Operator:
Ladies and gentlemen, thank you for joining us, and welcome to the KNOP Fourth Quarter 2025 Earnings Call. [Operator Instructions] I will now hand the conference over to Derek Lowe. Please go ahead, sir.

Derek Lowe:
Thank you, Tyler, 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 2025. Our website is knotoffshorepartners.com, and you can find the earnings release there along with this presentation. On Slide 2, 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 contingencies, 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. We begin on Slide 3 with the comments on the unsolicited and nonbinding offer from our sponsor, KNOT, to buy the publicly owned common units for $10 per common units, which we received during the fourth quarter. As announced in the press release on the March 19, the mutual decision was made by the independent KNOP Conflicts Committee and the sponsor to conclude those discussions with no transaction recommended. All information provided by KNOP's Conflicts Committee about that process was included within the March 19 press release, and I'll not be able to comment any further during today's call. On Slide 4, we have the Q4 financial and operational headlines, certain of which reflect the impact of the noncash impairment related to the Bodil Knutsen. Revenues were $96.5 million. Operating income was $8.4 million on a fully reported basis or $28.6 million when excluding the impact of the impairment on Bodil. Similarly, net income on a fully reported basis was a loss of $6.2 million whereas it was net income of $14 million when we exclude the impact of the impairment. Adjusted EBITDA was $59.3 million. And as of December 31, 2025, we had $137 million in available liquidity, made up of $89 million in cash and cash equivalents, plus $48 million in undrawn capacity on our credit facilities, and that was $11.8 million higher than at September 30. We operated at 99.5% utilization, taking into account the scheduled dry docking of Synnove Knutsen, which amounts to 96.4% utilization overall. Following the end of Q4, we declared a cash distribution of USD 0.026 per common unit, which was paid in February. On Slide 5, we have the developments during Q4. Early in the quarter, we entered into a $71.1 million senior secured term loan facility to refinance Synnove Knutsen. On November 4, the Vigdis Knutsen transitioned from a time charter contract to a bareboat charter with the same customer, Shell, extending until at least 2030. We completed our second of 2 RCF refinancings rolled over on similar terms. Our next refinancings are in the late third and early fourth quarter of this year. And on November 21, we agreed the time charter for Fortaleza Knutsen with KNOT to commence during the second quarter of 2026 and lasting between 1 and 3 years. Given the vessels smaller size relative to the Suezmax that has become standard in the Brazilian offshore segment, the vessel is expected to transition to the much more diversified North Sea. Then on Slide 6. The principal development in the first quarter has been the termination of discussions around the offer from KNOT, which I described earlier. Turning to Slide 7 for a high-level summary of our positive momentum coming into the spring of 2026 with the tightening market and expanding backlog and the balance sheet continuing to strengthen. In both Brazil and the North Sea, we continue to see tightening markets driven by FPSO start-ups, ramp-ups, expansions, new discoveries and in a number of cases, technology-driven increases in production beyond nameplate capacity. In each instance, these increased volumes are the outcome of lengthy, often CapEx-intensive projects such that they are not typically sudden unanticipated step changes in shuttle tanker demand that caps the market off guard. Nevertheless, the increase in shuttle tanker service volumes across both markets has been both sustained and sufficient to tighten the supply-demand balance. Petrobras will continue to deploy its long committed pipeline of FPSOs and to expand production capacity across its existing fleet. We've sustained our backlog as of December 31, 2025, with $929 million of fixed contracts averaging 2.6 years and rather more if all the options are exercised. At year-end, our fleet of 19 vessels had an average age of 10.2 years. We are continuing to repay debt at $90 million or more per year, which we think is prudent with the depreciating asset base. Having reliably addressed our refinancing needs typically on very consistent terms, we now look to the $220 million 5 ship facility in September 2026 and a $65 million single ship facility in October 2026, secured by Lena Knutsen. Over Slides 9 to 12, we provide the financials for Q4, the highlights of which we have covered already. On Slide 13 is our debt maturity profile on which you can see we have material repayment obligations later this year. While no guarantees can be made, we have historically benefited from our access to a wide pool of lenders, attractive bank finance and several key lender relationships with major players. Moreover, we've been encouraged by our refinancing experiences in recent years, and the strong signal they provide regarding lenders continued appetite. Notably, the average margin on our floating rate debt during the fourth quarter was 2.2% over SOFR. Moving on to Slide 15 and our charter portfolio. I've covered most of the updates here. But I believe this is very useful resource for investors looking to track the primary movements where a change can occur in a highly stable portfolio of cash flows. That is when charters turn over and when there are dry docks that will cause offhire and incur some CapEx costs. Based on current charter rates, we believe charter's options are likely to be taken up given the strength of the charter market. On Slide 16, you can see our strong coverage through the coming quarters. Some charters options that market conditions suggest have a good likelihood of being exercised and a small amount of open time. In all, we have 93% of vessel time in 2026 covered by fixed contracts and 69% in 2027. If all relevant options are exercised, this rises to 98% in 2026 and 88% in 2027. On Slide 17, you can see the drop-down inventory held at the sponsor. Drop-downs have been the route to growth in the fleet throughout the life of the partnership and other means of replenishing and rejuvenating the fleet given the depreciation in our assets. I would underscore both that our Board has consistently acknowledged the importance of drop-downs for the partnership, and also that any drop-down would first have to be approved by the Independent Conflicts Committee. On Slides 18 to 20, we include again some commentary from Petrobras with relevant highlights from a 5-year plan they released for 2026 through to 2030 as well as a useful overview of their significant 2025 progress from their recently reported full year 2020 results. We believe that these materials from Petrobras provide a useful insight into the Brazilian offshore market, and we'd encourage you to review the extensive materials that Petrobras regularly publishes. In short, though, from the shuttle tanker owners perspective, Petrobras continues to deploy significant CapEx into a long-term FPSO pipeline in shuttle tanker service areas, to find new ways to increase volumes from existing fleet and overall, to continue expanding its aggregate production on time or in a number of instances ahead of schedule. As with the development that we're seeing in the North Sea, this gives us comfort that shuttle tanker demand should readily absorb the current order book. Further, we believe that the current order book still trends towards the medium-term shortage of shuttle tankers when set against the forthcoming production. To summarize on Slide 21, during Q4, we had strong utilization and financial results. We refinanced the Synnove Knutsen facility and the second RCF. We secured additional charter cover and paid a quarterly distribution. And in Q1, we've seen the termination of the discussions around the offer from KNOT. With that, I'll hand the call back to Tyler for any questions.

Operator:
[Operator Instructions] And your first question comes from the line of Fredrik Dybwad with Fearnley Securities.

Fredrik Dybwad:
Can you hear me well? Can you hear me?

Derek Lowe:
Fredrik, can't hear you that well.

Fredrik Dybwad:
Okay. Is this better?

Derek Lowe:
Just try us. Yes.

Fredrik Dybwad:
So congratulations, good quarter, solid cash flow. You're doing the things, market, as you say, very firm. Since last time around, I have noted that the Knutsen on the holding level issued a bond. Have -- in connection with that bond issue, has there been a valuation of KNOP?

Derek Lowe:
To repeat for anyone who didn't hear that clearly. Fredrik, I think you're referring to the TSSI bond, which is, I think, 2 corporate levels above KNOP. I think anyone interested in the circumstances around that bond would need to look at the offering materials and the disclosure related to it. I'm not directly aware of valuation exercise on KNOP, at least as far as the partnership was directly involved, but the offering materials will contain the disclosure related to that transaction.

Fredrik Dybwad:
Okay. Got it. And I also note that you reduced the useful life of your vessels from 23 to 20 years. Could you shed some light on the rationale behind that? I thought it was a bit -- bit surprised me a bit.

Derek Lowe:
Yes. So useful life is a measure of how long a vessel is expected to stay in the hands of a current owners. So it's not directly a measure of the economic life of a vessel per se. So in some instances, we see shuttle tankers being deployed commercially beyond 20 years. But quite often, it's outside the sector. So it's a conventional floating storage or FPSO. What we are seeing is that the typical scenario is clients will wish to see vessels that are under 20 years, and we'll seek those out before seeking to contract those that are older. And so it's a judgment around that overall situation, particularly operation in shuttle tanker form that led us to take that view that 20 years was a better judgment on that than 23.

Fredrik Dybwad:
Okay. And limited visibility just from my own modeling, what the price on new building Suezmax currently on the shuttle tanker?

Derek Lowe:
I think that's too commercially sensitive for us to disclose at the moment. We don't discuss our newbuild contract pricing.

Fredrik Dybwad:
No, not necessarily yours, but generically, how much would it cost to build shuttle tanker in, for instance, China.

Derek Lowe:
Well, given that our sponsor is quite active in the newbuild space, I think generically and commercially specifically, pretty much the same thing. So I don't have any comments on it, I'm afraid.

Fredrik Dybwad:
Okay. It's around $140 million will be fair from my end, as an assumption.

Derek Lowe:
As I said, I don't have any direct comment on that, I'm afraid.

Fredrik Dybwad:
Okay. And yes, just a final one, sorry, a bit of saturated on the question side, but last one. Back in 2023 when you cut the dividend, I can quote you that you said that until you have reestablished a greater degree of forward visibility and on earnings and on liquidity, the quarterly distribution is reduced, but will be increased once this is in place. And hearing what you are saying now on the outlook for shuttle tankers, your balance is rock solid and you're generating significant cash flow for the quarter. What will it take for the dividend to come back when it seems like everything is in place for it to happen?

Derek Lowe:
Yes. Thank you. I mean capital allocation is very much in the minds of directors on a continual basis. And whether it's distributions, buybacks or investment in the fleet or drop-downs, that's something that they are assessing on a continual basis, and we'll continue to do so. We don't have a direct formula that says there's a given time for one or other of those aspects to be selected, but it does remain under active review by the directors.

Fredrik Dybwad:
So would you say that your view on dividend distributions is changed from 2022 to today? Or is it the same the way you look at it?

Derek Lowe:
Well, we're clearly pleased with a stronger financial position now than back then. That's certainly the case. But the choice of how and where and when to allocate capital is something, as I say, that the directors keep under continual review.

Fredrik Dybwad:
Okay. Okay. I understand. I understand. I appreciate your comments, Derek. And final question. You try to do the Annual General Meeting last year about the success. Are you going to schedule it again for this year? Or how should we think about that?

Derek Lowe:
Well, we do obviously have a standing obligation to seek to hold a meeting each year, and we intend to satisfy that obligation during 2026 as well.

Operator:
Your next question comes from the line of Liam Burke with B. Riley Securities.

Liam Burke:
Whatever happened to 2 questions per customer. Anyway, you've got a -- your sponsor has quite a list of drop-downs, which create nice opportunity considering you've got a very healthy end market there. Could you give us a sense on how you're prioritizing or any kind of timing? Or how you're thinking about adding vessels to the fleet?

Derek Lowe:
Well, that alludes to the capital allocation topic that we discussed -- I discussed just now. So the directors are well aware of a range of potential deployments of capital, whether it's distributions, buybacks or drop-downs, and they will keep that continually in mind, noting the financial position of the partnership and also the outlook from a chartering point of view as well. So there's no direct formula as to which of those will be chosen, which combination and when and so on.

Liam Burke:
Okay. That's fair. But I mean, we're looking at your liquidity position strengthening. Your operating cash flow was up 13.5% this year. You've had a long history of successfully refinancing balloon payments, and those balloon payments are coming down as we saw in one of the slides. So I mean, how would we -- and drop-downs in this market look to be very good considering we're looking at the long-term contracts. Is there any priority to the drop-downs vis-a-vis dividends or accelerated debt repayment?

Derek Lowe:
No, there's no working priority as between those different places that the capital could be allocated. The directors look at all of them at the same time.

Operator:
And there are no further questions at this time, so I will turn it back to Derek for closing remarks.

Derek Lowe:
Thank you, Tyler, and thank you all again for joining this earnings call for the KNOT Offshore Partners Fourth Quarter in 2025. I look forward to speaking with you again following the first quarter results.

Operator:
This concludes today's call. Thank you for attending. You may now disconnect.