Teekay Offshore narrows losses

Aug 02 2019

Recently spun-off, Teekay Offshore Partners reported revenues of $319.8 mill and net loss of $28 mill, for the second quarter of this year.

The revenues were said to be consistent with the same quarter of 2018.

Net loss was down $28 mill in 2Q19, compared to a loss of $168 mill in 2Q18, primarily due to the timing of recognition of write-downs and gains on sales of vessels and a decrease in unrealised fair value losses on derivative instruments resulting from movement in interest rates.

In 2Q19,, the net loss included a gain on the sale of three vessels of $13 mill, whereas in 2Q18, net loss included write-downs of $180 mill relating to two FPSOs.

Non-GAAP adjusted EBITDA was $159 mill in 2Q19, which was consistent with the same quarter of 2018. An increase in adjusted EBITDA of $11 mill from the shuttle tanker segment was offset by a decrease of $11 mill from the FPSO sector.

Non-GAAP adjusted net income was $5 mill, an increase of $5 mill compared to 2Q18,, primarily due to a decrease in depreciation and amortisation of $7 mill.

Revenues decreased by $17 mill and net loss increased by $25 mill,, compared to 1Q19,, primarily due to the absence of a $15 mill amortisation of non-cash deferred revenue relating to the ‘Piranema Spirit’ FPSO, which was fully amortised during 1Q19; a $7 mill decrease in contributions from the completion of the ‘Rio das Ostras’ FPSO charter contract in March, 2019 and a $5 mill decrease from lower utilisation in the towage fleet.

Revenues and vessel operating expenses in 2Q19 also included the recognition of deferred revenues and deferred costs of $13 mill and $15 mill,, respectively, upon termination of the Cheviot Field agreement relating to the ‘Petrojarl Varg’ FPSO.

“We are pleased to announce another good operational quarter with adjusted EBITDA of $159 mill. The shuttle tanker and the FSO segment results were in line with first quarter,, while the FPSO segment result decreased by $22 mill,, primarily on non-cash items. The Towage segment was basically EBITDA neutral,” said Ingvild Sæther, President and CEO, Teekay Offshore Group.

“During the quarter we decided to terminate the agreement with Alpha Petroleum for the redeployment of the ‘Petrojarl Varg’ FPSO on the UK Cheviot field. Given the increased activity on a number of field developments in the North Sea, it was important for us to either reach a final contract award with Alpha Petroleum on the Cheviot field, or make the unit available for other field developments, where it can offer an attractive field development solution.

"On the financing side, we were pleased to announce during the quarter the closing of the refinancing of the $450 mill revolving credit facility backed by 16 of our shuttle tankers on attractive terms, in addition to the long-term financing of the first four shuttle tanker newbuildings and the refinancing of three FPSOs with $100 mill, both as announced in the last quarterly release," he concluded.


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