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Press release from Nordic American Tankers

72661 fcras 26/6 2015 14:26

Hamilton, Bermuda June 24, 2015

Dear Shareholder,

As we approach the halfway point of 2015, I'd like to share with you some of my views on the current state of the tanker market and on our business in general. We are in the midst of an interesting period during which the tanker market is showing positive developments, a point we discussed in our first quarterly report earlier this year.

The decline of the price of oil coupled with minimal tanker fleet growth are among the factors behind this gratifying development for Nordic American. In our previous communications to investors, we have talked about the trends in tanker demand and supply, trends that have helped make this market such a solid one.

Our business is sustainable both in strong and weak markets based upon simplicity, transparency and predictability. NAT has a very high degree of liquidity in the stock; at this time about 1.5 million shares are bought and sold every day. We have achieved such good results by sticking to our strategy, which can be summarized as follows:
•Expansion of a homogeneous fleet
•The payment of dividend every quarter
•Limited debt and a strong balance sheet
•Maintenance of a top quality fleet
•Aligned interests between shareholders and management
•A low cash breakeven point through effective management.

For the second quarter of 2015, we believe that NAT will achieve rates generally at the same level as in the first quarter of 2015. This should result in a strong dividend for 2Q2015 too, a dividend which will be announced in mid-July. As you know, we have retained some cashflow in recent quarters - this reflects our strategy of effectively managing risk and working towards the long term benefit of shareholders. Cash held back will contribute to the financing of fleet expansion.

We have two newbuildings joining the fleet in 2016 and 2017, adding further to our dividend and earnings capacity. In addition, we continue to assess acquisition opportunities. At the same time, the operational record of our fleet is excellent. The high technical standard of our suezmax fleet is underscored by the good vetting statistics that emerge from the inspection of our ships by clients. Our vessels are performing very well - underlining that it is not age, but quality that matters. The major oil companies strongly demand quality vessels, which is what NAT stands for. The NAT established brand is linked to safety for assets and for crews while at the same time we have a strong focus on protection of the environment.

Our steady relationship with a subsidiary of the US based oil giant ExxonMobil is now in its fourth year. In early June this year the cooperation was extended for an additional year. It is the type of freight agreement that is good for our client and for Nordic American.

Our strategy of maintaining a strong balance sheet and focusing on the quality of our operations and vessels is quite literally paying dividends. The company is in an excellent position to grow the fleet. The two newbuildings will not require further equity from the capital markets. Based on our strategy, NAT has the financial capacity to increase the fleet beyond 24 units, by a ship or two, without issuing stock.

We are resisting the temptation to make large fleet acquisitions. Those who have followed the NAT story for some time, know we prefer to grow in a considered and deliberate way. We see that some other players, both public and private, have suffered as a result of what I like to call gigantomania. Our approach to risk management is to take one step at a time, always considering the many pitfalls of large and complicated transactions.

We also avoid mergers for the same reasons. NAT is, and has always been, vastly different from other tanker companies. We believe that our lean model and focus on shareholder value is far superior to "empire building", which is often more for the benefit of management than shareholders. As one of the largest shareholders myself, please rest assured that you and I are all literally in the same boat. We believe 2015 is shaping up to be a great year for Nordic American.

I wish you and your families all the best for the summer. As always, please feel free to communicate your views to me at

Kind regards,
Herbjørn Hansson
Chairman & CEO

Tanker Operator newsletter - June 25th, 2015