Teekay Provides Details of Agreement to Acquire FPSO Units and Equity Interest in Sevan Marine ASA

HAMILTON, BERMUDA--(Marketwire - Oct. 18, 2011) - Teekay Corporation (Teekay or the Company) (NYSE:TK) today announced that it has entered into an agreement with Sevan Marine ASA (Sevan) and holders of more than two-thirds of each of Sevan's bond loans for Teekay to acquire three floating production storage and offloading (FPSO) units from Sevan and make an equity investment in a recapitalized Sevan.

Under the terms of the agreement, which has also been approved by the Board of Directors of Teekay and Sevan, Teekay will:

• Acquire from Sevan three FPSO units, the Sevan Piranema (Piranema), the Sevan Hummingbird (Hummingbird), and Sevan Voyageur (Voyageur), along with their existing charter contracts, for an aggregate purchase price of $668 million plus the remaining cost required to complete the upgrade of the Voyageur, which is estimated to be $110 - $130 million;
• Invest $25 million in a new issuance of Sevan equity, which is expected to provide Teekay with a 40 percent ownership interest in a recapitalized Sevan; and
• Enter into a cooperation agreement whereby Teekay will have the right to acquire future FPSO projects developed by Sevan.

Acquisition of Three FPSO Units

The Piranema and Hummingbird will be acquired by Teekay immediately upon closing of the transaction, which is expected to occur during the fourth quarter of 2011. The Voyageur will be acquired when the unit is deployed and has commenced its new charter contract on the Huntington field, which is expected to occur during the third quarter of 2012.

The 2007-built Piranema FPSO is currently operating under a long-term charter to Petrobras S.A. on the Piranema field located offshore Brazil. The charter includes a firm contract period ending in March 2018 followed by up to 11 one-year extension options.

The 2008-built Hummingbird FPSO is currently operating under a charter to Centrica Energy Upstream (Centrica) on the Chestnut field in the UK sector of the North Sea. The Hummingbird FPSO contract was recently extended to September 2012 and thereafter, includes one six-month extension option, one three-year extension option, and two one-year extension options.

The 2009-built Voyageur FPSO operated successfully on the Shelley field in the UK sector of the North Sea from August 2009 to August 2010. The unit is currently undergoing an upgrade prior to commencement of its charter contract with E.ON Ruhrgas UK E&P (E.ON) on the Huntington field in the UK sector of the North Sea. This charter is expected to commence in the third quarter of 2012 for a firm period of five years, with extension options. In addition to agreeing to acquire this FPSO unit from Sevan upon commencement of the E.ON contract, Teekay will finance the remaining upgrade cost which is expected to be $110 - $130 million.

Under Teekay's existing omnibus agreement and as further agreed between Teekay and Teekay Offshore Partners L.P. (Teekay Offshore), following the closing of the transaction, the Piranema will be eligible for sale to Teekay Offshore and the Voyageur will be eligible for sale to Teekay Offshore upon commencement of its contract with E.ON, both at fair market value. The Hummingbird will be eligible for sale at fair market value upon commencement of a new charter contract with a firm period of greater than three years in duration.

Teekay intends to finance the purchase of the three FPSO units through a combination of assuming Sevan's existing $230 million bank debt facility secured by the Voyageur, arranging new debt facilities, and utilizing its existing liquidity. Teekay expects that Teekay Offshore would finance its purchase of any FPSO units from Teekay through a combination of common unit issuance, assumption of debt or the arrangement of new debt facilities, and utilization of existing liquidity.

Investment in New Sevan Equity

As part of the agreement, Sevan intends to raise the Norwegian Kroner equivalent of $50 million in new equity (Equity Placement), of which Teekay will invest $25 million in equity of a recapitalized Sevan. Existing Sevan shareholders and unsecured bondholders will be given the opportunity to acquire the remaining $25 million of the equity placement. Assuming the completion of the Equity Placement, Teekay will own 40 percent, Sevan's existing shareholders will own 40 percent, and the unsecured bondholders will own 20 percent in the recapitalized Sevan on a pro forma, fully-diluted basis. Following its equity investment in Sevan, Teekay will be entitled to appoint two directors to Sevan's Board of Directors.

Sevan will use the proceeds from the sale of the three Sevan FPSOs to Teekay to repay all indebtedness secured by these assets. Following the FPSO transactions and the proposed Equity Placement, Sevan will be a substantially net debt free company consisting of:

• Two partially-completed hulls (#4 and #5) available for upgrade to FPSOs or other offshore projects;
• A licensing agreement with ENI;
• Engineering and offshore project development businesses (including 100 percent ownership of engineering subsidiary, Kanfa AS);
• Intellectual property rights, including offshore unit design patents; and
• Approximately $50 million in cash from the Equity Placement.

In addition, Sevan will retain the $83 million debt facility (of which $37.9 million principal amount is currently outstanding), which is serviced in full by revenue earned under an existing licensing arrangement.

Going forward, Teekay expects that Sevan's business will mainly focus on applying its engineering, project development, and marketing capabilities to develop new offshore projects (which Teekay shall have the right to purchase, as described below), and developing opportunities to earn fees from licensing its intellectual property rights. Following its recapitalization, it is anticipated that Sevan will continue to be a publicly-listed company with shares traded on the Oslo Stock Exchange.

Cooperation Agreement Between Teekay and New Sevan

Upon closing, Teekay and Sevan will enter into a cooperation agreement relating to joint marketing of offshore projects, the development of future projects, and the financing of such projects. As part of the cooperation agreement, Sevan will be obligated to offer to sell any FPSO or other offshore projects, and associated charter contracts, to Teekay at fair market value.

Teekay and Sevan will also enter into reciprocal service agreements for access to each other's resources related to engineering, project and technology development, assistance with redeployment and other FPSO-related work, subject to availability and further terms and conditions to be agreed by the two parties.

Transaction Closing Conditions

The transaction between Teekay and Sevan remains subject to customary closing conditions, including but not limited to, finalizing details and agreement on definitive documentation, formal approval by Sevan's shareholders at an extraordinary general meeting, formal approval by the bondholders in each of Sevan's bond loans, consent from Sevan FPSO charterers and syndicate of banks, and approvals by relevant regulatory authorities. The transaction is expected to close during the fourth quarter of 2011, except for the purchase of the Voyageur, which is expected to be completed in the third quarter of 2012.

About Teekay

Teekay Corporation provides a comprehensive set of marine services to the world's leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. Teekay is growing its operations in the offshore oil production, storage and transportation sector through its publicly-listed subsidiary, Teekay Offshore Partners L.P. (NYSE:TOO), continues to expand its significant presence in the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. (NYSE:TGP), and seeks to grow its conventional tanker business through its publicly-listed subsidiary, Teekay Tankers Ltd. (NYSE:TNK). With a fleet of 152 vessels, offices in 16 countries and approximately 6,400 seagoing and shore-based employees, Teekay transports approximately 10 percent of the world's seaborne oil and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.

Teekay's common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".

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 completion of the transactions contemplated in the agreement between Teekay, Sevan and the Sevan bondholders; the anticipated timing of the closing of such transactions, including Teekay's acquisition of the Piranema, Hummingbird and Voyageur FPSO units, and the completion of the upgrade of the Voyageur FPSO unit; the purchase price to be paid by Teekay to purchase the FPSO units; the estimated remaining cost to complete the upgrade of the Voyageur FPSO unit; Teekay's plans to finance the purchase of the three FPSO units, the completion of the Voyageur FPSO unit upgrade and investment in the Sevan Equity Placement; potential sales of the Sevan FPSO units by Teekay to Teekay Offshore; the planned Equity Placement by Sevan, and Teekay's participation in the Equity Placement, as well as the resulting pro forma ownership interest in Sevan relating to Teekay and the existing Sevan shareholders/unsecured bondholders; the remaining assets and business focus of Sevan subsequent to the sale of the three FPSO units and recapitalization of Sevan; the potential sale of future FPSO projects by Sevan to Teekay under the proposed cooperation agreement; and the continuation of Sevan as a publicly-listed company with shares trading on the Oslo Stock Exchange.

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: inability of the parties to negotiate and agree to definitive documentation; failure to satisfy closing conditions for the transaction, including failure to attain approvals from Sevan's shareholders, Sevan's bondholders, regulatory authorities, Sevan FPSO charterers, and Sevan's syndicate of banks relating to the Voyageur; shipyard delays and cost overruns relating to the Voyageur FPSO upgrade; potential cancellation of FPSO contracts by existing Sevan FPSO charterers; failure of the Teekay Offshore Board of Directors to approve the purchase of FPSO units offered by Teekay; the inability of Teekay to obtain acceptable financing to acquire Sevan's FPSO units or future offshore projects, or of Teekay Offshore to obtain acceptable financing to acquire any FPSO units from Teekay; and other factors discussed in Teekay Corporation's filings from time to time with the United States Securities and Exchange Commission, including its report on Form 20-F for the fiscal year ended December 31, 2010. The Company expressly disclaims any obligation of undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change to the Company's expectation with respect thereto or any change in events, conditions or circumstances on which any such statement is based.