KNOT Offshore Partners Posts Strong Q4 2025 Operations as Take-Private Talks Collapse and Charter Coverage Tightens

The latest update is out from KNOT Offshore Partners ( (KNOP) ).

KNOT Offshore Partners reported interim results for the quarter ended December 31, 2025, posting revenues of $96.5 million, operating income of $8.4 million and a net loss of $6.2 million, mainly due to a $20.3 million non-cash impairment on the shuttle tanker Bodil Knutsen. Adjusted for the impairment, the partnership generated operating income of $28.6 million, net income of $14.0 million, Adjusted EBITDA of $59.3 million and ended the year with $137.0 million in available liquidity.

Operationally, the fleet delivered 99.5% utilization for scheduled operations in Q4 2025, and 96.4% including the scheduled drydocking of the Synnøve Knutsen, while the partnership maintained distributions on common and preferred units for the quarter and completed a $3.03 million unit buyback program previously authorized in July 2025. Management also refinanced multiple credit facilities, including a new $71.1 million term loan for the Synnøve Knutsen and the rollover of a $25 million revolver, and secured new and extended charter coverage such as the Vigdis Knutsen’s bareboat charter through at least 2030 and a new time charter for Fortaleza Knutsen starting in Q2 2026.

The partnership’s efforts to strengthen its contract backlog resulted in approximately 98% charter coverage for the first half of 2026 and around 88% for the second half, excluding planned drydockings, underlining strong near-term revenue visibility. However, governance and engagement challenges were evident as attempts to convene the 2025 annual meeting of unitholders on three separate dates in December 2025 and January 2026 failed due to lack of quorum.

Strategically, KNOT Offshore Partners navigated a proposed take-private transaction when sponsor Knutsen NYK Offshore Tankers offered on October 31, 2025, to acquire all publicly held common units for $10 per unit, but after review by a conflicts committee and negotiations, both sides announced on March 19, 2026, that they could not reach agreement and terminated discussions. The partnership also adjusted the accounting useful life of its vessels from 23 to 20 years effective January 1, 2026, a move that will increase future non-cash depreciation charges without limiting potential operations beyond 20 years.

Fleet maintenance and technical events continued into early 2026, with scheduled drydockings completed for Synnøve Knutsen in December 2025, Tuva Knutsen in early March 2026 and Bodil Knutsen in late March 2026, while the Tordis Knutsen suffered a diesel generator breakdown on February 16, 2026, taking it off-hire until expected repairs in May 2026, largely covered by loss-of-hire and hull insurance. The partnership also received a final $1.8 million loss-of-hire insurance payment in March 2026 relating to earlier thruster repairs on the Windsor Knutsen, underscoring the importance of insurance recoveries in managing operational disruptions.

Management highlighted tightening shuttle tanker markets, particularly in Brazil, where Petrobras exceeded its 2025 production targets as FPSO projects ramped up ahead of schedule, driving demand for shuttle tankers, while the North Sea market showed improving momentum as new projects in the U.K. North Sea and Barents Sea advanced. In this backdrop of strengthening fundamentals and limited fleet growth, KNOT Offshore Partners expects offshore oil production in shuttle tanker-serviced fields in Brazil and the North Sea to continue outpacing shuttle tanker supply growth, supporting its focus on securing long-term charters and optimizing fleet deployment.

The most recent analyst rating on (KNOP) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on KNOT Offshore Partners stock, see the KNOP Stock Forecast page.

Spark’s Take on KNOP Stock

According to Spark, TipRanks’ AI Analyst, KNOP is a Outperform.

KNOT Offshore Partners’ strong valuation and technical indicators are the primary drivers of its score. Financial performance is solid, but high leverage and cash conversion issues are risks. Earnings call insights are mixed, with strategic successes offset by uncertainties.

To see Spark’s full report on KNOP stock, click here.

More about KNOT Offshore Partners

KNOT Offshore Partners LP is a U.K.-based limited partnership that owns and operates a fleet of shuttle tankers, serving offshore oil production fields, primarily in Brazil and the North Sea. The partnership focuses on long-term charter contracts with major energy companies, positioning itself as a key provider of shuttle tanker capacity in these core offshore markets.

Average Trading Volume: 114,622

Technical Sentiment Signal: Buy

Current Market Cap: $343.3M

Find detailed analytics on KNOP stock on TipRanks’ Stock Analysis page.