Partnership Expects Favorable Outlook for Future Shipping Market
The company said, "As at December 31, 2025: the Partnership had charters with an average remaining fixed duration of 2.6 years, with the charterers of the Partnership's vessels having options to extend their charters by an additional 4.1 years on average and the Partnership had $929.8 million of remaining contracted forward revenue, excluding charterers' options and charters agreed or signed after that date. As at December 31, 2025, the nineteen vessels which comprised the Partnership's fleet had an average age of 10.2 years. During Q4 2025, fifteen of the vessels in our fleet operated in Brazil. The market for shuttle tankers in Brazil has continued to tighten, in particular for the Suezmax vessel class around which that market has increasingly consolidated, driven by a significant pipeline of new production growth over the coming years, a limited newbuild order book, and typical long-term project viability requiring a Brent oil price of only $35 per barrel. Following a protracted period of muted demand in the North Sea region, positive momentum has been regained with the 2025 activation and ramp-up of multiple FPSOs spanning from the UK North Sea to the Barents Sea. The North Sea development pipeline continues to expand as well, with the announcement of new discoveries and multi-year projects intended to further augment production across the region, including at both the Goliat FPSO and Johan Castberg FPSO. On October 31, 2025, the Partnership received an unsolicited non-binding proposal from KNOT, pursuant to which KNOT proposed to acquire through a wholly-owned subsidiary all publicly held common units of the Partnership in exchange for $10 in cash per unit. The Conflicts Committee of the Partnership's Board, which is comprised of only non-KNOT-affiliated directors, retained Evercore Group, Richards, Layton & Finger, and IGB Group as independent advisors to assist it in evaluating the KNOT Offer. The Conflicts Committee and its independent advisors reviewed the KNOT Offer carefully and held a series of discussions with KNOT regarding the potential transaction since receiving the proposal. Following such discussions, on March 19, the parties announced that they were not able to reach an agreement and have therefore terminated discussions regarding the KNOT Offer. Looking ahead, based on supply and demand factors with significant forward visibility and committed capital from industry participants, we believe that the overall medium and long-term outlook for the shuttle tanker market remains favourable. In the meantime, the Partnership intends to pursue long-term visibility from its charter contracts, build its liquidity, pursue accretive dropdown transactions supportive of long-term cash flow generation, and position itself to benefit from its market-leading role in an improving shuttle tanker market. The Partnership continues to believe that key components of its strategy and value proposition are accretive investment in the fleet and a long-term sustainable distribution."
