Good afternoon and good morning. Welcome to the KNOT Offshore Partners LP Second Quarter 2017 Earnings Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note that today’s event is being recorded. At this time, I’d like to turn the conference call over to Mr. John Costain, CEO. Sir, please go ahead.

Thank you. If any of you have not seen the earnings release or the slide presentation, they’re both available on the Investors section of our website. On today’s call, our review will include non-U.S. GAAP measures such as distributable cash flow and adjusted EBITDA. The earnings release includes a reconciliation of these non-U.S. GAAP measures to the most directly comparable GAAP financial measures. A quick reminder that any forward-looking financial statements made during today’s call are subject to risks and uncertainties, and these are discussed at length in our annual and quarterly SEC filings. As you know, actual events and results can differ materially from those forward-looking statements. The Partnership does not undertake the duty to update any forward-looking statements. And now on to the presentation. KNOT Offshore Partners, KNOP, focus is on the Shuttle Tanker segment. The asset is field-specific and integral part of the logistic supply chain. It provides a vital service transporting oil from the offshore oil production unit to shore side shore side. In essence, a midstream mobile pipeline business. Shuttle Tankers operate in a space which will see substantial oil production growth in the coming years. The vessels are built to charters’ requirements and used on specific oil fields. They attract contracts which give them long-term, non-volume-based revenue streams. Although our MLP is young, our sponsor is very experienced operator having been involved in the design and construction of these type of vessels for over 30 years. Today, the Knutsen Group has more than 30 of these high-specification tankers building the fleet organically during this period. And on these sectors, there has been no speculative oil drill, so the partnership should yield both stable and sustainable revenues longer term. Following on from the recent acquisitions of Raquel in 2016, Tordis in quarter one, Vigdis in…

Ladies and gentlemen, at this time, we'll start the question-and-answer session. [Operator Instructions] And our first question today comes from Hillary Cacanando from Wells Fargo. Please go ahead with your question.

So recently one of your competitors orders 2 DTT shuttle tanker newbuilds with LNG propulsion technology, I was just curious is this technology, I guess, to be able to use LNG as a fuel, something that you expect will be included in shuttle tanker newbuild going forward? Would this be a normal this kind of like a one-off do you think?

I think, with the North Sea, it might be more prevalent because there're emission criteria. They are basically restricting the greenhouse gases in that area of operations. So I think it was quite prudent for them to do that, the shipping legislation going forward and what replacing. But it's not really, it's down to what the charter -- what the charter specifies when you go to the vessel as to what we build. Generally in Brazil, there's no requirement to - ships. I means, it's little more expensive. I mean, probably rest you can management talks it over [indiscernible]. But basically, we will build to what the charter requirements are, not what we need to do, and it's time for the charter to make a decision on how he designs vessel to that level, because basically partner deal [indiscernible]

And then just I know your next -- I think your next maturities are, I guess, due in October 2018 and December of next year, and I know you've been able to tap attractive bench financings, but I was just curious -- just wanted your thoughts on the capital structure plan? Would it look fairly traditional with bank finance -- bank refinancings or would you look at some refi options? I know we’ve seen lot of sales leaseback transactions and stuff at just MLPs as well, so just wanted to get your thoughts on your structure plans?

Yes, he have Øystein here. Why not? Øystein Kalleklev: Just to mention on the refinancing, of course we’ve taken out the first facility that mature for Hilda Knutsen, and of course sister vessels. So we are looking into doing something similar in terms of financing program. And as John mentioned in his presentation, something in place by year end before the loans turn into our portion in our balance sheet. And then of course there are also maturity on the [indiscernible] loan but that is more long because most of that loan is actually export candid loan that matures in 2025 and it’s only a small commercial bank transfer matures at end of 2018. But that we will also refinance. So we will see whether we put together with some other loan or how we actually do this. When you do have a time charter with extra month in 2024, that’s not really a issue doing the refinancing. So it’s more about finding the alternate solutions. When it comes to, say, leasebacks, it could be - basically it’s a little bit but we do think that we have so good access bank financing that go into some other leasing company in order for them to kind of finance it through the banking system. It also make that much sense for us because we have a very good access bank finance. And so, our finance to do this fairly simple, finance or - mostly bank financing and then of course relying on the equity market for risk capital. And so far we haven’t done any bonds and the reason is it’s a fact that we have already new fleet and we have a good backlog so that gives us good access to bank financing. And rather than doing bonds we have…

[Operator Instructions] Our next question comes from Nick Raza from Citi. Please go ahead with your question.

Thank you. Really quick. John mentioned new tendering activity and potentially the possibility of rebuilding a backlog. Could you just speak a little bit more about where this tendering activity is, North Sea versus Brazil? And then how the new tendering activity is coming out in terms of rates and just give us your initial thoughts on that? Øystein Kalleklev: Of course, predominantly the lead for shuttle tankers are in Brazil, but right now of course within four orders this year and all of them are for North Sea, and of course two of them are specialized for Brazil in the balance and then of course Teekay when they have resolved the financial situation they are finally in a shape to renew the [indiscernible] which have edge quite lately. But so in general I think going forward I think we will see more activity from Brazil in terms of they are fairly stable, they are a bit dependent on the interstate level, yacht cost and then of course specification of the rest. On the sponsor side we have just acquired a vessel without any contract attached to it, and the reason for this is that we do see that there is pent-up demand for vessels and we want to position ourselves for some of these charters. John, maybe you have something to add?

Pretty comprehensive, I think we would like to see more growth in business, being a bit slowly, we expect to pick up more by now. Obviously, Teekay, I should mention by name, they obviously have requirements for new fleets and they are just ordering on the basis they reposition. Now it’s good to see that they are going into shuttles again. So we expect market to pickup. But we haven’t, it’s not evolved quite as quickly as we expected it to, just how it is you know.

Okay. And then I guess in terms of the new vessel acquired by the sponsor, do you sort of have a sense of timing in terms of when it gets chartered and what the drop would look like?

Of course we can get shorter contract but of course if we after prefer into the MLP, we will probably need a longer contract. So it’s a bit early to say how and when it might be feasible, we just took over the vessel. So I think we will go on the status of that contract, when… Øystein Kalleklev: And it can be placed a modern charter fleet ship. It can be given the flexibility when negotiating with the clients about tonnage requirements. We’ve seen in the past where we had to provide and intermediary solution before we can place an order. It’s quite a long lead time with these tankers, and some times it makes your acquire unit early, and it gives you quite a lot of flexibility if you got tankers around. Basically it's a competitive advantage.

And then in terms of the distribution I mean obviously you guys have used preferred equity in the recent past to sort of facilitate the dropdowns and they seemed to be somewhat slightly just slightly accretive to right about net even. But I mean in terms of what the equity investor could expect going forward in terms of distribution growth, John I don't know we've spoken about this in the past and we've discussed the difficulty areas in the distribution briefly, but any sort of color on that now that the shuttle tanker is getting a little tighter, you might have tendering opportunities in the backlog? Øystein Kalleklev: I obviously think when we've vessels and eventually we want to raise whole capital distribution room actually go up. Today we can elect to increase obviously we could as it is, but it gives us rather more flexibility if we don’t increase the distribution. It's not really my decision. I obviously have the capacity to do increase [indiscernible], but we've obviously been refinancing, must have refinancing ships by doing charter renewals, and we just want to see how things fall out a little. But obviously it does help to get interest in the unit while increasing distribution and a normal MLP you would expect and we would expect more in this way -- we'd expect 2% to 3% distribution increase per year because I guess an NLP is bit like a pension for a lot of people. But the reality is today, at 9% and the unit price not going up too much, we’re comfortable at the distribution level. If unit went up to $25, $26 and obviously we would definitely increase distribution. I'm sure we would because it would be -- we have to have a sensible yield on it, to make it attractive for people for purchase the units, but that yield unit price within the price, it’s a bit of this is a bit of check now. You don't load the distribution too much, if we haven't got unit price to support it. I think the number [indiscernible] anyway because if we keep the cover we don't raise so much equity and the MLP naturally strengthens over time.

[Operator Instructions] And at this time I'm showing no additional questions. I'd like to turn the conference call back over to management for any closing remarks.

Thank you for your interest in conference call and the questions we had were very good as usual. Appreciate the time you've taken, and if you like the [indiscernible] story go out and buy the unit. Thank you.

Ladies and gentlemen that does conclude today's conference call. We thank you for attending. You may now disconnect your lines.