Q3 2017 Knot Offshore Partners LP Earnings Call

Nov 06, 2017 AM EST
KNOP - Knot Offshore Partners LP
Q3 2017 Knot Offshore Partners LP Earnings Call
Nov 06, 2017 / 05:00PM GMT 

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Corporate Participants
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   *  John Costain
      KNOT Offshore Partners LP - CEO and CFO

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Conference Call Participants
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   *  Benjamin Preston Brownlow
      Raymond James & Associates, Inc., Research Division - Research Analyst
   *  Hillary Cacanando
      Wells Fargo Securities, LLC, Research Division - Associate Analyst
   *  Naqi Syed Raza
      Citigroup Inc, Research Division - Senior Associate of Oil and Gas
   *  Spiro M. Dounis
      UBS Investment Bank, Research Division - Director and Equity Research Analyst of Shipping

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Presentation
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Operator   [1]
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 Good day, and welcome to the KNOT Offshore Partners LP Third Quarter 2017 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to John Costain, CEO. Please go ahead, sir.

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [2]
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 Thank you. If any of you have not seen the earnings release or the slide presentation, they're both available on the Investors section of our website.

 On today's call, our review will include non-U.S. GAAP measures such as distributable cash flow and adjusted EBITDA. The earnings release includes a reconciliation of these non-U.S. GAAP items to the most directly comparable GAAP financial measures.

 A quick reminder that any forward-looking statements made during today's call are subject to risks and uncertainties, and these are discussed at length in our annual report with the SEC filings. As you know, actual events and results can differ materially from those forward-looking statements, and the partnership does not undertake a duty to update any forward-looking statements.

 Now onto the presentation. KNOT Offshore Partners, KNOP, focuses on the shuttle tanker segment. Yes, it is a field-specific and integral part of the supply chain. On the non-volume-based contracts, we transport oil from the offshore oil production unit shore-side, in essence, the midstream of our pipeline business. Shuttle tankers operate in a niche space and being built to the charterer's requirements and are generally used on specific oil fields.

 In our sector, there has been nonspeculative ordering so the partnership should yield both stable and sustainable revenues longer term. As our production moves further offshore, these tankers operate in a space which will see substantial growth in the coming years.

 Some of the largest discovered oil reserves in the southern hemisphere are in pre-salt layer, 130 kilometers off the coast of Brazil. And Petrobras, for the month of September, oil and natural gas output (inaudible) proportions of 1.68 million barrels of oil equivalent average daily production, a 6.6% increase from the previous months and higher than last year's average.

 With the phasing out of some of the less technologically advanced (inaudible) tankers occurred in 2017, we now see further newbuild tendering activity. Petrobras Transpetro have requested tenders for shore tankers and whilst have not been specific about numbers, we believe their requirement will be for at least 4 vessels initially.

 Although our MLP is young, our sponsor is a very experienced operator, having been involved in the design and construction of these type of vessels for over 30 years. Today, the Knutsen Group has more than 30 of these high-specification tankers, building the fleet on (inaudible) period.

 In the last 12 months, the MLP has acquired the Raquel Knutsen in 2016 Q4, Tordis in Q1 2017, Vigdis in Q2 2017 and Lena Knutsen in Q3. We have achieved these acquisitions through a combination of common and preference units used together in refinancing the revolving credit facilities. This has enabled us to grow our distributable cash flow cover to the current level and improve the long-term outlook for the MLP.

 Our sponsor, Knutsen NYK, [in accordance] to Clarkson Platou Research, part of the largest shipping group in the world, and NYK is a major company in the Mitsubishi family. In the space of 4 short years, the fleet will have grown 230% to 14 vessels with an average age of about 4.25 years.

 Now turning to the main presentation. Slide 3 of the financial highlights. The partnership generated its highest quarterly revenues of $58.2 million and net income of $21.1 million and generated its highest adjusted EBITDA of $45.1 million and distributable cash flow of $24 million. We reported our highest-ever distribution coverage ratio of 1.46. We declared a cash distribution of $0.52 per unit in Q3 2017; annualized, that's $2.08. The quarterly distributable cash flow, we calculate as $0.76 per unit.

 On the 15th of November 2017, the partnership will pay this cash distribution with respect to Q3, a record 18.2 million distribution payments, including recently issued common and preference units. Since our initial public offering over 4 years ago, we have declared and paid common unit distributions of $8.74. So our initial investors have received a total return of 42%. Our current yield is a stable 9%.

 The fleet achieved strong performance with 99.7% utilization for scheduled operations and 99.3% utilization, taking into account the scheduled drydocking and repair of Carmen Knutsen. We completed the acquisition of Lena Knutsen, which is a 5-year charter to Shell.

 On July 5, 2017, Knutsen NYK acquired from Chevron the Brazil Voyager, a DP2 Suezmax-class shuttle tanker built in 2013. The vessel located in Brazil has been renamed Brasil Knutsen and the sponsor has acquired a 5-year contract with Galp Sinopec. There are options to extend the charter from up to 2 further 3-year periods and it is expected to commence charter in November.

 Slide 4, income statement. Total revenues were $58.2 million for the 3 months ended 30th September 2017 compared to $54.4 million for the 3 months ended June 30, 2017. Q3 revenues were positively impacted by the increase in the time charter earnings due to the 4-quarter earnings from Vigdis Knutsen [as yields], including the result from operations from the 1st of June.

 Lower utilization rate for the third quarter compared to the second quarter was offset by the additional calendar day during this quarter. Vessel operating expenses for the third quarter were $11.8 million, an increase of $2.4 million from the second quarter in 2017. This was partly due to the Vigdis Knutsen being included in the results of operations from the 1st of June and higher operating expenses, mainly due to the strengthening of the NOK against the U.S. dollar compared to the second quarter.

 The second quarter was also affected by a receipt of insurance proceeds related to the technical repair of Raquel Knutsen. General and administrative expenses were $1.3 million for the third quarter, a decrease of $0.2 million compared to the second quarter, reflecting lower activity.

 Depreciation increased with $1 million from the last quarter because of the Vigdis Knutsen being included. As a result, operating income for the third quarter of $26.7 million compared to $26.1 million in the second quarter. Interest expense for the third quarter was $8 million compared to $7.3 million in the second quarter. The increase was mainly due to the additional debt incurred in connection with the acquisitions of the Vigdis Knutsen and refinancing of the Hilda Knutsen.

 Interest rate swap agreements totaled $655 million. The partnership receiving interest based on LIBOR and paying a weighted average interest rate of 1.7%, with an average maturity of about 4.8 years. Foreign exchange forward contracts or economic hedges and vessel operating expenses totaled $25 million against the NOK at an average rate of NOK 8.38 per U.S. dollar.

 The financial results are impacted by changes in the market via these instruments. Realized and unrealized gains were $2.8 million in Q3 compared to losses of $1.5 million in Q2. As a result, net income for Q3 was $21.1 million compared to $16.9 million for Q2.

 Slide 5, adjusted EBITDA. In Q3, the partnership generated adjusted EBITDA of $45.1 million and this compares to $43.5 million for Q2. Adjusted EBITDA refers to earnings before interest, taxation, depreciation and amortization, providing a proxy for cash flow. Adjusted EBITDA is a non-U.S. GAAP measure and is used by our investors to measure our financial performance.

 With a wasting asset like our vessel, these younger vessels, in theory, should produce lower EBITDAs for every dollar invested. The annuity effect reduces the value lost in the early years, which is factored into the replacement CapEx calculation for the distributable cash flow.

 At the end of Q3, the KNOP fleet of 14 vessels had an average age of around 4.5 years compared to the rest of the industry average, which is around 12 years. In general, since the formation of KNOP, we have had very high levels of vessel utilization, on average, around 99.6%. Financially, this translates into continually high and increasing predictable revenue, adjusted EBITDA and discounted cash flow as more vessels are added to the fleet.

 Distributable cash flow, Slide 6, another non-U.S. GAAP measure to estimate distribution sustainability. Today, we report our highest-ever quarterly distributable cash flow of $24 million in Q3, which compares to $23.4 million in Q2. We maintain our distribution level for Q3 at $0.52 per unit with an annual distribution of $2.08 and a distribution coverage ratio again of 1.46.

 The coverage ratio has increased, primarily due to the equity overhang being removed. The common units of 54.9 million issue and preference unit issue of 87.4 million together refinancing of Hilda and the further revolving credit facility has funded these transition -- acquisitions of Tordis in February, Vigdis in June and Lena in September. The outlook for the MLP is improved with the acquisition of Lena Knutsen at the end of the third quarter.

 The MLP has an elevated yield compared to most MLPs, and we therefore are focused on first rebuilding coverage and then deleveraging when not making accretive investments. There is little benefit to the MLP in the short term in paying much more than the current yield. We have raised funds between $21 and $29 per unit, and many of our common unitholders remain loyal so we would not want to dilute them. And we see double-digit distributions as a signal where investors prefer our increased coverage. The coverage ratio of 1.46 gives us flexibility in regard to our capital base. And also, there is room for an increase in the distribution.

 Slide 7, balance sheet. At the end of Q3, we had a very solid liquidity position with cash and cash equivalents of $38.1 million and undrawn credit facility of $12 million. And the credit facilities are available until mid-2019. In addition, the partnership has accepted an offer from Bank of Tokyo-Mitsubishi as agent for a new $100 million senior secured loan facility on vessel Torill Knutsen. It is intended -- it will be consolidating 3 banks involved.

 And the closing of the facility anticipated to occur around the end of 2017. We have a predictable cash flow, a healthy liquidity position and once Torill is refinanced, no significant (inaudible) until 2019.

 Slide 9, long-term -- sorry, Slide 8, long-term contracts by leading energy companies. The Windsor Knutsen has been on 2-year contract from 30th of October 2015 with Brazil Shipping 1, a subsidiary of Royal Dutch Shell with a further 6 years of extension options, one of which was lifted in October 2018.

 The Bodil Knutsen, the largest shuttle tanker operating in the North Sea, is ice class and on chart to Statoil until May 2019. There are further 5 1-year options to extend. Four of our vessels are on long-term bareboat charter to Petrobras Transporte. These vessels are amongst the youngest in the Petrobras fleet being delivered between 2011 and '12 and are heavily utilized.

 Dan Sabia and Dan Cisne are of unique size, and Fortaleza and Recife have shallow drafts with lots of thruster capacity. Delivered in 2013, the Carmen Knutsen is on charter direct to Repsol Sinopec until 2023. The Ingrid Knutsen was delivered in December 2013 and is operating in the North Sea on time charter to Standard Tønsberg, and a Norwegian subsidiary of ExxonMobil. This will expire in the first quarter of 2024. The charterer has options to extend the charter for 5 1-year periods. The Raquel Knutsen was delivered in March 2015 and operates under a time charter, expires in the first quarter of 2025 with Repsol Sinopec in Brazil. There are options to extend through to 2030.

 The Tordis Knutsen is on 5-year charter to Brazil Shipping 1, a subsidiary of Shell. This will expire in the first quarter of 2022. The charter again has options to extend 2 further additional 5-year periods.

 The sister ships of Tordis, the Vigdis and Lena, are on similar time charters with Shell. KNOP fleet has an average remaining fixed contract duration of around 4.5 years, with an additional 4.5 years, on average, in charterer's option. We have 2 further dropdown candidates. Brasil Knutsen, which has 5-year contracts with Galp Sinopec with options to extend the charter for up to 6 further years. This charter should commence by the end of November. Anna Knutsen on a 5-year contract with Petrogal from May 2017 with options to extend the charter for a further 6 years.

 Slide 10, in summary, KNOT Offshore Partners is a midstream of our pipeline business with fully contracted revenue streams. Since being awarded its first 2 contracts in 1984, Knutsen has grown organically for over 30 years as the business has been built into a sizable fleet of these tankers, currently 31 units, including orders.

 We have a solid and highly profitable contract base generated by our modern fleet, which, by the end of September, will have an average age of around 4.5 years. The fleet has delivered the MLP's best-ever quarterly performance for EBITDA, distributable cash flow and distribution coverage ratio.

 Since the formation of KNOP, we have a very high level of vessel utilization, on average, around 99.6%. And financially, this translates into stable, high and increasing predictable revenue, adjusted EBITDA and discounted cash flow as more vessels are added to the fleet.

 This year, we have so far completed the acquisitions of Tordis Vigdis and Lena Knutsen. KNOP has very good access to financing. We have managed to utilize the banking relationships of KNOP and our sponsors in NYK, which has an active banking group of around 30 banks.

 In the year-to-date, to finance the growth of acquisitions, we have raised both $145 million of new equity and $100 million of long-term debt, and $25 million of credit facilities, all on attractive terms. We expect to be in condition to raising additional $100 million on Torill Knutsen by the end of the year.

 No one has more expertise in operating these sophisticated shuttle tanker than Knutsen Offshore, and we operate these vessels with real expertise. Today, supply is timing and the market is expanding. And with tenders back, the sponsor expects to build a further drop-down inventory. We have a supportive sponsor, and we remain an attractive value proposition with a distribution of $0.52, around 9%.

 Thank you. I'll take questions if anybody has any.

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Questions and Answers
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Operator   [1]
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 (Operator Instructions) The first question comes from Hillary Cacanando with Wells Fargo.

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 Hillary Cacanando,  Wells Fargo Securities, LLC, Research Division - Associate Analyst   [2]
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 You've been very aggressive in terms of fleet growth. So I just wanted to get your thoughts around your plans around the drop-down schedule going forward. I know there's one in the drop-down pipeline and then the parent just recently bought another one. So are you expecting the pace to be this fast going forward as well or -- just your thoughts.

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [3]
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 Well, we haven't got that many ships left in the inventory currently with -- we will see when we get this Torill financing out of the way and perhaps, we'll see how the equity market looks. And I think probably early next year, first quarter next year, we might send that ship dropping to the MLP. But that's subject to the factors on equity we can raise and what kind of financings we do. So it can be longer than that. But after that, we'd probably take a bit of a breather, although it has been quite a big steep growth this year, and it's been good to lock in significant improvement in coverage on the MLP on the back of the increase in leverage on the preference issues. So I think the MLP looks very solid today and we look forward to growing it. I think the pace will slow next year, definitely. I can't....

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 Hillary Cacanando,  Wells Fargo Securities, LLC, Research Division - Associate Analyst   [4]
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 Yes. No, it makes sense. And then also could you just talk about the tender activity? I know you mentioned Petrobras earlier in your remarks but are you seeing any other -- what other tender activities are you seeing out there?

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [5]
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 Well, we believe that Transpetro as separate from Petrobras will also submit a tender as well but it's open for all kinds of shipping companies. So we'll just have to wait and see. We believe that the tenders for about the Petrobras tenders with 4 ships, but I can't actually specify the numbers that they want. I understand that there's about 4 or 5 DP1s that come in the next 1 to 2 years, and Petrobras have only started to really deliver them. And so they're phasing them out. And production has not been quite as aggressively growing next year. It's certainly not plateaued, and I think the pace is going to pick up in the next year or 2. So they're saying -- I mean, the tankers, we've been waiting for them to come to the market really. But it will be 2019, '20 before the first of those get delivered. So that again -- in case there will be a bit of a time line (inaudible) for the dedicated shuttle tanker [covenant] which, I think, is the sponsor's intention before we make further substantial drop-downs.

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Operator   [6]
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 The next question comes from Spiro Dounis with UBS.

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 Spiro M. Dounis,  UBS Investment Bank, Research Division - Director and Equity Research Analyst of Shipping   [7]
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 Just want to follow up in Hillary's first question there just around the drop-down inventory fleet. When you think about maybe growing that, I guess, 2 potentials stick out to me before getting into 2019 when those newbuilds would deliver, assuming you want some tenders. One of those would be going out and doing another third-party purchase either yourselves or through your sponsor. I guess, one, are there other opportunities like that available to you? And then the other sort of angle might be opening up to dropping down some LNG vessels at the sponsor. Is that something that's even on the table?

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [8]
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 It could be. It really depends. The first one, the Chevron ship was a nice vessel and it's an elementary vessel and there aren't that many quality (inaudible) around really. There are all those orders in the market, but they -- everyone's always in the market if the price is right. I don't think the pricing might be at all -- are probably suitable for us. So I think -- and also, you do tend to buy second-hand (inaudible) and buy other people's problems. So I think -- I never say never but I'm not convinced that because of the nature of the market as well and the fact the ships are locked in the contracts. And generally, most vessels from others owners have quality long-term contracts on them, so people are not that keen on selling. So that's not -- I'm not saying it's not going to happen, but it's less likely to happen, and [I'm not suspecting], in shipping. The other alternative -- LNGs are an alternative. The other alternative, I guess, is to put one into the older vessels in from the sponsor, but they basically have a different contract structure. Well, the market is much tighter there as well. That's a possibility or an alternative to the LNGs or alternatively, just as you build a (inaudible) quite well now. We're quite relaxed about us sitting tight for a year as well or having a gap year in growth for the MLP, if necessary. But yes, the -- I could imagine there will be discussions around an LNG fleet, but the yield is -- with the quality of contracts we've got now, the yield is quite high on this unit (inaudible) but again, I -- it's not my decision, that one, but it has been something that we had talked about. I hope that helps.

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 Spiro M. Dounis,  UBS Investment Bank, Research Division - Director and Equity Research Analyst of Shipping   [9]
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 No, no, that's fair. That's really what I was looking to sort of hear just in terms of what you think the realistic options are. So that makes sense. Just in terms -- you mentioned having the ability to, I guess, increase the distribution. It's something you've been a little reluctant to do. And like you said, you're getting credit for building that coverage. So no issues on that front. You guys have somewhat been rewarded for that. But as you think about what would make you increase the distribution, how do you think about that now? Is it an increase in the unit price? Do you need to reward that? Or how are you thinking about it these days?

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [10]
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 Well, I think also as well having the need to go to the market and take equity, as you've got a significant number of ships to place, the MLP would obviously -- you'd have to get more aggressive with the distribution in the current market. I think also if the unit price did go up, I think that's a possibility as well. But again, you have to have something -- I think something in the hopper to make it really worthwhile. We've got 2 ships left, and I'm pretty relaxed. And I think it's a fairly good risk/reward profile for the MLP to play so -- and there's no need to push the distribution too much (inaudible). I think if we had a significant inventory and we were going to grow the MLP in the very near term, I wouldn't -- and we weren't -- I wouldn't honestly be in a position where you have to put all (inaudible) in at the moment. I think a slow and steady growth is more beneficial for everybody. But if we were in a position where we have -- we have to evaluate when the next (inaudible) and evaluate what we do with the distribution, but I can't see a [space] to look for, that's for sure, and just fit in our purpose. This year, we've had -- I mean, bear in mind that beginning of -- less than 2 years ago, we were down $9, $10 considering the price now. We just feel that most people -- we want to be just to able to -- need to see how (inaudible) trading up and so we're quite comfortable with the way things are today. And you don't particularly need to push the distribution too much (inaudible) reduce quite a lot of the additional (inaudible) as you build in effectively.

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 Spiro M. Dounis,  UBS Investment Bank, Research Division - Director and Equity Research Analyst of Shipping   [11]
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 Yes. No, you've certainly come a long way from $10. So nice job on that. That's it for me, John.

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Operator   [12]
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 The next question comes from Ben Brownlow with Raymond James.

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 Benjamin Preston Brownlow,  Raymond James & Associates, Inc., Research Division - Research Analyst   [13]
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 Just wondering if you could quantify what the impact on OpEx was from the stronger Norwegian kroner.

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [14]
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 I think it was about -- probably about -- from about NOK 8.3 to about NOK 7.8. It's quite difficult to say exactly what it is. But generally, that sort of level is probably about -- is actually $200 or $300 a day on the vessel. I think it's no more than that. But I think the main area for the OpEx, it was significant difference. The Raquel Knutsen (inaudible) the insurance receipts were accounted for had quite an impact on the second quarter because the first quarter had a little bit of cost in it and the second quarter had quite a lot of insurance receipts in it. So it actually had a very low OpEx figure in the second quarter. Plus some of the ships that we want to deliver into the fleet like the new ones, the Tordis and the Vigdis, they also have quite low operating cost. So it's not that much. It is there. There is -- somebody would take a big move on the Norwegian kroner on the dollar rates have an impact on the earnings really. But that was just taken out of the G&A. Perhaps -- I have seen the figures. With all the new ships coming and the low OpEx in the first few months, it tends to distort a little bit the results as well as the Raquel Knutsen as well. So it's not a -- but I would say for about (inaudible) we're about $200, something like that, just being from about -- probably about NOK 8.3 to NOK 7.8 is what I'm guessing has gone back up again a bit now.

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 Benjamin Preston Brownlow,  Raymond James & Associates, Inc., Research Division - Research Analyst   [15]
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 Okay. That's helpful. And how should we think about, I guess, that vessel OpEx, just kind of run rate going forward? I assume it will be -- I mean, I guess, the puts and the takes in the fourth quarter from relocating the Carmen for drydocking. And just kind of as we think about before the next drop-down, how should we think about that kind of underlying run rate in vessel OpEx at this point?

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [16]
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 On the OpEx, I think -- well, we do actually -- you can see in the -- we do actually have 25 million in dollars swaps to -- and that's back into our Norwegian kroner exposure and the swap is about NOK 8.3 there so NOK 8.38 or something. So we are actually well covered. And often, ironically, as you can see in the results this time, the NOK is wrong -- has gone the wrong way. But obviously, the way we mark-to-market our instruments, you can see there's been quite a significant FX gain. It's an accessible way. The OpEx impact is quite heavily (inaudible) for the contract. So it tends to distort the results a bit. But yes, I mean, if you -- if the Norwegian kroner went down by, say, about 1, it would probably be $5 to $6 a day on the OpEx of the ship. So it's not material but it does have a little bit of an impact, and ships are probably clearing about -- the OpEx (inaudible) investments are between 13,000 and 14,000 a day, just so you get an idea. And the revenue is about [50]. So it's not that much but it is there.

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Operator   [17]
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 The next question comes from [Robert Silvera] with RE Silvera & Associates Marine Surveyors.

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 Unidentified Analyst,    [18]
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 My question involves hedging for fuel cost, bunker fuel. Could you give us some why on how you are hedged in this position, especially with crude oil heading in the states and WTI now at $57 a barrel?

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [19]
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 Well, we can actually -- we don't actually have an impact. The vessels are natively time chartered so that means we just pay -- we don't have to worry about the commercial cost of the ships. That was the major (inaudible). And I think -- I've always dealt with tankers, the rates are higher there, more on transports than the fuel anyway. So we don't worry too much about the residual cost of the vessel because obviously, the oil goes up in price there and (inaudible) goes up a lot more. So the vessels aren't actually -- we're not actually exposed as a business to the crude oil price. We have a little bit of impact because of (inaudible) are affected, but I mean, it's not significant in terms of the performance of this particular business.

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Operator   [20]
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 (Operator Instructions) The next question comes from Nick Raza with Citi.

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 Naqi Syed Raza,  Citigroup Inc, Research Division - Senior Associate of Oil and Gas   [21]
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 Most of my questions are answered. But just really quickly, just from an overall perspective, you spoke about some tendering activity. But could you talk about east Canada and the North Sea and just give us your view in terms of what sort of activities you expect out of there?

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [22]
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 The North Sea tends to be more CoA-focused at the moment with, obviously, Teekay Offshore ships for Statoil. We've also seen from some of our small investments a pick up in their CoA activity. But they're not on the MLP because they've been basically on short-term contracts. But we've seen quite a lot in the North Sea in terms of that. But nothing -- no structural contracts, no long-term unchartered at the moment. As far as Canada is concerned, there are still obviously the 3 Teekay ships delivering into Canada. And I think that's probably sufficient for the meat at the time being. We've still got 2 of our ships on charter out there. So I don't think those vessels are in that market, they will be in (inaudible). So with Brazil, this year, we've built quite a lot of ships (inaudible) for Petrobras Transpetro who have now put out a tender, so -- and obviously, Shell will take investment (inaudible) delivered quite a few vessels into -- and (inaudible) delivered 5 vessels (inaudible) so that's quite a lot but nothing more (inaudible) than that, (inaudible) I'm sorry.

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Operator   [23]
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 This concludes our question-and-answer session. I would like to turn the conference back over to John Costain for any closing remarks.

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 John Costain,  KNOT Offshore Partners LP - CEO and CFO   [24]
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 Thank you, everyone, for listening in, and thank you for some interesting questions. I always appreciate your interest. And let's hope the next year is as good as this year has been. Thank you very much.

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Operator   [25]
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 The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.




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