Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) announced yesterday that it has signed a $260 million revolving credit facility secured by the Petrojarl Varg Floating Production Storage and Offloading unit (Petrojarl Varg FPSO) which was recently acquired from Teekay Corporation (Teekay) .

A portion of the new facility will be drawn to repay the $160 million
Tranche A of the $220 million vendor financing provided by Teekay at
the time of the Petrojarl Varg FPSO acquisition. The $60 million
Tranche B of the vendor financing will remain outstanding. The undrawn
portion of the new revolving credit facility will immediately increase
the Partnership’s liquidity by approximately $100 million. The new
facility was arranged through a syndicate of commercial banks led by
ING Bank N.V.

“Our ability to complete the syndication of a new revolving credit
facility on competitive terms in this challenging bank market reflects
both the diversity of our banking relationships and the quality of cash
flows generated by the Petrojarl Varg FPSO,” commented Peter Evensen,
Chief Executive Officer of Teekay Offshore GP LLC, the Partnership’s
General Partner. “The new facility is well-matched to the Petrojarl
Varg contract and provides additional liquidity which enhances the
Partnership’s financial flexibility.” Mr. Evensen added, “This
transaction is another example of the beneficial relationship we have
with our sponsor, Teekay Corporation. The interim vendor financing
enabled us to complete the acquisition of the Partnership’s first FPSO
unit on a timely basis, while the details of this facility were being
finalized.”

Teekay Offshore purchased the Petrojarl Varg FPSO from Teekay on
September 10, 2009 for $320 million. In July 2009, this FPSO unit
commenced a new a four-year fixed-rate contract extension (including
options to extend the new contract for up to an additional nine years)
with Talisman Energy on the Varg oil field in the North Sea, where the
FPSO has been operating for over ten years.

Source: Teekay Offshore Partners

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