Thank you for standing by, ladies and gentlemen, and welcome to Dynagas LNG Partners conference call on the thir d quarter 2022 financial results. With us we have Mr. Tony Lauritzen, Chief Executive Officer, and Mr. Michael Gregos, Chief Financial Officer of the company. At this time, all participants are in listen-only mode. There'll be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. At this time, I would like to remind everyone that in today's presentation and conference call, Dynagas LNG Partners will be making forward-looking statements.
These statements are within the meaning of the Federal Securities Laws. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. The statements in today's conference call that are not historical facts, including among other things, the expected financial performance of Dynagas LNG Partners business, Dynagas LNG Partners ability to pursue growth opportunities, Dynagas LNG Partners expectations or objectives regarding future and market charter rate expectations, and in particular, the effects of COVID-19 on the financial condition and operations of Dynagas LNG Partners and the LNG industry in general, may be forward-looking statements as such defined in Section 21E of the Securities Exchange Act of 1934 as amended.
Matters discussed may be forward-looking statements which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to slide two of the webcast presentation, which has the full forward-looking statement. The same statement was also included in the press release. Please take a moment to go through the whole statement and read it. Now I pass the floor to Mr. Lauritzen. Please go ahead, sir.
Morning, everyone, thank you for joining us in our 3-month end of 3rd September, 2022 earnings conference call. I'm joined today by our CFO, Michael Gregos. We have issued a press release announcing our results for the said period. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures as well as a discussion of why we believe this information to be useful in our press release. Moving on to slide three of the presentation. We are pleased to report results for the three months end of 3rd September, 2022. All six LNG carriers in our fleet are operating under their respective long-term charters. The fleet utilization was 100% for the 10th consecutive quarter included.
For the third quarter of 2022, we reported net income of $7.4 million, earnings per common unit of $0.12, adjusted net income of $4.5 million, adjusted earnings per common unit of $0.04 and adjusted EBITDA of $20 million. In terms of operational highlights related to the third quarter of 2022, we successfully completed the special service of Amur River and Ob River, including ballast water installation in accordance with current regulatory requirements. Our thoughts goes out to everyone affected and suffering as a result of the crisis in Ukraine. We continue to closely monitor this ongoing situation, including the implications of economic sanctions, trading restrictions and other considerations that may affect our business. It is our understanding that the current U.S. and E.U. sanctions regime have broadly extended energy shipping and do not materially affect the business, operations or financial conditions of the partnership.
The partnership has one syndicated credit facility in place. One of the lenders in this credit facility was Amsterdam Trade Bank. However, following the designation of Amsterdam Trade Bank by OFAC as an SDN, the partnership, in agreement with all lenders, made a voluntary prepayment of $18.7 million from the $50 million restricted cash collateral, which was applied in prepayment of the entire participation of Amsterdam Trade Bank to the credit facility. Consequently, Amsterdam Trade Bank is no longer a lender under the credit facility. The partnership's counterparties are performing their obligations under their respective term charter in compliance with all applicable U.S. and E.U. rules and regulations.
Our vessels named Clean Energy, Ob River and Amur River are on charter to Gazprom Marketing and Trading Singapore, which has been renamed Securing Energy for Europe Marketing & Trading, and which the onward through the authority as SEFE. On November 14, 2022, it was announced that the full ownership of Securing Energy for Europe GmbH and all of its subsidiaries, including SEFE, had been transferred with immediate effect to the Federal Republic of Germany via the Federal Ministry for Economic Affairs and Climate Action, which had taken over as a 100% shareholder. Sanctions legislation is changing rapidly, the partnership is continuously monitoring the ongoing situation. The partnership is well-positioned to take advantage of a strong market outlook for long-term charters with the Arctic Aurora opening up in Q3, Q4 2023.
I will now turn over the presentation to Michael, who will provide you with further comments on the financial results.
Thank you, Tony. Moving to slide four. Net income for the third quarter decreased by 35%.
To $7.4 million compared to Q3 2021, primarily due to the special survey drydock cost of $3.5 million for the Amur River and $2.9 million for the Ob River, $7.4 million total. 67 scheduled off-hire days related to the drydock and the increase in interest finance cost of $2.1 million, which was partially offset by a realized and unrealized gain on our interest rate swap of $10.2 million, $2.5 million of which was realized. Adjusted net income, which excludes realized and unrealized gains on our interest rate swap for the quarter, was $4.5 million. If we add the realized gain from our interest rate swap quarterly cash payment of $2.5 million, adjusted net income would have amounted to $7.1 million.
Adjusted EBITDA for the third quarter was $20 million, a decrease of $4.8 million compared to last year, mainly attributable to the off-hire days related to the aforementioned scheduled drydocks. This year we have completed the special survey and drydocks of three steam turbine LNG carriers, including the installation of the ballast water treatment systems, which is capitalized at the total cost of the third special survey and drydocks of our three steam turbine LNG vessels for this year has amounted to $16.4 million with 103 days of off-hire time. $3.6 million impacted our Q1 P&L, $2.8 million our second quarter P&L, and $7.4 million has impacted our third quarter P&L. $3.7 million relates to the installation of the ballast water treatment system, which has been capitalized. Moving to slide five.
At the end of September, we had $531 million debt outstanding, which was further reduced following a $19 million debt prepayment in October, following the designation of one of our lenders as an SDN. As of today, our debt outstanding amounts to $512 million. We are seeing the benefits of our 0.41%, excluding the margin, fixed interest rate swap for the entire indebtedness outstanding until maturity in September 2024, with floating interest expense for the quarter of $7.2 million being offset by interest rate swap payments of $2.5 million for the quarter.
We are continuing our comprehensive de-leveraging path, which commenced in the first quarter of 2020, having repaid $163 million in debt, resulting in a decrease in our net leverage to 4.8x from 6.6x and an increase in book value of our equity of 33%. Moving to slide six. In line with our strategy of using our contracted cash flow to reduce leverage for the quarter, we utilized 95% of our unlevered cash flow to service debt and interest rate payments. Excluding working capital changes, operating cash flow for the quarter was $16 million. Our cash balance decreased by about $2.5 million-$97.7 million, primarily due to our drydocks and working capital changes.
We expect our Q4 2022 cash position to be impacted by the aforementioned $19 million debt prepayment to Amsterdam Trade Bank and the settlement of outstanding payments following the completion of our aforementioned drydocks. That wraps it up from my side. I will pass over the presentation to Tony.
Thank you, Michael. Let's move on to slide seven. Our fleet currently counts six LNG carriers with an average age of about 12.3 years. The charterers of our vessels are Equinor of Norway, SEFE of Singapore, and Yamal Trade of Singapore. As of today, 12 December, 2022, the fleet's contract backlog is about $915 million, equivalent to an average backlog of about $152 million per vessel. The fleet's average remaining charter period is about 6.2 years. Moving on to slide eight.
Our strategy is to conclude long-term charters with reputable LNG producers. The earliest contracted redelivery date for any of our six LNG carriers is in the third or fourth quarter of 2023 for the Arctic Aurora, with the second earliest contract redelivery in the first quarter of 2026 for the Clean Energy, both subject to terms of the applicable charter. Barring any unforeseen events and vessel scheduled drydocking, our fleet is 100% employed for the remainder of 2022, 96% for the year 2023, and 83% for 2024 and 2025. There continues to be strong demand for LNG term shipping. In particular, we believe the 150,000-160,000 m3 LNG carrier segment is ideal to supply LNG for the European FSRU market.
As such, we believe the Arctic Aurora should be in a good position to benefit from a strong period market. All the vessels in our fleet are employed on time charter contracts under which the charterer pays major voyage-related variable costs such as fuel, canal fees, and terminal costs. Two of the vessels, namely the Lena and Yenisei River, are under drydock and OpEx cost pass-through contracts that in general provide protection for reasonable inflation and operating expenses. Let's move on to slide nine.
Since September 2019, as of Q3 2022, the partnership has repaid $163 million in debt, decreased net leverage from 6.6- 4.8 times, increased core equity value by 33% to $450 million. The partnership's de-leveraging efforts should continue to build equity value on a contractually structured basis as we continue to benefit from stable long-term cash flow visibility and improved market conditions. The Russia-Ukraine situation has shed light on a fragile European energy infrastructure and a general global underinvestment into energy production and receiving facilities. The E.U.'s goal to replace 50 bcm and Russian pipeline gas imports with LNG imports has increased competition for LNG supply and shipping. With the opening of Arctic Aurora in Q2, Q4 2023, we believe the partnerships will have exposure to strong shipping fundamentals.
Some European countries are looking to accelerate their infrastructure development by chartering FSRUs. Germany, which currently does not have any land-based import facilities, has charted FSRUs for long-term charters, two of which are from the partner fleet of Diamond Gas. Post current charters, we believe the partnership has the potential to consider conversion of existing LNG carriers to FSRUs as an alternative to conventional charters. Both alternatives will be considered. We believe the combination of the availability of the Arctic Aurora against a strong market and the future strengthening of our balance sheet places the partnership in a favorable position. We have now reached the end of the presentation, and I now open the floor for questions. Thank you.
Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question today, you may press star one from your telephone keypad, and a confirmation tone to indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Thank you. Our first question is from the line of Ben Nolan with Stifel. Please proceed with your question.
Hey, Tony, Michael. Hope you guys are well. The really the only variable out there at the moment is the Arctic Aurora, which you talked about. And Tony, you said that the appetite is pretty good because it should fit pretty well and with the FSRU market in Europe. Any sense as to the timing? Are charters at, you know, being pretty aggressive in terms of when they're looking to lock things in? Alternatively, how are you thinking about it? Would you rather wait until you get a little bit closer or do something sooner if it's available?
Yeah, thank you, Ben. That's a good question. look, we see appetite from charters right now. we see, you know, several interests for the position. As you know, energy is quite different from from other shipping segments, and it, you know, has a longer-term view and a further forward fixing. I would expect that, you know, that within the next quarter that the vessel will probably be locked in for a charter.
Okay, that's helpful. Switching gears maybe. You talked about the prepayment of debt. I assume that doesn't change anything in terms of the terms of the loan or your ability to do things with your cash, like pay dividends or whatever. For now, it's still a lower principal amount, basically. Is that fair?
Yeah, Ben, that's correct. Yeah, we just used the funds that were for a more strict cost collateral account to repay this debt, not anything that changed.
Okay. As it relates to, yeah, we're still a little ways from refinancing that facility, but I assume if it comes due in mid-2024 that you probably, maybe six months from now are gonna be looking to refinance that, I would guess. How do you think about the collateral value? I know that, it's a pretty good time in the LNG market. Obviously, new buildings are a whole lot more expensive. There's I believe a little bit of less appetite for steam turbine ships. As you think about sort of your ability to refinance that debt and the value of the underlying assets behind it, has that changed in your view materially in the last, I don't know, year?
Yes, Ben. Let me, I mean, I can address the, you know, the question on the, you know, on the, you know, on the steam turbine. Of course the, you know, the vessels here are locked up on term charters. They're all with, you know, Securing Energy for Europe. As we kind of alluded to in the presentation, you know, there is, you know, there is good appetite for smaller vessels to feed the, you know, the European market too in terms of, you know, FSRU importations.
It is difficult, to, you know, to apply this, you know, this unique large two-strokes, the 174,000 m3 LNG ships to perfectly match, you know, an empty FSRU and discharge all of that cargo, into, you know, into an equally sized FSRU. You know, first of all, we do see, you know, interest for smaller ships. Now, you know, our turbine ships, they are quite large. They are 150,000 cubic, which for a vessel of that type is a good ship. We would just like to point out that, you know, they are timed out, you know, till 2026 and 2028 respectively.
That's a good point, Tony. I think, Ben, I mean, you remember, you know, three years ago when we refinanced this debt, we had, you know, it was a $675 million facility. By the time this one comes up for renewal, it's gonna be $415 million, so that's gonna be less than $20 million per vessels. I mean, so I think we're in a much better position. Obviously, the, you know, the market fundamentals are also materially better than then. You know, obviously, we never leave it for the last minute. We will start looking at the refinancing. You know, time passes very, very fast. It's already 2023, so I think within the six months of 2023, you know, we will be looking into refinancing.
Okay. Yeah. That's what I assumed. I appreciate the color. Thanks, guys.
Thank you.
Thank you. At this time, I'll turn the call over to Tony Lauritzen for closing remarks.
We would like to thank you for your time and for listening in on our earnings call. We look forward to speak with you again on our next call. Thank you very much.
This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation.