TEN Announces Contract for New Aframax

Tsakos Energy Navigation Limited (TEN) announced that it has ordered one aframax double hulled tanker, with a carrying capacity of 105,000 dwt. The vessel, featuring a new design that will provide customers with new options for moving cargoes in the aframax class, will be built by Sumitomo in Japan, and is scheduled for delivery in the first half of 2007. The special design of this new vessel creates a more versatile aframax that will allow it to trade in a greater variety of ports, especially in the US, Caribbean, and South America, and allow TEN to service clients that otherwise would be serviced by Panamax tankers. "We are very excited to introduce this environmentally friendly, high- specification vessel, the first of its kind in the Aframax market," said Nikolas P. Tsakos, President and CEO of TEN. "We are always looking for innovations that increase our clients efficiency. Our naval architects have once again developed a design that meets the evolving needs of the major oil companies. We expect that this vessel will have the opportunity to earn a significant premium because of its technical characteristics." The vessel is specifically designed to meet the stringent environmental protection requirements of classification societies and other regulatory bodies, the rules and guidelines of oil majors and various port authorities and terminals. Additionally, the vessel incorporates the technical requirements of all the oil majors. TEN also announced the sale of the Aframax Toula Z, built in 1997 to a third party. TEN will continue to operate the vessel until its delivery to the new owners in late December of this year. As a result, the sale will not impact the earnings potential of this vessel for 2004. However, the company will recognize a net gain of over $11 million from the sale of this vessel in the fourth quarter. Mr. Tsakos noted, "The Toula Z was the first of the series of 30 newbuildings vessels ordered since 1997. We have profitably operated the vessel for the past seven years and our focus on meticulous vessel service and maintenance made her an attractive acquisition for the buyer. As a result, we were able to negotiate a price that will be sufficient to cover almost all of TEN's equity investment in the new aframax, announced today, without adding significant cost." Out of TEN's 27 vessels currently trading, 21 operate with medium or long- term employment contracts, some at variable rates, accounting for 78% of the remaining operating days for 2004, and 63% of the operating days of 2005. These contracts will generate a minimum of approximately $255 million over the next six quarters, which should provide a sustainable flow of earnings. The company currently employs its remaining 6 vessels in the spot market. Currently, more than 90% of TEN's fleet is of the double hull design.