sea. The contract will be serviced by a new FPSO unit to be constructed by Samsung Heavy Industries for a fully built-up cost of approximately $1 billion. Pursuant to the omnibus agreement, Teekay is obligated to offer to the Partnership its interest in this FPSO project at Teekay's fully built-up cost, within 365 days after the commencement of the charter, which is expected to occur during the first quarter of 2014.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $31.6 million for the quarter ended September 30, 2011, compared to $12.9 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of decreasing net income by $106.7 million and $16.8 million for the quarters ended September 30, 2011 and 2010, respectively, as detailed in Appendix A. Including these items, the Partnership reported, on a GAAP basis, net loss attributable to the partners of $75.1 million for the third quarter of 2011, compared to a net loss of $3.9 million in the same period of the prior year. Net revenues(2) for the third quarter of 2011 increased to $208.8 million compared to $181.8 million in the same period of the prior year.
The Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $79.9 million for the nine months ended September 30, 2011, compared to $51.9 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of decreasing net income by $143.0 million and $43.7 million for the nine months ended September 30, 2011 and 2010, respectively, as detailed in Appendix A. Including these items, the Partnership reported, on a GAAP basis, net loss attributable to the partners of $63.1 million for the nine months ended September 30, 2011 and net income attributable to the partners of $8.2 million for the nine months ended September 30, 2010. Net revenues(2) for the nine months ended September 30, 2011 increased to $618.7 million compared to $572.3 million in the same period of the prior year.
Due to the significant reduction in spot conventional tanker rates and asset values during the past several quarters, for accounting purposes, the Partnership recorded non-cash impairment charges of $24.0 million in the third quarter of 2011 associated with three of the Partnership's older vessels. These non-cash charges do not affect the Partnership's operations, cash flows, liquidity, or any of the Partnership's loan covenants.
For accounting purposes, the Partnership is required to recognize, through the consolidated statements of loss, changes in the fair value of certain derivative instruments as unrealized gains or losses. This revaluation does not affect the economics of any hedging transactions or have any impact on the Partnership's actual cash flows or the calculation of its distributable cash flow.
The Partnership has recast its historical financial results to include the results of the Falcon Spirit FSO unit, the Cidade de Rio das Ostras (Rio das Ostras) FPSO unit and the Amundsen Spirit shuttle tanker unit relating to the periods prior to their acquisition by the Partnership from Teekay, which pre-acquisition results are referred to in this release as the Dropdown Predecessor. In accordance with GAAP, business acquisitions of entities under common control that have begun operations are required to be accounted for in a manner whereby the Partnership's financial statements are retroactively adjusted to include the historical results of the acquired vessels from the date the vessels were originally under the control of Teekay. For these purposes, the Falcon Spirit was under common control by Teekay from December 15, 2009 until April 1, 2010, when it was sold to the Partnership; the Rio das Ostras FPSO unit was under common control by Teekay from April 1, 2008 to October 1, 2010, when it was sold to the Partnership; and the Amundsen Spirit was under common control by Teekay from July 30, 2010 to October 1, 2010, when it was sold to the Partnership.
On October 1, 2010, Teekay Offshore agreed to acquire Teekay's interest in the newbuilding shuttle tanker Peary Spirit. Prior to its acquisition by the Partnership, this entity was considered a variable interest entity for accounting purposes. As a result, the Partnership's consolidated financial statements include the financial position, operating results and cash flow contribution of the Peary Spirit subsequent to October 1, 2010. The Peary Spirit was acquired by the Partnership on August 2, 2011.
Operating Results
The following table highlights certain financial information for Teekay Offshore's four main segments: the Shuttle Tanker segment, the Conventional Tanker segment, the FSO segment, and the FPSO segment (please refer to the "Teekay Offshore's Fleet" section of this release above and Appendix C for further details).
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership's shuttle tanker segment increased to $55.2 million for the third quarter of 2011 compared to $45.6 million for the same period of the prior year, primarily due to an increase in revenues from offshore projects in the North Sea, an increase in revenues resulting from the September 2010 amended master agreement with Statoil, which includes the contribution from the acquisition of the three newbuilding shuttle tankers, the Amundsen Spirit and Nansen Spirit (which were acquired during the fourth quarter of 2010), and the Peary Spirit (which was acquired in August 2011), and lower time-charter hire expense due to the redelivery of two in-chartered vessels. This was partially offset by higher vessel operating expenses, the termination of the time-charter out contract of the Basker Spirit in the first quarter of 2011, and lower revenue as a result of fewer revenue days from vessels operating under contracts of affreightment.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's conventional tanker segment increased to $22.2 million in the third quarter of 2011 compared to $14.9 million for the same period of the prior year, primarily due to a decrease in the number of off-hire days due to scheduled drydocking days and lower bunker consumption.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO segment decreased to $7.5 million in the third quarter of 2011 compared to $8.2 million for the same period of the prior year, primarily due to the sale of the Karratha Spirit FSO unit during the first quarter of 2011.
FPSO Segment
Cash flow from vessel operations from the Partnership's FPSO segment increased to $20.4 million for the third quarter of 2011 compared to $9.2 million for the same period of the prior year, primarily due to the acquisition of the Rio das Ostras FPSO unit in October 2010, and a planned maintenance shutdown on the Petrojarl Varg FPSO unit during the third quarter of 2010.
Liquidity
As of September 30, 2011, the Partnership had total liquidity of $286.2 million, which consisted of $160.9 million in cash and cash equivalents and $125.3 million in undrawn revolving credit facilities.
Conference Call
The Partnership plans to host a conference call on November 11, 2011 at 12:30 p.m. (ET) to discuss its results for the third quarter of 2011. An accompanying investor presentation will be available on Teekay Offshore's website at prior to the start of the call. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
The conference call will be recorded and available until November 18, 2011. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 7648937.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P., a publicly-traded master limited partnership formed by Teekay Corporation (NYSE: TK), is an international provider of marine transportation, oil production and storage services to the offshore oil industry. Teekay Offshore owns interests in 40 shuttle tankers (including four chartered-in vessels and four committed newbuildings), five floating storage and offtake (FSO) units, 10 conventional oil tankers, and two floating production, storage and offloading (FPSO) units. Teekay Offshore also has rights to participate in certain other FPSO and shuttle tanker opportunities provided by Teekay Corporation.
Teekay Offshore Partners' common units trade on the New York Stock Exchange under the symbol "TOO".
Set forth below is a reconciliation of the Partnership's unaudited adjusted net income attributable to the partners, a non-GAAP financial measure, to net (loss) income attributable to the partners as determined in accordance with GAAP. The Partnership believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Partnership's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Partnership's financial results. Adjusted net income attributable to the partners is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
Description of Non-GAAP Financial Measure - Distributable Cash Flow (DCF)
Distributable cash flow represents net loss 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, income (loss) from variable interest entities, non-cash income taxes, loss on write down of vessels 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 loss or any other indicator of the Partnership's performance required by GAAP. The table below reconciles distributable cash flow to net loss for the quarter.
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 Partnership's future growth prospects, cash flows and distributions to unitholders; the timing of delivery of the four newbuilding shuttle tankers and expected future increase in the Partnership's distributable cash flow as a result of the new long-term contract with BG in Brazil; the industry fundamentals for deepwater offshore oil production, storage and transportation; the potential for Teekay to offer additional vessels to the Partnership and the Partnership's acquisition of any such vessels, including the Petrojarl Foinaven, the Petrojarl Cidade de Itajai, the Sevan Voyageur, the Sevan Hummingbird and the newbuilding FPSO unit that will service the Knarr field under contract with BG Norge Limited; the Partnership's intent to acquire from Sevan the Piranema FPSO unit and related cost and results to the Partnership; financing for the proposed Piranema FPSO, including the equity private placement transaction; and the potential for the Partnership to acquire other vessels or offshore projects from Teekay or third parties.
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; variability in shuttle tanker tonnage requirements under the Statoil master agreement; different-than-expected levels of oil production in the North Sea offshore fields; potential early termination of contracts, including the Rio das Ostras FPSO time-charter contract and the Statoil master agreement; failure of Teekay to offer to the Partnership additional vessels; the inability of the joint venture between Teekay and Odebrecht to secure new Brazil FPSO projects that may be offered for sale to the Partnership; failure to obtain required approvals by the Conflicts Committee of Teekay Offshore's general partner to acquire to acquire other vessels or offshore projects from from Teekay or third parties; the Partnership's ability to raise financing for the BG newbuilding shuttle tankers or to purchase additional assets; negotiation and finalization of definitive agreements for the proposed transactions with Sevan and any failure to satisfy related closing conditions, including obtaining approvals from Sevan's shareholders, Sevan's bondholders, regulatory authorities, Sevan FPSO charterers, and Sevan's syndicate of banks relating to the Voyageur FPSO; 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, 2010. 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:
For Investor Relations enquiries:
Teekay Offshore Partners L.P.
Kent Alekson
+1 (604) 609-6442
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Datum: 10.11.2011 - 14:43 Uhr
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