Tsakos Energy Navigation Ltd (TEN) 2006 Q4 法說會逐字稿

Good day. My name is Jackie and I will be your conference operator today. At this time, I would like to welcome everyone to the Tsakos Energy Navigation conference call. [OPERATOR INSTRUCTIONS]. It is now my pleasure to turn the floor over to Mr. Tom Rozycki. Sir, you may begin your conference.

Good morning, and thank you for joining us for Tsakos Energy Navigation's fourth quarter and year end 2006 earnings conference call. By now you should have received a copy of the earnings press release. [Inaudible] of TVP Communications at 212-279-3155, extension 208 and she will fax or email a copy of the release to you. Again, this quarter, we are also providing a supplemental slide presentation which can be accessed from the front page of TEN's website at www.tenn.gr.

As a reminder, this conference call is also being webcast. To access the webcast, please refer to the press release for the web address, which will direct you to the registration page. At this time I would like to read the Safe Harbor Statement.

This conference call and the accompanying slide presentation contain certain forward-looking statements within the meaning of the Safe Harbor provision of the Privacy Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties which may affect TEN's business prospects and results of operations. Such risks are fully discussed in TEN's filings with the Securities and Exchange Commission. Thank you.

At this time I would like to turn the call over to Mr. Nikolas Tsakos, President and CEO of Tsakos Energy Navigation. Nick?

Thank you, Tom, and good morning and good afternoon to those on this side of the Atlantic from all of us here in Athens. Thank you very much. We are very glad to talk to you about our 2006 results and operations and financial results. Here with us we have our Chairman, Mr. Stavropoulos, our CFO, Mr. Durham, our COO, Mr. Saroglou, our Chief Marine Officer, Mr. [Glass], and [Gardo] and the whole team from Greece. I would first ask our Chairman to give us a little bit of wisdom, and then we will get in more on the nitty-gritty of the operations. Please, Chairman?

Well, thank you very much, [Niko], and good morning to everyone. Well, we're certainly delighted you've joined us for this very special discussion. It's special because it marks the fifth anniversary of our IPO with the U.S.A., and the simultaneous New York Stock Exchange listing. Then, as now, TEN has highlighted its objective to be a young and growing Company, with a young and growing fleet.

The supporting business plan has emphasized the diversified fleet, with a policy of balanced employment. The vision was, and is, to be a leader in the energy transportation arena. A parallel objective was then to reward investors with earnings growth, generous dividends and capital appreciation. A primary objective of a transport company is to deliver the cargo in a safe condition on a timely basis. Likewise, TEN has undertaken to convey the funds entrusted to us by investors.

We can report that TEN has carried these funds in a first-class cabin with minimal turbulence. The internal rate of return since the IPO on March 6, 2002, has been 31.7%. The comparable return for the S&P 500 has been only 5.7%. Clearly, TEN has delivered the goods. Strategies, policies, business plans, etc., are essential. Execution is critical.

Clearly, execution has been outstanding. On behalf of the Board of Directors and all of TEN's Directors, and I, congratulate Nikolas, his management team and the Tsakos Group on a job very well done. Thank you Niko. Keep up the good work.

Well, thank you Chairman, and my hope we will continue [inaudible] important year. It's always a pleasure reporting positive news, and don't forget, we come from a country where bearers of bad news were killed or fired. So we have to be very careful for one or the other in our case.

This was our [tenth] consecutive profitable year, and 2006 has also been a very productive and rewarding year, so far for our Company's history, perhaps the most productive and most rewarding. We had some excellent operational and financial new heights in every respect. In 2006, 15 new vessels entered our fleet, and we added 1.4m deadweight tons of carrying capacity, with an average age of just above two years.

The Company after that has consolidated by acquiring fleets of nine modern Ice-class vessels from oil company concerns. We also formed strategic alliances with esteemed end users, taking advantage of very long relationships with companies like [Propic], the state oil company of Ecuador, [Neste Oil], the state oil company of Finland, and Petrobras, the state oil company of Brazil.

We ordered 11 newbuilding vessels for delivery between '07 and '09, and we sold profitably all our remaining non double-double [products], becoming 100% a double-double company, and at the same time, with our acquisitions and sales, we balanced our fleet almost perfectly with new products and [crude].

More importantly, our ships and our 2,000 seamen carried 330m barrels of oil safely around the world, and this is the equivalent of 35 days of U.S. imports, just to put it in perspective what a huge, colossal task that was, and we were very thankful to them. So we are pleased to see that our commercial and operational efforts were translated straight to the bottom line, producing our fifth consecutive record year since we moved to the United States and the New York Stock Exchange [inaudible] as the Chairman said.

I will not take too much of your time. I will give you a very short list of our financial performance for the year, and then Paul Durham, our CFO, will get into more details. Our net revenues for '06 were $343m, well above the $248m in '05. Our net income rose to $196.5m, from $162m in '05. Our per share earnings were $10.30, up from $8.18 in the previous year, and our average time charter for this very diversified modern fleet, rose to $30,150 a day, from $28,650 in '05. Also, our [utilization risk record] was 97.4%.

The above results were achieved in a strange market environment, where global warming influenced our industry cyclicality to the extent that we experienced a very hot market in the summer, and a less exciting rate environment in the winter. However, TEN has navigated successfully in '06 by aggressively increasing and balancing our fleet, while we participated in the [SMP] market by selling our older, non double-double vessels, and feel free to look at slides three and four for the developing and the balancing of our fleet in our presentation.

[You will see the reference] of 1.4m deadweight tons enter our fleet, one VLCC, two Suezmax's, three Ice Class [built] Aframax's, and nine Handymax and Handysize Ice-Class product ranges. At the same time, 17 additional newbuilding vessels will be delivered to us between 2007 and 2010.

Three of them have already delivered so far in the first quarter, and the majority of those ships, 11 out of the 17, will be delivered this year, so we will have one delivery a month, almost. And you can take a closer look to our deliveries on slide 7 in the -- or page 7 on the presentation.

The vessels we are building are eight new design Aframax's, built in Japan, two Suezmax's, built in Korea, two Panamax product carriers in Korea, and four Ice-class Handysize products, also in Korea, and one LNG [silver] vessel. The above tonnage, which is also an additional 1.4m deadweight tons, will result in one of the largest, most modern and dynamically diversified [inaudible] fleets in the world.

We will have 28 crude carriers, 24 products, and one LNG so far. 23 Ice-class vessels are included in our fleet, making us one of the biggest Ice-class operators worldwide. Our target for the [fuel] double-double fleet was also reached in '06. On the same side, we sold our last non double-double tonnage, the Crux and the Libra, and in January this year, our last 89 with double-double Panamax, the [Bravia]. Those vessels have attributed to a combined capital gain of $20m.

More recently we took delivery of our IA Ice-class Suezmax, the Arctic, which immediately entered an [accredited] position in [volumes] from Korea. Last Thursday, March 8, the Andromeda, the [Handysized] product carrier was delivered, Class IA class -- was delivered -- Ice-class, was delivered to us by [July] and immediately started earning $27,000 a day for a two to three month time charter reposition in [volumes]. I would say that breakeven, [volume] breakeven is about $20,000 on a ship like that, and we are currently representing a two year accretive time charter with profit sharing to a major end user.

Later this week, our first LNG, the Neo Energy, will be ready to sail from Hyundai Heavy after all the approvals and testings are in place, and we will be entering the first employment which we are currently finalizing. Also, in Q1, TEN repurchased the Aframax Olympia from a German KG which we sold back in 1999 as the first ever tanker that we [taken in] from a German KG in the system. This vessel, we sold at the time with a significant capital gain, and a repurchase option at $31.5m. Its value today is almost double that.

On the commercial side, the quality of our fleet, coupled with strong market expectations, has allowed us to implement our charting policy with a great [efficiency]. The continuing appetite for our vessels from first-class charters has been unstoppable, and encourages us as we go on for the future for '07 and forward.

From the [in] vessels we took delivery since January 2006, 15 in '06, and three so far in this year, we have managed to keep on the spot market only two. Our clients' appetite for a modern, well-managed fleet is [unpresented]. Five of our vessels have been fixed to Neste Oil, as I mentioned before, the state oil company of Finland, but for ice-trading, as an accretive minimum rate, a 50/50 profit sharing above that, for between two and three years.

Three of our vessels have been chartered to [Hyundai] Oil of Korea, with similar arrangements for the duration of three to five years, and the six remaining vessels all were fixed out to major end users for periods between two to five years and profit sharing arrangements. Our new two additions, the Andromeda, which was delivered on Thursday, as I mentioned, and the Aegeas, delivered in April, are subject to a major end user, again with a very accretive minimum rate, and a 50% profit share above that.

Our existing fleet has also attracted significant new charters at higher rates. Three of our Suezmax's have been re-fixed to Petrobras at [times] that will add at least $8m to the bottom line for the next three to five years for the new rate. In addition, two of our Panamax's have been chartered to Petrobras for four years, and the charter has options of two more vessels.

Very importantly, the provision of the strategic alliance with FLOPEC, consisting of six vessels, started and materialized within '06. The sale of 49% of our Panamax vessels, the Maya and the Inca, and the extended five-year charter with an accretive minimum and an [optimum side] were the beginning. The system vessel Atlantis was also chartered for five years by the same charter for the [minimum] and the Adelphi for three years. Those are smaller product carriers.

Finally, FLOPEC purchased 100% of the Panamax Aztec, resulting to a capital gain of approximately $25m, which we have reported in our fourth quarter results. The above transactions have created a very balanced chartering portfolio and, if you look on your slide, page 5, they have given TEN huge earning visibility, and you can look at this at the following slide. As we speak today, we could easily charter all our newbuildings to major oil companies and end users at accretive rates if so we wished.

Operationally, the Aframax [Vergina] is completely linked to a conversion to double-double in China, and she will be ready by the end of the month. The vessel has been inspected by all those interested buyers for trading and conversion projects, since the conversion for sales and purchase value has doubled.

Our Ice-class Aframax, the Propontis had a grounding in the icy Baltic last month but, thanks to the charterers and crew actions, they eventually they lost control to only hull damage. The vessel is fully insured for hull and machinery and loss of [inaudible] and is currently being repaired in Germany. Our utilization of 97.4% speaks for itself, also the pre-emptive maintenance of our vessels, and especially our older [inaudible] allowed us to sell [inaudible] to those acquired many years ago.

For our Company's efficiency and operational performance, and the successful movement of 330m barrels of oil on our vessels, we were awarded the Green Flag Environmental Achievement Award from the port of Long Beach, California. Also our Company was voted Tanker Company of the Year by the prestigious Lloyd's List newspapers.

For all the above, and on behalf of the Board, I would like to thank our on-board and on-shore personnel, who together with our technical managers, cargo, shipping and trading, have protected our interests [inaudible] day and night.

The market for -- looking forward, 2007 started with a short-term mixed signal. The warmer than usual winter, new supply of tonnage, and the Chinese syndrome have kept the markets nervous. However, the long-term prospects are positive. Major oil companies are out to cover their requirements forward from three to ten years; a very positive sign for our industry.

And if you sit down and look at what the market has achieved so far, and we had a significant movement, positive movement recently in all sectors, the [inaudible] has been the most attractive sector, has averaged $45,000 in its three basic groups since January, and that's down from $60,00 for the whole of 2006. But, don't forget, the pick of the re-emphasis is not the winter any more but is almost in July, so we're looking forward to a huge increase in that sector also.

The Suezmax's have averaged in the first two and a half months $55,000, again, for the basic three groups on the spot market, and last year they did $60,000 also for the whole year. Aframax's are steady at $40,000. Panamax's and products also steady, $35,000, and products $25,000 respectively.

On the corporate side, this month, as the Chairman said, marks our Company's fifth anniversary on the New York Stock Exchange. The Company continues its [stallion] growth, with 53 consecutive profit on the quarters since inception back in 1993, as we started on the Oslo Stock Exchange, for those of you who remember.

Our mere -- our first performance on the New York Stock Exchange were mere earnings of $3.9m for the whole year of 2002. Today, we are almost reporting $200m for 2007. Our dividend at the time was $0.70 for '02 and it's $2.75 for '07, and our share price ranged from a low of $9 to almost $50 where we are -- we hit in August, and we are today.

However, the Management of the Board believe that the Company, with our track record of growth, and $10.30 earnings per share, we finally see our share increase and reach what we believe is fair value. We will work hard and even harder to achieve this for our shareholders, ourselves, for being also the major shareholders, and we would like to thank all of you who have followed the Company and supported it so far, and we will continue to work very hard to increase our share price, and the value of the Company.

The Management will be starting a two week road show in the United States, starting Monday 19, from the east coast, and then moving to the mid-west and west, and we would like very much to see as many of you during our time in the United States, followed by a European road show on April 23, not [inaudible] in Europe. So we would like very much to thank you for being with us, and looking forward for an even better 2007, and I would like Paul Durham to translate all of what we said to the [analysts]. Paul?

Thank you Niko, and thank you all for joining us today. Before I begin, please note that a summary of selected financial data is included in the press release for your reference. And now I'd like to say a few words more on the significant items occurring during the quarter, and 2006.

In 2006, TEN's net income increased by 21% over 2005, from nearly $162m to over $196m. Earnings per share reached $10.30, compared to $8.18 in the previous year. Attractive opportunities provided capital gains of $63m in 2006, of which $50m was earned in Quarter 4 on the sale of the Aztec, and on the sale of 49% of the holding company of Maya and Inca. In 2005, capital gains were $45m.

Excluding these gains, net income for the year was $133.1m, compared to $116.5m in 2005; an increase of 14%, mainly due to the increase in the size of the fleet and better overall rates achieved. And, as far as I can make out, we are the only major tanker Company to announce to date an increase in annual net income, excluding capital gains.

For Quarter 4, total net income increased from $60.8m in 2005, including $20m of capital gains, to $77.1m in 2006, including the $50m of capital gains. And earnings per share rose from $3.16 based on 19.2m average shares, to earnings per share of $4.05, based on just 19m shares.

Total revenue for the year was nearly $428m, compared to nearly $296m for 2005; a 45% increase, again, primarily due to the much increased size of the fleet, and the increased rates achieved. Total revenue for the quarter was $111.6m, compared to $89.4m in Quarter 4 2005; a 25% increase.

The average number of vessels in Quarter 4 was 37, compared to 25.3 in last year's Quarter 4. However, productivity in the fourth quarter of 2006 was lower at 97.2%, as Vergina II was in dry-dock throughout the quarter. Although average charter rates achieved were a respectable $29,800 for Quarter 4 2006, they were lower than expected, due to the softening of the market in October and November. In the previous Quarter 4, we had achieved $35,400.

For the year, as Niko has mentioned, we achieved an average of $30,150 compared to $28,650 for 2005. There was a significant move in the year towards chartering our vessels on time charter with profit sharing, the number of days in such charters doubling. Overall, our exposure to market rates increased from 59% in 2005 to 78% in 2006, with similar changes between the two fourth quarters.

However, the overall number of days on fixed employment in the quarters, including pool and contract replacement, remained around 85% of total employment. Of the seven vessels that were operating under the pool arrangements during 2006, four had been sold by mid-January 2007, and the other three are now on time charter.

During Quarter 4 2006, average rounded rates achieved by VLCCs were down from Quarter 4 2005, earning on average approximately $35,800. Suezmax rates were similar to 2005, at $38,600. Aframax's, including the three new large product carriers, achieved slightly less than 2005, at $35,200. Panamax rates fell to $23,200, and Handysize product carriers were slightly down to $19,750. The newly acquired six Handymax product carriers earned $20,400.

VLCC and Panamax average rates were impacted by the accounting treatment of six monthly profit share arrangements and this will especially impact Quarter 1, as the VLCCs, La Madrina and Prudencia, the Handysize Antares and Arion, and Panamaxes Maya and Andes, will all be accounted for after a minimum rate until final determination of their six month rates in Quarter 2, which will enjoy the extra [hire] to be accounted for then.

Total operating expenses in Quarter 4 amounted to $23.7m; a 69% increase from Quarter 4 2005, due mainly to the larger number of vessels. On the daily average cost of vessel basis, costs increased from $7,134 to $7,811 from Quarter 4 2005 and, on an annual basis, increased by 7% from $6,534 to $6,979, due to higher lubricant and insurance costs, the addition of a VLCC and extensive repair work performed on certain older vessels.

G&A expenses for the quarter increased by over $200,000 from Quarter 4 2005, primarily due to audit related fees. Including our management fees and excluding the management incentive award, our total overhead costs per vessel decreased from $954 per day in 2005 to $878 per day for 2006, mainly due to the increased size of the fleet.

Total net finance costs for Quarter 4 amounted to $14.8m compared to $4.7m in Quarter 4 of 2005. The loan interest alone was nearly $18m in the quarter, mainly due to average loans increasing by nearly $700m, and average loan interest rates increasing from 4.8% to 5.6%, and current average interest rates approximately 6%.

These increases in loan expenses were again mitigated by positive changes of $1.2m to the values of swap insurance, and another $3.2m in capitalized interest. At the end of the quarter, outstanding loans amounted to $1.134b and our net debt to capital ratio was 56%. Real leverage, that takes account of the fair values of the vessels, was 41%.

During Quarter 1 2007 we have sold the Panamax [inaudible] for $23m with a gain of $5m and released cash of $10m. We have taken delivery of the LNG carrier Neo Energy, the Suezmax Arctic, and the product carrier Andromeda. And we have purchased the Aframax Olympia -- repurchased the Aframax, I should say.

Taking these transactions into account, and other scheduled yard installments, we have already expended this quarter to date $227m, of which $165m was funded by debt, although no debt was used to acquire the Olympia for $31m. Including the newly commissioned construction contracts with two more Aframax's, we now have 14 vessels under construction, with a total contract value of $750m, of which $577m remains to be paid. Of this, $540m is expected to be covered by debt.

The remaining yard installments will be paid as follows; $291m in 2007, $95m in 2008, $108m in 2009 and $83m in 2010. With regard to [several] dry-dockings, we spent $5m in 2006 on the Libra and [inaudible] and the initial costs of the Vergina II. The Vergina II will remain in dry-dock for all of Quarter 1, before completing its conversion work to a refurbished double hull vessel. The remaining cost of the conversion is approximately $8m, and mostly it will be capitalized in Quarter 1 as upgrading.

We paid $24m in October for the first dividend relating to 2006, bringing total dividend payments to $45m within the year. We have just announced the second dividend for 2006 of $1.50, which will be paid in Quarter 2 at a cost of nearly $29m. The total dividend for 2006 amounts to $2.75; a 31% increase over 2005. And this concludes my comments, and now I'll hand the call back to Niko.

Thank you Paul. Well, we would be very happy to listen to any of your comments and answering of your questions, so we would like at this stage to open the floor for any comments or questions. Thank you.

[OPERATOR INSTRUCTIONS]. Your first question is from Jonathan Chappell of JPMorgan.

Thank you and good afternoon everybody.

Hello Jonathan.

A very quick question for you at the start. There was a good exercise of the Olympia option. Do you have options on the other two vessels that you're chartering in the Cape Balboa and the Cape Baker?

Yes, a very good point. We have options for -- and the options are for October of '08, so the next year. I think the options we have for these vessels are, again, about half of what -- they represent half of what their market value is today. A newbuilding, Suezmax, was sold last in January for $97m, and that was not an Ice-class vessel [since] we will be looking at values in the 90s, and so about half of that is the option we have.

Okay, great. Another question was on the cost side. Paul mentioned that the higher costs for lubricants and a larger fleet. A lot of people have been talking about higher crude costs, and I think you've even addressed that in the past but, at least in your prepared remarks, there was no mention of higher crude costs. Are you seeing inflation on the crewing side, and a shortage in labor, or are economies of scale helping Tsakos to limit the expansion of crewing costs?

Well, our crew costs did take quite a jump in previous years. It's more stabilized in 2006 but it is, nevertheless, still a challenge for us. Crew costs account for almost 50% of our total operating costs, and it's one thing that we recognize that we have to get a grip of. And fortunately, as you're aware, most of our vessels do have Greek flags, and new legislation in Greece recently has reduced the required number of Greek officers, or Greek seamen, on our ships, so we're looking at that.

We might look into reducing the number of Greeks per ship, but on the other hand, might increase the number of ships with Greek flags to compensate for that. But, within 2006, there wasn't a very material increase in crew costs, per se.

As you look at '07, Paul, do you think that it's still going to be somewhat leveled out, or could there be another spike as there has been in recent years?

Well, our crew -- the Greek crew, anyway, are paid in euros so it really much -- very much depends on how the euro goes, and I think that's one of the reasons why it's fairly stable in 2005, seeing as from year-on-year, there was a relatively small change. So it really depends on the euro.

Okay, that makes sense. And then, finally, just one almost obligatory question. You received your LNG carrier, and you've mentioned you've been employed on the spot market. What do you see out there as far as longer-term charters are concerned and, also, what is the spot market type level for LNG, as there are very few ships that technically trade on spot in that market?

Yes. Technically we are receiving the ship at the end of this week, because these are very specialized vessels, and we are manning the ship with [nine] merchant marine officers with whom we have a very long relationship. Korea is one of the largest importers of the natural gas, so the ship and the crew, and all the tests will be ready at the end of the month. We are looking at medium-term businesses in which we find -- long-term business we do not find very interesting.

There are contracts right now, but we could secure for anywhere up to 20 -- 15 to 20 years. I think the rate environment for this is not interesting. The spot market ranges from -- when we talk about the spot market, we're talking to seven to 10 [inaudible], so it might take a year of consecutive [inaudible]. We are looking at [inaudible] on the time charter equivalent, so in the mid-60s, and we also are closely negotiating three to four-year contracts around this rate environment. As I said, with long term, we are enthusiastic about this market. We have an [all in] breakeven cost, Paul, of about what, 32?

Yes.

We have about $32,000 all in breakeven cost on that, so whatever chartering the possibility is accretive to the bottom line, and we enthusiastically welcome these new signs of diversification in our Company.

Okay, thank you very much Nick and Paul.

Thank you Jonathan.

[OPERATOR INSTRUCTIONS]. Your next question is from Gregory Lewis of Fortis Bank.

Yes, good afternoon. I just have two general questions. One is, the conversion for the Vergina II, has that gone according to schedule? Have there been any unforeseen incidents and do you expect -- if you had another opportunity, would you go through the conversion process?

It's a very good question. I think conversion is quite a complicated issue. However, it doubles the remaining life of a vessel, making it into double-double. We have technically achieved and done for only smaller vessels. There is about a 28-day overlap, mainly because of cold weather in China. However, we have -- this has been paid by the shipyards, so we don't have any loss of that. They will be paying a penalty of about $1m for the overlap.

We were looking for the ship to be finishing in the beginning, or first week in February. It seems we will be taking delivery of the ship, as she's almost ready testing, at the end part of this month. It was our only single vessel and that's why we took the decision to go ahead with that. We expect that, financially, it's a very -- it was a very prudent decision, but technically it was a very tough decision. If we had 10 ships being single-single, we would not perhaps have gone ahead in terms of turning them into double-double, but with one ship, I think, it will be worthwhile.

Okay, great. My next question is, your eight newbuildings scheduled for delivery in 2007, are they all on schedule?

They are on, or before schedule, all of this is. In some cases, we were talking about the Japanese built ships. They are on schedule on the hour! If we take a slight [delay] they [might not] give us the ship so, yes, they are -- we have been spoilt and [like] the company. We have not -- we have never had a late delivery.

At the same time, we have been spoilt because when we started our Newbuilding Program many, many years ago, we are building ships for the largest shipyards in the world, only in Japan and only in Korea. We have not yet started building in China. Owners who have not the -- who are not as lucky as us to have long relationships with Chinese -- with the Japanese and Korean yards, are guinea pigs in China, and we will build in China sooner or later, but we'd rather be later when China has technically and efficiently increased.

Okay, great. And then, lastly, just talking about the Ice-class fleet, what sort of premiums, if any, are you seeing for the Ice-class vessels?

Well, the Baltic trading, where we have a significant number of our ships, we have seen -- although this was quite a warm winter, we saw significant premiums. Our Aframax's almost earned double the product Ice-class vessels than the market for this period that we are going through now, from December until now.

Okay, great. Thank you very much.

Thank you. Your next question is from Bill Frasier of [Green Hill] Capital.

Yes, gentlemen, congratulations on a great year. Fantastic job! A question on dry-docks for the balance of the year. What do you see for activity around dry-dock days?

Let me just run through the vessels that we anticipate to be on dry-dock. As we said, Vergina, which as well as conversion, is also undergoing special survey. Well, that's until the end of Quarter 1. We have Cape Baker and Cape Balboa which are chartered-in vessels and, therefore, we will not be bearing the cost of the dry-dock. But we will obviously lose that from the revenue that those vessels gain during the time.

I think Cape Baker in Quarter 3, Cape Balboa in Quarter 4, it should be the first dry-docking, so we don't anticipate much time spent on those, say, about two to three weeks each, possibly less.

La Prudencia is coming up in Quarter 2, that's a VLCC, so there is a good month on that one. Silia T in Quarter 2/Quarter 3, again, about two or three weeks on that one. Triathlon in Quarter 4, that's a Suezmax, again, the first one so only two or three weeks on that one.

Okay, thank you. Getting back to the LNG tanker, do you folks think that you can run that at least breakeven for the year above 2008?

Yes, as I said, we're looking for -- our breakeven is about 2,000, and hopefully we're looking businesses in excess of $50,000 -- between $50,000 and $65,000, so we believe it will be above that $50,000, above the breakeven.

Okay, and in the last conference call you indicated that you were pursuing a partnership on the tanker. Did that opportunity go away?

We are still open in discussions so for partnering with other end users in this small market of the LNG, so we're looking at this possibility, but our priority right now is to get the vessel operationally ready, and starting to earn money.

Okay, great. Last year in your annual report, you mentioned that the fleet was -- the fair value was in excess of $700m [inaudible] over the carrying costs, and I was wondering if -- did that number hold up at the end of this year?

This is a very difficult question, only the Chairman can answer.

It not only held up, it has increased.

Very good, very good. Well, keep up the good work gentlemen, and keep up the fantastic performance. Thank you.

Thank you very much. Thank you.

Thank you. This concludes today's question and answer session. I would like to hand the floor back to Management for any closing remarks.

Well, thank you very much for those of you listening in and asking questions. We hope that 2007 will be another very positive and hopefully another record year. And, as I said, the Management will be in the United States for two weeks from the March 19, to the end of March, and then a road show in Europe from April 23 to 27, and then hopefully we'll see many of you there.

We are [in the closing down of] the Stock Exchange on 22. This is next Thursday, so hopefully you can participate with us there, and I would like the Chairman to close the conversation.

Well, we certainly appreciate your joining and hearing our story. One thing that we passed over rather quickly, and that was our very recent dividend action. It's our intent to be generous in the dividend and I think we are delivering.

Thank you. This concludes today's Tsakos Energy Navigation conference call. You may now disconnect your lines.