- Generated distributable cash flow of $67.0 million, or $0.62 per common unit, in the fourth quarter of 2015 and $244.7 million, or $2.29 per common unit, during 2015.
- Generated cash flow from vessel operations of $172.9 million and $588.4 million in the fourth quarter and fiscal year of 2015, respectively, increases of 38 percent and 25 percent from the same periods of the prior year.
- Declared fourth quarter 2015 cash distribution of $0.11 per common unit.
- Completed the sale of two conventional tankers and agreed to sell the remaining two conventional tankers for total gross proceeds of approximately $130 million.
- Total liquidity of approximately $283 million as at December 31, 2015.
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 and year ended December 31, 2015. During the fourth quarter of 2015, the Partnership generated distributable cash flow(1) of $67.0 million, compared to $50.0 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 acquisition of six long-distance towing and offshore installation vessels during the first seven months of 2015, the commencement of the Arendal Spirit unit for maintenance and safety (UMS) charter contract in early-June 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO. These increases were partially offset by the expiration of two shuttle tanker contracts in the second quarter of 2015 and the sale of two conventional tankers, the SPT Explorer and Navigator Spirit, in the fourth quarter of 2015.
On January 20, 2016, the Partnership declared a cash distribution of $0.11 per unit for the quarter ended December 31, 2015. The cash distribution was paid on February 12, 2016 to all unitholders of record on February 5, 2016.
'Despite the challenging macro energy environment affecting our customers, the Partnership grew its cash flows during the fourth quarter and fiscal year 2015, highlighting the stability of our business which plays an integral role in our customers' oil production logistics chains,' commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. 'The growth was driven mostly by the delivery and acquisition of several offshore units during 2015, including our largest FPSO acquisition to date, the Knarr FPSO, the Arendal Spirit UMS and six long-distance towing and offshore installation vessels.'
Mr. Evensen added 'Teekay Offshore's fleet continues to operate with high uptime and fleet utilization, generating stable cash flow, supported by a diversified portfolio of long-term contracts with high quality counterparties.'
'The decision in December to temporarily reduce Teekay Offshore's distributions was a difficult decision and was caused by the inability to access competitively priced capital in the current negative capital market environment and was not caused by a shortfall in the cash flows of our operations,' Mr. Evensen continued, 'We believe the reduction is in the best interests of long-term unitholders as the reallocation of a significant portion of our internally generated cash flows to fund our profitable growth projects that will deliver over the next several years will result in higher available distributable cash flow per unit.'
'We are pleased to announce the sale of our four remaining non-core conventional tankers, further improving the Partnership's liquidity position,' Mr. Evensen continued. 'These asset sales take advantage of strong tanker asset prices and represent one of many ways that the Partnership is able to supplement its internally generated cash flows to fund our financing requirements.'
Mr. Evensen added 'Looking ahead to 2016, despite the sale of the conventional tankers and the anticipated redelivery of the Varg FPSO after operating on the Varg field for almost 18 years, the Partnership's cash flows are expected to increase compared to 2015 supported by high uptime and fleet utilization and the delivery of various growth projects in 2016, including the Petrojarl I FPSO project and the delivery of four newbuilding long-distance towing and offshore installation vessels. We remain focused on completing our existing growth pipeline and are now pivoting our business strategy to focus on the future redeployment of our existing assets onto new contracts instead of new organic growth projects, implementing various cost saving initiatives, and addressing our remaining funding needs.'
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