Globe Newswire 27-Mar-2020 6:59 AM
VANCOUVER, British Columbia, March 27, 2020 (GLOBE NEWSWIRE) -- Teekay Corporation (Teekay) (NYSE:TK) today announced that it has entered into a new bareboat charter contract with the Foinaven Operator (Britoil Limited, a subsidiary of BP p.l.c.), for the Petrojarl Foinaven (Foinaven) floating production, storage and offloading (FPSO) unit for up to approximately ten years (the Contract). Under the terms of the Contract, Teekay is expected to receive an upfront payment of approximately $67 million in cash, a nominal per day rate over the life of the Contract, and a lump sum payment at the end of the Contract period, which is expected to cover the costs of recycling the FPSO unit in accordance with the EU Ship Recycling Regulations.
As part of the transaction, Teekay Offshore Partners L.P., now known as Altera Infrastructure L.P. (Altera Infrastructure) has entered into agreements with the Foinaven Operator directly to provide the operations and shuttle tanker services for the Foinaven FPSO.
"We are pleased to announce this new contract for the Foinaven FPSO, which allows our customer to continue to maximize the value of the Foinaven field whilst eliminating Teekay's operational exposure to the FPSO unit," commented Kenneth Hvid, Teekay's President and CEO. "The new contract further reduces our exposure to the offshore business, which is a strategic priority, improves our profitability, and allows us to further delever and strengthen our balance sheet."
BP North Sea Regional President, Ariel Flores, said, "This new arrangement will enable BP and its joint venture partner RockRose Energy to introduce an innovative contractual framework for the FPSO's operating services and shuttle tanker provision, giving BP greater influence over the strategic direction of operations, while allowing us to build on our existing strong relationship with Altera Infrastructure. It will also help ensure safe, reliable and efficient operations out to at least 2025 and give us space to set the Foinaven area up for future success."
Altera Infrastructure FPSO President, Chris Brett, commented, "We are proud of our 24 years of continuous operations on the Foinaven field in the harsh West of Shetlands environment. This innovative new contractual model allows us to keep providing our unique competency to BP and their partners as we work together to extend the Foinaven field safely into the future."
Teekay is a leading provider of international crude oil and gas marine transportation services and also provides offshore production and logistics. Teekay provides these services primarily through its directly-owned fleet and its controlling ownership interests in Teekay LNG Partners L.P. (NYSE:TGP), one of the world's largest independent owners and operators of LNG carriers, and Teekay Tankers Ltd. (NYSE:TNK), one of the world's largest owners and operators of mid-sized crude tankers. The consolidated Teekay entities manage and operate total assets under management of approximately $11 billion, comprised of approximately 140 liquefied gas, conventional tanker, and offshore assets. With offices in 12 countries and approximately 5,700 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world's leading oil and gas companies.
Teekay's common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".
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Forward Looking Statement
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, among other things, regarding: the terms of the Contract, including the upfront payment, day rate and lump sum payment expected at the end of the Contract term; the anticipated timing of receipt of payments due under the Contract; the certainty of the lump sum payment expected at the end of the Contract term covering the recycling costs of the Foinaven FPSO at such time; the impact of the Contract on the customer's utilization of the Foinaven field; and the expected impact of the Contract on Teekay's operational exposure, profitability and 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: market or counterparty reaction to changes in exploration, production and storage of offshore oil and gas, either generally or in particular regions that would impact expected future growth; changes in the demand for oil and refined products; changes in global oil prices; the impact of geopolitical tensions and changes in global economic conditions; the duration and extent of the COVID-19 coronavirus pandemic; changes in EU Ship Recycling Regulations and associated costs; and other factors discussed in Teekay's filings from time to time with the SEC, including its Annual Report on Form 20-F for the fiscal year ended December 31, 2018. Teekay 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 Teekay's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.