Hello and welcome everyone to the KNOT Offshore Partners LP First Quarter 2025 earnings call. My name is Maxine, and I'll be coordinating the call today. If you would like to ask a question, you may do so by pressing Star followed by one on your telephone keypad. I will now hand you over to Derek Lowe, Chief Executive Officer. Please go ahead. Thank you, Maxine, and good morning, ladies and gentlemen. My name is Derek Lowe, and I'm the Chief Executive and Chief Financial Officer of KNOT Offshore Partners. Welcome to the partnership's earnings call for the first quarter of 2025. Our website is knotoffshorepartners.com, and you can find the earnings release there along with this presentation. On slide two, you will find guidance on the inclusion of forward-looking statements in today's presentation. These are made in good faith and reflect the management's current views, known and unknown risks, and are based on assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied in forward-looking statements, and the partnership does not have or undertake a duty to update any such forward-looking statements made as of the date of this presentation. For further information, please consult our SEC filings, especially in relation to our annual and quarterly results. Today's presentation also includes certain non-U.S. GAAP measures, and our earnings release includes a reconciliation of these to the most directly comparable GAAP measures. On slide three, we have the financial and operational headlines for Q1. Revenues were $84 million, operating income $23.4 million, and net income $7.6 million. Adjusted EBITDA was $52.2 million. We closed Q1 with $101 million in available liquidity, made up of $67 million in cash and cash equivalents, plus $34 million in undrawn capacity on our credit facilities. We operated with 99.5% utilization, taking into account the start of two dry dockings, which amounts to 96.9% utilization overall. Following the end of Q1, we declared a cash distribution of $0.026 per common unit, which was paid in early May. Onto slide four, our outlook remains positive on both industry dynamics and the partnership's positioning to participate fruitfully in our markets. Significant growth is anticipated in production in fields which rely on service by shuttle tankers. In particular, we've seen Brazilian FPSOs delivering and starting up ahead of schedule, with quite a few still to come. In the North Sea, the long-awaited Johan Castberg FPSO started production, following shortly after the Penguins FPSO back in February. On the vessel supply front, we are seeing continued new build orders placed in order to service the large new production volumes coming online in the years ahead. This includes for our sponsor, Knutsen NYK, whose most recent order was placed in March. A measured amount of new shuttle tanker ordering is unavoidable and, in fact, necessary as a shortage of shuttle tanker capacity remains projected in the coming years. As usual for the shuttle market, we believe that all known newbuild orders are backed by firm client charters, which minimizes or even eliminates a dynamic of speculation around anticipated supply into the global fleet in two to three years' time. The partnership remains financially resilient, with a strong contracted revenue position of $854 million at the end of Q1 on fixed contracts, which averaged 2.3 years in duration. Transfer options are additional to this and average a further 4.7 years. With the markets having strengthened and given expectations for tightness in the years ahead, the economic rationale for exercising these options has been strengthening, and we increasingly expect these options to be taken up. Our pattern of cash generation and liquidity balance is sufficient for our operations and the significant paydown rate for our debt, which is in the region of $90 million per year for installment payments. The debt from the Lever acquisition fits in with this repayment profile also. On slide five, a number of developments in Q1 were announced already on the previous earnings call. Most notably, our near-term chartering exposure was addressed by a swap of the Dan Sabia for the Lever Knutsen. Slide six contains additional details on that vessel swap, which is explained further in our Form 20F filing as a subsequent event in our 2024 annual report. On slide seven, our most recent developments include the Hilda Knutsen going on hire with Shell in late March on the one-year fixed charter. The addition of one vessel to our potential dropdown inventory, which is the newbuild order I mentioned earlier, and the current charter for Brazil Knutsen has also been extended to September, when she'll be redelivered from Petra Rio and then delivered out to Equinor. Onto slide eight, you can see consistent and growing revenues over the quarters and years, along with improving profitability. Slide nine similarly reflects consistent and growing Adjusted EBITDA, and you can find the definition of this non-GAAP measure in the appendix. On slide ten, we showed the change in our balance sheet from the end of 2024 to the 31st of March 2025. The main point to note there is that even after the assumption of $73 million of debt from the Lever Knutsen acquisition, our long-term debt balance rose by the much lower figure of $47 million in that period, which reflects the contractual debt repayments we make in the area of $90 million per year. The debt facilities can be seen on slide 11, which sets out the maturity profile. On line one, the first of our revolving credit facilities is due to mature in August 2025, and on line two, the loan secured by Tordis Knutsen and Vigdis Knutsen matures over September and October 2025. The second revolver matures in November 2025. We typically seek to refinance such facilities on very comparable terms, and we have a good track record of refinancing success even in less favorable market environments. The highlighted column shows how the outstanding balances of each facility have been reducing because of the repayments we've been making in line with scheduled repayment terms. The current installments are the amounts of capital repayment due over the next year, which do not include interest or the final balloon payments due on maturity dates. Of note, $96 million in current installments is due to be paid over the 12 months following 31st of March 2025. Our typical pattern is for our vessels to provide security for our debt facilities, and that now applies to the whole fleet of 18 vessels. In addition to the $932 million of secured debt, the two revolving credit facilities, totaling $50 million of capacity, are unsecured. The maturity profile of these debts is set out graphically on slide 12. As you can see, repayments are spread out over the coming years, but include material balloons in each of 2025 and 2026. Slide 13 shows the contracted pipeline in chart format, reflecting the developments I set out earlier, as well as the fact that Raquel Knutsen's option period is the only material outstanding period until Q2 of 2026. While nothing is certain until it's formally in place, we are cautiously optimistic about securing that additional coverage in the current time market, either as an extension or under a new charter. Similarly, slide 14 highlights an encouraging 96% of fixed charter coverage for the last three quarters of 2025. We currently have 75% of 2026 fixed as well, although the open percentage does rise materially over the course of the year, which demonstrates the need for our continuing commercial efforts. On slide 15, we see our sponsor's inventory of vessels which are eligible for purchase by the partnership. This applies to any vessel owned by or in order for our sponsor, where the vessel has secured a firm contract period at least five years in length. At present, four existing vessels and six under construction fall into this category. There is no assurance that any further acquisitions will be made by the partnership, and any transaction will be subject to the board approval of both parties, which includes the partnership's independent conflicts committee. We continue to believe that key components of KNOT's strategy and value proposition are accretive investment in the fleet and a long-term sustainable distribution. At present, we see a compelling opportunity to increase our revenue backlog and long-term cash flow while lowering our average fleet age by dropdowns from KNOT. As such, we intend to pursue long-term charter visibility and accretive dropdowns supportive of long-term cash flow generation. On slides 16 to 18, we've provided some useful illustrations of the strong demand dynamics in the Brazilian market, as published by Petrobras. We encourage you to review Petrobras's materials directly at the web pages shown there. The primary takeaway from each of these slides is consistent. There's very significant committed demand growth coming in the Brazilian market in the form of new FPSOs that will require regular service from shuttle tankers. We believe that recent reports of additional vessel construction contracts are an endorsement of the strong anticipated market conditions in the medium and longer term. Six outstanding newbuild contracts are for our sponsor, Knutsen NYK, and are due for delivery over late 2025 to early 2028. We would not be surprised to see further newbuild orders placed in order to service the large new production volumes coming online in the years ahead. In a trend that also applies to oil production globally, you'll see that even in the years ahead, when aggregate production growth slows down, deep offshore production, in this case in the Brazilian presalts, continues to outpace the overall market and take market share. On slide 19, we provide information relevant to our US unit holders, in particular those seeking a Form 1099. Those holding units via their custodians or brokers should approach those parties directly. Those with directly registered holdings should contact our transfer agent, the Quinity Trust Company, whose details are shown there. On slide 20, we include some reminders of the strong fundamentals of our business. In the market we serve, our assets, competitive landscape, robust contractual footprint, and Brazilian finances. I'll finish with slide 21, recapping our financial and operational performance in Q1 2025 and the subsequent time and our current outlook. We're glad to have delivered high and safe utilization, which have generated consistent financial performance. We're particularly pleased to have filled the contracting schedule and taken a further growth step by swapping Dan Sabia for Lever Knutsen. Our continued commercial focus remains on adding to our longer-term charter visibility and the cash flows that provide us with the capacity for both accretive investment in the fleet and a long-term sustainable distribution. In the coming months, we will also be addressing the four refinancings which are coming due this year. In total, though, we are making good progress and pleased to have established positive momentum against an improving market backdrop. Thank you for listening, and with that, I'll hand the call back to Maxine for any questions. Thank you. If you would like to ask a question, you may do so by pressing star followed by one on your telephone keypad. If you do change your mind, please press star followed by two. When preparing to ask your question, please ensure that your line is unmuted locally. Our first question today comes from Liam Burke from B. Riley Securities. Please go ahead, Liam. Your line is now open. Thank you. Hi, Derek. How are you today? Okay. Good, thank you. Derek, the dropdowns, there were 11 potential dropdowns from the sponsor. Any sense of timing? You have growing liquidity and financial flexibility now. Sure. Each of those potential transactions is reviewed one by one on its own merits. Although there's no guarantee that any of them will come through, clearly it's something that we would seek to invest in on the right terms. It's a function of when those vessels are offered to us and the board's decision at the time around the terms on which the vessels are offered. We don't have any clear timing for you. Obviously, a number of the vessels are on the water and some are still new builds, and that would guide the timing on those as well. Okay. You've had a pretty strong history of successful refinancings of your balloon payments. Do you anticipate being able to refinance at similar or better terms? That's what we're working towards. We've got the same pattern of refinancing as we've had in the past, in that we tend to start those conversations with our lenders quite early, and so the negotiations go on a fairly slow pace because there's so much time in which to do that, and there's no real urgency as we go through from either side. Those conversations are underway. We don't have any negative indications so far, but until they're signed, of course, then they're not set. Sure. Thank you, Derek. Thanks, Liam. Thank you. As a reminder to ask a question, please press Star followed by one on your telephone keypad. Our next question comes from Jim Altschul from Aviation Advisors. Please go ahead, Jim. Your line is now open. Good afternoon. Thanks for taking my call, my question, rather. The question I have is, just looking at the news release, it appears that the various interest rate hedges you currently have in place will all run off by sometime next year. What will be the impact on the bottom line of the end of these interest rate hedges? Thanks, Jim, for your question. The average maturity is one and a half years, and some of them will come off earlier than that, and some will roll out later. You're right to highlight that they do all expire. We put in new interest rate hedges on a rolling basis when we see terms that we think are suitable or attractive. It's not as if the portfolio of interest rate swaps is static and will just expire. I don't have a direct comment on bottom line impact. Obviously, you can see with each quarter's results, disclosures around what we receive as realized income from those derivatives and also mark to market on the unrealized portions. If you're putting new ones in place, it's certainly not going to be at 2.5% or 2.8% the way you have now. That's right. If you reference the swap rate versus SOFR over anywhere between two and five years, that will give you an indication of the type of fixings that are currently available in the market. Obviously, that's a market level that moves around fairly quickly, but we're in a position to put new swaps in place when we see a rate that we like. Good. Related question, though. I don't have the balance sheet in front of me, but I believe we have $600 million in long-term debt versus $900 million. How much of the long-term debt is covered by these different interest rate swaps? Sure. That is described in, I think it is about page four of the release, directly under the debt maturity profile. You have asked how much long-term debt. I mean, the total debt burden we have is $948 million as of the end of March. $932 million of that is in the secured debt facilities, and then the remainder is what we have drawn down on our RCS. In the paragraph below, I will not read through that, but you can see how, or the two paragraphs below, you can see how our interest rate swap portfolio covers that in various portions. I would also say that the sale and lease back facilities we have are on fixed rates anyway, so we treat those as being part of our effectively fixed cost portfolio. Okay. Thank you very much. Great. Thank you, Jim. Thank you. Our next question comes from Pavel Oliva from Rockhill Global. Please go ahead. Your line is now open. Hi. Good morning. Thank you very much for another great quarter. It sounds like that you guys are doing sort of $40 million pre-debt repayment in free cash flow and sort of mid to high $20 million in free cash flow afterwards. My question is, on the refinancing that you are doing this summer, you have several packages that are potentially to be refinanced. I think it is the $345 million facility for Ana, Tordis, Vigdis, Brazil, and Lena Knutsen. Is that correct? Is that the one that is getting refinanced? No, that is September next year, 2026. On slide 11, that is— It is the Windsor, Bodil, Carmen, Fortaleza, Recife, and Ingrid, right? No, that is 2028. If you look at slide 11 in the presentation, you've got them in time order. We've got two revolving credit facilities unsecured that are due over the course of August to November, and that's $50 million of capacity in total. The secured loans are for Toba and Sonova, and that's over September and October, and they total at that point $139 million. I see. I see. Okay. How old are those ships? I'm trying to figure out. Those are one of the new ones, right? Yeah. I'm just thinking off the top of my head. They were delivered around 2020 and 2022. You need to refer to our filings just to get that exactly right, but I believe that there was— That was 2021 and— Yeah, beginning of 2021 and over middle of 2022. Can I ask you in terms of what kind of loan-to-value RDs at this point? Because you have been making pretty aggressive repayments. Yeah. I do not have that figure off the top of my head. I am not sure if we disclose the vessel valuation vessel by vessel, which would help get through that calculation. Yes, you are right that we have been paying down pretty heavily over that time. Can I ask you, when you are doing loan-to-values and trying to determine how much you can borrow against the different assets, do you do mark to market, or is it the accounting value? Or Or the bank? Sorry. When you— I am not sure I followed the exact line of the question, but. If I am the bank and I'm trying to determine the loan-to-value, do I use the mark to market, what I think the market value of the ship is, or do I use the accounting value of the ship? I generally use the mark to market value, so it's a broker valuation. In fact, the covenants in the loans. Is it fair to say that given the tight market in Brazil, the value of the ships has gone up? They've held pretty level over the last time we did it. I wouldn't say it's necessarily gone up, but obviously, we've got a range of vessel ages and specifications and so on. They held pretty well over the last time we did that, which was for the year-end 2024. You'll see that in the disclosure in portfolio. Where I'm getting at is I'm trying to understand you may be able to negotiate with the banks as you talk to them over the next few months, and my guess is you're already talking to them, obviously. If you can get a further advance on these ships and basically get some cash through refinancing to speed up the dropdowns. Yeah. If that's the nub of your curiosity on that topic, then yes, we think there is potential to, or there can be potential to increase proceeds with refinancing. That would obviously generate liquidity, but additional debt on the balance sheet and additional amortization rates if we do that. Right. Right. My other question was about the two ships that will come up for renewal early next year. They are operating in Brazil, right? They're probably at fairly low rates. Is it fair to assume that that rate that you would recharter it on would be a lot higher than where it is now? I think I need to leave you to make your own assumptions about that. I mean, because we do not comment on individual contract rates. The key when you are looking at that is contracts are, the levels are set at the time they are signed. Of course, that can be sometime in the past, or in the case of extensions, the time those extensions are signed. We make disclosures each quarter on when new contracts have come through. I would have to leave you to make your own assumptions about the rates that those vessels may be on at the moment and what current or future markets might be. If I make an assumption that the rates in the past are a lot lower than they are right now, that's probably a fair assumption, would you say? As I say, I think I need to leave you to make your own assumptions on that. If you look at the timing at which any given contract was signed and within the subsequent quarter announced, that should give you a guide as to where you want to set those levels. One question. You mentioned that the valuations of the ships per broker quotes have been relatively stable. Does that mean in terms of valuations year on year, given the age of the fleet, or even with the increase in age of the ship, the value of the ship stayed about the same? It's the latter. It's just the absolute numbers that came through. Okay. Basically, an older ship hasn't really depreciated in value. It has remained about the same. One-year-older ships. Yeah. It was a comment on the fleet. It was a comment on the fleet overall for the vessels, obviously, that were in the fleet throughout the period. If the rates, especially in Brazil, have increased, which it seems when we talk to your customers, that's the case, theoretically, that should also be reflected in the value of the ships, correct? That will certainly be in the minds of the brokers as they're looking at them along with any other circumstances they think are relevant. The other circumstance would be that the new ships are $120 million or $140 million, depending Brazil and North Sea, right? That seems sort of the new quotes. Also, given that the new ships are more expensive, that would also increase the value of the used ships, correct? It should do. I mean, that's for the brokers themselves to comment on. Those are some of the considerations they would have as they come up with each valuation. Understood. Okay. Okay. How long does it take in general to drop down the ship? Drop down a ship? What, from start to finish of the transaction process, you mean, or? Yeah. I would say that's two to four months. Can you comment if you have started or have done any of those right now? Because you have $67 million on your balance sheet, right? It sounds like you will be refinancing and potentially taking some cash out of these borrowings that you're doing. Hopefully, even the revolving credit facility may be extended, etc. This may not be a bad time to drop down some of those ships, right? You may see that we announce dropdown transactions at the time that they're agreed on, and usually, that's around the closing time. That's the pattern of our announcements, and that's the point at which those transactions become material. Obviously, we need to announce them then. Prior to that, we don't make any other comment. Last one or two dropdowns, how much cash or value? You did the swaps with Dan Sabia and then Sismo. Even the one before, how much cash or value did you have to provide in order to swap, in order to drop down those ships? If you can remind us. You have got, I think it is page six in this presentation and a similar page in the, I think it is going to be the Q2 or Q3 presentation from last year. Also in the 2020, but I think for, it is only in the filings, but if you want the headlines. Those two, obviously, as you have alluded to, they were vessel swaps rather than funded purchases of the new larger dropdown vessels. The valuation of the two DANs, Dan Sabia and Sismo, was order of magnitude $30 million. Clearly, you need to look at the filings for the exact numbers. Even the deal summaries have got the figure set out further. That is the approximate valuation where the cash element of the consideration was very low by comparison, so sort of $1 million in either direction. I think it was in one way for one of the transactions and the other way for the other. The cash element of those was negligible compared with the value. Negligible, but the value was about $30 million, plus or minus. I think you can see on page six that the Dan Sabia sale price was $25.75 million, and for the Sismo, it was, I think, above that to memory. Sort of, but the ships going forward would be probably slightly higher, right? For the three or four ships that are ready to be dropped down at the moment, you probably need $30 million-$35 million per ship, correct? Yeah. We do not have a particular comment on the exact terms of those. But being that bit newer and contracted that bit more recently, it wouldn't be a surprise to see a slightly higher number there for the equity component. Understood. The latest dropdown came in March. The full impact of that, we're going to see only in the second quarter, right? That was an accretive transaction. On the margin, the cash flow, free cash flow run rate should be slightly higher in the second quarter than in the first quarter. Would that be a fair statement? Yes, as it relates to that 1/18 of the fleet. Yep. Understood. Thank you very much. Great quarter. I really appreciate it. Great. Thank you. Bye-bye. Cheers. Cheers. Thank you. Our next question comes from Robert Silvera. Please go ahead. Your line is now open. Hi. Good morning, and thank you for taking my call. I was a little late to the call, and I'm trying to understand the long-term debt increased significantly, about $50 million, and the lease liabilities increased by about roughly $3 million. Could you give me a wrap-around as to why that took place during this last quarter? Sure. If you listen to the replay in due course, you'll get a couple of comments on that as well, but I'm happy to repeat them here. The vessel swap that we did in March involved us assuming $73 million of debt as part of the transaction terms. Our long-term debt balance over the quarter increased by much less than that, so increased by only $47 million. Yes, the long-term debt has gone up. It's primarily transaction-related. The fact that there is that difference of, is that $26 million, I think, demonstrates the debt paydown rate that we have in all of our facilities where we make amortization payments. Back on slide 11, I just refer you to the, I think it is the third column of figures that add up to $96 million. That is our current outlook for debt amortization in cash over the next year. We pull out that figure deliberately to show that that is our debt service capacity as far as amortization is concerned and our ability to pay it back. Thank you. That involves what? One ship dropdown? The March transaction? Yes. That is right. That was one ship dropdown, one single ship. It was a single ship dropdown, but it was a vessel swap, actually. We sold our Dan Sabia, and we bought Lever Knutsen. Good. Okay. Thank you very much for taking my call, and it looks good. Hopefully, in the future, the dividend can go back toward the old days when it was $0.51 a share. We'll talk to you later. Thank you. Great. Thanks, Robert. Thanks for your question. Thank you. Our next question comes from Mario Epelbaum from First New York. Please go ahead, Mario. Your line is now open. Hi. I was on mute. Sorry. Can you hear me now? Yes, I can. Thanks. Okay. Thank you for the space to ask questions. I had a question about the Raquel with Repsol. When is that charter actually supposed to finish or the option to remove? If you could give me, I can't see the date. The final end of the option is in 2030. Do you mean the current? Yeah. Yeah. Yeah. The current fixed period finishes around the end of June, and then the option runs through till the same time in 2030. Okay. So you are one and a half months. And how is if that gets renewed with Repsol, is there a little bit of an increase in the—could we expect an increase in the charter rate? Or usually, at the signing, they have the option of the same charter rate, or if you cannot talk specifically about this one, but in general, what happens at renewals? Yeah. I mean, you are right that we cannot comment on individual charter rates, but it is generally the case that we have a small amount of escalation in option terms. And in general, when you renew, does the charter tell you one month in advance, or is this unusually late that you have not been known to renew? Yeah. It's not unusually late, which you can imagine is a little bit of a frustration, I think, for any vessel owner, any operator in the space. They'd prefer to have more notice. That is common practice that the deadline is relatively close and that a lot of clients leave it quite late on to choose whether to exercise or not. I would say that simply on the basis of current market rates and the need for shuttle service, I would say we're not particularly nervous about exercise of that. The sooner that happens, clearly, the happier we'll be. Okay. Thank you for that. The second question I had is, with regard to things that you can easily see when you compare the first quarter and the second quarter, when you look at the dropdown, I mean, sorry, the dry dockings, how would you compare first quarter dry dockings to second quarter dry dockings? There were two dry. The two that are relatively current, and the vast majority of their work was after the start of the second quarter, but clearly six weeks or so or seven weeks into the second quarter now. That much of that work fell in April rather than in March. I realize on page 13 that the current time red line, it is hard to see exactly when that falls. That is designed to be now rather than the end of the quarter. Okay. When you compare the second quarter to first quarter, will you expect we have an additional ship, but we have some additional dry dockings? Those are the two puts and takes when you compare the cash flow. Yeah. That's fair enough. Would that be fair? Y eah. Okay. With the Fortaleza and Recife, these ships that you have that are coming up in 2026, are you engaged already with other parties in discussions of potential different ships? Yeah. I mean, we're marketing our—yeah. I mean, it may be a generic comment, but we're marketing our open contract positions all the time. I'm glad that the next material open positions are as far out in the future as they are now. That clearly was not the position that we had a year ago or even six months ago. Yes, we are marketing that all the time. Given your description of the market being tight, I imagine that you are enjoying these negotiations of the open marketing positions in Brazil. Would that be fair in the sense that you're in a stronger position than you've been in quite a while? I think it's fair to say we are in a stronger position now than we have been previously. Nonetheless, until they're signed, they're not signed. Okay. In terms of the North Sea, it's my understanding that the cargo is going to ramp up quite quickly, that they have these wells that they have drilled in advance, and that it should go up to its max capacity, like 200,000 barrels a day sometime in the mid-year to third quarter. Would that be your sense? Yeah. We do expect it to be fairly quick, and that is the public domain information or news discussion information as well. That should be increasing significantly, the number of ships in the North Sea that are needed. Between those two, what would be—you think, the increased demand for shuttle tankers in general in that market? Yeah. From the numbers to put. If you help us guess, I mean, you know a lot better than I do. Yeah. I mean, I'm reluctant to guess. I'm reluctant to guess, but what I would say is, as you're aware, we've got four vessels in the North Sea. They're all contracted, which means that they're not available for contracting in the immediate term to soak up that extra demand. I'd say the next vessel that is due for that will be open is the Hilda, and she gets open again late March next year. What you described means that we are reasonably confident with that open position and looking to contract this in due course. We run a time charter model, as you're aware. It is the operators in the spot or COA markets that will experience that change. Yeah. No, the reason I—you just chartered your most recent time charter was for one year in the North Sea. Do you expect the conditions when you re-charter that to be significantly better than what they were when you chartered that before? There is a good chance of that. I mean, I think the North Sea is ramping up more slowly than the conditions we got in Brazil. Yes, those conditions ought to be better when we recontract the Hilda. Okay. I am just getting at the fact that whatever is open in the next two years, you are a lot more confident about the likelihood of chartering it and the price than you have been in, let's say, the last 12-24 months. Yeah. That is fair comment. That is fair comment. Yeah. Today, if you annualize the first half, if you annualize the first quarter, you are cash flowing somewhere between around $1.50-$2 a share of free cash flow after debt repayment. That will soon go out. As these things between the dropdowns and those additional increased charter rates, that will go up maybe to $2, $2.20, $2.50. I understand that getting dropdowns is interesting, but how does that compare to the return on investment of spending some of the additional cash and buying back shares? I mean, it seems to me that it's impossible for those dropdown economics to match the purchase of shares at this price, at the current market price. Yeah. I mean, I would say at the moment, the board's focus is on growth in the fleet, improving the capital value position of the partnership overall rather than— The board believes that it should deploy capital at a WAC of 7-8% instead of buying shares at an IRR of 25-30%, 100% of the capital used by the firm. Is that what you say is the board's appropriate decision? Okay, 120% of the capital because they're going to maybe borrow more to do the dropdowns at 7-8% WAC, which is, I believe, what you must be buying the ships versus a 25-30% IRR on the shares. Do you think that's what the board thinks? Is that what you're saying? The board is interested in the longer -term interest exposure. This maintains the longer term. If your shares appreciate, you could use the shares to do more dropdowns instead of cash if they're valued correctly. This is definitely in the long-term interest of the shares. What is the fiduciary duty of the board? Is it maximizing the shareholder value over the long term? It's the valuation of the partnership overall, and that, if anything, is going to be reduced if some of the units are bought in rather than spent on expanding the fleet on appropriate terms. Is it overall, or is it per share? Why would they care about the whole, the size of the pie rather than the pie for the shareholders? They consider both in the decisions that they make, and they're aware of the ability to buy back units as well. That's one of the options that's available to them, and they juggle between those. I appreciate that I'm putting you here on the spot, but the message is really to the board that they do have a fiduciary duty to everyone, and the return on investment on doing the dropdowns with that money is dramatically different to buying the units. It's, in my opinion, not in the best interest of all shareholders, at least some money allocated to buybacks. I really appreciate you taking my questions seriously. Thank you. I take the point you raised at the end and will raise it with the board. I would point also to the rather low absolute amount of trading volume in the units. Any exercise in repurchasing is likely to suffer in its effectiveness from low trading volume. It might raise the value of the shares, and then one can use your shares for part of your dropdowns and increase the number of shares at a better price. If there's a buyback, sometimes it increases the liquidity of the shares, actually, because people know that if they need to sell for some other reason, there's a buyer out there. Sure. No, I understand those issues as well. Yeah. Thank you. No, I appreciate it. Thanks, Bryan. Cheers. Repurchase. Thank you. Our next question comes from Climent Molins from Value Investor's Edge. Please go ahead. Your line is now open. Hi. Good afternoon. Thank you for taking my questions. Most has already been covered, but I wanted to ask a question on the modeling side. Will those dry docking take place in Q3 or Q4? Hi, Climent. Thanks for your question. Tordis is, at the moment, I'm seeing that actually in—are you mean Tordis? Sorry. We've got two vessels with similar names. Tordis is, I think, straddling the end of Q3 and the start of Q4. Perfect. Thank you. That's helpful. And over the past couple of years, we've seen a number of new-build orders, including Knutsen NYK Offshore Tankers' recent transactions. I was wondering, could you talk a bit about the cost advantage of a shuttle tanker new-build or modern asset relative to, say, a 15-year-old vessel? I think that's quite hard to comment on specifically. We've obviously got a fleet with a range of ages that cover the almost new through to a good 15-plus years old. You can see our operating expenditure rates as well. I think we probably can't address anything more refined than that as to around the differences between different vessels. All right. Is the eco component something meaningful in the shuttle tanker market? Or given the shorter distances, is it a smaller factor? I believe it's less of a factor, but as I say, we prefer, for commercial reasons, not to comment on differences between individual vessel cost or revenue. Understand. Makes sense. All right. That's everything from me. Thank you for taking my questions. Okay. Thank you. Thank you. Our next question comes from Hani Hassanein. Please go ahead. Your line is now open. Hello, Derek. How are you doing? Hi. Good. Thank you. And you? Wonderful. Thank you. Congratulations for an awesome quarter. I'm looking at it right now with an increase in revenues to around $84 million, annualized to $335 million, which is about $50 million-$60 million in revenue above the previous years if we annualize it further. This is great. Looking at the operating expenses, I have two questions. First, one on the depreciation. Currently, it's at a rate of around $28.75 million. When will that depreciation drop? I mean, if we're looking at a depreciation table that we have—we have older vessels and newer vessels—when will we see that depreciation drop to, let's say, $20 million a quarter? I do not have a direct answer on when it would drop to that as quickly down to 20. The depreciation is generally on a straight-line basis, not down to zero, but down to a disposal value. It is only when we start having vessels leave the fleet that you would start to see any impact on that. In fact, you are more likely to have the introduction of new vessels. The Lever Knutsen only has one month of depreciation in there, for example, but we will have the full quarter's worth for the second quarter. It is the introduction of new vessels, if we do further dropdowns, that is likely to have a greater influence on that figure. With a higher fleet value, which would come from acquisitions, you would actually expect to see that depreciation figure go up, not down. Okay. I understand. Does depreciation, say, for example, for the vessels that we just acquired, are we putting the depreciation over a period of 10 years, 15 years, or do we put it to end of life like 25 years? I mean, what number of years do we use in our own calculations at this stage? We have a useful life policy of 23 years, and so we run it to that. Oh, okay. All right. That answers my question here. All right. With regards to the loans that we have, especially the balloon payments, I can see that we have $150 million-plus this year and $280 million-plus next year. I am sure that you are working on refinancing those. Are we going to try to refinance them with a balloon payment at the end as well, like a three-year finance with a balloon payment or a five-year finance with a balloon payment? I mean, I'm sure you're in the middle of negotiation. I'm not sure if you can default to that or not, but what are you targeting at this stage? It is typical to replace like for like. If we keep with the same structure of debt, then it would be typical to replace a three-year with another three-year. There is no particular magic to that or no particular formula or rule about it. We would still expect to have a medium to long-term debt facility with debt amortizations, which you can see some of on page 11, and then a lower balloon at the end of the next period. That has been the pattern for these facilities since the vessels were purchased. Okay. Wonderful. Just kind of, I think it's just a quick typo on item number three on the long-term borrowing. It says that we have an outstanding of $15 million, but there is a balloon payment at $25 million. I think there is just a typo here. Yes. Thank you. Sorry. For the revolvers, yeah, the outstanding amount is what is currently drawn. You are right. It is $15 million in that last column. Thank you. Okay. All right. My last question is actually about dividends. Currently, we are at $0.026 per share. I can see that we have a little bit of net profits there. Is there any discussion on the board with regards to incremental increase in the dividends? I mean, raising it up to $0.15 or $0.20? Are we waiting until we can go back to the $0.52 that we used to get before? They are not waiting for particular level targets, if you like, as you describe at the end there. What I would refer you to is the board's thinking in the outlook section of the earnings release. The last couple of paragraphs of that cover the board's considerations around how they want to deploy capital. I understand that's how they want to deploy capital. Also, as shareholders, I think we're looking at a little bit better payouts, maybe not back to the full. I mean, if we even got like 20% in the capital expenditure, I guess there's something for the board to discuss. If the capital expenditure just uses 80% to what you think we need, which I agree with, I don't have a problem with, and 20% gets distributed versus what we're getting at this stage. That's my point of view to be discussed, I guess, with the board at a later stage. Yeah. Those are my questions. Appreciate it very much, Derek. Thanks. Thanks, Hani. Thank you so much. You have a great day. Bye. And you. Bye-bye. Thank you. That does conclude our Q&A session for today. I'll hand back over to Derek for closing remarks. Thanks, Maxine. Thank you all again for joining this earnings call for KNOT Offshore Partners' first quarter in 2025. I look forward to speaking with you again following the second quarter results and also at the Marine Money Conference in New York over the 16th to 18th of June. Thank you. This does conclude today's call. Thank you for joining. You may now disconnect your line.