Hello and welcome to the KNOT Offshore Partners’ Second Quarter Earnings Call. All participants will be in listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Arild Vik. Please go ahead sir.

Thank you very much and we are happy to welcome you all to our second quarter results presentation. And I think I'll go straight to the presentation. We would like to just remind you if page two where we say something about the forward-looking statements. And along that, I'll go to straight to page three to talk about the highlights for this quarter. The quarter has been an excellent for the MLP where we have refinanced our debt and secured longer maturities, we have done the acquisition of two vessels and we have done an equity issue. And from that we will see that there has been a certain costs related to the affecting these transactions. So, our net income $2.5 million, however our operating income is $9.6 million which is in line with our initial assumptions and improvement in relation to the previous quarter. This is also reflected in the generated adjusted EBITDA which is 16.3 million and our generated distributable cash flow is also slightly lower than it would have been if we had not done all these transactions. And then further, in the second bullet point, you'll see that we had 1.6 million of unrealized derivative losses obviously due to movement in the interest rate and further there is about $2.2 million in various transaction costs related to the refinancing, acquisition and equity offering that we have been undertaking. We paid today the second quarter distribution of $0.435 per unit and as we have previously advised the management has recommended to the Board that there should be an increase for the third quarter up to $0.49 per unit. As mentioned we have completed the acquisitions of Hilda Knutsen and Torill Knutsen that was completed at the end of the quarter the last quarter meaning that these vessels…

Thank you. We will now begin the question-and-answer session. (Operator Instructions). Our first question comes from [Andy Gafta of Height Hedge]. Please go ahead.

Hi, good afternoon. Thank you for taking the question. I’ve got a couple for you, first if you could give us some color on EBITDA from the two vessels the Dan Cisne and the Dan Sabia and the potential timing that will be very helpful?

Yes. Well we haven’t specifically given that information, but obviously what we’ve said is that we will look to do (inaudible) pricing at 10 times EBITDA so obviously these vessels are bit smaller and that will then be reflected there. In terms of the timing we obviously we’re just on an equity issue but obviously we’re now considering what is the optimal timing and we have not decided whether this would work to the original order of (inaudible) we set out with.

Understood. And then how about the additional to drop-downs, how far turning for in Ingrid Knutsen, can you give us some guidance on those two?

Yes well, I think the guidance is to some extend the same I mean we said when we set out that we will the drops within 18 to 24 months and that means that we will look to spread these June results over the next I think now probably we should say 12 to 18 maybe and I think that when it comes to those vessels they are on the expensive side due to their high specifications. Well, but on the other hand I think if you look at the -- if you average out the numbers that we have in our existing accounts I think that you will get a pretty good idea of how this EBITDA levels would look like.

Understood. And the final question from me is while we see of course your assets are contract for very good period here could you give us some perspective on what are you seeing generally in the industry for shuttle tankers and for rates what are you seeing in terms of competition out there?

Well I think that what we see now is that the period this continues to be in line of between 5 to 10 years. We don’t think that would become shorter because the oil companies using the vessels also need the security that they have offtake when they actually plan expensive offshore oil operation which we are actually the shuttle tanker, cost is not the major cost element for them. As we have said and we cannot say anymore there are activity out there now in the market, this is tender activity, we have seen that new building prices of course to some extent that the level in terms of what investment is and we have been looking to have about 10% IRR on leverage on our project and I believe that would be -- our competitors would be thinking sort of mainly along the same lines.

Understood. Well, thank you. Congratulations on a good quarter.

Thank you.

Our next question comes from Sunil Sibal of Global Hunter Securities. Please go ahead.

Hi, good afternoon guys.

Good afternoon.

My question was really follow-up on the previous color. Can you just give a little bit more color on the market for shuttle tank? I was wondering if you could talk about which markets are you seeing the most tender activity with base Brazil or not to see and it seems like or the past few months some vessels have retired. So how do you see the demand-supply balance in the next say 12 to 24 months?

Well, I think it’s still the same which is where we see most of the activity. Although we know there are some activity coming up in the North Sea as well over the next couple of years. I think that the situation is that there is really today any modern, there is a delay as we have seen in for example in (inaudible) meaning that vessel are effectively operated by start oil once they're going to E&I project, we don't see there will really be any surface capacity and that means that new project will need new vessels and we don't see anyone contract respectively. So we continue to see this very much in the same way that we have done for a while that there are projects coming out and there will be kind of processes to meet those demands. And fundamentally speaking I think we see the same overall demand over the next 5 years in the range of 60 vessels that we saw some time ago. What’s been holding back of course is delays in production both in Brazil and in Norway. We feel that we see some improvement in the activity in Brazil. They have now managed the increase their production over the last quarter so we think these things are going in a right way. And they're going slowly but I think in one way that fits us as well because that means that we can adjust our investment activity in line with actual demands and don't want to take speculative positions.

Okay, that's very helpful. Thanks. That's all from me.

(Operator Instructions). Our next question comes from Derek Walker of Bank of America Merrill Lynch. Please go ahead.

Hi. Good afternoon guys.

Good afternoon.

Hi. Most of my questions have been answered but I have a couple of questions here. Can you give us little bit more background around the conversations you had with PG and (inaudible), and rechartering there? I guess the next contract up is with the (inaudible) oil. At this point and just little bit further on contract is up for actually expiring before the auction for extension but is there potential for that contract to be similar to the BG contract where there is -- they didn’t do the renewal, but then you are able to actually re-contract there? Just any insight around the conversation you have with BG and then the potential -- of that potentially happing with the Statoil?

Yes. I mean first to talk about the process with BG, I mean they are expanding massively in the area and however they had production delays and in getting the FPSOs coming on stream. And of course after having taking four vessels from our competitor, they needed sometime to assimilate that. And in combination that led to them not needing Windsor Knutsen. But on the other hand, we continued to have a strong dialog with them and they always like the vessel. And of course that's now demonstrated by the fact that they took her back. And I think we believe that there will be further demand for vessels from BG. So, that situation was because of the delay and that’s how we ended up in this. The vessel was not -- was really, it wasn't matter of money for BG that they had a period where they actually thought couldn’t pay for it. When it comes to Statoil, I think that the situation is a bit different. There is not any sort of overcapacity of modern tonnage in the North Sea. And it’s too early to talk them about what’s going to happen in ‘16, but our idea still is that we believe that vessel we will be needed for North Sea operations. It is in many ways besides two Eni vessels, the most sophisticated vessel available for harsh North Sea conditions.

Got it. I appreciate the color.

At that time, we also assume that there have been no temporarily oil capacity in the market as well in general.

Got it, okay. And then, I appreciate the color there. Just last one from me is just on consolidation within the shuttle tanker market. How are you guys looking at third party M&A, in particular just are there certain opportunities there you are trying to avoid just giving certain contract lengths or most opportunities out there well contracted and you see plenty of opportunity for potentially third-party acquisitions?

Well, I mean we have completed one third party acquisition and it takes time. So, it’s really upto the (inaudible) this and I think that we’d be interested. On the other hand, would have to be meaningful pricing. And we still believe the main business philosophy is to grow organically and to develop new projects because we know that we are always on -- have a seat at the table when there are new contracts coming along. We truly, position we have with the sponsor, we are more than critical mass in order to be in that position. And we’re not dependent on M&A to grow for the time being. But yes, of course that’s something, we watch the market and there could be opportunities. It’s really what I could say about it.

Got it. Thanks Arild, thanks for the color. I appreciate it.

(Operator Instructions). This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Vik for any closing remarks.

Yes, thank you very much. Thank you all for listening and giving us the opportunity to present the Partnership and our ideas and results for you. And we look forward to talking to you again in three months time.

Thank you. The conference is now concluded. You may now disconnect. And thank you for attending today’s presentation.