KNOT Offshore Partners LP Price & Performance (KNOP)

You, Prika, and good morning, ladies and gentlemen. My name is Derek Lowe, and I'm the Chief Executive and Chief Financial Officer of KNOT Offshore Partners. Welcome to the partnership's earnings call for the fourth quarter of twenty twenty four. Our website is kNOToffshorepartners.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. 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 contingent 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 or undertake a 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. 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 34,700,000.0 net income 23,300,000.0 Adjusted EBITDA was 63,100,000.0 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 2 point dollars per common unit, which was paid in early February. 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 Castberg FPSO is expected to start production shortly. While the Penguins FPSO began production recently. Penguins is Shell's first new operated platform in the North Sea in over twenty years, bringing production back to a field It's been offline since the decommissioning of the prior generation platform in 2021. On Johan Castberg, we're aware of some media speculation that the KNOTP vessel has already offloaded cargoes.

But I can clarify that this operation is our vessel coming alongside still as part of the commissioning process. Nonetheless, the picture at Johan Gassberg is positive, and we look forward to operations there. On the vessel supply front, we are 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, KNOTZM MYK. A measured amount of new shuttle tanker ordering is unavoidable and, in fact, necessary as a a shortage of shuttle tanker capacity remains projected in the coming years. 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 and fixed contracts, which averaged two point four years in duration Chancellor's options are additional to this and average a further four point eight years. With the market having strengthened, [indiscernible] expectations for tightness in the years ahead, the economic rationale for exercising these options has been strengthening.

We increasingly expect these options to be taken up. Our near term chartering exposure has been addressed by a swap of the Dan Sabya for the Leverknutsen, which we announced on the February 27. And our patent 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 installment payments. The debt on the Lever 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 at Hilter Knutsen, which is about to begin. On Slide six, our most recent developments include closeout of the insurance claim for Toral Knutsen dating back to January 2024, totaling a bit less than $6,000,000. A brief option exercise for Brazil KNOTZEN, 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 Danzabia for Lieberknutsen. Lieber has brought nearly five years of fixed or guaranteed future charter revenue, and the swap was a significant step in fleet 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. 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 sheet over 2024. 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 set 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 Toberknutsen and Sonovaknutsen materials over September and October twenty twenty five. 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 date. Of note, dollars 93,000,000 in current installments is due to be paid during 2025. 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 thirty first December. With the one exception being Dansabia, which is the vessel we sold earlier this month. $883,000,000 out of $910,000,000 in debt facilities at December 31 are secured by vessels while the two revolving credit facilities taking $50,000,000 of capacity are unsecured. The Lieber Knutsen, which we acquired earlier this month, have £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. Maturity profile of these debts is set out graphically on Slide 12. As you can see, repayments are spread out over the coming years, but include material balloons in each of 2025 and 2026.

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 the only material outstanding period for the year as well as the possibility of brief off hire the Brazil KNOT some transitions between charters. While nothing is certain until it's formally in place, we are cautiously optimistic about securing that additional coverage 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. Demonstrates the need for our continuing commercial efforts. On Slide 15, we see our sponsors' inventory of vessels are eligible for purchase by the partnership. 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 KNOT 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. On Slide 16 to 18, we've 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 page as 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. Five outstanding newbuild contracts are off for our sponsor, KNOTZEN 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 large 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 pre salt continues to outpace the overall market and take market share.

On Slide 19, we provide information relevant to our US unitholders and particularly those seeking a form ten ninety nine. Those holding units via their custodians or brokers should approach those parties directly. Those with directly registered holdings should contact our transfer agent, Equinix 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. 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 Tansabi for Leverknutsen Our continued commercial focus remains on adding to our longer term charter visibility and the cash flows that provide us with 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, are making good progress are pleased to have established positive momentum against an improving market backdrop.

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

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

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

Fine. I'm good. Thank you. And you?

I'm doing just great. Thank you. Eric, you've got a long of being able to refinance high quality assets. [indiscernible] improving your liquidity is improving. Your cash flow is up year over year. Up nicely. How do you think about allocation of capital now that you've got a fairly size, you know, safe lease book here?

Well, 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 isn't 90 of cash without other considerations. That's probably the first thing to be mindful of as you look at those balances. We don't take anything for granted in our debt renegotiations. And 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 as we usually do. I'm I'm 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 next year, but clearly it drops away over the course of the year. And that's something that, from from our chartering team, we're 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 the long term sustainable distribution and they have both of those things in mind. As they look at decisions that they make.

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

Yeah. We don't have any we don't have any signals that they won't be. They're all of the specification that that that fits Okay. Alright. Thank you, Derek.

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

Derek, can you address the open windows for 02/1926 for the Fortaleesa and the is it the receipt fee or receipt? Are we potentially facing the same situation we had with the Dan Sabia and the other smaller shuttle tanker that was on airboat charter to Transpetro. Can you just address sort of the specs of those vessels? And how you're looking at free chartering at this point in time? So, yes, Portalasia and Recife, and on you're looking at page 13, think, aren't you, where they charters expire? Outside the middle of next year. I think the main difference is between those and the two dams are size. I mean, though the Fortilage And Receiver Are Approximately Double Capacity That Cisner and Sarbia have So we're far less concerned about the ability to continue deploying them than we than we were [indiscernible] That's helpful.

But there isn't any option there you know, when are you currently trying to, you know, line up time charters for those, or is it too early to you know, work on those?

Oh, we work on all open periods all the time.

Okay. Any interest in those? Or can you give us a flavor for you know, the Yeah. I thought I thought you were conscious You said you were confident. So what kind of confidence inter interval should I use?

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

Okay. What can you just address the shift in with Shell on the Vigness Vigness or Vignus. 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.

Yeah. I mean, the first I'll I'll answer your last point first. The bareboat 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 being extended as well. So the we've got fixed coverage for that vessel for longer as part of that that negotiation process, which obviously is welcome too. In terms of Shell's intentions, there are benefits of [indiscernible] [indiscernible] pushing them out on management contracts and and that's what I expect Shell were looking at. I mean, they they've had that [indiscernible] an option to make that switch in place since the original time charters were put in place. So that option, you know, they've had they've contemplated that for some time.

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 shift to bareboat Yeah. I don't think any comes to mind at the moment. And if that's if that's incorrect, we'll get back to you, but none none come to mind at the moment.

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

Yeah. That's probably a question for the for that best learner.

Okay. And then, you know, we always play a game of cat and mouse with the time charter rates. And, you know, the renewals and extensions and, you know, it's always interesting and, you know, you can 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? 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 February?

Yeah.

I I appreciate the question and the reason for it, and we we have the same competitive issue that we don't think it makes sense to expand on on day rates too much. The there weren't any bonus type elements in that number. So one offs, for example, the insurance payment you can see was received [indiscernible] accountable separately. So it's not as if that's included. Biggest difference is that we had some new operations starting in fourth quarter. If you go back to, I think it's slide, five and those are developments that we discussed on the last call actually, so they just happened already by that stage. We've got [indiscernible] [indiscernible] Yeah. And so they they wouldn't tell the new operation starts and the others were news about future contracts. But don't 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's yes. So we've got [indiscernible] swap out of the SIB 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.

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 a full quarter of that Kilda commercial contract as well. So it's down to I'd 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 starting?

But we have hit a new level And as you mentioned, the new level was driven by pretty much the Ingrid and the Hilda early in the quarter and then you know, the Toro later in the quarter.

Yeah.

Okay. And then can you can you share with us the potential impact to backlog of the liver [indiscernible] 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? [indiscernible] 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 [indiscernible] the market really is around when you contract a rate rather than when the rate is being earned. Once the vessel is on hire. And of course, for a vessel that's on the her first charter, after delivery. That rate was set at the point when new build 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. 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 in March of twenty twenty five doesn't make it a March 25 sort of rate.

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

Just under May Okay. Can we talk about OpEx There was a big drop in OpEx in the fourth quarter the third quarter. You highlighted the impact of what was it the I think the, you know, the return of the one of the dance Right? Can you just talk about sort of the run rate for OpEx in the first half of twenty twenty five?

Yeah. Well, you should see a similar impact of the other dam coming out of the fleet.

Fact, a very close equivalent because the sale of each of those vessels was just two months into the quarter into the into the half year. And so you should find that that the further impact of on OpEx of the being sold should be fairly similar.

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

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

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

Not not for those reasons. No. Because the we we won't have had any vessels off hire.

That we'd be paying for.

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

No. Nothing significant. The the biggest one was the for the Torill which we've discussed on a number of quarters, think, and is that completed. In January.

Yeah. That was a pleasant surprise. For your time.

Great. Thanks, Bo.

Thank you.

Just as a quick reminder, if you would like to ask any further questions, you can do so by pressing star followed by one on your telephone keypad. And we now have the next question from Mariel Epsham. With First New York.

Please go ahead.

Hi, gentlemen.

You very much for the opportunity to ask questions. I did 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 izations, you're talking about almost $70,000,000 of cash flow. After amortizations per year. Am I Am I wrong in my analysis?

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

Yeah.

Yeah. Of course, I did. I did. Yes. It's you you Yeah. I subtracted the interest and the insurance. [indiscernible] from this quarter, and you get, a 40,000,000 of cash flow. You had a 63,000,000 of EBITDA, something like that, take 6,000,000 and then the 16 of interest. And that's where you land. 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 that that you want to be secure with your you want it to be recurring in order to to pay your the 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 to the $2 change per year that and and this is before the increases that you just described that are likely to come. So I'm just a question of how 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 more color on how you think how you're thinking about it.

I would appreciate it.

Yeah. Yeah. Thank you. Thank you for the question. I will 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 those we think those things come together. The partnership starts with four vessels twelve years ago, and is now at 18 vessels through that that combination. And so we expect that balance to continue in the minds of the board as they look forward. You annualize some figures Obviously, we've had one quarter that you've you've used for that basis, and and that time needs to to pass and the the new charters that are starting need to feed through to the results, think, get to the position that you were describing. That that in itself is some way off The last the last point you say, would would there be some sort of threshold passed if we had a % charter coverage. Well, the thing is that there's a continuing there's a rolling need to renew charters so a high 90s percentage for a foreseeable period is not going to last simply with the passage of time. So clearly, 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. No. Thank you for that, and I agree with that.

But 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, that would mean that you perhaps would never wanna pay a dividend. Using that logic. I'm I'm not suggesting that that's your point of view, but I'm just [indiscernible] extrapolating that logic.

As unitholders Yes. I appreciate that. But my my Apologies. Do do go ahead. Sorry.

No. No. That that was it. I guess let me let me let me move on. I understand. What you're saying. I wanted to. Sorry. Yeah. I know.

Think that as a unit holder, there's quite a bit of room now. To pay dividends, you could pay maybe a you could have a policy where you pay 40 or 50% of the cash after after [indiscernible] And that might be the May remunerated. So let me ask another question. In terms of When you when you I imagine that there's four vessels now that you make purchasing the 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 you long term outlook for that that market is smaller and the growth of it is not so not as secure as in Brazil? [indiscernible] our conflicts committee would be looking at definitely when we're looking at drop land. So we have some listeners may not be aware, we have 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. They take independent financial and legal advice when any, potential transaction comes along. And that's exactly the type of question that they will 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.

Okay. And then and then the final question is, like, I understand that the the the dropdowns with the with the the with the with business was makes a lot of sense. But now if you do drop downs, you're likely to do them with cash. How would you look at the difference between the cash? Deployed to buying back shares a drop down. I would think the catch to the to the shares there's a lot higher ROE on return investment right now than than doing an additional drop back.

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

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

Okay. All right. Thank you very much for your prepared to ask questions.

Great. Thank you.

Congratulations. It's a very good report.

Thank you very much.

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

Sure. We I don't have any specific disclosure to give 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. [indiscernible] dry docks I appreciate the chart's a bit small, but on page 13, we've highlighted when in the year the dry docks are appearing. And also which dry dock it is in case you want to make different assumptions about the dry docks that happen at different stages in the vessel's life. So you can see those figures there. We are looking at four vessels during the course of this year.

Got it. The Windsor, the the Raquel, the Tobe, and the tuba. Correct?

Yes. I think Tuba might be slightly later into '26.

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

Right. Thank you.

Thank you. And we now have Clement Mullins with Value Investor's Edge. Please go ahead.

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 Danfavio for the LIFK KNOTZEN. Could you talk about how much the facility on the LIFK KNOTZEN adds to the scheduled debt repayment for twenty twenty five?

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

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 Castro Verdict's startup have the potential to let call it, close the gap?

Well, they are, guess I'll be we're just we're not necessarily seeing seeing the comparison in in that way. I mean, they're clearly extremely welcome. And long awaited production starts in the North Sea, 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, mean, clearly, 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. [indiscernible] All right. Thanks for the color. You for taking my questions.

Thank you. Thanks.

Thank you. I can confirm we have no more questions in the queue. So I would now like to hand it back to Derek for some final closing comment.

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

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.