Teekay Offshore Partners Reports First Quarter 2016 Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 05/19/16 -- 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, 2016. During the first quarter of 2016, the Partnership generated distributable cash flow(1) of $62.0 million, compared to $60.6 million in the same period of the prior year. The increase in distributable cash flow was primarily due to the acquisition of the Petrojarl Knarr (Knarr) floating production, storage and offloading (FPSO) unit in July 2015, the commencement of the Arendal Spirit unit for maintenance and safety (UMS) charter contract in June 2015, and the commencement of the East Coast Canada shuttle tanker contracts in June 2015. These increases were partially offset by the reduction in revenue earned on the Petrojarl Varg (Varg) FPSO unit as it prepares to come off field in August 2016, the expiration of two shuttle tanker contracts in the second quarter of 2015, and the sale of two conventional tankers and one shuttle tanker during 2015.
On April 1, 2016, the Partnership declared a cash distribution of $0.11 per common unit for the quarter ended March 31, 2016. The cash distribution was paid on May 13, 2016 to all unitholders of record on April 29, 2016.
CEO Commentary
"The Partnership generated higher cash flows in the first quarter of 2016 compared to the same period in the prior year as our fleet continues to operate at high uptime and utilization," commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. "The increase in cash flow was mainly driven by various growth projects that delivered during 2015, which more than offset the lower revenue from the Varg FPSO as the unit begins to wind down operations after almost 18 years on the Varg field. We continue to receive a strong level of customer interest in the Varg FPSO for various other offshore production opportunities in Norway."
Mr. Evensen continued, "Since reporting our earnings in February 2016, we have made significant progress toward addressing the Partnership''s 2016 and 2017 funding needs and I am pleased to report that we have completed, or are nearing completion of, a number of financing initiatives which we believe will cover all of our liquidity requirements over the medium-term. This includes new committed facilities for our East Coast Canada shuttle tankers, refinancing $75 million of the existing Varg FPSO debt facility, an agreement to extend the majority of our 2017 and 2018 Norwegian bond maturities to late-2018, and discussions with the shipyard to defer the delivery of two UMS newbuildings. We are also in advanced discussions with investors on a new $200 million preferred equity issuance."
Mr. Evensen continued, "Upon our anticipated completion of these various initiatives, which we expect will occur prior to the end of June 2016, the Partnership''s financial position will be significantly strengthened. Importantly, we will have secured all the necessary financing for our pipeline of growth projects delivering through early-2018 which, once delivered, are expected to add over $200 million to Teekay Offshore''s annual cash flow from vessel operations, including our 50 percent share of cash flows from the Libra FPSO."
Summary of Recent Events
Financing Initiatives
Since early 2016, the Partnership has been negotiating a series of financing initiatives intended to fund its unfunded capital expenditures and upcoming debt maturities. The main financing initiatives include:
Completion of each of these initiatives is subject to, and conditioned upon, completion of each of the other initiatives described above, as well as the financing initiatives being undertaken by Teekay Corporation. Please refer to Teekay Corporation''s first quarter 2016 earnings release for additional information regarding these initiatives.
In April 2016, the Partnership completed the new $35 million tranche on an existing debt facility secured by two shuttle tankers. As of May 18, 2016, the Partnership has received lender commitments for the other bank financing initiatives, received a majority of lender commitments for the Varg FPSO refinancing, received commitments from a majority of the NOK bondholders to extend the bond maturities (only 66.7% of the votes are required to approve the proposal), extended the $200 million Teekay Corporation intercompany loan maturity, is in discussions to defer the delivery of the two remaining UMS newbuildings, and is in advanced discussions relating to the preferred equity financing. The Partnership expects to complete all these initiatives before June 30, 2016.
Arendal Spirit UMS Update
On April 21, 2016, during the process of lifting the gangway connecting the Arendal Spirit UMS to an FPSO unit in a period of heavy waves, the gangway of the Arendal Spirit suffered extensive damage, resulting in the UMS being declared off-hire by its charterer, Petrobras. The Partnership is arranging to replace this gangway with the gangway from the second UMS newbuilding, which is currently in the process of being transported from the shipyard in China to Brazil. The Partnership anticipates having the new gangway installed on the Arendal Spirit by mid-June, at which point the unit is expected to recommence full operations.
Sale-leaseback of Two Conventional Tankers
In March 2016, the Partnership completed the sale of two conventional tankers, the Kilimanjaro Spirit and Fuji Spirit, to a third party for aggregate sales proceeds of approximately $50 million. After repaying existing debt secured by these vessels, this transaction added approximately $30 million to the Partnership''s liquidity position. Related to the sale of these vessels, the Partnership has arranged to charter back both vessels for a period of three-years with an additional one-year extension option at $23,000 per day and $22,750 per day, respectively. One vessel has been fixed on a two-year time charter-out contract at $25,000 per day and the other vessel is currently trading in the spot conventional tanker market.
Sale of One Shuttle Tanker
In January 2016, the Partnership completed the sale of one shuttle tanker, the Navion Torinita, to a third party for aggregate sale proceeds of approximately $5 million.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) of $44.0 million for the quarter ended March 31, 2016, compared to $40.5 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 $48.4 million and $57.7 million for the quarters ended March 31, 2016 and 2015, respectively, as detailed in Appendix A to this release. Including these items, the Partnership reported, on a GAAP basis, net loss attributable to the partners of $4.4 million for the first quarter of 2016, compared to a net loss attributable to the partners of $17.2 million in the same period of the prior year. Net revenues(2) increased to $288.4 million for the first quarter of 2016, compared to $242.5 million in the same period of the prior year.
Adjusted net income attributable to the partners for the three months ended March 31, 2016 increased from the same period in the prior year mainly due to the acquisition of the Knarr FPSO unit on July 1, 2015, the Arendal Spirit UMS commencing its charter contract in June 2015, and the commencement of the East Coast of Canada shuttle tanker contracts in June 2015. These increases were partially offset by a reduction in revenue earned relating to the Varg FPSO unit as it prepares to come off field in August 2016, the expiration of two shuttle tanker contracts in the second quarter of 2015, and the sale of two conventional tankers and one shuttle tanker during 2015.
For accounting purposes, the Partnership is required to recognize, through the consolidated statements of (loss) income, changes in the fair value of derivative instruments as unrealized gains or losses. This revaluation does not affect the economics of any hedging transactions nor does it have any impact on the Partnership''s actual cash flows or the calculation of its distributable cash flow.
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 F for further details).
FPSO Segment
Cash flow from vessel operations from the Partnership''s FPSO segment (which also includes the results from two equity-accounted FPSO units), increased to $80.4 million for the first quarter of 2016, compared to $53.0 million for the same period of the prior year, primarily due to the acquisition of the Knarr FPSO unit from Teekay Corporation in July 2015, partially offset by a reduction in revenue earned relating to the Varg FPSO unit as it prepares to come off field in August 2016. In accordance with the Varg FPSO charter contract, from February 1, 2016 to August 1, 2016, the Partnership does not receive the capital portion of the charter hire but does continue to receive the operating portion of the charter hire.
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership''s Shuttle Tanker segment decreased to $62.9 million for the first quarter of 2016 compared to $67.7 million for the same period of the prior year, primarily due to the sale of Navion Svenita in March 2015 and the expirations of a long-term contract of affreightment and a time-charter out contract over the past year, partially offset by the commencement of the East Coast of Canada shuttle tanker contracts in June 2015 and an increase in charter rates in certain contracts.
FSO Segment
Cash flow from vessel operations from the Partnership''s FSO segment increased to $9.8 million for the first quarter of 2016, compared to $8.5 million for the same period of the prior year, primarily due to lower crew costs due to the strengthening of the U.S. Dollar compared to the same period of the prior year.
UMS Segment
Cash flow from vessel operations from the Partnership''s UMS segment increased to $4.9 million for the first quarter of 2016, due to the Arendal Spirit UMS commencing its charter contract with Petrobras in June 2015.
Towage Segment
Cash flow from vessel operations from the Partnership''s Towage segment decreased slightly to $2.0 million for the first quarter of 2016, compared to $2.1 million for the same period of the prior year as the increase in fleet size during 2015 was offset by lower charter rates and utilization.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership''s Conventional Tanker segment increased to $6.2 million for the first quarter of 2016, compared to $5.9 million for the same period of the prior year, primarily due to a $4.0 million early termination fee received from Teekay Corporation relating to the charter contract termination for the Kilimanjaro Spirit during the first quarter of 2016, partially offset by the sale of two conventional tankers, the SPT Explorer and Navigator Spirit, in the fourth quarter of 2015.
Teekay Offshore''s Fleet
The following table summarizes Teekay Offshore''s fleet as of May 1, 2016.
Liquidity Update
As of March 31, 2016, the Partnership had total liquidity of $336 million, comprised of cash and cash equivalents.
Availability of 2015 Annual Report
Teekay Offshore Partners L.P. filed its 2015 Annual Report on Form 20-F with the U.S. Securities and Exchange Commission (SEC) on April 18, 2016. Copies are available on Teekay Offshore''s website, under "Investors - Teekay Offshore Partners L.P. - Financials & Presentations", at . Unitholders may request a printed copy of this annual report, including the complete audited financial statements free of charge by contacting Teekay Offshore''s Investor Relations.
Conference Call
The Partnership plans to host a conference call on Thursday, May 19, 2016 at 12:00 pm (ET) to discuss the results for the first quarter of 2016. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
An accompanying First Quarter 2016 Earnings Presentation will also be available at in advance of the conference call start time.
The conference call will be recorded and available until Thursday, June 2, 2016. This recording can be accessed following the live call by dialing 1-888-203-1112 or 647-436-0148, if outside North America, and entering access code 4260566.
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 offshore oil industry, primarily focusing on the deepwater 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 $5.7 billion, comprised of 65 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 units trade on the New York Stock Exchange under the symbol "TOO".
This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, or any other securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
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 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.
Distributable cash flow represents net loss adjusted for depreciation and amortization expense, non-controlling interests, non-cash items, distributions relating to equity financing of newbuilding installments, distributions on our preferred units, vessel and business acquisition costs, estimated maintenance capital expenditures, write-down and gains on sale of vessels, unrealized 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 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 three months ended March 31, 2016 and March 31, 2015.
Net revenues represents revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies, however, it is not required by GAAP and should not be considered as an alternative to revenues or any other indicator of the Partnership''s performance required by GAAP.
Cash flow from (used for) vessel operations from consolidated vessels represents income (loss) from vessel operations before depreciation and amortization expense, write-down and gain on sale of vessels, and amortization of the non-cash portion of revenue contracts, and includes the realized gains and losses on the settlement of foreign exchange forward contracts and adjusts for direct financing leases to a cash basis. Cash flow from vessel operations is included because certain investors use this data to measure a company''s financial performance. Cash flow from vessel operations is not required 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.
Cash flow from vessel operations from equity accounted vessels represents income from vessel operations before depreciation and amortization expense. Cash flow from equity accounted vessel represents the Partnership''s proportionate share of cash flow from vessel operations from its equity-accounted vessels, the Cidade de Itajai FPSO unit and the Libra FPSO conversion project. 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 GAAP and should not be considered as an alternative to equity income or any other indicator of the Partnership''s performance required by GAAP.
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 completion of financing initiatives to address the Partnership''s medium-term funding needs and their impact on the Partnership''s financial position, including, among other things, plans to refinance and access additional debt, extend the maturities to late-2018 for two NOK senior unsecured bonds, issue equity securities and defer deliveries of two UMSs; the impact of growth projects on the Partnership''s future cash flows; securing all the necessary financing for the Partnership''s pipeline of growth projects; the replacement of the Arendal Spirit UMS gangway and timing of recommencing operations; the timing and completion of negotiating contract extensions; and the interest of current and potential customers in chartering the Varg FPSO. 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: the Partnership''s ability to complete its financing initiatives, including delivery deferrals for the UMS newbuildings, to address the Partnership''s medium-term funding needs, including financing for existing growth projects; failure of lenders, bondholders, investors or other third parties to approve or agree to the proposed terms of the financing initiatives of the Partnership; failure to achieve or the delay in achieving expected benefits of such financing initiatives; 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; delays in the commencement of charter contracts; potential delays related to the Arendal Spirit UMS recommencing operations; failure by the Partnership to secure a new charter contract for the Varg 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, 2015. 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 contact:
Teekay Offshore Partners L.P.
Ryan Hamilton
+1 (604) 609-6442
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Datum: 18.05.2016 - 23:45 Uhr
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