December 18, 2008HAMILTON, BERMUDA–(Marketwire – Dec. 18, 2008) – Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE:TOO) today announced that its estimated distributable cash flow(1) for the three months ended September 30, 2008 is expected to be greater than the previous quarter and will exceed the total cash distributions paid to the Partnership’s LP unitholders and GP interests for the quarter. The Partnership also announced that it expects to publish its complete third quarter results in January 2009, upon finalization of the regular quarterly review by the Partnership’s independent auditor, Ernst & Young LLP. The delay is due to a later than normal start to the Partnership’s third quarter earnings review process as a result of committing resources to finalize the previously announced restatement of historical results. “The Partnership is pleased to report strong operational performance in the third quarter,” commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC, the Partnership’s general partner. “We generated strong cash flows as demonstrated by the 12.5 percent increase in our distribution this quarter. As the world’s largest shuttle tanker fleet operator, our vessels are vital to our customers’ oil delivery supply chains, an important consideration for the stability of our cash flows.” Mr. Evensen continued, “Based on our favorable debt profile with no near-term refinancing requirements or covenant concerns, no capital commitments and approximately $300 million in total liquidity, we believe Teekay Offshore remains well-positioned in the current uncertain economic and financial environment.” On November 3, 2008, the Partnership declared a cash distribution of $0.45 per unit for the quarter ended September 30, 2008, an increase of $0.05 per unit, or 12.5 percent, from the previous quarter. The cash distribution was paid on November 14, 2008 to all unitholders of record on November 7, 2008. About Teekay Offshore Partners L.P. Teekay Offshore Partners L.P., a publicly-traded master limited partnership formed by Teekay Corporation (NYSE:TK), is an international provider of marine transportation and storage services to the offshore oil industry. Teekay Offshore Partners owns a 51 percent interest in and controls Teekay Offshore Operating L.P., a Marshall Islands limited partnership with a fleet of 34 shuttle tankers (including nine chartered-in vessels), four FSO units, nine double-hull conventional oil tankers and two lightering vessels. In addition, Teekay Offshore Partners L.P. has direct ownership interests in two shuttle tankers and one FSO unit. Teekay Offshore Partners also has rights to participate in certain FPSO opportunities. Teekay Offshore Partners’ common units trade on the New York Stock Exchange under the symbol “TOO”. (1) Distributable cash flow is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Distributable cash flow represents net income adjusted for depreciation and amortization expense, non-controlling interest, non-cash items, estimated maintenance capital expenditures, gains and losses on vessel sales, income taxes and foreign exchange related items. 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 Partnership’s future growth prospects; timing of publishing its third quarter 2008 results; the Partnership’s financial position in the current economic and financial environment; and the estimated distributable cash flow generated during the third quarter of 2008 and subsequent quarters. 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: changes in production of offshore oil, either generally or in particular regions; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of long-term contracts and inability of the Partnership or Teekay Offshore Operating LP to renew or replace long-term contracts; any adjustments to the Partnership’s estimated distributable cash flow for the third quarter of 2008 arising from Ernst & Young LLP’s review of the Partnership’s third quarter results; and other factors discussed in Teekay Offshore’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2007. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.