Overseas Shipholding Group, Inc. (NYSE:OSG) (“OSG”), a provider of energy transportation services for crude oil and petroleum products in the U.S. Flag markets, announced today that it has entered into a Bareboat Charter Party Agreement with the owner of the vessel known as the Oregon Voyager. OSG will rename the 1999-built U.S. flagged product tanker the Overseas Key West and intends to use this vessel in the U.S. coastwise trade under the Jones Act. The Bareboat Charter extends for 10 years, into 2029. OSG will undertake the vessel’s fourth special survey following the vessel’s expected delivery and expects the vessel to commence commercial operations during the second quarter of 2019.
Sam Norton, OSG’s President and CEO, remarked, “Following closely on our decision to extend all of the leases for our AMSC-owned tankers, the addition of the Overseas Key West to our fleet of Jones Act tank vessels is an important and visible signal of OSG’s continuing commitment to sustaining our leading position in the markets which we serve. The extended duration of this new lease agreement is both an affirmation of our positive outlook for the future as well as a validation of OSG’s reputation as a preferred counterparty in operating Jones Act tank vessels to the high standards demanded by its customers.”
Mr. Norton added, “At current market levels, we expect the Overseas Key West to contribute more than $18 million per annum in time charter equivalent revenue once she enters into service. At this revenue level, we estimate that the Overseas Key West would add approximately $5.5 million in net annual vessel operating contribution, which would be a welcome addition toward building a solid future cash flow profile.”
OSG’s announcement of its new bareboat charter is the latest in a series of transactions previously announced, including:
“We had a busy and highly productive fourth quarter,” commented Dick Trueblood, Vice President and CFO of OSG. “Having extended the maturities of all of our material liabilities and having resolved any perceived uncertainty regarding the future deployment of our principal revenue generating assets, we believe that we have enhanced the future visibility of our cash flow streams. We are optimistic that this improved visibility will highlight the value-generating prospects of our business model and provide us with the capability to pursue additional growth opportunities.”
About Overseas Shipholding Group, Inc.
Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded tanker company providing energy transportation services for crude oil and petroleum products in the U.S. Flag markets. OSG is a major operator of tankers and ATBs in the Jones Act industry. OSG’s 21 vessel U.S. Flag fleet consists of five ATBs, two lightering ATBs, three shuttle tankers, nine MR tankers, and two non-Jones Act MR tankers that participate in the U.S. MSP. In addition to the currently operating fleet, OSG has on order two additional non-Jones Act MR tankers and one Jones Act compliant barge which are scheduled for delivery in 2019 and 2020 respectively. OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in Tampa, FL. More information is available at www.osg.com.
Forward-Looking Statements; Non-GAAP Financial Measures
This release contains forward-looking statements. In addition, OSG may make or approve certain statements in future filings with the Securities and Exchange Commission (“SEC”), in press releases, or in oral or written presentations by representatives of OSG. All statements other than statements of historical facts should be considered forward-looking statements. These matters or statements may relate to OSG’s prospects, OSG’s future results of operations, OSG’s ability to maintain its market position, OSG’s ability to operate without interruption, OSG’s ability to pursue growth opportunities, and OSG’s ability to comply with the terms of its credit facilities and other material contracts. Forward-looking statements are based OSG’s current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in OSG’s Annual Report on Form 10-K and in similar sections of other filings made by OSG with the SEC from time to time. OSG assumes no obligation to update or revise any forward-looking statements. Forward-looking statements and written and oral forward-looking statements attributable to OSG or its representatives after the date of this release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed OSG with the SEC. “TCE revenue” and “net annual vessel operating contribution” are non-GAAP financial measures, which are defined in OSG’s most recent Quarterly Report on Form 10-Q and the related earnings release, a copy of which was filed as an Exhibit to OSG’s Current Report on Form 8-K filed with the SEC on November 9, 2018. These Non-GAAP measures are used because management makes economic decisions, and evaluates OSG’s financial performance, based on these measures.
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Investor Relations & Media Contact:
Susan Allan,
Overseas Shipholding Group, Inc.
(813) 209-0620
[email protected]