TeekayOffshorePartnersInvestor DayPresentationJune 18, 2012
Forward Looking StatementsThis presentation contains forward-looking statements (as defined in Section 21E of the Securiti...
Investment Highlights•   Leading market positions    ○   Market leader in harsh weather FPSOs and shuttle tankers•   Stabl...
Teekay Offshore Overview•   Teekay Offshore completed IPO    in Dec. 2006 by Teekay Corp.•   $1.9bn* Market Cap•   Strong ...
Strong Industry Fundamentals Support OurBusiness StrategyIncrease distributions per unit by executing on the following str...
Market Leader in Core Segments                                                                                            ...
Expertise in Deepwater and Harsh Environments North Sea • 20 shuttle tankers owned,   4 in-chartered • 1 FPSO + 6 owned   ...
Attractive Contract Portfolio•   Substantial portfolio of long-term, fixed-rate contracts with high quality    oil and gas...
Conventional Tanker Portfolio Rolling-off•   Expect reduction in conventional tanker fleet    ○    Do not anticipate renew...
TOO’s Business Mix is Evolving•     Since IPO, greater proportion of TOO’s cash flow has come from high-      growth FPSO ...
Significant Visible Growth Opportunities                                                  Acquisition Candidates         A...
Voyageur Spirit FPSO (ex. Sevan Voyageur)                           •   Charterer: E-ON Ruhrgas                           ...
Four BG Shuttle Tankers                          •   Charterer: BG Group                          •   Delivery Dates:     ...
Petrojarl Cidade de Itajai FPSO (ex. Tiro & Sidon)                              •   Charterer: Petrobras                  ...
Knarr FPSO                  •   Charterer: BG Group                  •   Expected First-Oil: 1H 2014                  •   ...
Linking Rig to Refinery  Leading indicators for offshore                                         Teekay’s role in the     ...
Drilling Activity a Key Leading Indicator•             81 mobile drilling unit (MODU) orders placed in 2011               ...
North Sea Market – Resurgent Activity•   Resurgence in North Sea                   Norwegian Exploration Wells Drilled*   ...
Brazil Market – More Growth to Come                            Brazil Offshore Production Fleet Development    140    120 ...
Strong Future Demand for FPSOs         FPSOs in the Planning Stage                         FPSO Forecast (Next 5 Years)   ...
Increased Demand for FSO Solutions•       Resurgence in offshore activity creating new FSO opportunities        ○     Re-e...
Investment Highlights•   Leading market positions•   Stable operating model•   Visible growth through accretive acquisitio...
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Teekay Offshore Partners Investor Day Presentation 2012

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Teekay Offshore Partners Investor Day Presentation 2012

  1. 1. TeekayOffshorePartnersInvestor DayPresentationJune 18, 2012
  2. 2. Forward Looking StatementsThis presentation contains forward-looking statements (as defined in Section 21E of the SecuritiesExchange Act of 1934, as amended) which reflect management’s current views with respect to certainfuture events and performance, including statements regarding: the Partnership’s future growthprospects, cash flows and distributions to unitholders; the timing of delivery of vessels underconstruction or conversion; the industry fundamentals for deepwater offshore oil production, storageand transportation; the potential for Teekay to offer additional vessels to the Partnership and thePartnership’s acquisition of any such vessels, including the Petrojarl Foinaven, the Petrojarl Cidade deItajai, the Voyageur Spirit, the Hummingbird Spirit and the newbuilding FPSO unit that will service theKnarr field under contract with BG Norge Limited; and the potential for the Partnership to acquire othervessels or offshore projects from Teekay or third parties. The following factors are among those thatcould cause actual results to differ materially from the forward-looking statements, which involve risksand uncertainties, and that should be considered in evaluating any such statement: vessel operationsand oil production volumes; significant changes in oil prices; variations in expected levels of fieldmaintenance; increased operating expenses; variability in shuttle tanker tonnage requirements underthe Statoil master agreement; different-than-expected levels of oil production in the North Sea andBrazil offshore fields; potential early termination of contracts; failure of Teekay to offer to the Partnershipadditional vessels; the inability of the joint venture between Teekay and Odebrecht to secure new BrazilFPSO projects that may be offered for sale to the Partnership; failure to obtain required approvals bythe Conflicts Committee of Teekay Offshore’s general partner to acquire other vessels or offshoreprojects from Teekay or third parties; the Partnership’s ability to raise financing to purchase additionalassets; 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, 2011. The Partnershipexpressly disclaims any obligation or undertaking to release publicly any updates or revisions to anyforward-looking statements contained herein to reflect any change in the Partnership’s expectationswith respect thereto or any change in events, conditions or circumstances on which any such statementis based. 2 www.teekayoffshore.com
  3. 3. Investment Highlights• Leading market positions ○ Market leader in harsh weather FPSOs and shuttle tankers• Stable operating model ○ Diversified portfolio of fixed-rate contracts with major oil companies• Visible growth through accretive acquisitions and projects ○ Seven FPSO units will be available for purchase from Sponsor, Teekay Corporation ○ Four advanced shuttle tankers scheduled for delivery in 2013• Strong fundamentals driving industry growth ○ High E&P spending driving record number of planned FPSO projects• Advantageous tax structure ○ Teekay Offshore is a 1099 filer – no K-1 reporting requirements 3 www.teekayoffshore.com
  4. 4. Teekay Offshore Overview• Teekay Offshore completed IPO in Dec. 2006 by Teekay Corp.• $1.9bn* Market Cap• Strong Sponsor ○ Teekay Corp. ownership: 33% (incl. 2% GP interest)• Core focus: Deepwater offshore production, floating storage and transport projects• 56 vessels in global fleet (Shuttle tankers, FSOs, FPSOs, oil tankers)• 3 -10 years fixed-rate contracts *As at June 8, 2012 4 www.teekayoffshore.com
  5. 5. Strong Industry Fundamentals Support OurBusiness StrategyIncrease distributions per unit by executing on the following strategies:• Expand presence in high-growth regions ○ Focus on leadership positions in Brazil and North Sea• Continue to pursue new high-return projects in the FPSO, FSO and shuttle tanker segments• Opportunistically acquire existing assets on long-term fixed-rate contracts ○ Preference for assets with contracts provides immediate accretion ○ Several FPSOs at Sponsor – received offer to acquire Voyageur Spirit FPSO from Teekay Corp• Provide superior customer service by maintaining high reliability, safety, environmental and quality standards ○ Operational expertise is a competitive advantage 5 www.teekayoffshore.com
  6. 6. Market Leader in Core Segments Control More Than 40Number of Shuttle Tankers 4 22 Existing Newbuildings on Order 50% Fleet of the World’s 36 4 9 18 5 3 7 2 3 Teekay Knutsen Transpetro Viken / Lauritzen Offshore NYK PJMR Number of FPSO Units 7 Leading Operator of 2 3 Leased FPSOs in the 2 1 5 North Sea Teekay Bluewater Maersk BW Offshore / Offshore Teekay Corp.Source: Clarkson Research Services, Platou, Company Websites, Industry Sources. 6 www.teekayoffshore.com
  7. 7. Expertise in Deepwater and Harsh Environments North Sea • 20 shuttle tankers owned, 4 in-chartered • 1 FPSO + 6 owned by Sponsor Brazil • 16 shuttle tankers owned • 2 FPSOs + 1 owned by Sponsor 7 www.teekayoffshore.com
  8. 8. Attractive Contract Portfolio• Substantial portfolio of long-term, fixed-rate contracts with high quality oil and gas companies ○ Total forward fixed-rate revenues of $3.8 billion ○ Weighted average remaining contract life of over 5.0 years Shuttle Tankers FPSO Units FSO Units Conventional Tankers # of units 40 3 5 8 AverageContract Life 5.4 years 4.1 years 3.2 years 2.8 years Forward Revenues $2.6 bn $0.7 bn $0.2 bn $0.3 bn High QualityCustomers 8 www.teekayoffshore.com
  9. 9. Conventional Tanker Portfolio Rolling-off• Expect reduction in conventional tanker fleet ○ Do not anticipate renewing conventional tanker charters ○ Will keep some conventional hulls for future redeployment as FSOs - Two hulls currently tendered for FSO project in Asia• Acquisition of FPSOs will replace lost cash flow ○ Example: cash flow from Piranema FPSO = approximately 4 conventional tankers 2012 2013 2014 2015 2016 2017 2018 Vessel Built 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Fuji Spirit 2003 Kilimanjaro Spirit 2004 SPT Navigator 2008 SPT Explorer 2008 Poul Spirit 1995 Gotland Spirit 1986 Hamane Spirit 1997 Sold Torben Spirit 1994 For sale Leyte Spirit 1992 In lay-up, FSO candidate Luzon Spirit 1992 In lay-up, FSO candidate 9 www.teekayoffshore.com
  10. 10. TOO’s Business Mix is Evolving• Since IPO, greater proportion of TOO’s cash flow has come from high- growth FPSO sector ○ Higher risk-adjusted returns ○ With roll-off of conventional tanker contracts, TOO is becoming a true ‘pure-play’ in the build-out of offshore crude oil TOO Q1-12 CFVO* By Segment TOO Q1-07 CFVO* By Segment 27% 29% 66% 10% 56% 5% 7% Conventional Tankers FPSOs Shuttle Tankers FSOs*Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, write-down of vessels and amortization of deferred gains and in-processrevenue contract, includes the realized gains (losses) on the settlement of foreign exchange forward contracts and adjusting for direct financing leases to a cash basis. Cash flow from vessel operationsis a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Partnership’s web site at www.teekayoffshore.com for areconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure. 10 www.teekayoffshore.com
  11. 11. Significant Visible Growth Opportunities Acquisition Candidates Assets and Contracts Following Contract Suitable for Acquisition Renewal / Amendment Cidade de Itajai Knarr FPSO Petrojarl Hummingbird (50%)(Petrobras) (BG) Foinaven (BP) Spirit (Centrica) Voyageur Spirit 4 Shuttle Petrojarl I Petrojarl Banff (E.ON) Tankers (BG) (Statoil) (CNR) Received offer Directly ordered from Teekay Corp by TOOOmnibus agreements with Teekay & Sevan provide additional opportunities 11 www.teekayoffshore.com
  12. 12. Voyageur Spirit FPSO (ex. Sevan Voyageur) • Charterer: E-ON Ruhrgas • Year Built: 2009 • Upgrade in progress at Nymo Shipyard in Arendal, Norway • Expected First-Oil: Oct. 2012 • Cylindrical hull design by Sevan Marine • Firm Contract Length:5 years • Contract Options: evergreen with 12-month cancellation • Expected CFVO ~$75m p.a. • Operating Water Depth +120m • Processing Capacity: 30,000 bbls/d • Storage Capacity: 270,000 bbls • Field Application: Oil production, Gas export and water injection • Huntington Field North Sea, U.K. 12 www.teekayoffshore.com
  13. 13. Four BG Shuttle Tankers • Charterer: BG Group • Delivery Dates: ○ Hull 2037, Q2-2013 ○ Hull 2038, Q2-2013 ○ Hull 2039, Q3-2013 ○ Hull 2040, Q4-2013 • Suezmax-sized DP2 shuttle tankers • Delivered Cost: ~$120m / vessel • Being constructed at Samsung Shipyard, South Korea • Contract Length: 10 years plus 2 x 5-year options • Will service BG’s pre-salt requirements • BG is one of the largest international oil companies operating in Brazil 13 www.teekayoffshore.com
  14. 14. Petrojarl Cidade de Itajai FPSO (ex. Tiro & Sidon) • Charterer: Petrobras • Expected First-Oil: December 2012 • Aframax conversion at Jurong Shipyard, Singapore • 50/50 Joint Venture with Brazil- based Odebrecht • Firm Contract Length: 9 years • Extension Options: 6 x 1 years • Expected CFVO: $25m (50% basis) • 80% Project Financing arranged with syndicate of International Banks • Designed Water Depth: up to 1,000m • Operating Depth: ~250m • Processing Capacity: 80,000 bbls/d • Storage Capacity: 650,000 bbls • Tiro & Sidon fields on Block BM-S- 40, Santos Basin, offshore Brazil ○ +150 million barrels of recoverable oil 14 www.teekayoffshore.com
  15. 15. Knarr FPSO • Charterer: BG Group • Expected First-Oil: 1H 2014 • Purpose built in South Korea by Samsung Heavy Industries • Firm Contract Length: 6 or 10 years • Extension Options: up to 20 years (total) • Processing Capacity: 63,000 bbls/d • Designed to handle a wide-range of LPGs • Operating Water Depth: ~400m • Est. Recoverable Reserves: 70-150 mmbbls • Knarr Field, North Sea 15 www.teekayoffshore.com
  16. 16. Linking Rig to Refinery Leading indicators for offshore Teekay’s role in the production, storage and offshore value chain transportation demand 16 www.teekayoffshore.com
  17. 17. Drilling Activity a Key Leading Indicator• 81 mobile drilling unit (MODU) orders placed in 2011 ○ Highest since 1980• Growth strongest in the deepwater / ultra-deepwater drilling fleet• Deepwater wells yielding the biggest results ○ Average discovery size in 2010 for wells >1,500m depth was 1,000+ mboe MODU Orders Versus Oil Price 100 120 Jack Ups Semi-subs and Drillships Oil Price (USD) 80 100 $ / BBL Oil Price MODU Orders 80 60 60 40 40 20 20 0 0 Source: Clarksons, Douglas Westwood, BP 17 www.teekayoffshore.com
  18. 18. North Sea Market – Resurgent Activity• Resurgence in North Sea Norwegian Exploration Wells Drilled* drilling activity yielding Record high level of exploration results ○ 1.7 - 3.3 billion barrel Johan Sverdrup find was biggest of 2011• New finds tend to suit an FPSO and shuttle tanker solution *Source: Norwegian Petroleum Directorate• Barents Sea Enhanced Oil Recovery (emerging shuttle region) leading to renewed production in mature areas Norwegian Sea• Move into Barents Sea (existing shuttle region) requires high-specification North Sea shuttle tankers and FPSOs (existing shuttle area) 18 www.teekayoffshore.com
  19. 19. Brazil Market – More Growth to Come Brazil Offshore Production Fleet Development 140 120 100 Installed On Order Planned 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: IMA• Brazilian offshore production fleet set to double in 2011-18 ○ Growth in offshore production drives demand for shuttle tankers and FPSOs• Petrobras is aggressively increasing its production capability• Other oil companies also have shuttle requirements in offshore Brazil 19 www.teekayoffshore.com
  20. 20. Strong Future Demand for FPSOs FPSOs in the Planning Stage FPSO Forecast (Next 5 Years) 30 28 Source: IMA Source: IMA 24End-06 68 25 20 20 15End-08 96 15 10 10 5Apr-12 141 0 Avg. Avg. Orders Orders Low Low Base Base High High Orders Jan-Apr Case Case Case 0 50 100 150 Orders per year Jan-Apr 2012 Case Case Case per year 2012 Next 5 Years (2007 – 2011)• The number of projects which could require an FPSO has doubled in the past five years• Estimate of 20-28 FPSO orders per year over the next five years depending on the global economy, oil demand and energy prices• Operational and engineering expertise required to be successful in the leased FPSO business creates a high barrier to entry 20 www.teekayoffshore.com
  21. 21. Increased Demand for FSO Solutions• Resurgence in offshore activity creating new FSO opportunities ○ Re-emergence of FSO demand in the North Sea ○ New development in S.E. Asia• 22 projects currently considering the use of an FSO ○ 11 in Asia; 4 in North Sea Planned FSO Projects Top Leased FSO Operators12 10 11 4 Owners with 2 units10 19 Owners with 1 unit 8 7 8 6 5 6 4 4 4 4 4 3 3 2 2 1 1 2 0 0 S.E. Asia North MED GoM Brazil Africa Tanker Teekay Modec Trada MISC Sea Pacific Maritime 21 www.teekayoffshore.com
  22. 22. Investment Highlights• Leading market positions• Stable operating model• Visible growth through accretive acquisitions and projects• Strong fundamentals driving industry growth• Advantageous tax structure – no K-1 reporting requirements 22 www.teekayoffshore.com
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