KNOT Offshore Partners generated a net income of $2.6 million for the first quarter of 2026, which ended on March 31, 2026. The partnership reported total revenues of $92 million and an operating income of $14.7 million for the same three-month period.
This net income represents a recovery from a net loss of $6.2 million in the fourth quarter of 2025. The fourth-quarter loss was primarily driven by a $20.3 million impairment charge recognised on the vessel Bodil Knutsen.
At the end of March 31, 2026, the partnership had available liquidity of $140.7 million, consisting of $92.7 million in cash and cash equivalents alongside $48 million of undrawn capacity under its revolving credit facilities.
During the quarter, the vessel fleet operated at a 97.2 per cent utilisation rate for scheduled operations, which declined to 92 per cent when accounting for the scheduled drydockings of Tuva Knutsen and Bodil Knutsen.
The partnership also disclosed that discussions regarding an unsolicited, non-binding proposal from Knutsen NYK Offshore Tankers to acquire all publicly held common units at $10 per unit in cash were terminated on March 19.
The independent conflicts committee of the board of directors and its advisers evaluated the offer but could not reach an agreement with Knutsen NYK Offshore Tankers.
Several charter agreements were updated, including the execution of a three-year charter for Hilda Knutsen with Eni starting in the third quarter of 2027 and a two-year contract for Recife Knutsen with Transpetro starting in the third quarter of 2026.
Additionally, TotalEnergies exercised an option on March 20, to extend its charter of Anna Knutsen for one year until May 2027, while Carmen Knutsen commenced a four-year charter with PetroChina on February 11.
On February 16, Tordis Knutsen suffered a diesel generator breakdown, forcing the vessel off-hire until repairs were completed on May 21. KNOT received an insurance payment of $1.8 million in April and the remaining repair costs beyond a $150,000 deductible are expected to be covered by insurance.
The partnership fleet comprised 19 vessels with an average age of 10.5 years as of March 31, with 15 of these vessels operating in the tightening Brazilian shuttle tanker market.
In this region, Petrobras has continued to commit to additional floating production storage and offloading contracts with deliveries extending over several years, according to KNOT.
Based on supply and demand factors, KNOT stated that the overall medium and long-term outlook for the shuttle tanker market remains favourable. It added that it plans to pursue long-term visibility from its charter contracts and continue acquiring vessels to support long-term cash flow.
