SEAL-PA

Seapeak LLC Form 6-K Summary: Q1 2026

Business Context and Reporting Period

This filing covers the quarterly period ended March 31, 2026. Seapeak LLC is an international provider of marine transportation services focusing on liquefied natural gas (LNG) and natural gas liquids (NGL). The company operates a fleet of vessels under medium to long-term, fixed-rate charters and holds significant interests in equity-accounted joint ventures.

Key Financial Metrics

Note: All figures are in thousands of U.S. Dollars unless otherwise noted.

Material Changes vs. Prior Period

• Profitability Surge: Net income increased significantly to $40.5 million from $7.9 million in Q1 2025. This was driven primarily by a $24.2 million swing in realized and unrealized gains on non-designated derivative instruments (from a $17.0 million loss to a $7.1 million gain) and a $7.9 million reduction in other expenses (credit loss provisions).
• Revenue Decline: Voyage revenues decreased 8.2% to $147.4 million. The LNG segment saw a 10.2% drop due to lower charter rates, idle days following contract expirations, and vessel sales. The NGL segment remained relatively flat with a 1.4% increase.
• Equity Income Growth: Equity income rose 61.4% to $28.5 million, largely due to favorable changes in unrealized credit loss provisions and derivative gains within joint ventures, offsetting operational declines in some ventures.
• Asset Sales: The company recognized a $3.0 million gain on the sale of the Seapeak Jupiter LNG carrier in March 2026. The Seapeak Mars was sold in January 2026.
• Liquidity Reduction: Total liquidity decreased by $146.6 million to $191.3 million, primarily due to a $105 million increase in drawdowns on the revolving credit facility and a decrease in cash balances.

Outlook, Risks, and Unusual Items

• Geopolitical Risks: The filing highlights significant risks from the Russia-Ukraine war and the U.S.-Israel conflict with Iran. The latter has resulted in attacks on commercial vessels and the effective closure of the Strait of Hormuz. While assets in the vicinity (including the Bahrain LNG terminal) have not yet been materially damaged, future hostility poses risks to operations and costs.
• Market Conditions: LNG project delays have caused a near-term oversupply of LNG carriers. Management notes that results for 2026 and beyond may be negatively impacted if vessels remain unchartered or are rechartered at lower rates.
• Subsequent Events:
  • April 2026: Sold the Seapeak Creole for $165 million and chartered it back for 20 years. Refinanced the Ineos Dolphin and Ineos Innovation NGL carriers.
  • May 2026: Entered contracts for three new X-DF LNG carriers (cost ~$756 million) with deliveries in H1 2029. Charterers exercised extension options on three NGL carriers.
• Going Concern: Despite a working capital deficit of $509.5 million (driven by current debt maturities), management asserts sufficient liquidity to continue as a going concern for the next 12 months based on operating cash flows, joint venture distributions, and expected newbuilding financing.

Investor Verification Checklist

• Derivative Volatility: Verify the sustainability of the $24.2 million swing in derivative gains, which was the primary driver of the net income increase.
• Liquidity Coverage: Assess the sufficiency of the $191.3 million liquidity buffer against $1.1 billion in contractual obligations due within 12 months.
• Geopolitical Exposure: Monitor the operational status of assets near the Strait of Hormuz and the impact of potential sanctions or trade route disruptions.
• Rechartering Rates: Track the rechartering rates for LNG carriers whose contracts expire in 2026 to confirm if the "oversupply" narrative impacts future revenue.
• Newbuilding Financing: Confirm the execution of financing for the $756 million new LNG carrier order and the $1.2 billion order from 2022.