Teekay Tankers will be net debt-free after buying back the last of its fleet financed through leasebacks.
The New York-listed company said on Thursday that it is spending $137m to repurchase eight tankers, without specifying the ships.
There will be no debt remaining after the deals complete in the first quarter.
Teekay had signalled in November that there were eight ships it could buy back at the start of 2024.
Up to the third quarter last year, the suezmax and aframax/LR2 specialist had repurchased 19 ships from sale-and-leaseback financing arrangements for $364m.
The company has been enjoying the highest average rates in its history at about $48,000 per day across 2023, up from $34,000 in 2022.
Teekay said spot rates remain firm at the start of 2024 with continued volatility.
“Positive tanker supply and demand fundamentals remain intact and signal ongoing market strength over the next two to three years,” it added.
Two 2004-built aframaxes were sold to Greece’s IMS for a combined $46.5m in the fourth quarter, meaning a profit of $21.9m.
But overall net earnings were down at $111.7m from $146.4m a year ago, as rates fell year on year and more vessels were dry-docked.
Revenue rose to $313.3m from $367m.
In the first quarter it expects a fall of 115 net revenue days, after the vessel sales.
Teekay noted strong oil demand growth of 1.9m barrels per day from China and an increase in crude exports from non-Opec+ countries, including record US shipments.
The midsize tanker fleet has been “stretched” by the European Union ban on seaborne Russian oil imports, meaning longer-haul voyages into India and China.
Chief executive Kevin Mackay said: “Our spot market exposure and fleet of midsize tankers position Teekay Tankers to continue generating strong cash flow, particularly as tonne-mile demand growth is forecasted to outpace fleet supply growth in the coming years.
“We intend to maintain our discipline and long-term orientation in capital allocation, prioritising the retention of capital for future fleet reinvestment while also continuing to return capital to shareholders.”
