2001 Maritime

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GULF OFFSHORE 2001 event
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May 14, 2001

OMI buys two and sells one
OMI Corporation is to acquire two vessels that are currently on long term time charter. In an unrelated transaction, it will sell another vessel.

The acquisition is of two 35,000 dwt crude oil tankers built in 1993 and the purchase price for each is $21,750,000. Deliveries to the company are expected in June. Osprey Maritime Limited, the seller, will receive 1,000,000 shares of OMI common stock priced at $8.00 per share for each vessel in partial payment. The vessels are on time charter to affiliates of Pertamina, and have in excess of four years each (plus options) remaining on the time charters.

Somebody is buying shuttle tankers
OMI is selling the 2000-built LOIRE, a Suezmax tanker with advanced design capabilities that make it especially attractive to shuttle operations. The vessel is expected to be delivered to the buyer in the third quarter of 2001 at which time a gain of approximately $18 million from the sale will be recorded.

Frontline Ltd, OMI's partner in Alliance Chartering LLC, has agreed to sell a sister ship to the same buyer on the same terms.

Frontline says its ship, Front Archer, was designed and built with future employment as shuttle tanker in mind. It is equipped with controllable pitch propeller and thruster tunnel. It is the buyer's intention to use the vessel in his shuttle operations.

Frontline took delivery of the Front Archer in February 2000 and the vessel has traded in the spot market from delivery. The vessel is expected to be delivered to the buyer in July/August 2001. Frontline expects to book a profit of approximately $20 million and to free up about $32 million in liquidity.

Frontline says it didn't fully utilize the technical capacity of Front Archer in regular trading. Since Frontline's newbuilding program after acquisition of Mosvold already includes two suezmaxes and six VLCCs, Frontline decided to accept the price offered for Front Archer. An important consideration was that the ship is being sold for the shuttle trade and thereby will not be competing with the existing Frontline fleet in the spot market.

At OMI, chairman, CEO and president Craig H. Stevenson said: "While we do not like to give up a high quality Suezmax, the sale will allow us to do other transactions. The acquisition of the two other vessels with profitable long term charters continues our strategy of securing income for long term periods.''

FGH gets approval for BLM sale
Friede Goldman Halter, Inc. says Judge Edward Gaines has approved the previously announced sale of Brissonneau & Lotz Marine (BLM), for $33.5 million. It is anticipated that the sale will close and the money will be funded shortly.

"We couldn't be happier that this sale was approved and received the unanimous approval of all our major creditor groups," said John Alford, president and chief executive officer of FGH. "This is a big step in the re-strengthening of our company, since it provides us with liquidity outside our bank lines of credit, and it enables us to have the resources necessary to commence new projects."

Shell orders two more LNG carriers
Shell International Gas Limited (Shell) today announced the order of a further two Liquefied Natural Gas (LNG) carriers; one from the Mitsubishi Heavy Industries (MHI), Japan and one from Daewoo Shipbuilding and Marine Engineering Company Limited in Korea.

The two new vessels have been secured against the background of a growing portfolio of Shell LNG projects around the world, which require shipping capacity and will help supply the growing demand for LNG. They are in addition to the two vessels already on order from Mitsubishi shipyard for delivery in 2003 and a third vessel, the Galeomma, which is currently on short term contract until the first quarter of 2002.

The order maintains a long-term relationship between the Royal Dutch/Shell Group and the Daewoo Shipbuilding and Marine Engineering Co. Ltd and Mitsubishi Group. The ships will be delivered in late 2003 and early 2004 respectively. The Daewoo vessel is of the membrane type. The Mitsubishi vessel is of the Moss Spherical Tank design and will be similar to those already on order from Mitsubishi.

Chris Evans, Shell Gas & Power’s VP for global LNG said: “The new vessels are an important step in realizing Shell’s plans to develop new markets for LNG.”

The vessels, will be manned and operated by Shell International Trading & Shipping Co. Ltd (STASCO) taking advantage of STASCO’s experience in LNG shipping.

Shell has over 300 officers qualified to serve in senior positions on LNG ships.

Shell International Media Relations - Cerris Tavinor +44 (0) 207 934 3045

The Mitsubishi vessel has the following dimensions and characteristics :

Length overall - about 290 m
Length between perpendiculars - 276 m
Breadth moulded - 46 m
Depth moulded - 25.5 m
Scantling draft molded - 12 m
Design draft molded - 11 m
Deadweight on design draft - about 67,300 metric tons
Capacity of LNG - 135,000 cu.m at 98.8% cargo tank filling ratio and at tank temperature of -163 degrees Celsius
Main propulsion plant - Marine steam turbine
SHP metric (at MCR) - 21,320 kW
Containment system - Moss

The Daewoo vessel has the following dimensions and characteristics :

Length overall - about 279.8 m
Length between perpendiculars - 268.8 m
Breadth molded - 43.4 m
Depth molded - 26 m
Scantling draft molded - 12.5 metres
Design draft molded - 11.5 metres
Deadweight on design draft - about 70,700 metric tons
Capacity of LNG - 137,680 cu m at 98% cargo tank filling ratio and at tank temperature of -163 degrees Celsius
Main propulsion plant - Marine steam turbine
SHP metric (at MCR) - 32,400 hp
Containment system - Membrane
Design Speed - 19.5 knots

Bergesen makes $12 million on newbuilding resale
Norway's Bergesen has entered into a preliminary agreement to sell the tanker Berge Kyoto (296.000 dwt, built 2001) to foreign interests for $83 million.

Bergesen will receive the vessel as a newbuilding from Hitachi at the end of May 2001, and the buyer will take delivery of the vessel mid June 2001 in Singapore. The sale is in accordance with what Bergesen calls its "opportunistic approach" to the tanker business.

Bergesen will book a profit on the sale of about $12 million.

Ice and floods hit barge line earnings
American Commercial Lines LLC (ACL) reported a first-quarter operating loss of $10.4 million, compared with operating income of $8.0 million for the first quarter of last year.

Operating revenue in the first quarter was $173.1 million, 3 percent higher than the $167.5 million for the same period last year. The prior-year period does not reflect the purchase of Peavey Barge Line's assets in May, 2000.

The increased revenue, resulting primarily from the additional Peavey barges and favorable fuel-price adjustments on long-term contracts, was largely offset by the reduction in loads per barge caused by severe ice conditions and fog.

In addition, a rate reduction that became effective on a generating coal contract in the second quarter of 2000 also negatively affected the year-over-year revenue comparison. Operating expenses increased to $183.5 million from $159.5 million in 2000. The higher expense level was the result of operating the expanded barge fleet, higher fuel prices, and ice-related repair and service costs.

"The historic cold weather in December of last year and the consequent build-up of ice on key river segments had a devastating impact on our ability to operate our barge fleet this quarter,'' said Mike Hagan, ACL's CEO. "Our results were extremely disappointing. The deep freeze made the Illinois and middle Mississippi rivers nearly unnavigable in January and much of February, resulting in the extensive ice damage to our fleet. Repairs increased our costs and reduced available barge capacity for the remainder of the quarter. One positive note for the quarter was a strong showing by our international units, led by our newly formed UABL joint venture in Argentina, which posted a notable improvement.

"Unfortunately, the second quarter will be affected by the continuing flood on the Upper Mississippi. The floods delayed the opening of the Twin Cities to the latest point on record. This follows the earliest closure of the area in recent history. Nevertheless, we have reason to look for modest improvement next quarter if water levels subside and several market segments, particularly coal, bulk and liquids, continue to show strong demand.''