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The oil markets have a logistical bottle neck-oil tankers.
Oil located in the Middle East is of no value unless it can be moved to market. There is currently a shortage of tanker capacity, which is causing tanker charter rates to rise.
Due to environmental and safety regulations, about 10-20% of the world's tanker capacity is being retired/yr. There are currently about 3200 tankers worldwide. Approximately 400 of the 3200 tankers are VLCC's and ULCC's
It is my belief that the world's shipyards will not be able to replace 320 tankers/yr.
Investors Business Daily has given NAT a top rating. I agree.
This URL gives tanker info such as charter rates, new building etc.
NAT was incorporated in 1995.
NAT owns 3 suezmax tankers (150 000 dwt), “British Hawk”, “British Hunter” and “British Harrier”, all on charter to BP Shipping until September 2004. BP has an option to prolong the charter by 7 x 1 year.
BP Amoco Plc guarantees the charters.
NAT is paying dividend to its shareholders on a quarterly basis. The minimum guaranteed annual dividend until 2004 is USD 1.35 per share. If the timecharter equivalent for suezmax tankers is above an average of USD 22,000 per day during a quarter – the dividend will increase correspondingly.
NAT receives a minimum of USD 22,000/day per vessel on a timecharter basis from BP. If the market for suezmax tankers is above USD 22,000, based on an agreed formula and specific trades, NAT will receive additional charter hire from BP. The additional revenue is being calculated and paid in arrears. NAT will distribute all excess earnings to the company’s shareholders.
If the market for suezmax tankers is less than USD 22,000/day, NAT will still receive the minimum timecharter equivalent of USD 22,000.
No off-hire risk. The vessels receive hire 365 days a year.
No management risk or costly administration. Ugland Nordic Shipping ASA is the commercial manager of NAT.
Fixed interest costs on loan.
NAT is listed on the stock exchanges in New York (AMEX) and Oslo (Oslo Stock Exchange) – ticker code ”NAT”.
Outstanding number of shares is 9.706.606.
NAT was incorporated in 1995 under the laws of the Island of Bermuda. In September of 1995 the company offered and sold 11,731,613 warrants to the public at an offering price of USD 5.00 per warrant. Exercise price was USD 10.21 per warrant and these were exercised on September 30th 1997. The proceeds were utilised to acquire 3 suezmax tankers built at Samsung Heavy Industries Co. Ltd. The 3 vessels, "British Hawk", British Hunter" and "British Harrier", were all delivered during the autumn of 1997 and commenced their charter to BP Shipping (BP) immediately after delivery.
The charter party with BP is valid until September 2004 with a further seven one-year options in BP's favour. The contract ensures that the ships receive a minimum rate of USD 22,000 per day per ship on a time charter basis, but in periods when the tanker market is stronger the company will receive the market rate. The market rate is calculated quarterly in arrears on the basis of a formula set out in the contract. If the market is below USD 22,000 per day, NAT will still receive the minimum rate of USD 22,000.
Based on this rate structure, NAT is paying dividend to its shareholders every quarter. The base hire (USD 22,000/day) is being paid in advance and any additional hire is being paid in arrears. The minimum annual dividend based on the minimum rate is USD 1.35 per share. If there are payments of additional hire in excess of the timecharter equivalent of USD 22,000 per day, the shareholders will receive additional dividend.
Since the commencement of the BP contracts,
NAT has made the following dividend payments to its shareholders:
4. quarter 1997 USD 0.30 per share
1. quarter 1998 USD 0.40 per share
2. quarter 1998 USD 0.41 per share
3. quarter 1998 USD 0.32 per share
4. quarter 1998 USD 0.30 per share
1. quarter 1999 USD 0.32 per share
2. quarter 1999 USD 0.35 per share
3. quarter 1999 USD 0.35 per share
4. quarter 1999 USD 0.36 per share
1. quarter 2000 USD 0.34 per share
2. quarter 2000 USD 0.45 per share
In November 1998, the shareholders of NAT voted in favour of the company taking up a loan of USD 30 mill in order to repurchase shares through a tender offer. During this process the company repurchased 2,107,244 shares at a price of USD 12.50 per share. After the repurchase of shares there are 9,706,606 NAT-shares in issue.
Ugland Nordic Shipping ASA (UNS) is serving as the manager of NAT and provides certain management, administrative and advisory services to the company. UNS owns 22,8% of the company.
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