Gary Chapman: Rob, the previous earnings call in August, the dropdown had already happened. It was effective 1st of July and the previous earnings call was in August
Rob Silvera: I missed that one, it was the one before that you said it. So it was the call so forgive me
Gary Chapman: But the dropdowns that we’ve done, certainly, recently have been using cash and debt and it basically internally financed. So we haven’t had to dilute any of unitholders to in order to do that and in order to bring in those new revenue streams
Rob Silvera: That I understand
Gary Chapman: And we put out the KNOT vessels, which was your original point. So that people can see what those vessels might be. And we always are looking to drop vessels down at an appropriate time when we think we benefit from doing that. So certainly something that we want to do.
Rob Silvera: Yes. But at this point in time, when you’re struggling to get new contracts to fill the ships we have, I think it does not serve a good purpose to imply that there maybe future dropdowns with the raising of interest rates and raising of the debt levels that we have, because this last one you paid cash and you assume the debt. And altogether, we paid $119 million for a ship that turned out that it was actually defective and had to be repaired, which is not something that looks good
Gary Chapman: I think that’s a little bit harsh, because all of vessels have troubles and they get fixed. And that’s the same as your car, it’s the same as anything else. I mean, it wasn’t a little bit of
Rob Silvera: I know. But it troubles me to see a used vessel go for $119 million in total cost, that was troubling. Anyhow, I’m happy as a shareholders for many, many years now that we’re going to in the near future do some more dropdowns with conditions as they are until we get good contracts for our vessels, because it’s obvious you do not want to operate in the spot market even though rates are high. And I can understand why you don’t want to, because you’re really not designed to compete against the VLCCs or the Suezmaxs that are doing that every day. And so that’s my feeling that
Gary Chapman: Well, we do and we are happy to go into the conventional market. I mean, all of these things are not so simple as looking at a headline rates and saying, yes, we can get that. But there’s no reticence from us about putting our vessels in the conventional tanker market if we think that’s the best thing to do. And certainly
Rob Silvera: What size do we come in at, what size are we classified as Suezmax
Gary Chapman: Most of the North Sea are Aframax and then we’ve got the Bodil Knutsen, which is Suezmax.
Rob Silvera: I see. Okay. Well, that’s my concern. I know you want to be conservative and I just, I really don’t want to see us increase our debt and increase our dropdowns at this point in time until we have solidified our existing fleet. Because next year, like you say, we face another five dry dockings, which are very tough on earnings. So that’s my input. Okay. Thank you, Gary.
Gary Chapman: We won’t be doing any dropdowns unless it makes sense. So it’s not that we grow, it’s not a grow at all cost MLP
Rob Silvera: How does it make sense? Can you explain to me how it makes sense in a time when interest rates have risen and will probably rise some more, and we have ships that are not contracted for that maybe open to having to go in the spot market? How is it contemplating a dropdown beneficial?
