Teekay Offshore Partners L.P. (NYSE:TOO) announced that is has completed the acquisition of the Cidade de Rio das Ostras floating production storage and offloading (FPSO) unit from Teekay Corporation (NYSE:TK) for a purchase price of approximately $158m. The partnership also announced that its 51 percent-owned subsidiary, Teekay Offshore Operating L.P. (OPCO), has acquired the newbuilding shuttle tanker, the Amundsen Spirit, from Teekay for approximately $128m and has agreed to acquire two additional newbuilding shuttle tankers, the Nansen Spirit and the Peary Spirit, from Teekay for a total purchase price of $260m.
The partnership has financed the acquisition of the Rio das Ostras FPSO and Amundsen Spirit newbuilding shuttle tanker through the assumption of $187m of debt secured by these assets, with the remainder of the purchase price financed from available capacity under the Partnership's revolving credit facilities.
The transactions are expected to increase the partnership's Cash Flow from Vessel Operations1 by approximately $60m per annum in 2011, and Distributable Cash Flow2, which includes only 51 percent of OPCO, of approximately $20m.
The Rio das Ostras FPSO operates under a fixed-rate contract with Petroleo Brasileiro SA (Petrobras) servicing the Aruana field, located in Brazil's Campos Basin, through 2017. The Amundsen Spirit operates as part of a Master Agreement with Statoil ASA (Statoil), under a fixed-rate, life-of-field time-charter contract to service the Tampen and Haltenbanken fields on the Norwegian Continental Shelf.
The acquisitions of the Nansen Spirit and Peary Spirit are expected to be completed upon the commencement of their life-of-field, time-charter contracts, under the same Statoil Master Agreement, which is expected to occur in January 2011 and July 2011, respectively.
The Board of Directors of the Partnership's General Partner and its Conflicts Committee have approved the transactions. The Conflicts Committee retained independent legal and financial advisors to assist it in evaluating the transactions.