TEN Ltd THE TANKER MARKET CAN A MIRACLE HAPPEN? Nikolas P. Tsakos President & CEO, TEN November 19 th, 2008 1
Tanker Freight Rates Remain Healthy Charterer discrimination against single hull tonnage on the increase (20% of fleet single hull) Shortage of refining capacity in oil consuming nations demand to be largely long-haul Dislocation between refinery supply and demand Global refinery capacity expected to expand by 15% by end of 2010. 80% of new refineries to be constructed in Middle East and India Development of new long-haul trade routes $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $250 2002-01 2002-06 Break-Even level 2002-11 2003-04 2003-09 2004-02 VLCC TCE Asset Values 2004-07 2004-12 2005-05 2005-10 2006-03 2006-08 2007-01 1yr 3yr 5yr 2007-06 2007-11 2008-04 2008-09 Products Far East to US (48 days one way 92 days rtn) Crude $200 $150 $100 $50 Venezuela to China (45 days one way 87 days rtn) West Africa to China (35 days one way 67 days rtn)) $0 2002-01 2002-06 2002-11 2003-04 2003-09 2004-02 2004-07 2004-12 2005-05 2005-10 2006-03 2006-08 2007-01 2007-06 2007-11 2008-04 2008-09 5 yrs 10 yrs NB Resale Source: Clarkson Research Studies 2
NB Orderbook remains in check. Vessel Delivery Schedule Number of Ships 550 500 450 400 350 300 250 200 150 100 50 0 731 newbuildings vs. 634 single-hulls 2008 (remaining) 2009 2010 2011 2012 VLCC 19 68 68 93 15 Suezmax 13 63 49 55 5 Aframax 46 103 79 41 - Panamax 26 51 25 31 - Handysize 117 225 200 98 12 About 25% of orderbook is built in either newly established or Greenfield yards Total NBs 263 185 269 133 652 Single Hulls 123 48 105 57 301 Handysize Panamax Aframax Suezmax VLCC 1,502 634 Source: Clarkson Research Studies, Oil & Tanker Trades Outlook - September 2008 3
4 Demand Long Term Prospects Positive Potential of China and India in oil consumption is tremendous. Their total population is 2.5 billion in a world of 6.5 billion. Their per capita oil consumption is at extremely low levels and have already embarked on an aggressive industrialization program and development of a middle class auto owner If China reaches the same levels of consumption per capita as Thailand, Chinese oil demand (based on existing population) would rise to 18 mbpd, an increase of 10 mbpd from current levels Planned increase of US s SPR to 1.5 billion by 2027 Increase of 152,000bpd for next 20 years 25 20 15 10 5 0 BARRELS OF OIL PER CAPITA PER ANNUM (Source: BP Statistical Review of World Energy June 2008) 2007 India China (incl. HK) Thailand EU Japan United States China and India are also building SPRs Rates should remain healthy due to growing oil demand Shipyards running at 100% utilization - Constraints until early 2012 GLOBAL OIL DEMAND Year Demand Increase YoY % 2006 84.7 mbpd + 0.2 mbpd + 1.1% 2007 86.1 mbpd + 1.4 mbpd + 1.6% 2008 86.5 mbpd + 0.4 mbpd +0.5% 2009 (est) 87.2 mbpd +0.7 mbpd +0.8% Source: International Energy Agency, Oil Market Report, Sept. 2008
TEN Ltd 5
2007-01 2007-07 2008-01 2008-07 $100,000 $90,000 $80,000 IRAQ WAR $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 NY $80m 6 2006-01 2006-07 TEN - Growth in Challenging Environments 1yr VLCC TC rates vs. Newbuilding Prices and TEN s equity raising ability MIF/TEN OSE $35m OSLO $85m NYSE $110m OPA 90 Effect ASIAN CRISIS RUSSIAN CRISIS 9/11 Effect $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 1994-01 1994-07 1995-01 1995-07 1996-01 1996-07 1997-01 1997-07 1998-01 1998-07 1999-01 1999-07 2000-01 2000-07 2001-01 2001-07 2002-01 2002-07 2003-01 2003-07 2004-01 2004-07 2005-01 2005-07 1YR TCE NB Prices
Strong Timely Fleet Growth Focused relationships with yards in South Korea and Japan Average contract price at significant discount to current NB prices Strong banking relations to finance upcoming deliveries Capacity to take advantage of NB resales if appropriate Timely Newbuildings the backbone of TEN s growth Vessels 11 10 9 8 7 6 5 4 3 2 1 0 NB Deliveries 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 One of the best timed newbuilding programs in the peer group 6 5 Fleet Growth (in DWT mill) 4 3 2 1 0 1993 1994 1995 1996 25% CAGR 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20 07 7
Profitable Through the Cycles Continuous profitability irrespective of market cycles $600,000 Net Income in 1993 - $183.2m in 2007 ($175.3m in 9 months 2008) 230,000dwt in 1993 5.3 million in November 2008 Paid over $250 million in dividends since initiation of dividend program in 2002 A 313% price increase since NYSE IPO 24% per annum compounded (incl. dividends) 2:1 stock split in November 2007 210 Net Income Growth 175 Dec. 2007 51 vessels 5.3m dwt 140 USD million 105 70 October 1993 March 2002 26 vessels 2.3m dwt 35 4 vessels 0.2m dwt 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (est) 8
Diversified Fleet CRUDE TANKERS CLEAN / PRODUCT TANKERS Dwt Built Hull Ice Class VLCC 1 Millennium 301,171 1998 DH 2 La Madrina 299,700 1994 DH 3 La Prudencia 298,900 1993 DH SUEZMAX 1 Arctic 163,216 2007 DH 1A 2 Antarctic 163,216 2007 DH 1A 3 Archangel 163,216 2006 DH 1A 4 Alaska 163,250 2006 DH 1A 5 Eurochampion 2004 164,608 2005 DH 1C 6 Euronike 164,565 2005 DH 1C 7 Triathlon 164,445 2002 DH 8 Silia T 164,286 2002 DH 9 Cape Balboa* 164,274 2002 DH 10 Decathlon 164,236 2002 DH AFRAMAX 1 Uraga Princess 105,000 2010 DH 2 Ise Princess 105,000 2009 DH 3 Asahi Princess 105,000 2009 DH 4 Sapporo Princess 105,000 2009 DH 5 Maria Princess 105,000 2008 DH 6 Nippon Princess 105,000 2008 DH 7 Izumo Princess 105,374 2007 DH 8 Sakura Princess 105,365 2007 DH 9 Marathon 107,181 2003 DH 10 Parthenon 107,018 2003 DH 11 Opal Queen 107,222 2001 DH 12 Vergina II 96,709 1991 DH * Sale & Leaseback (1) 51% ownership Dwt Built Hull Ice Class AFRAMAX - LR 1 Proteas 117,055 2006 DH 1A 2 Promitheas 117,055 2006 DH 1A 3 Propontis 117,055 2006 DH 1A PANAMAX 1 Selecao 74,296 2008 DH 2 Socrates 74,327 2008 DH 3 Maya (1) 68,439 2003 DH 4 Inca (1) 68,439 2003 DH 5 Andes 68,439 2003 DH 6 Victory III 68,157 1990 DH 1C 7 Hesnes 68,157 1990 DH 1C HANDYMAX - MR 1 Ariadne 53,021 2005 DH 1A 2 Artemis 53,039 2005 DH 1A 3 Afrodite 53,082 2005 DH 1A 4 Apollon 53,149 2005 DH 1A 5 Aris 53,107 2005 DH 1A 6 Ajax 53,095 2005 DH 1A HANDYSIZE 1 Andromeda 37,061 2007 DH 1A 2 Aegeas 37,061 2007 DH 1A 3 Byzantion 37,275 2007 DH 1B 4 Bosporos 37,275 2007 DH 1B 5 Antares 37,061 2006 DH 1A 6 Arion 37,061 2006 DH 1A 7 Didimon 37,432 2005 DH 8 Delphi 37,432 2004 DH LNG 1 Neo Energy 85,602 2007 DH 9
Our Fleet Our Pride 10
Secured Revenues Based on employable dates subject to change based on new deliveries and potential changes to in chartering policy 2009 2010 (so far) 70% 43% Fixed to dated Fixed to dated Minimum Revenues (guaranteed) $290m Minimum Revenues (guaranteed) $140m 39 vessels with period employment (profit-share vessels only at min. rates) have secured: 780 months forward coverage (1.7 years per ship) $572 million in min. revenues 11
What We Need To Keep Up The Step Up?? Structural changes and improved ship designs have led to higher base rates over the last three decades Flight to quality has raised the floor for double hull tankers TEN s modern double-hull fleet on the forefront of reaping the rewards $50,000 $46,000 $40,000 $35,500 $30,000 $20,000 $10,000 $12,714 $10,134 $9,388 $25,473 $17,890 $15,873 $27,350 $0 1980-89 1990-99 2000-2007 VLCC Suezmax Aframax Source: Clarkson Research Studies 12