Teekay Offshore Partners Announces $200 Million Private Placement of Equity Securities

HAMILTON, BERMUDA--(Marketwired - June 17, 2016) - Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) TOO announced today that it has entered into binding agreements to issue $200 million of equity securities through two private placements:

  -  Series D Preferred Units: The Partnership has agreed to issue $100     
     million of 10.5% Series D Cumulative Exchangeable Perpetual Preferred  
     Units (Series D Preferred Units) to a group of investors. These        
     investors will also receive approximately 4.5 million warrants with an 
     exercise price equal to the closing price of the Partnership's common  
     units on June 16, 2016, or $4.55 per unit, and 2.25 million warrants   
     with an exercise price at a 33% premium to the closing price of the    
     Partnership's common units on June 16, 2016, or $6.05 per unit. The    
     warrants have a seven-year term. The Series D Preferred Units are      
     exchangeable into common units of the Partnership at the option of the 
     holder at any time after five years. In addition, the Partnership has  
     the option to redeem the Series D Preferred Units any time after five  
     years.                                                                 
                                                                            
  -  Common Units: The Partnership has also agreed to issue $100 million of 
     common units to a group of investors priced at the closing price of the
     Partnership's common units on June 16, 2016, or $4.55 per unit.        

Both equity issuances are expected to close on or prior to June 30, 2016, subject to the completion of Teekay Offshore's other previously announced financing initiatives. The Partnership intends to use the net proceeds from these offerings for general partnership purposes, including the funding of its existing newbuilding installments and capital conversion projects.

"These equity issuances represent the most significant components of Teekay Offshore's previously announced financing initiatives," commented Peter Evensen, Teekay Offshore's Chief Executive Officer. "With the pricing and placement of these offerings, we remain on track to complete all of our financing initiatives by June 30, 2016. Together with cash flow from operations, these financing initiatives, which include bank financings totaling $400 million, are expected to cover all of our medium-term liquidity requirements and fully finance Teekay Offshore's $1.6 billion of committed growth projects scheduled to deliver through 2018, which we expect will contribute to further growth of our distributable cash flow."

Investor Presentation

The Partnership provided to potential investors in the equity financings a presentation about, among other things, the Partnership's business, the proposed equity financings and the Partnership's other financing initiatives. A copy of the presentation is available on our website at www.teekayoffshore.com and is also accessible through the following link: http://media3.marketwire.com/docs/1059439-TKIP.pdf

This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state of jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

About Teekay Offshore

Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the oil industry, primarily focusing on oil production-related activities of its customers and operating in offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Teekay Offshore is structured as a publicly-traded master limited partnership (MLP) with consolidated assets of approximately $5.7 billion, comprised of 65 offshore assets, including shuttle tankers, floating production, storage and offloading (FPSO) units, floating storage and offtake (FSO) units, units for maintenance and safety (UMS), long-distance towing and offshore installation vessels and conventional tankers. The majority of Teekay Offshore's fleet is employed on medium-term, stable contracts.

Teekay Offshore's common units trade on the New York Stock Exchange under the symbol "TOO".

Forward-Looking Statements

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the timing and completion of the Partnership's equity financing, bank financings, and other financing initiatives to address its medium-term funding needs, and the results and benefits of such initiatives; the use of the net proceeds of the equity financings; and the expected impact of the Partnership's cash flows from operations and the delivery of the Partnership's existing growth projects its future distributable cash flows. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: the Partnership's ability to complete or delays in completing the equity and bank financings or its previously announced other financing initiatives; failure of lenders, investors or other third parties to approve or agree to the proposed terms of the financing initiatives of the Partnership; failure to achieve or the delay in achieving expected benefits of such financing initiatives; vessel operations and oil production volumes; significant changes in oil prices; variations in expected levels of field maintenance; increased operating expenses; different-than-expected levels of oil production in the North Sea, Brazil and East Coast of Canada offshore fields; potential early termination of contracts; shipyard delivery or vessel conversion and upgrade delays and cost overruns; changes in exploration, production and storage of offshore oil, either generally or in particular regions that would impact expected future growth; delays in the commencement of charter contracts; and other factors discussed in Teekay Offshore's filings from time to time with the SEC, including its Report on Form 20-F for the year ended December 31, 2015. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

FOR FURTHER INFORMATION PLEASE CONTACT:
For Investor Relations Enquiries:
Ryan Hamilton
+1 (604) 844-6654
www.teekay.com