This transaction is currently being reviewed by Teekay Offshore’s Conflicts Committee. This is another example of a drop down transaction, which supports the growth of our daughter companies and which also leads to enhanced net asset value for the Teekay Parent level as our MLP daughter companies grow their GP and LP cash flows. All three of our publicly traded daughter entities were busy this past quarter integrating acquisitions and negotiating charter contracts that will enhance the stability of their future cash flows.
In the next few weeks, we will take over technical management of the final vessel of the six LNG carriers acquired by Teekay LNG in February 2012 through its joint venture with Marubeni Corporation and thereby complete the integration of this purchase.
In June, Teekay LNG took advantage of the strong fundamentals in the LNG shipping market to secure a new forward start three-year charter for the Magellan Spirit LNG carrier, which will commence immediately after expiration of the current charter in September 2013, at a 20% increase from its current charter rate.
For the quarter ended June 30, 2012, Teekay LNG declared a cash distribution of $0.675 per unit, which based on Teekay Parent’s current GP and LP ownership interest in Teekay LNG, results in $22.5 million of cash flow to Teekay Parent for the quarter.Moving on to Teekay Offshore, Talisman Energy, the charter of the Petrojarl Varg FPSO, declared their three-year option to extend the firm period of this contract to June 30, 2016. Talisman has two remaining three-year options. For the second quarter, Teekay Offshore declared a cash distribution of $0.5125 per unit, which based on Teekay Parent’s current GP and LP ownership interests results in $14.3 million of cash flow to Teekay Parent for the quarter. Read the rest of this transcript for free on seekingalpha.com
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