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Teekay Offshore Partners Announces First Oil and Contract Start-up for the Petrojarl I FPSO

/EIN News/ -- HAMILTON, Bermuda, May 10, 2018 (GLOBE NEWSWIRE) -- Teekay Offshore Partners L.P. (NYSE:TOO) (Teekay Offshore or the Partnership) announced today that the Petrojarl I floating production, storage and offloading (FPSO) unit has successfully achieved first oil and commenced its five-year charter contract with a consortium led by Queiroz Galvão Exploração e Produção SA (QGEP) on the Atlanta oil field, which is the Petrojarl I FPSO’s tenth field over its lifetime.  The Petrojarl I FPSO is expected to generate annualized cash flow from vessel operations(1) of approximately $25 million(2) for the first 18 months, increasing to annualized cash flow from vessel operations(1) of approximately $55 million(2), plus additional upside from oil price tariffs, during the remaining 42 months of the charter contract.

The Atlanta field, which is located in Block BS4 in the Santos Basin offshore Brazil, is a post-salt oil field situated 185 kilometers from the city of Rio de Janeiro, in water depths of approximately 1,500 meters and contains an estimated 260 million recoverable barrels of oil equivalent. 

The upgraded Petrojarl I FPSO is designed to operate at water depths of up to 1,550 meters, with a production capacity of 30,000 barrels of oil per day and daily compression capacity of 225,500 cubic meters of gas.  

“Today is an important day for Teekay Offshore as it marks the completion of all our near-term growth projects that are expected to generate annual cash flow from vessel operations(1) of approximately $200 million, which is also expected to further strengthen our balance sheet as we naturally delever over time,” commented Ingvild Sæther, President and CEO of Teekay Offshore Group Ltd.  “In addition, the Petrojarl I FPSO project expands our presence in the fast-growing Brazilian offshore market where we now own and operate a total of five FPSO units and nine shuttle tankers.”

(1) Cash flow from vessel operations, a non-GAAP measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and equipment and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract.
(2) Excludes the impact of any potential liquidated damages relating to project delays.

About Teekay Offshore

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 oil industry, primarily focusing on oil production-related activities of its customers and operating in 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 63 offshore assets, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, a unit 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 and preferred units trade on the New York Stock Exchange under the symbols "TOO", "TOO PR A", "TOO PR B" and “TOO PR E”, respectively.

For Investor Relations
enquiries contact:

Ryan Hamilton
Tel: +1 (604) 609-2963
Website: www.teekay.com

For Media enquiries contact:
Axel Wiedenmann
Tel: +47 9516 3022
Website: www.teekay.com

Forward Looking Statements

This release contains forward-looking statements (as defined in Section 21E of the U.S. 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 estimated reserves on the Atlanta field; the operational capabilities of the Petrojarl I FPSO; the estimated annualized cash flow from vessel operations from the Petrojarl I FPSO charter contract; the amount and timing liquidated damages relating to project delays; and the total annualized cash flows from operations from the Partnership’s near-term growth projects and the expected impact of such projects on the Partnership’s balance sheet. 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 operational performance of the Petrojarl I FPSO; variations in operating expenses; different-than-expected levels of oil production on the Atlanta field; changes in oil prices; potential early termination of the charter contract; 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, 2017. 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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