KNOT Offshore Partners Q4 2024 Earnings Call Transcript

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Provided by Quartr
March 20, 2025

There are 6 speakers on the call.

Operator

Good morning, and thank you all for attending Enoch Offshore Partners Fourth Quarter twenty twenty four Earnings Call. My name is Brica, and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the call over to your host, Derek Lowe, Chief Executive Officer and Chief Financial Officer of Knott Offshore Partners. Thank you.

Operator

You may proceed, Derek.

Speaker 1

Thank you, Brika, and good morning, ladies and gentlemen. My name is Derek Lowe, and I'm the Chief Executive and Chief Financial Officer of Connaught Offshore Partners. Welcome to the Partnership's earnings call for the fourth quarter of twenty twenty four. Our website is kwnottoffshorepartners.com, and you can find the earnings release there along with this presentation. On Slide two, you will find guidance on the inclusion of forward looking statements in today's presentation.

Speaker 1

These are made in good faith and reflect management's current views, known and unknown risks and are based on assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied in forward looking statements, and the Partnership does not have for undertaker duty to update any such forward looking statements made as of the date of this presentation. For further information, please consult our SEC filings, especially in relation to our annual and quarterly results. Today's presentation also includes certain non U. S.

Speaker 1

GAAP measures, and our earnings release includes a reconciliation of these to the most directly comparable GAAP measures. On Slide three, we have the financial and operational headlines for Q4. Revenues were $91,300,000 operating income $34,700,000 net income $23,300,000 dollars adjusted EBITDA was $63,100,000 We closed Q4 with $90,000,000 in available liquidity made up of $67,000,000 in cash and cash equivalents, plus $23,000,000 in undrawn capacity on our credit facilities. We operated at 98.3% utilization, and the vessel time available for scheduled operations was not impacted by any planned drydocking. Following the end of Q4, we declared a cash distribution of US0.2 $6 per common unit, which was paid in early February.

Speaker 1

On to Slide four. Our outlook remains positive on both industry dynamics and the partnership's positioning to participate fruitfully in our markets. Significant growth is anticipated in production in fields which rely on service by shuttle tankers. In particular, we've seen Brazilian FPSOs delivering and starting up ahead of schedule with quite a few still to come. In the North Sea, the long awaited Johan Casberg FPSO is expected to start production shortly, while the Penguin's FPSO began production recently.

Speaker 1

Penguin is Shell's first new operated platform in the North Sea in over twenty years, bringing production back to a field that's been offline since the decommissioning of the prior generation platform in 2021. On Johan Casberg, we're aware of some media speculation that a KNFP vessel has already offloaded cargoes, but I can clarify that this operation was our vessel coming alongside still as part of the commissioning process. Nonetheless, the picture at Johan Casberg is positive, and we look forward to operations there. On the vessel supply front, we're seeing continued new build orders placed in order to service the large new production volumes coming online in the years ahead, including for our sponsor, Knutsen MYK. A measured amount of new shuttle tanker ordering is unavoidable and, in fact, necessary as a shortage of shuttle tanker capacity remains projected in the coming years.

Speaker 1

As usual for the shuttle market, we believe that all known newbuild orders are backed by firm client charters, which minimizes or even eliminates the dynamic of speculation around anticipated supply into the global fleet in two to three years' time. The partnership remains financially resilient with a strong contracted revenue position of $870,000,000 at the end of Q4 on fixed contracts, which averaged two point four years in duration. Charterverse options are additional to this and average a further four point eight years. With the market having strengthened and given expectations for tightness in the years ahead, the economic rationale for exercising these options has been strengthening, and we increasingly expect these options to be taken up. Our near term chartering exposure has been addressed by a swap of the Dan Sabia for the Leverknotsen, which we announced on the February 27.

Speaker 1

And our passive cash generation and liquidity balance is sufficient for our operations and the significant pay down rate for our debt, which is in the region of $90,000,000 per year for instalment payments. The debt on the Lieber acquisition fits in with this repayment profile also. On Slide five, a number of developments in Q4 were announced already on the previous earnings call, including a new charter for Hildeknotsson, which is about to begin. On Slide six, our most recent developments include closeout of the insurance claim for Toroknotsson dating back to January 2024, totaling a bit less than $6,000,000 a brief option exercise for Brasil Knutsen and for Vigdis Knutsen, a switch to bareboat and extension of fixed duration by three years out to 02/1930, along with an option for a further two years. The most important recent development is on Slide seven, showing a swap of the Dansarbia for Lieber Knutsen.

Speaker 1

Lieber has brought nearly five years of fixed or guaranteed future charter revenue, and this swap was a significant step in fleets and pipeline growth without the need for new funding. Additionally, this transaction leaves our fleet wholly concentrated in the most in demand shuttle tanker classes. On to Slide eight, you can see consistent and growing revenues over the quarters and years, along with improving profitability. Slide nine similarly reflects consistent and growing adjusted EBITDA, and you can find the definition of this non GAAP measure in the appendix. On Slide 10, there are two notable points in the balance sheet over 2024.

Speaker 1

The first is that four of our debt facilities have moved up from long term to current liabilities because of their upcoming maturities. The second is that even after the assumption of debt involved in the Tuber acquisition in September, our overall liabilities decreased by $29,000,000 in 2024 as we continue to make contractual debt repayments in the area of $90,000,000 per year. The debt facilities can be seen on Slide 11, which sets out the maturity profile. On line one, the first of our revolving credit facilities is due to mature in August 2025. And on line two, the loan secured by Toberknotsson and Sonovaknotsson matures over September and October 2025.

Speaker 1

The second revolver matures in November 2025. We typically seek to refinance such facilities on very comparable terms, and we have a good track record of refinancing success even in less favorable market environments. The highlighted column shows how the outstanding balances of each facility have been reducing because of the repayments we've been making in line with scheduled repayment terms. The current installments are the amount of capital repayment due over the next year, which do not include interest or the final balloon payments due on the maturity dates. Of note, $93,000,000 in current installments is due to be paid during 2025.

Speaker 1

Our typical pattern is for our vessels to provide security for our debt facilities, and that applies to 17 out of the 18 vessels in the fleet as of the December 31, with the one exception being Dansawbia, which is the vessel we sold earlier this month. Dollars $883,000,000 out of $910,000,000 in debt facilities at December 31 are secured by vessels, while the two revolving credit facilities, totaling $50,000,000 of capacity, are unsecured. The Lieberknotsson, which we acquired earlier this month, has CHF 73,000,000 of secured debts attached maturing in October 26 and on very similar terms and conditions to the other secured loans shown here. The maturity profile of these debts is set up graphically on Slide 12. As you can see, repayments are spread out over the coming years, which include material balloons in each of 2025 and 2026.

Speaker 1

Slide 13 shows the contracted pipeline in chart format, reflecting the developments I set out earlier as well as the fact that Raquel Knutsen's option period is the only material outstanding period for the year as well as the possibility of brief off hire as the Brazil Knutsen transitions between charters. While nothing is certain until it's formally in place, we are cautiously optimistic about securing that additional coverage in the current tight market, either as an extension or under a new charter. Similarly, Slide 14 highlights an encouraging 94% of fixed charter coverage for 2025. We currently have 75% of 2026 fixed as well, although the open percentage does rise materially over the course of the year, which demonstrates the need for our continuing commercial efforts. On Slide 15, we see our sponsor's inventory of vessels, which are eligible for purchase by the partnership.

Speaker 1

This applies to any vessel owned by or on order for our sponsor, where the vessel has secured a firm contract period at least five years in length. At present, four existing vessels and five under construction fall into this category. There's no assurance that any further acquisitions will be made by the partnership, and any transaction will be subject to the board approval of both parties, which includes the partnership's independent conflicts committee. We continue to believe that key components of K and N P's strategy and value proposition are accretive investment in the fleet and a long term sustainable distribution. As such, we intend to pursue long term charter visibility and accretive dropdowns supportive of long term cash flow generation.

Speaker 1

On Slides 16 to 18, we provided some useful illustrations of the strong demand dynamics in the Brazilian market as published by Petrobras. We encourage you to review Petrobras' materials directly at the web pages shown there. The primary takeaway from each of these slides is consistent. There's very significant committed demand growth coming in the Brazilian market in the form of new FPSOs that will require regular service from shuttle tankers. We believe that recent reports of additional vessel construction contracts are an endorsement of the strong anticipated market conditions in the medium and longer term.

Speaker 1

Five outstanding newbuild contracts are off for our sponsor, Knutsen MYK, and are due for delivery by the end of twenty twenty seven. We would not be surprised to see further newbuild orders placed in order to service the larger new production volumes coming online in the years ahead. In the trend that also applies to oil production globally, you'll see that even in the years ahead where aggregate production growth slows, deep offshore production, in this case, the Brazilian presold, continues to outpace the overall market and take market share. On Slide 19, we provide information relevant to our U. S.

Speaker 1

Unitholders and particularly those seeking a Form ten ninety nine. Those holding units, whether they're custodians or brokers, should approach those parties directly. Those with directly registered holdings should contact our transfer agent, Acinity Trust Company, whose details are shown there. On Slide 20, we include some reminders of the strong fundamentals of our business in the market we serve, our assets, competitive landscape, robust contractual footprint and resilient finances. I'll finish with Slide 21, recapping our financial and operational performance in Q4 twenty twenty four and the subsequent time and our current outlook.

Speaker 1

We are glad to have delivered high and safe utilization, which have generated consistent financial performance. We're delighted to have taken the further growth step by swapping Dan Sabi for Lever Knutsen. Our continued commercial focus remains on adding to our longer term charter visibility and the cash flows that provide us with the capacity for both accretive investment in the fleet and a long term sustainable distribution. And in the coming months, we will also be addressing the four refinancings which are coming due this year. In total, though, we are making good progress and are pleased to have established positive momentum against an improving market backdrop.

Speaker 1

Thank you for listening. And with that, I'll hand the call back to Brica for any questions.

Operator

Thank you, Derek. We will now begin the question and answer session. Session. We have the first question on the line from Liam Burke with B. Riley Securities.

Operator

You may proceed.

Speaker 2

Thank you. Hi, Derek. How are you today?

Speaker 1

I'm good. Thank you. And you?

Speaker 2

I'm doing just great. Thank you. Derek, you've got a long history of being able to refinance high quality assets. You're improving, your liquidity is improving. Your cash flow is up year over year, up nicely.

Speaker 2

How do you think about allocation of capital now that you've got a fairly safe lease book here?

Speaker 1

Well, we are pleased thank you. We are pleased with the way things are going. I mean, I would say at the moment that we do count in our freely available liquidity $50,000,000 worth of RCF capacity. So $90,000,000 isn't $90,000,000 of cash without other considerations. And that's probably the first thing to be mindful of as you look at those balances.

Speaker 1

We don't take anything for granted in our debt renegotiations and the world is perhaps a slightly more volatile place now than it has been in the last couple of years. And so we're going to proceed with those debt renegotiations in good time, well ahead of the maturity dates as we usually do. I agree our track record on that is good and we don't see any particular obstacles there, but nonetheless that is a more immediate priority. And then into the medium term, we are still looking to fill spaces in our charter coverage next year. If you saw on Slide 14, I think, the coverage averages 75% fixed for next year, but clearly, it drops away over the course of the year.

Speaker 1

And that's something that from our chartering team are particularly concerned to fill up. So there's a number of priorities there already. But the in terms of use of capital, which I think was your basic question there, the board continues to think it's in the long term interests of the unitholders to both to consider accretive acquisitions and a long term sustainable distribution, and they have both of those things in mind as they look at decisions that they make.

Speaker 2

Okay. Fair enough. On the charter coverage, obviously, you've mentioned 75% covered in the next year. If you're looking at the amount of FPSO or production activity coming online, either in the North Sea or in Latin America. Do you are you comfortable that your available vessels will fit into that demand profile?

Speaker 1

Yes. We don't have any signals that they won't be, and they're all of the specification that fits.

Speaker 2

Okay. All right. Thank you, Derek.

Speaker 1

Thanks, Liam.

Operator

Thank you. We now have Poe Fratt with Alliance Global Partners. Your line is open.

Speaker 3

Dare, can you address the open windows for 2026 for the Ford lease and is it the receipt fee or receipt? Are we potentially facing the same situation we had with the Jan Sabia and the other smaller shuttle tanker that was on airboat charter to Trans Petro? Can you just address sort of the specs of those vessels and how you're looking at re chartering at this point in time?

Speaker 1

Sure. Yes, ForzaLaser and Recife, and on you're looking at Page 13, I think, aren't you, where they those charters expire outside the middle of next year. I think the main difference is between those and the two dams are size. I mean, the Fortilaser and Receipt are approximately double the capacity that Cissna and Serbia have. So we're far less concerned about the ability to continue deploying them than we were with Cissna and Serbia.

Speaker 3

That's helpful. But there isn't any option there. When are you currently trying to line up time charters for those or is it too early to work on those?

Speaker 1

We work on all open periods all the time.

Speaker 3

Okay. Any interest in those or can you give us a flavor for you know the Yeah.

Speaker 1

I can't You

Speaker 3

said you were confident You said you were confident. So what kind of confidence interval should I use?

Speaker 1

Well, that's a market conditions observation. I mean, we don't comment on individual negotiations until we've got something that's signed and announceable.

Speaker 3

Okay. Can you just address the shift in with Shell on the Vigness or Vigness? Why did they decide to flip over to bareboat chartering the shuttle tanker? And can you just give us the dynamics of that decision? And then also is there an impact to the net cash flow that will be generated from that shuttle tanker?

Speaker 1

Yes. I mean the first I'll answer your last point first. The fairboat terms are commercially comparable to the terms that would have applied under the previous time charter. And so from a financial point of view, we are obviously content with that switch. It's also been extended as well.

Speaker 1

So we've got fixed coverage for that vessel for longer as part of that negotiation process, which obviously is welcome too. In terms of Shell's intentions, there are benefits of an oil major operating their own fleet rather than putting them out on management contracts and and that's what I expect Shell were looking at. I mean, they've had that the an option to make that switch in place since the original time charters were put in place. So that option, yeah, they've had they've contemplated that for some time.

Speaker 3

It does lower your operating risk on that shuttle tanker, correct? And then can you highlight whether any other time charters have the same option to ship to bareboat?

Speaker 1

Yes. I don't think any come to mind at the moment. If that's incorrect, we'll get back to you, but none come to mind at the moment.

Speaker 3

Yes. It's interesting too because I'm not sure if you saw the recent award of I think it was nine shuttle tankers where Petrobras or Trans Petro intends to bareboat charter the vessels, which seems I'm just trying to figure out why the shift to potentially bareboating instead of just straight time chartering?

Speaker 1

Yes, that's probably a question for the, for that best learner.

Speaker 3

Okay. And then, we always play a game of cat and mouse with the time charter rates and the renewals and extensions and it's always interesting and you never give sort of specific guidance. But can you just highlight the large jump sequentially in time charter revenue? You seem to be all of a sudden hitting a new level. And can you talk about the forward looking time charter book?

Speaker 3

Will is $84,000,000 in time charter revenue a reasonable expectation going forward? Or is there was there something in the fourth quarter maybe bonuses or other things that would have pushed that number up that won't recur in the first half of twenty twenty five?

Speaker 1

Yes. I appreciate the question and the reason for it. We have the same competitive issue that we don't think it makes sense to expand on day rates too much. There weren't any bonus type elements in that number. So one offs, for example, the insurance payment you can see was received and accounts for separately.

Speaker 1

So it's not as if that's included. The biggest difference is that we had some new operations starting in the fourth quarter. So if you go back to, I think it's slide five, and those are developments that we discussed on the last call actually, because they just happened already by that stage. We've got

Speaker 3

The Ingrid, they talked about the Yes.

Speaker 1

Yes. And so Ingrid and Toll were new operational starts and the others were news about future contracts, but they sort of don't count in that on that point. In terms of what will happen to that line, that 84 line, in the future, well, that comes back to what are the new operations, well, question, are there any operations that come through in Q1, Q2 and so on, which would impact that? And the answer to that is yes. So we've got, particularly the swap out of the Saabian and swap in of the lever, which obviously was closed on the March 3 and therefore will apply to a small extent to Q1 and then in full in Q2.

Speaker 1

And as you're aware, we've got the Hilda due to go on higher by the end of this month. And so minimal impact from that in Q1, but the Q2 figures should reflect full quarter of that Hilda commercial contract as well. So it's down to

Speaker 4

I'd

Speaker 1

say the more notable changes won't be particularly down to rate, which I understand is what you're looking for as well, but simply the fact of, chances of starting.

Speaker 3

But we have hit a new level. And as you mentioned that new level was driven by pretty much the Ingrid and the Hilda early in the quarter and then the Toro later in the quarter? Yes. Okay. And then can you share with us the potential impact to backlog of the Liva acquisition because that potentially I assume that's not in the stated backlog of $870,000,000 Can you give me a ballpark on how that will change the backlog the contract backlog?

Speaker 1

Yes. I mean, we can't give specific numbers on that. But what you would want to look at is when was it that, that rate was set, because the market really is around when you contract a rate rather than when the rate is being earned once the vessel is on higher. And of course, for the vessel that's on her first charter after delivery, that rate was set at the point when the newbuild order was made for her. So if you backdate from the delivery date by a reasonable period to allow for construction, you're looking at market levels that were contracted around then.

Speaker 1

I can't guide you as to what those were specifically, but that will give you an idea. So the fact that the vessels newly arrived in March of twenty twenty five doesn't make it a March 2025 sort of rate.

Speaker 3

Understood. But it will have a it'll add what's five point five, six years of contract backlog or contracted revenue to that contracted backlog number. So in the second

Speaker 1

quarter Yes, it's under five

Speaker 3

November. Okay. Can we talk about OpEx? There was a big drop in OpEx in the fourth quarter versus third quarter. You highlighted the impact of what was it the, I think the return of the one of the dams, right?

Speaker 3

Can you just talk about sort of the run rate for OpEx in the first half of twenty twenty five?

Speaker 1

Yes. Well, you should see a similar impact of the other dam coming out of the fleet. In fact, a very close equivalent because

Speaker 4

the

Speaker 1

sale of each of those vessels was just two months into the quarter into the half year. And so you should find that the further impact of on OpEx of the SAVIA being sold should be fairly similar.

Speaker 3

Can you quantify the impact of the Dan SAVIA in the third quarter? Because I don't recall that you actually talked about that on the December call.

Speaker 1

If you look at, say, a fairly reasonable OpEx rate assumption and then look at the times when she was on contract versus not, that would give you a good guide.

Speaker 3

Okay. And just to summarize, so the first quarter will be impacted from a cost standpoint, but then the second quarter of twenty twenty five shouldn't see a similar impact?

Speaker 1

Not for those reasons, no, because the, we won't have had any vessels off fire that we'd be paid for.

Speaker 3

Okay. And is there any outstanding off hire, receivable any at this point in time or is that all cleared up and you have nothing in negotiations as far as off hire reimbursement or anything like that, Derek?

Speaker 1

No, nothing significant. The biggest one was the for the TORO claim which we've discussed on a number of quarters I think and is that completed in January.

Speaker 3

Yes. That was a pleasant surprise. Thanks for your time.

Speaker 1

Great. Thanks, Beau.

Operator

Thank you. And we now have the next question from Marill Edsblom with First New York. Please go ahead.

Speaker 4

Hi, gentlemen. Thank you very much for the opportunity to ask questions. I guess my first question is to see if I'm thinking about this right. If I take a quarter like this and a full year of a quarter like this, you would probably have like cash flow before debt amortization of about $160,000,000 a year. And if you have $90,000,000 a year of amortizations, you're talking about almost $70,000,000 of cash flow after amortizations per year.

Speaker 4

Am I wrong in my analysis?

Speaker 1

If you included interest in the first line you gave us, did you do that?

Speaker 4

Yes, of course, I did. I did, yes. It's I subtracted the interest and the insurance from this quarter and nearly like a $40,000,000 of cash flow. You had a $63,000,000 of EBITDA, something like that takes $6,000,000 and then the $16,000,000 of interest. And that's where you land.

Speaker 4

So this is more than $2 per share of cash flow after amortizations now. And so it's quite a hefty number. Now I understand that you want to be secure with your you want it to be recurring in order to pay your dividend or not, but there's a lot of recurring cash flow that is already there. So do you think you have to have 100% charter coverage in order to increase the distribution to match it a little bit to the $2 change per year? And this is before the increases that you just described that are likely to come.

Speaker 4

So I'm just a question of how I mean, could we see maybe a little bit more dividend because there's a big difference between paying all the cash flow and some other cash flow. If you could give us a little bit more color on how you think how you're thinking about it, I would appreciate it.

Speaker 1

Yes. Yes. Thank you for the question. Well, the board's view is that the long term interest of unitholders are served both through accretive investment and the long term sustainable distribution. And we think those things come together.

Speaker 1

The partnership started with four vessels twelve years ago and is now at 18 vessels through that combination. So we expect that balance to continue in the minds of the board as they look forward. You annualized some figures, obviously that we've had one quarter that you've used for that basis and that time needs to pass and the new charters that are starting need to feed through to the results I think to get to the position that you were describing. So that in itself is some way off. The last point you say, would there be some sort of threshold passed if we had 100% charter coverage?

Speaker 1

Well, the thing is that there's a continuing, there's a rolling need to renew, charters. And so a high 90s percentage for a foreseeable period is not going to last simply with the passage of time. So clearly a good level of coverage is always going to be sought and welcome. But there's a lot of optionality in the charter outlook as you can see on slides, I think, thirteen and fourteen, especially 14, you can see the fixed periods dropping away during the course of next year. So that's why there's a continuing rolling commercial focus on filling up the charter schedule.

Speaker 4

Thank you for that and I agree with that. There is some sense of a connection between your decision to pay more dividends and the charters. And as you just said, you will always have some charters rolling off. So that would mean that you perhaps would never want to pay a dividend using that logic. I'm not suggesting that that's your point of view, but I'm just sort of extrapolating that logic.

Speaker 4

As unitholders

Speaker 1

Yes, I appreciate it. Apologies. Do go ahead, sorry.

Speaker 4

No, no. That was it. I guess, let me move on. I understand what you're saying. I wanted to sort of think that as a unit holder, there's quite a bit of room now to pay dividends.

Speaker 4

You could pay maybe a you could have a policy where you pay 40% or 50% of the cash after amortizations. And that might be the beginning of the enumerated. Let me ask another question in terms of

Operator

when

Speaker 4

you I imagine that there's four vessels now that you made purchase in the that are now actually out there on the water. Two of them are in Brazil and two of them are in the North Sea. Would you buy some in the North Sea given that the long term outlook for that market is smaller and the growth rate is not so not as secure as in Brazil?

Speaker 1

Yes, that's a question that our conflicts committee would be looking at definitely when we're looking at dropdown. So we have some listeners may not be aware, we have a committee of the independent members of our board who look at any transaction that is contemplated with our sponsor, so it's called the conflicts committee, and they take independent financial and legal advice when any potential transaction comes along. And that's exactly the type of question that they would be considering. Is any given vessel and the associated commercial exposure of that vessel the right thing to look at? It's not simply the terms of a transaction.

Speaker 4

Okay. And then the final question is like, I understand that the drop downs with the stiffness was makes a lot of sense. But now if you do drop downs, likely to do them with cash. How would you look at the difference between the cash deployed to buying back shares versus a drop down? I would think the cash to the shares, there's a lot higher return investment right now than doing a transition at drop down.

Speaker 4

Would that be something that you would consider when you make your decision?

Speaker 1

Well, the board is looking at the long term interest of unitholders. And so they look at the two together not necessarily regarding a business in some way competing with each other. So yes, those two factors are always considered, but the sustainability on the distribution side, particularly the sustainability of this is very much in the board's minds.

Speaker 4

Okay. All right. Thank you very much for your first few last questions.

Speaker 1

Great. Thank you.

Speaker 4

Congratulations. It's a very good report.

Speaker 1

Thank you very much.

Operator

Thank you. We have a follow-up from Poe Fratt from Alliance Global Partners. Please go ahead when you're ready. Please ensure your line is unmuted locally before speaking.

Speaker 3

I apologize. Yeah, you probably didn't think I had another question, Derek, but I do. Can you look at first quarter utilization? And how has utilization been this quarter? And can you highlight any drydocking activity that you know about for the either the first quarter or the rest of the year?

Speaker 1

Sure. We I don't have any specific disclosure to you on utilization during the first quarter, but we haven't had any issues that we'd like to disclose to you. Let's put it in those terms. The drydocks I appreciate the chart's a bit small, but on Page 13, we've highlighted when in the year the drydocks are appearing and also which drydock it is in case you want to make different assumptions about the drydocks that happen at different stages in the vessel's life. So you can see those figures there.

Speaker 1

We are looking at four vessels during the course of this year.

Speaker 3

Got it. The Windsor, the Raquel, the Tove and, and the Tuba, correct?

Speaker 1

Yes, I think Tuva might be slightly later into '26.

Speaker 3

Okay. Great. That's helpful. Thank you.

Speaker 1

Right. Thank you.

Operator

Thank you. And we now have Clement Mullins with Value Investors Edge. Please go ahead.

Speaker 5

Hi. Thank you for taking my questions. I wanted to start by asking about your debt repayment schedule pro form a for the recent swap of the Dansavia for the Lief Knutsen. Could you talk about how much the facility on the Lief Knutsen adds to the scheduled debt repayment for 2025?

Speaker 2

Yes. We

Speaker 1

will be disclosing more details of the debt facility on that vessel when we filed our '20 F. And as we've not expanded on that detail in this disclosure, I think it's probably best if you wait for that. But it's you'll find it highly recognizable by comparison with other debt facilities.

Speaker 5

Makes sense. And this one is more market related. Over the past couple of years, the North Sea had lagged behind the Brazilian market. Does the Penguins and Johan Castor Vertex startup have the potential to let's call it close the gap?

Speaker 1

Well, they are, yes, I'll be just we're not necessarily seeing the comparison in that way. I mean, they're clearly extremely welcome and long awaited production starts in the North Sea, and they are the key difference to pick up in the North Sea market that's been anticipated for some time. But the aside from that, I mean, clearly, we welcome strengthening in both markets, but it's quite hard to make a comparison as if one is catching up with the other and so on.

Speaker 5

All right. Thanks for the color. Thank you for taking my questions.

Speaker 1

Thank you. Thanks.

Operator

Thank you. I can confirm we have three more questions in the queue. So I would now like to hand it back to Derek for some final closing comments.

Speaker 1

Thank you, Brika, and everyone again for joining this earnings call for Connaught Offshore Partners fourth quarter in 2024. And I look forward to speaking with you again following the first quarter results.

Operator

Thank you all for attending today's earnings call. I can confirm today's call has now concluded. You may now disconnect and thank you all for your participation.

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Earnings Conference Call
KNOT Offshore Partners Q4 2024
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