OSG to Acquire Heidmar Lightering

Overseas Shipholding Group, Inc. will acquire the Heidmar Lightering business from Heidmar Inc., a subsidiary of Morgan Stanley Capital Group Inc. The operation, a fleet of four International Flag Aframax tankers and two U.S. Flag workboats, provides crude oil lightering services to refiners, oil companies and trading companies primarily in the U.S. Gulf. The business manages a portfolio of one-to-three year fixed rate cargo contracts.

Under the agreement, OSG will acquire the lightering fleet, which is time chartered-in to one of Heidmar Inc.'s subsidiaries, including a 50% residual interest in two specialized lightering Aframax tankers. The agreement is subject to certain conditions, including entering into definitive documentation. The lightering operation will add synergies and expand OSG's already significant Aframax cargo and logistical system in the Atlantic basin. In addition, it provides opportunities to serve U.S. West Coast customers with lightering service using OSG's Panamax tankers. Based in Houston, Texas, Heidmar Lightering has performed over 900 lighterings since beginning operations in November 2002. Jim Enright, 45, who has nearly 20 years of oil trading and shipping industry experience, will continue to lead the team of office staff and mooring masters out of Houston. Enright will report to Mats Berglund, Senior Vice President and Head of OSG's Crude Tanker unit.