OSG extends American Shipping Company charters

DECEMBER 11, 2011 — Overseas Shipholding Group, Inc. (NYSE: OSG) and American Shipping Company ASA (OSE: AMSC / OTCQX: ASCJF) have announced that OSG has exercised options to extend its charter agreements for nine vessels currently under charter from AMSC. Charter agreements for five of the vessels were extended for additional three-year terms, commencing from December 2019 and ending in December 2022. The charter agreements for four vessels were extended for one-year terms commencing from December 2019 and ending in December 2020. OSG previously exercised its option to extend its charter agreement for a tenth vessel that it leases from AMSC, extending that charter into 2025. As a result, all ten OSG bareboat charter agreements with AMSC have now been extended for additional periods.

OSG CEO, Sam Norton said “The decision date for extending our AMSC options has been a focal point for some time. Our decision addresses the uncertainty associated with approaching contract maturities. The extension of charter agreements on all of the vessels enables continuity of our existing operations. At the same time, OSG retains continued flexibility afforded by the serial options remaining, a feature of our contracts which has always been appealing.”

Mr. Norton added, “We are pleased that the contract extensions will allow us to continue our close working relationship with AMSC for many more years.”

The charter agreements provide that each one-year option is only usable once, while the three- and five-year options are available indefinitely. The lease payments for the charters-in are fixed throughout the option periods, and the options are on a vessel-by-vessel basis and can be exercised individually.

AMSC CEO, Pål Lothe Magnussen commented “OSG’s decision to extend the charters of all the vessels ensures the stability of AMSC’s cash flow going forward and maintains AMSC’s exposure to an improving Jones Act tanker market through the profit share arrangement. We look forward to continuing our long-standing cooperation with OSG:”