Teekay Offshore Partners L.P.

Teekay Offshore Partners L.P.

May 22, 2013 09:28 ET

Teekay Offshore Partners Signs New FSO Contract With Statoil

HAMILTON, BERMUDA--(Marketwired - May 22, 2013) - Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE:TOO) today announced that it has entered into an agreement with Statoil Petroleum AS (Statoil), on behalf of the field license partners, to provide a floating storage and offtake (FSO) unit for the Gina Krog oil and gas field located in North Sea.

The contract will be serviced by a new FSO unit converted from the 1995-built shuttle tanker, Randgrid, which is currently 67 percent owned by Teekay Offshore. The Partnership's portion of the FSO conversion project is expected to be completed for a total net capital cost of approximately $220 million, including the cost of acquiring the remaining 33 percent ownership interest in the Randgrid shuttle tanker. Following completion in the first quarter of 2017, the newly converted FSO unit will commence operations under a 3-year firm period time-charter contract to Statoil, which includes 12 additional one-year extension options.

"This strategically important conversion project represents another milestone in Teekay Offshore's expanding FSO franchise," commented Ingvild Sæther, President, Teekay Shuttle and Offshore Services. "The Gina Krog FSO project highlights how Teekay Offshore can combine its growing offshore project development capability and financial resources to provide an FSO solution to Statoil while repurposing an existing shuttle tanker asset to generate distributable cash flow accretion."

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 and owns interests in 35 shuttle tankers (including four chartered-in vessels and three committed newbuildings), four floating production, storage and offloading (FPSO) units, seven floating storage and offtake (FSO) units (including two committed FSO conversions) and six conventional oil tankers. 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 and shuttle tanker opportunities provided by Teekay Corporation (NYSE:TK) and Sevan Marine ASA (Oslo Bors:SEVAN).

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 of commencement of the FSO service contract between the Partnership and Statoil and the effect of this contract on the Partnership's future distributable cash flow; the estimated total capital cost to convert the 1995-built shuttle tanker Randgrid into an FSO unit; and the cost and certainty of the Partnership's acquisition of the remaining 33 percent ownership interest in the Randgrid. 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: variances in expected capital costs of converting the Randgrid shuttle tanker into an FSO unit; failure by the Partnership to acquire the remaining 33 percent interest in the Randgrid shuttle tanker; shipyard delays resulting in delayed delivery and contract commencement of the newly converted FSO unit to the Gina Krog oil and gas field; greater than expected levels of operating expenses; potential early termination of the contract between the Partnership and Statoil and inability to replace this contract; the Partnership's ability to finance the completion of the conversion of the Randgrid shuttle tanker into an FSO; 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, 2012. 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.

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