Company Overview - Knot Offshore (KNOP) currently holds a Momentum Style Score of A, indicating strong potential for momentum investing [2] - The company has a Zacks Rank of 2 (Buy), suggesting favorable market performance [3] Price Performance - Over the past week, KNOP shares have increased by 8.06%, significantly outperforming the Zacks Transportation - Shipping industry, which rose by only 0.43% [5] - In a longer time frame, KNOP's monthly price change is 6.38%, compared to the industry's 0.48% [5] - Over the last quarter, KNOP shares have risen by 17.32%, and they have surged 84.21% in the past year, while the S&P 500 has only moved 5.66% and 13.75% respectively [6] Trading Volume - The average 20-day trading volume for KNOP is 131,883 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, one earnings estimate for KNOP has increased, while none have decreased, raising the consensus estimate from $0.75 to $1.06 [9] - For the next fiscal year, one estimate has also moved upwards with no downward revisions during the same period [9] Conclusion - Given the strong price performance, positive earnings outlook, and high Momentum Style Score, KNOP is positioned as a solid momentum pick for investors [11]

Core Insights - The analyst team has demonstrated a strong track record, achieving an annualized return of almost 40% over the past decade, with a long-only model portfolio return exceeding 23 times [1]. Group 1: Investment Focus - The company offers income-focused investment options for those preferring lower-risk firms with consistent dividend payouts [1]. - The research covers various sectors, including energy, shipping, and offshore markets, indicating a broad investment strategy [1]. Group 2: Analyst Background - The analyst has extensive experience in trading, primarily focusing on tech stocks, and has recently expanded coverage to offshore drilling, supply, and shipping industries [2]. - The analyst has a background in auditing with PricewaterhouseCoopers and has navigated significant market events, including the dotcom bubble and the subprime crisis [2].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $96.9 million, with operating income at $30.6 million and net income at $15.1 million. Adjusted EBITDA was reported at $61.6 million [4][9] - Available liquidity as of September 30, 2025, was $125.2 million, consisting of $77.2 million in cash and cash equivalents, plus $48 million in undrawn capacity on credit facilities, which is $20.4 million higher than at the end of Q2 2025 [4][9] Business Line Data and Key Metrics Changes - The company operated with a utilization rate of 99.9%, accounting for scheduled dry docking, resulting in an overall utilization of 96.5% [4] - The company extended its backlog to $963 million of fixed contracts, averaging 2.6 years, with potential for more if all options are exercised [9] Market Data and Key Metrics Changes - The shuttle tanker market is tightening in both Brazil and the North Sea, driven by FPSO startups and ramp-ups, which are expected to increase shuttle tanker demand [8][12] - Petrobras' five-year plan indicates that overall production volumes and project startup timelines are in line with or above prior expectations, which is positive for the Brazilian offshore market [12][13] Company Strategy and Development Direction - The company is focused on maintaining a robust financial model, evidenced by successful refinancing efforts and a commitment to debt repayment of $95 million or more per year [9] - The company has established a buyback program and completed the purchase of the Daqing Knutsen, indicating a strategy to enhance shareholder value and fleet growth [5][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the shuttle tanker demand absorbing the current order book, with expectations of a medium-term shortage of shuttle tankers against forthcoming production [13] - The management refrained from commenting on specific rates related to the Fortaleza Knutsen but indicated satisfaction with the expected rate under the new contract [19][20] Other Important Information - An unsolicited and non-binding offer from the sponsor, KNOT, to buy the publicly owned common units for $10 per unit is currently under evaluation by the Conflicts Committee [3][4] - The company has completed its refinancing schedule for the year, securing a $71 million loan and a $25 million revolving credit facility [8] Q&A Session Summary Question: Can you give me an appreciation for the potential rate change for Fortaleza? - Management did not comment on individual rates but expressed satisfaction with the expected rate [19][20] Question: How many dry dockings are expected in 2026? - Management confirmed that there would be at least four to five dry dockings in 2026 [21] Question: Will G&A expenses change with the acquisition of Daqing? - Management does not expect a material change in G&A expenses, maintaining it at approximately $1.6 million per quarter [22] Question: Has the buyback program concluded? - Management confirmed that the buyback program has concluded, stopping at three million instead of the full ten million authorization [25][26] Question: What is the timeframe for the independent committee process regarding the KNOT offer? - Management indicated that all available information was provided in the press release and that no further comments could be made [28][30]

Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $96.9 million, with operating income at $30.6 million and net income at $15.1 million. Adjusted EBITDA was reported at $61.6 million [4][9] - Available liquidity as of September 30, 2025, was $125.2 million, consisting of $77.2 million in cash and cash equivalents, plus $48 million in undrawn capacity on credit facilities, which is $20.4 million higher than at the end of Q2 2025 [4][9] Business Line Data and Key Metrics Changes - The company operated with a utilization rate of 99.9%, accounting for scheduled dry docking, resulting in an overall utilization of 96.5% [4] - The company extended its backlog to $963 million of fixed contracts, averaging 2.6 years, with potential for more if all options are exercised [8][9] Market Data and Key Metrics Changes - The shuttle tanker market is tightening in both Brazil and the North Sea, driven by FPSO startups and ramp-ups, which are expected to increase shuttle tanker demand [8][12] - Petrobras' five-year plan indicates that overall production volumes and project startup timelines in the pre-salt region are in line with or above prior expectations, suggesting a positive outlook for the Brazilian offshore market [12][13] Company Strategy and Development Direction - The company is focused on maintaining a robust financial model, evidenced by successful refinancing efforts and a commitment to debt repayment of $95 million or more per year [9][10] - The company has established a buyback program and completed the purchase of the Dan Cisne, indicating a strategy to enhance shareholder value and fleet growth [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the shuttle tanker demand absorbing the current order book, with expectations of a medium-term shortage of shuttle tankers against forthcoming production [13] - The management refrained from commenting on specific rates related to the Fortaleza contract but indicated satisfaction with the expected rate change [19][20] Other Important Information - An unsolicited and non-binding offer from the sponsor, KNOT, to buy publicly owned common units for $10 per unit is currently under evaluation by the Conflicts Committee [3][4] - The company has completed its refinancing schedule for the year, securing loans and credit facilities to support its operations [8][10] Q&A Session Summary Question: Can you provide insight on the potential rate change for Fortaleza when it moves to KNOT? - Management did not comment on individual rates but expressed satisfaction with the expected rate [19][20] Question: How many dry dockings are expected in 2026? - Management confirmed that there would likely be four to five dry dockings in 2026 [21] Question: Will G&A expenses change with the acquisition of Dan Cisne? - Management indicated that G&A is not expected to change materially and will remain around $1.6 million per quarter [22] Question: Has the unit buyback program concluded? - Management confirmed that the buyback program has concluded, stopping at three units instead of the full ten [25][26] Question: What is the expected timeframe for the independent committee process regarding the KNOT offer? - Management stated that no further information is available beyond the press release and that the process is ongoing [28][30]

Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $96.9 million, with operating income at $30.6 million and net income at $15.1 million. Adjusted EBITDA was reported at $61.6 million [4][9] - Available liquidity as of September 30, 2025, was $125.2 million, consisting of $77.2 million in cash and cash equivalents and $48 million in undrawn credit facilities, which is $20.4 million higher than at the end of Q2 2025 [4][9] Business Line Data and Key Metrics Changes - The company operated with a utilization rate of 99.9%, accounting for scheduled dry docking, resulting in an overall utilization of 96.5% [4] - The company extended its backlog to $963 million in fixed contracts, averaging 2.6 years, with potential for more if all options are exercised [9][12] Market Data and Key Metrics Changes - The shuttle tanker market is tightening in both Brazil and the North Sea, driven by FPSO startups and ramp-ups, which have positively impacted shuttle tanker demand growth [8][12] - Petrobras' five-year plan for 2026 to 2030 indicates that overall production volumes and project startup timelines are in line with or above prior expectations, suggesting a favorable outlook for the Brazilian offshore market [12] Company Strategy and Development Direction - The company has initiated a buyback program, purchasing nearly 385,000 common units at an average price of $7.87 per unit, which concluded in October [5][26] - The company is focused on prudent debt repayment, targeting $95 million or more per year, to manage its depreciating asset base effectively [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the charter market, indicating that charterers' options are likely to be exercised due to favorable market conditions [11] - The company is optimistic about the future demand for shuttle tankers, anticipating a medium-term shortage against forthcoming production [13] Other Important Information - The company received an unsolicited and non-binding offer from its sponsor, KNOT, to buy publicly owned common units for $10 each, which is currently under evaluation by the Conflicts Committee [3][4] - The company has completed refinancing of two facilities, including a $71 million loan secured by the Synnøve Knutsen and a $25 million revolving credit facility [7][10] Q&A Session Summary Question: Can you provide insight on the potential rate change for Fortaleza when it moves to KNOT? - Management refrained from commenting on specific rates but indicated satisfaction with the expected rate [18][19] Question: Will G&A expenses remain stable despite the acquisition of Dan Cisne? - Management confirmed that G&A is not expected to change materially, maintaining around $1.6 million per quarter [21] Question: Has the unit buyback program concluded? - Management confirmed that the buyback program has concluded, stopping at approximately $3 million instead of the full $10 million authorization [24][26] Question: What is the expected timeframe for the independent committee's evaluation process? - Management stated that all available information has been disclosed, and further details will depend on the Conflicts Committee's discussions with KNOT [27][29]

Financial Performance (3Q 2025) - Revenues reached $96.9 million[10], with an operating income of $30.6 million[10] and a net income of $15.1 million[10] - Adjusted EBITDA stood at $61.6 million[10] - A cash distribution of $0.026 per common unit was paid in November 2025[10, 18] Key Transactions & Refinancing - Daqing Knutsen was purchased for a net cash cost of $24.8 million[12], with KNOT guaranteeing the hire rate until July 2032[12, 22] - A common unit buyback program was concluded in October, with 384,739 common units purchased for $3.03 million, averaging $7.87 per unit[13, 28] - The Synnøve Knutsen loan was refinanced with a new $71.1 million senior secured term loan facility[24] - Refinancing of the Tove Knutsen was completed, generating $32 million of net proceeds[16] Contractual Agreements & Fleet Utilization - Fleet operated with 99.9% utilization, or 96.5% overall including the drydocking of the Tove Knutsen[10, 74] - The term of the current time charter for the Bodil Knutsen was extended to a fixed term ending in March 2029, followed by two charterer's options each of one year[17] - The term of the current time charter for the Hilda Knutsen was extended by 3 months firm (to June 2026) plus a further 9 months at the company's option (to March 2027)[15] - A time charter for the Fortaleza Knutsen was executed with KNOT, to commence Q2 2026 for a fixed period of one year plus two charterer's options each for one additional year[27] Strategic Developments - KNOT made an unsolicited non-binding offer to purchase all publicly held common units of the Partnership for $10 in cash per common unit[9, 25] - Contractual backlog expanded to $939.5 million of fixed contracts averaging 2.6 years, with charterers' options averaging a further 4.2 years[32, 54]

Financial Performance - KNOT Offshore Partners LP generated total revenues of $96.9 million, operating income of $30.7 million, and net income of $15.1 million for Q3 2025[4]. - Adjusted EBITDA for Q3 2025 was reported at $61.6 million, with a fleet utilization rate of 99.87% for scheduled operations and 96.49% including drydocking[4][6]. - The Partnership's total revenues for Q3 2025 were $96.867 million, an increase from $87.060 million in Q2 2025[31]. - Net income for Q3 2025 was $15.114 million, compared to $6.810 million in Q2 2025[31]. - The Partnership's operating income for Q3 2025 was $30.663 million, up from $22.184 million in Q2 2025[31]. - Net income for the nine months ended September 30, 2025, was $29,505 thousand, a significant recovery from a net loss of $9,185 thousand in the same period of 2024[39]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $165,359, an increase from $138,025 in the same period of 2024[42]. - EBITDA for the three months ended September 30, 2025, was $61,745, up from $40,404 in the same period of 2024[42]. Liquidity and Debt - The partnership had $125.2 million in available liquidity as of September 30, 2025, consisting of $77.2 million in cash and cash equivalents and $48 million in undrawn revolving credit facility capacity[4][13]. - The average margin paid on outstanding debt during Q3 2025 was approximately 2.22% over SOFR, with total interest-bearing obligations of $986.5 million[14]. - The partnership's net exposure to floating interest rate fluctuations was approximately $278.8 million as of September 30, 2025[15]. - The new $71.1 million senior secured term loan facility with MUFG Bank has a maturity date in October 2030, with an outstanding amount of $48.6 million expected at that time[19]. - The refinancing of a $25 million revolving credit facility with SBI Shinsei Bank will mature in November 2027, with an interest rate of SOFR plus a margin of 2.18%[20]. - Interest expense for the nine months ended September 30, 2025, was $46,702, down from $51,185 in the same period of 2024[42]. - Long-term debt stood at $657,543 thousand as of September 30, 2025, compared to $648,075 thousand at December 31, 2024, indicating a slight increase of 1.4%[37]. Asset Management - Total assets increased to $1,722,489 thousand as of September 30, 2025, up from $1,572,165 thousand at December 31, 2024, representing a growth of 9.5%[37]. - The total partners' capital increased to $546,887 thousand as of September 30, 2025, up from $526,827 thousand at December 31, 2024, showing a growth of 3.8%[37]. - Cash and cash equivalents rose to $77,207 thousand at the end of the period, compared to $66,933 thousand at the beginning of the period, marking an increase of 18.5%[39]. - Current liabilities increased to $367,742 thousand as of September 30, 2025, from $287,122 thousand at December 31, 2024, reflecting a rise of 28.1%[37]. Operational Highlights - Charter coverage for Q4 2025 is now secured at 100%, with approximately 93% coverage for 2026[7]. - The demand for shuttle tankers in Brazil is tightening due to a significant pipeline of new production growth and a limited newbuild order book[24]. - The average age of the Partnership's fleet is 10.0 years, with an average remaining fixed duration of charters at 2.64 years[24]. - The company reported a total realized gain on derivative instruments of $376 thousand for the three months ended September 30, 2025, compared to a loss of $370 thousand in the previous quarter[35]. Strategic Initiatives - The acquisition of the Daqing Knutsen for $95 million was completed on July 2, 2025, with a guaranteed hire rate until 2032[4][11]. - The partnership realized net proceeds of approximately $32 million from the sale and leaseback of the Tove Knutsen, with a gross sale price of $100 million[18]. - The company anticipates growth strategies that may include entering long-term charters of five years or more[45]. - The company is focused on maintaining long-term relationships with major users of shuttle tonnage[46]. - The company is exploring opportunities for profitable operations in the shuttle tanker and general tanker industries[45]. - The company is assessing the impact of supply chain disruptions and inflation on its operations[46]. - The company is evaluating its ability to refinance its indebtedness on acceptable terms and to access debt and equity markets[45]. Shareholder Actions - The partnership repurchased 384,739 common units for a total cost of $3.03 million at an average price of $7.87 per unit as part of a $10 million buyback program[4]. - The KNOT Offer proposes to acquire all publicly held common units at $10 per unit, currently under evaluation by the Conflicts Committee of the Board[5][11].

Core Viewpoint - KNOT Offshore Partners LP is set to release its financial results for the 3rd Quarter of 2025 on December 5, 2025, before market opening [1] Financial Results Announcement - The financial results will be disclosed before the market opens on December 5, 2025 [1] - A conference call is scheduled for the same day at 9:30 AM (Eastern Time) to discuss the results [1] - Unitholders and interested parties are invited to join the conference call via a live webcast link on the Partnership's website [1]

Core Viewpoint - Knot Offshore (KNOP) shares experienced a significant increase of 9.7% to $9.89, driven by a takeover offer from Knutsen NYK Offshore Tankers AS, which proposed to acquire all publicly held common units for $10 each [1][2]. Company Performance - The upcoming quarterly earnings for Knot Offshore are projected at $0.13 per share, reflecting a substantial year-over-year growth of 218.2%. Revenue is expected to reach $86.33 million, marking a 13.2% increase from the same quarter last year [3]. - The consensus EPS estimate for Knot Offshore has remained stable over the past 30 days, indicating that the stock's price movement may not sustain without trends in earnings estimate revisions [4]. Industry Context - Knot Offshore is part of the Zacks Transportation - Shipping industry, where another company, Okeanis Eco Tankers Corp. (ECO), saw a decline of 3.4% to $34.37, despite a 20.8% return over the past month [5]. - Okeanis Eco Tankers Corp. has experienced a significant downward revision in its consensus EPS estimate, which decreased by 39.2% to $0.29, representing a year-over-year decline of 35.6% [6].