TEN Strengthens Vessel Base
Tsakos Energy Navigation (TEN)'s growth has continued unabated in 2017 with the delivery of one VLCC, the Hercules I, one aframax tanker the Marathon TS and the shuttle tanker Lisboa, currently all under long-term employment to solid counterparties.
These came on the back of nine vessels that were delivered or acquired in 2016 and will be followed in 2017 by the last four, of nine, aframaxes that were built against long-term employment to a Norwegian oil major.
With the delivery of these remaining high-end aframaxes, TEN's fully fixed, fully financed newbuilding program will complete and increase the Company's vessels in the water to 65 vessels, and the fleet's available days under secured employment, for this year so far to 63%, averaging approximately 2.7 years.
The intention of management is to increase this coverage further with placements under secured contracts, ideally with profit sharing provisions, of some of its vessels currently operating under flexible charters, without materially reducing its exposure in the spot market, which is expected to firm up again after a large part of the current (low) order book is delivered and as oil prices remain range bound.
Concurrent with this integral growth, management would also explore opportunities to profitably divest some of its vessels around the 10 year of age mark either through direct sales or other related structured transactions as they become available.
In addition, separately from the growth achieved via the newbuilding program, the Company remains on the lookout for additional opportunities, in the sectors which it operates, in order to further solidify the industrial nature of its business and enhance its cash flow visibility going forward.
On January 2017, the Company took delivery of the VLCC Hercules I from Hyundai Heavy Industries in South Korea which has subsequently been chartered for a period of up to 18 months to a significant North American oil company.
In February 2017 the aframax tanker Marathon TS was delivered from Daewoo Mangalia Heavy Industries, the fifth in a series of nine aframaxes built against long-term contracts for a Norwegian oil major.
On March 10, 2017, the Company took delivery of the DP2 suezmax shuttle tanker Lisboa from Sungdong Shipbuilding in South Korea. The vessel was built against an eight year contract, with an option to extend to eleven years, to a major European oil concern and gross revenues from this employment, may reach $200 million over its maximum potential duration.
"The industrial nature of our recent charters fits in well with the Company's strategy in building and operating vessels to accommodate the long-term needs of international oil concerns," stated Nikolas P. Tsakos, President and CEO of TEN and current Chairman of INTERTANKO.
"With our entire newbuilding program chartered on long-term accretive employment to first class end-users, TEN's new phase will be in full force within 2017. The long-term business further solidifies our balance-sheet, ensures TEN's continued profitability and dividend distribution. This should ultimately be reflected in our share's true valuation," Tsakos concluded.
