Teekay Tankers is expanding its fleet portfolio with new purchases and charter deals.
The New-York listed owner said it had given notice during January 2023 to exercise nine vessel purchase options, under sale-leaseback arrangements, for a total of $164 million. The company expects to purchase the vessels in March 2023, using cash on hand, as it says.
A term sheet for a new secured revolving credit facility for up to $350 million has also been signed in February 2023 to refinance 19 vessels, including the nine vessels mentioned above, currently under sale-leaseback financing arrangements. The facility is expected to be completed during the second quarter of 2023.
In a tactical move the company proceeded in a numerous of charter deals during the year 2022 and at the beginning of 2023. This month the company made a charter-in contract deal for one Aframax, at a rate of $35,750 per day for 24 months, with an option to extend for an additional 12 months. The vessel is expected to be delivered prior to the end of the first quarter of 2023.
The US listed owner also reported the delivery to the company of an eco-Aframax newbuilding, under a charter-in agreement for seven years at a rate of $18,700 per day. The charter includes three one-year extension options as well as a purchase option.
Last year Teekay Tankers sealed a charter deal for one Suezmax vessel, at a rate of $32,250 per day, for 54 months with an option to extend for an additional 12 months, while simultaneously entered into a charter-out agreement for the same vessel at a rate of $38,475 per day for a 21 to 26-month period. Both charters commenced in December 2022.
At the end of year 2022 the shipowner entered into a charter-in agreement for one Aframax vessel at a rate of $31,150 per day for 36 months, with an option to extend for an additional 12 months, while simultaneously entered into a charter-out agreement for the same vessel at a rate of $48,500 per day for a 12-month period. Both charters commenced in February 2023.
Kevin Mackay, Teekay Tankers’ President and CEO said “We are greatly benefiting from the high operating leverage of our business with our near-total spot market exposure, including the very strong performance of our chartered-in fleet, resulting in Teekay Tankers reporting its highest ever quarterly adjusted net income. By continuing to pay down debt and refinancing vessels currently in sale-leaseback arrangements, we are taking action to further reduce our fleet breakeven levels, and utilize our strong operating cash flow to increase shareholder value.”
As far as the tanker market outlook, the company expects that that will remain firm during 2023 due to positive oil market fundamentals, the continued rerouting of Russian oil exports away from Europe and the subsequent replacement of imports into Europe from other sources, and an expected rebound in Chinese oil imports following the removal of Covid-19 mobility restrictions.
The company also retains a positive outlook for the longer-term due to the best fleet supply fundamentals in several decades, as it is said, which should ensure that spot tanker rates remain well supported, albeit volatile, in the coming years.