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2014-05-12

Nordic American Tankers Limited: Nordic American Tankers' 1Q2014 Report (NYSE:NAT) - Cash dividend of $0.23 declared earlier. Strongly improved operating cashf

Link to the complete 1st Quarter 2014 report:
http://hugin.info/201/R/1784418/611430.pdf
http://hugin.info/201/R/1784418/611430.pdf

Hamilton, Bermuda, May 12, 2014

Thanks to a strong winter market, 1Q2014 has produced the best results we have
seen in several years. The timecharter results of NAT were significantly
better in 1Q2014 than in 4Q2013. The short term rates in tanker markets are
very volatile. At the time of this report the tanker market has weakened.
Nonetheless, there are indications that after the weakness of the past few
years a recovery is coming closer. During 1Q2014 we had positive cashflow
from operations of $27.1m, compared with $1.9m in 4Q2013 and -$4.9m in
1Q2013.

During 2012 and 2013, when the market was weak, we used the opportunity to
have ships in planned drydock for maintenance to ensure continued top
technical quality of the vessels. It has been very advantageous to implement
the comprehensive drydocking, maintenance and improvement work for many of
our ships during a period of low rates, when the cost of time is lower.

Since the beginning of 2012, 15 of our vessels have undergone their required
special surveys, certifying their seaworthiness. The technical quality of our
fleet ranks with the best in the industry. In 2014 NAT has undertaken two
drydockings, which both are completed at the time of this report. Going
forward, drydocking costs and off-hire (time out of service) should be
significantly reduced and the number of revenue days should increase
correspondingly as there are no more scheduled drydockings for 2014.

As communicated earlier, in November 2013, NAT established Nordic American
Offshore (NAO) - a Platform Supply Vessel (PSV) company. At the time of this
report we expect the public listing of NAO on the New York Stock Exchange to
commence very soon.

On April 2, 2014 NAT declared a cash dividend of $0.23 per share payable to
shareholders of record as of May 15, 2014. The dividend is expected to be
paid on or about May 27, 2014.

Since NAT commenced operations in the fall of 1997, the Company has paid a
dividend 67 times, with total dividend payments over the period amounting to
$44.90 per share, including the dividend to be paid in May 2014. In addition,
a dividend in kind of $0.13 per share will be distributed to NAT shareholders
in the form of NAO shares after the listing of NAO at NYSE.

During November, 2013, the Suezmax market strengthened, and in December the
market achieved its highest level since 2010. This lasted into January before
the market began to subside. NAT's strategy meant a number of cargoes were
concluded at high levels. The rate increase is an indication of the improved
fundamentals of the tanker business.

Key points to consider:

* Tanker rates achieved on average for 1Q2014 were $26,300 per day per vessel
for our trading fleet, as against $14,100 per day achieved in 4Q2013.
* A stock issue was launched April 7, and closed April 10. The total number
of shares issued was 13,800,000, paving the way for further growth. The net
proceeds of $113.6m will be reflected in the 2Q2014 accounts.
* Earnings per share in 1Q2014 was $0.05, compared with -$0.31 in 4Q2013 and
-$0.59 in 1Q2013.
* The undrawn part of the credit facility and net working capital stood at
$305m at the end of first quarter.
* The agreement to transport crude oil for an affiliate of ExxonMobil
wordwide is positive.
* We continue to focus on cost efficiencies - both in administration and
onboard our vessels.
* 15 vessels were vetted (inspected by clients) during 1Q2014. NAT came out
with excellent results, reflecting the quality of our fleet.
* "Financial Vetting", focus on the financial strength of shipowners, is
relevant in the tanker industry. NAT is in good financial health, which is
important for our clients.
* The Company was successful in establishing Nordic American Offshore Ltd.
with a $65m investment in November 2013. The private placement of shares
was oversubscribed and our investment in NAO is expected to be accretive to
shareholders of NAT. Our investment in NAO is already producing results. On
May 9 NAO declared its first dividend, of $0.45 per share, yielding a total
of about $2.0m for NAT. NAO is expected to be listed on NYSE very soon. NAO
owns at this time six platform supply vessels which are serving the
offshore oil installations in the North Sea. An agreement has been reached
in order for the Ulstein shipyard to build two more Platform Supply Vessels
(PSV) of the same type, bringing the PSV fleet of NAO to eight ships. Our
investment in NAO was financed via a follow-on offering in November 2013.
* The Company does not engage in any type of derivatives.

Nordic American Tankers is different from other tanker companies.

Nordic American has an operating model that is sustainable in both a weak and
a strong tanker market. Accretive fleet growth and quarterly dividend
payments are central elements of the strategy. NAT has one type of vessel -
the Suezmax vessel that can carry one million barrels of oil. A homogenous
fleet reduces our costs, which helps to keep our cash-breakeven down at about
$12,000 per day per vessel, which is considered low for the industry. Net
asset value (NAV) is a measure that is linked to the steel value of the
ships. NAV has no relevance when it comes to valuation of NAT as an ongoing
business.

Financial Information

The Company declared a cash dividend of $0.23 on April 2, 2014, which is
expected to be paid on or about May 27, 2014 to shareholders of record as of
May 15, 2014. The number of NAT shares outstanding at the time of this report
is 89,182,001.

We believe that Nordic American Offshore will strengthen Nordic American
Tankers. We see cost synergies for both NAT and NAO, in particular as regards
general and administrative costs. Our $65m investment in NAO has been
recorded as a capital asset.

Earnings per share in 1Q2014 was $0.05, compared with -$0.31 in 4Q2013 and
-$0.59 in 1Q2013.

The Company's net operating cash flow in 1Q2014 was $27.1m, compared with
$1.9m in 4Q2013 and -$4.9m in 1Q2013.

Since the beginning of 2012, 15 of our vessels have undergone special surveys.
These surveys and dry docking periods have taken place in a weak tanker
market. In total we have paid about $40 million for all these dockings.
Since 1Q2012, the average offhire time (out of service) for the ships that
have undergone special surveys is about 90 days per ship including
positioning time to and from the yard. In 2014 two of our vessels have been
drydocked. In a weak tanker market time is not so costly. There are no more
scheduled drydockings for 2014

We continue to concentrate on keeping our vessel operating costs low, while
always maintaining our strong commitment to safe operations. We pay special
attention to the cost synergies of operating a homogenous fleet that consists
only of double hull Suezmax tankers. As we expand our fleet, we do not
anticipate that our administrative costs will rise correspondingly. In a weak
tanker market other tanker companies may have challenges in keeping up
technical standards as they cannot afford to spend the required funds for
operations and maintenance.

As a matter of policy, the Company has always kept a strong balance sheet with
low net debt and a focus on limiting the Company's financial risk. This
policy will continue. At the end of 1Q2014 the net debt per NAT vessel was
$6.4m.

The Company is very well placed to take advantage of strong shipping markets,
which due to our spot strategy, can be expected to be reflected in increased
dividend payouts immediately.

The establishment of our Orion Tanker Pool, our chartering department, has
resulted in a closer relationship with customers and a stronger position in
the market place. The previously announced commercial frame agreement with a
subsidiary of ExxonMobil was extended for two years in early June 2013.
Moreover, as an indication of our quality profile we do business with some of
the other largest oil companies in the world on a regular basis. They demand
quality both at sea and onshore.

It is a prerequisite for any expansion of the fleet that our dividend and
earnings capacity per share increase.

Our primary objective is to enhance total return for our shareholders,
including maximizing our quarterly dividend.

The Company has in place a non-amortizing credit facility of $430m, of which
$250m has been drawn. Cash on hand is about $80m. Net working capital,
undrawn amounts of the credit facility and cash on hand amount to $385m. In
addition, the Company has cash on hand of $113.6m from the follow-on offering
that closed April 11, 2014.

Our credit facility matures in November 2017. The Company pays interest only
on drawn amounts and a commitment fee for undrawn amounts.

The tightened terms of commercial bank financing and higher margins on
shipping loans are challenging for shipping companies that are highly
leveraged. By having little net debt, and hence a strong balance sheet, NAT
is better positioned to navigate the financial seas, and we believe this is
in the best interests of our shareholders.

For further details on our financial position for 1Q2014, 4Q2013 and 1Q2013,
please see later in this release.

The Fleet

The Company has a fleet of 20 vessels at the time of this report. By way of
comparison, in the autumn of 2004, the Company had three vessels. Please see
the fleet list below. Our vessels are in excellent technical condition.

----------------------------------------------------
|Vessel Dwt Vessel Dwt |
|Nordic Apollo 159,999 Nordic Hunter 151,400 |
|Nordic Aurora 147,262 Nordic Jupiter 157,411 |
|Nordic Breeze 158,597 Nordic Mistral 164,236 |
|Nordic Cosmos 159,998 Nordic Moon 159,999 |
|Nordic Discovery 153,328 Nordic Passat 164,274 |
|Nordic Fighter 153,328 Nordic Saturn 157,332 |
|Nordic Freedom 163,455 Nordic Sprite 147,188 |
|Nordic Grace 149,921 Nordic Vega 163,000 |
|Nordic Harrier 151,475 Nordic Voyager 149,591 |
|Nordic Hawk 151,475 Nordic Zenith 158,645 |
| Total dwt 3,121,914 |
----------------------------------------------------
The arbitration hearings involving the Suezmax vessel Gulf Scandic (now named
Nordic Harrier) have finished. Gulf Navigation Holding PJSC (GulfNav) was the
other party in the arbitration. The case relates to the 6 year bareboat
charter with GulfNav of the Gulf Scandic covering the period 2004 to 2010.

When the vessel was redelivered to NAT by the charterer in October 2010, it
was in very poor technical condition. The vessel had not been operated
according to sound maintenance practices b...

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