Teekay Offshore Partners L.P.

Teekay Offshore Partners L.P.

June 01, 2015 09:00 ET

Teekay Offshore to Construct Three Shuttle Tankers to Service New East Coast Canada Contracts

HAMILTON, BERMUDA--(Marketwired - June 1, 2015) - Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE:TOO) today announced that it has entered into new long-term contracts with a group of companies that includes Chevron Canada, Husky Energy, Mosbacher Operating Ltd., Murphy Oil, Nalcor Energy, Statoil and Suncor Energy to provide shuttle tanker services for their East Coast Canada oil production.

These 15-year contracts, plus extension options, will initially be serviced by one of Teekay Offshore's existing shuttle tankers, the Navion Hispania, and two to three third party-owned shuttle tankers currently operating in East Coast Canada, which will be chartered-in to Teekay Offshore's Canadian affiliate located in St. John's, Newfoundland, prior to the delivery of up to four shuttle tanker newbuildings. Teekay Offshore will enter into shipbuilding contracts to construct three Suezmax-size, DP2 shuttle tanker newbuildings with a South Korean shipyard for a fully built-up cost of approximately $365 million, with an option to order one additional vessel should a fourth vessel be required. The three firm vessels are expected to be delivered in the fourth quarter of 2017 through the first half of 2018.

The Partnership intends to initially finance the installment payments for the shuttle tanker newbuildings with a portion of its existing liquidity and it expects to secure long-term debt financing for the vessels prior to their scheduled deliveries.

"These new, strategic long-term shuttle tanker contracts mark Teekay Offshore's entrance into the growing Eastern Canada offshore oil production market, which is a focal point for Canadian oil and gas development," commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. Mr. Evensen continued, "Teekay Offshore now has a leading market position in all three DP shuttle tanker basins, including the North Sea, Brazil and now the East Coast of Canada. I am pleased that we continue to secure new, accretive growth in our Offshore Logistics business, which increases the Partnership's growth pipeline to $3.7 billion of capital projects and extends our growth into late-2017 and 2018."

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 focusing on the fast-growing, deepwater offshore oil regions of the North Sea, Brazil and East Coast Canada. Teekay Offshore is structured as a publicly-traded master limited partnership (MLP) with consolidated assets of approximately $4.3 billion, comprised of 63 offshore assets, including shuttle tankers, floating production, storage and offloading (FPSO) units, 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 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 entering into shipbuilding contracts for the construction of three shuttle tanker newbuildings, including an option to order one additional vessel, the estimated cost to construct the vessels and the expected delivery dates and financing; the impact on the Partnership's market position in the shuttle tanker business; and the impact on the Partnership's capital project growth pipeline and distributable cash flow accretion resulting from the charter contracts. 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: failure by the Partnership to secure shipbuilding contracts for three shuttle tanker newbuildings, including the option to order one additional vessel; potential delays in the delivery of the shuttle tanker newbuildings; variances in expected operating costs of the vessels; variances in expected vessel construction costs; potential early termination of contracts; various factors affecting the oil production in the East Coast of Canada; the ability of the Partnership to secure financing for the newbuilding shuttle tankers; and other factors discussed in Teekay Offshore Partners' filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2014. 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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