KNOT Offshore Partners LP Announces Entry into an Agreement to Acquire the Dan Sabia

KNOT Offshore Partners LP (the "Partnership")

announced today that its wholly owned subsidiary, KNOT Shuttle Tankers AS, had entered into a share purchase agreement to acquire KNOT Shuttle Tankers 21 AS, the company that owns the shuttle tanker, Dan Sabia, from Knutsen NYK Offshore Tankers AS (the "Acquisition"). The purchase price of the Acquisition is $103.0 million, net of $64.5 million of outstanding indebtedness related to the Dan Sabia. The Partnership expects the Acquisition to close within approximately 30 days, subject to customary closing conditions. The Dan Sabia is operating under a bareboat charter with Petrobras Transporte S.A. The Dan Sabia charter commenced upon delivery of the vessel in the first quarter of 2012 and will terminate in the first quarter of 2024. The Partnership's board of directors (the "Board") is pleased that the Partnership has entered into this share purchase agreement in connection with its fifth acquisition since the Partnership's initial public offering in April 2013. The Board and the conflicts committee of the Board (the "Conflicts Committee") have approved the purchase price of the Acquisition. The Conflicts Committee retained an outside financial advisor to assist with its evaluation of the Acquisition. As a result of the Acquisition, the Partnership's management has recommended to the Board an increase in the Partnership's quarterly cash distribution of between $0.01 and $0.015 per unit (corresponding to an annualized increase of between $0.04 and $0.06 per unit), which would become effective for the distribution with respect to the quarter ending September 30, 2015. Any such increase would be conditioned upon, among other things, the closing of the Acquisition, the approval of such increase by the Board and the absence of any material adverse developments or potentially attractive opportunities that would make such an increase inadvisable. The Partnership owns, operates and acquires shuttle tankers under long-term charters in the offshore oil production regions of the North Sea and Brazil. The Partnership is structured as a master limited partnership. The Partnership's common units trade on the New York Stock Exchange under the symbol "KNOP."