Temporary cash flow dip

Tanker sales, dry dockings and the end of shuttle tanker contracts have led to a dip in second quarter cash flow at Teekay Offshore.

The MLP recorded cash flow of $40.1m in the three months to the end of June, down from $43.0m in the same stretch of 2013.

Teeaky Offshore sold three conventional tankers in the past year and has seen four shuttle tankers come to the end of charters. The Dampier Spirit FSO was also dry-docked in the quarter.

Chief executive Peter Evensen says the dip in cash flow is temporary and points to a number of expansion projects that would boost earnings in the future.

He said: “Since reporting our first quarter results in May, the Partnership has completed its acquisition of Logitel Offshore and has made significant progress on its existing organic growth projects.

“The Logitel Offshore acquisition solidifies Teekay Offshore’s entry into the high-specification floating accommodation sector, which provides the Partnership with further diversification and a complementary new channel for future distributable cash flow growth.”

He adds the Salamander FSO has been installed in the Bualuang field in Thailand and will begin a 10-year contract this August, with the Remora HiLoad DP also set to go live soon.

Evensen said: “In addition to these and other growth projects which provide a pipeline of direct growth for the Partnership between 2014 and 2017, we also have a number of dropdown growth opportunities available from our sponsor, Teekay Corporation, including up to five FPSO units, which must be offered to us once they are operating under eligible fixed-rate contracts.”