Teekay Offshore Partners LP (NYSE:TOO) Q4 2018 Earnings Conference Call Transcript
Feb 08, 2019 • 12:00 pm ET
Welcome to Teekay Offshore Partners' Fourth Quarter 2018 Earnings Results Conference Call. During the call, all participants will be in a listen-only mode. Afterwards you will be invited to participate in a question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded.
Now, for opening remarks and introductions, I would like to turn the call over to Ingvild Saether, Teekay Offshore Group's President and Chief Executive Officer. Please go ahead.
Jan Rune Steinsland
Before Ingvild begins, I would like to direct all participants to our website at www.teekayoffshore.com, where will you (ph) find a copy of the fourth quarter 2018 earnings presentation. Ingvild and I will review this presentation during today's conference call.
Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statement is contained in the fourth quarter 2018 earnings release and earnings presentation available on our website.
I will now turn the call over to Ingvild to begin.
Thank you, Jan Rune. Hello everyone, and thank you for joining us on our fourth quarter investor conference call. With me today, I have Jan Rune Steinsland, the CFO of Teekay Offshore Group.
During 2018, and in the fourth quarter, we experienced great progress, both operationally and commercially. Teekay Offshore generated adjusted EBITDA of $290 million this quarter, which is up $117 million or 68% from the prior quarter. The primary driver of this significant increase over the third quarter is related to the Petrobras settlement and higher earnings in our shuttle tanker fleet.
As we announced previously, we came to a positive settlement agreement with Petrobras for a total of $96 million. $55 million of this settlement has already been received, with the remainder to be received in 2020 and 2021.
Today, we announced a contract extension for up to three years on the Piranema Spirit FPSO, with our existing customer, Petrobras, which I will speak more about later in this presentation.
Our shuttle team was also very busy this quarter, securing five new shuttle CoA contracts, primarily renewals to existing customers, servicing existing fields. And our towage segment was awarded a towage and installation contract for Total's Kaombo Sul project, where we had utilized five of our vessels in January, and the project will require a total of 300 to 350 vessel days.
I will now turn it over to Jan Rune to go over the financial results.
Jan Rune Steinsland
Thank you, Ingvild. I would, first of all, like to draw your attention to the fact that in the fourth quarter 2018, we have made certain changes to our non-GAAP financial measures to more closely align with internal management reporting, annual reporting with the SEC under Form 20-F, and metrics used by our controlling unitholder.
Primarily cash flow from vessel operations, CFVO, from consolidated vessels and total CFVO, are replaced with consolidated adjusted EBITDA and adjusted EBITDA, respectively. Distributable