Nordic American Tankers Limited (NYSE:NAT) – Dividend payments, differentiation and a strong balance sheet are key elements.

Link to the shareholders letter

Hamilton, Bermuda, December 9, 2011

Dear Shareholder,

As 2011 draws to a close, I’d like to share with you my thoughts about the current situation for NAT, and I will comment on some key features going forward.  You may recall I wrote you a letter on October 5, 2011 that carried the headline, “A different company with a strong balance sheet and a unique operating model”.  The theme was “NAT is different”.

I must admit that we have not been able to communicate as effectively as I would like that NAT is fundamentally different from other stock listed tanker companies, and that NAT thus should not be lumped in with them. 

NAT has only one type of vessel – the suezmax vessel.  This type of vessel (150,000 dwt) can carry one million barrels of oil and is highly versatile, and can serve on most long haul trade routes.  A homogeneous fleet of this type helps us to keep down operating and administrative costs, thereby contributing to keeping our cash break-even low.

On several occasions we have communicated to you other elements of our strategy, including our unique operating model with little or no net debt and our available credit facility.  Our record of dividend payments as from the fourth quarter of 2010 and up to and including the fourth quarter 2011 is set forth below:

4Q2010 $0.25 per share
1Q2011 $0.25 per share
2Q2011 $0.30 per share
3Q2011 $0.30 per share
4Q2011 $0.30 per share

Having paid a dividend of $0.30 in the third and fourth quarter 2011, we wish to keep this level of dividend for the dividend payment that is expected to take place in 1Q2012.

The tanker market was weak during the third quarter of 2011 as discussed in our 3Q2011 report published in early November.  The spot tanker market is still weak while I expect that the average spot market rate for suezmax tankers for 4Q2011 should be up on 3Q2011.  It is my firm view that it is right for NAT to support our shareholders and pay a dividend even when the dividend exceeds that quarter’s cash flow, as long as we do not unduly increase the financial risk of NAT.  The question is whether NAT can afford it, and the answer is that it can. Our dividend policy reflects the view of the Board and Management that it is in the best long term interest of the company to support shareholders in periods when the tanker market is soft. 

We are now in the process of establishing the specialist Orion suezmax tanker pool together with Frontline. At the outset, this cooperation will have 29 vessels. We expect that the new set up will enhance customer service and save costs.

During the fourth quarter of 2010 our operating fleet stood at 15 vessels. As we told you more than a year ago, we planned to have 20 vessels operating at the end of 2011.  That is precisely what we have now.

We have in the past often stated that the tanker market may turn quickly and unexpectedly.  The development of the world economy is a key factor. We are optimistic on that note as we believe that the politicians, in particular in Europe in the end will take measures in order to stimulate long term economic growth. There is no alternative. 

In October of this year we saw a strong increase in rates, but after a short while rates fell back again. Looking at the future, we are a stronger company with 20 vessels than we were with 15 vessels. We are in an expansionary mode, but we are in no rush to grow larger. In spite of this general attitude in NAT, acquisition possibilities may present themselves unexpectedly, and the fleet could increase, bolstering the dividend capacity correspondingly. 

Predictability is a key dimension of this company.  We tell you what we wish to do and after a period of time, be it shorter or longer, we do it.

We wish you all the best for the Holiday Season and for the next year.  We thank you for your support during 2011, and look forward to 2012 with great aspirations – we are there to serve you and the company.

Please feel free to write to me personally and either I or one of my colleagues will reply to you. 

My E-mail is:

Nordic American Tankers Limited
Herbjorn Hansson
Chairman and CEO


Matters discussed in this press release may constitute forward-looking statements.  The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties.  Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.  We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC’s petroleum production levels and world wide oil consumption and storage, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission, including the prospectus and related prospectus supplement, our Annual Report on Form 20-F, and our reports on Form 6-K.

Scandic American Shipping Ltd
Manager for:
Nordic American Tankers Limited
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail:

Rolf Amundsen, Head of Investor Relations, Norway
Nordic American Tankers Limited
Tel: +1 800 601 9079 or + 47 908 26 906

Jacob Ellefsen, Head of Research, United Kingdom
Nordic American Tankers Limited
Tel: + 44 20 31 78 58 20   or + 44 78 27 92 94 11

Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223

Herbjørn Hansson, Chairman and Chief Executive Officer
Nordic American Tankers Limited
Tel:  +1 866 805 9504 or + 47 901 46 291