Nordic American Tankers Ltd. Reachs Out to Shareholders

Nordic American Tankers Ltd. Letter to Shareholders From the Chairman and CEO - NAT Is Different.

Dear Shareholder,

It is time to update you on recent developments in the Company and our industry. As we have stated before, it is at times of difficulty for the industry that NAT in particular improves its position relative to its peers.

We believe that important factors differentiate NAT from other tanker companies. A professional management and board with wide experiences and complementary skill sets, a strong balance sheet, one type and size of ships, low general and administrative costs and accretive growth are among the factors making NAT different.

The Company declared a dividend of $0.30 per share for 2Q2011 which was the same as for 1Q2011. We expect to keep this level of dividend per share for 3Q2011. NAT is in a very strong financial position as opposed to shipping companies with weak balance sheets. Furthermore, NAT has a large credit facility available. NAT remains firmly committed to protecting its underlying earnings and dividend potential through a disciplined and conservative policy.

Shipping rates are at a low level as a result of there being too many ships at the present time. However, as I noted in my last communication to you, actual deliveries from shipyards are significantly lower than what had been projected. This is partly a reflection of owners cancelling or changing newbuilding orders, or owners not being in a position to finance vessels contracted in the past.

Moving forward, we expect that the demand for crude oil transportation will continue to grow while we may see that the demand could be reduced from time to time. The tanker fleet growth is expected to slow down significantly as the major shipbuilders have been turning their focus to other sectors. The ordering of new vessels has decreased substantially and the orderbook for new suezmaxes as a percentage of the existing fleet is now about 22%, which is equal to the low level of 2002.

Spot shipping freight rates are a reflection of supply and demand for vessels. Small changes in this balance normally have a volatile impact on spot freight tanker rates. With this as a background, NAT may occasionally pay more dividend than our operating cash flow. We believe this strategy favors all shareholders, many of whom have been with NAT for a long time. Financially, paying more dividend than operating cash flow is in a way comparable to buying back stock or returning capital, but all shareholders are in the same boat, so to speak, because all of them receive the dividend. This is in line with our policy of not accumulating cash on the balance sheet. In fact, in a weak market environment, we in particular see it as our obligation to actively support our shareholders. It is worth noting that our recent dividend payments are insignificant in relation to our liquidity position and our overall financial position.

We will act decisively to expand the fleet when we believe it is optimal for the Company to do so.

We recently visited Korea to attend the naming ceremony for our two Korean newbuildings ordered in April 2010. These vessels will be economical to run and enhance our dividend and earnings capacity. One of these two vessels was delivered to us a few days ago. The second one is expected to be delivered to us in October.

2011 has been a year of growth for NAT. During the fourth quarter of 2010 our fleet consisted of 15 operating vessels on the water. When the last of the two newbuildings is delivered in October, our fleet will then total 19 vessels. This growth greatly enhances our dividend capacity for any market recovery when compared to our position before the downturn in the market. Our expansion has taken place with no increase in our overhead costs, because our organization is capable of handling a growing fleet.

We remain firmly committed to our strategy, and believe that our model is working to the benefit of our shareholders. As you know, we maintain our focus on transparency and active communication with our shareholders. At NAT, management's interests are aligned with yours -- we make money when you make money.

We focus on maintaining total return -- the only measure of performance that should matter to a shareholder and we have good total return statistics over the years. When the market recovers, we will be in a position to grow those returns.

We believe our history reflects excellent commercial management coupled with a prudent financial strategy. We always ensure that our growth is accretive to our dividends per share. This guiding principle serves as the foundation for how and when we choose to grow and how we finance this growth.

We continue to encourage any investor with an interest in the tanker industry who seeks dividend paying stocks to consider Nordic American.

After delivery of the second ship from Samsung in October, NAT expects to have a net debt of about $5 million per ship -- a very comfortable level. With the unique operating model, Nordic American has significant upside potential with relatively limited downside. We believe this also differentiates NAT from many other shipowning companies.

I am as optimistic about the future of Nordic American as ever. I am happy to receive any questions or comments via email at [email protected]

With the rest of our team, I am here to serve you.

All the best!

Herbjorn Hansson
Chairman & CEO