KNOT Offshore Partners Sees Strong Momentum Amid Tightening Markets
Knot Offshore Partners, a leading provider of shuttle tankers, has reported strong financial and operational performance for the second quarter of 2026. The company's revenues stood at $96.8 million, with operating income reaching $15.6 million and net income at $3.4 million.
Adjusted EBITDA came in at a healthy $57.6 million, while available liquidity was $143.3 million as of June 30, 2026. This represents an increase of $2.6 million from the previous quarter's available liquidity and demonstrates the company's improving financial position.
Commenting on the company's performance, Derek Lowe, Chief Executive and Chief Financial Officer, stated that the company operated with a utilization rate of 96.8%, taking into account scheduled drydocking which amounts to 92.4% overall following the drydocking of Fortaleza Knutsen.
The company also declared a cash distribution of $0.075 per common unit in August, representing an increase from the previous level and demonstrating its commitment to returning value to unitholders.
In a significant development since the start of the second quarter, Knot Offshore Partners acquired the Hedda Knutsen from KNOT for a purchase price of $113 million less an $89.4 million debt facility plus $0.8 million of capitalized financing fees, resulting in a net cash cost of $24.4 million.
The acquisition provides fleet growth, diversifies and extends Knot Offshore Partners' pipeline of long-term contracts, reduces its average fleet age, and develops the fleet in the most in-demand shuttle tanker asset class. The company has also secured several positive contractual developments since the beginning of the second quarter, including a time charter for Hilda Knutsen with Eni, a time charter for Recife Knutsen with Transpetro, and an agreement with Eni for a time charter on Ingrid Knutsen.
Additionally, Knot Offshore Partners refinanced its loan secured by five vessels via a new $225 million 5-year senior secured term facility arranged by DNB Bank ASA. The interest rate was meaningfully reduced to SOFR plus 165 basis points.
The company's operating momentum is being driven by tightening markets in both Brazil and the North Sea, with robust multiyear FPSO pipelines, production growth, continuing investment, exploration, existing project expansion, and increased shuttle tanker service volumes across both markets. This has resulted in a strong backlog of $881.2 million in fixed contracts as of quarter-end.
Overall, Knot Offshore Partners' strong performance in the second quarter demonstrates its ability to navigate a challenging market environment and deliver value to unitholders.
