STEALTHGAS INC. ALSO ANNOUNCES ENTRY INTO AN AGREEMENT TO ACQUIRE ITS FOURTH NEW M.R. TYPE PRODUCT CARRIER, THE DELIVERY OF THE GAS DEFIANCE, A 5,000 CBM RESALE LPG CARRIER, ON AUGUST 1, 2008, THE SALE OF THE GAS AMAZON IN NOVEMBER 2008, PLUS NEW CHARTER ARRANGEMENTS ON FIVE EXISTING VESSELS.
ATHENS, GREECE, September 11, 2008. STEALTHGAS INC. (NASDAQ: GASS) (the âCompanyâ), a ship owning company serving primarily the liquified petroleum gas (LPG) sector of the international shipping industry, announced today that it has ordered two new 156,000 deadweight Suezmax crude Oil Tankers with an option to order two additional such vessels. Delivery of the first vessel is expected in May-July 2011 and delivery of the second vessel in July-September 2011. If the Company exercises its option to construct the third and the fourth vessels, these will be delivered in the first and second quarters of 2012.
The Company has also entered into an agreement to acquire from an unaffiliated entity its fourth new resale 50,500 deadweight M.R. type Product Carrier to be delivered in November 2009. Upon her delivery to the Company, she will be named the âStealth Argentinaâ and will be deployed upon a three year bareboat charter to a far eastern shipping entity.
The aggregate cost of the five vessels detailed above, which assumes the option on the two additional vessels is exercised, is circa U.S.$403 million.
On August 1, 2008, the Company announced that it completed its previously announced purchase of the Gas Defiance, a 2008 Japanese newly built 5,000 cbm Fully Pressurized LPG carrier, which has been deployed on a one year time charter to an international gas trader.
The Company also announced that it has entered into a Memorandum of Agreement to sell the Gas Amazon, a 6,526 cbm Fully Pressurized 1992 built LPG carrier, for U.S.$11.0 million to an unaffiliated entity for delivery in November 2008.
The Company also announced the following new charter arrangements.
The Gas Evoluzione extended its existing time charter in July 2008 for one year to an oil major at a rate representing a circa 13% increase over the previous time charter rate.
In September 2008, the Gas Cathar will commence a new one year time charter to an oil refiner at a rate representing a circa 30% increase over the existing time charter rate.
The current time charter on the Gas Tiny has been mutually terminated with its charterer effective October 2008 and upon her redelivery she will immediately commence a new two year time charter at her existing rate to a European oil company.
The Gas Czar and the Gas Fortune, upon the expiry of their current time charters in December 2008, will both commence five year bareboat charters to a European gas owner and operator. The two new charter arrangements represent an average increase of circa 20% on a time charter equivalent (TCE) basis over the prevailing rates currently being earned by these two vessels.
Commenting on the acquisitions, sale, the strategic move into the Suezmax sector and the new charter arrangements CEO Harry Vafias said:
As I discussed on August 19th we have decided to acquire our fourth new M.R. Type Product Carrier for delivery towards the end of 2009, and already she is fixed on a three year bareboat arrangement, thus continuing our policy of having the vast majority of our fleet always under period employment.
We have decided after lengthy study to strategically enter into the transportation of crude oil by ordering two and, optioning two, brand new 156,000 deadweight Suezmax Tankers. We believe the outlook for these vessels at the time of their expected delivery as detailed above is very positive. I am pleased to say that despite the current difficult conditions within the banking sector that our bankers both existing and new have supported us willingly in regard to these new investments with well structured and competitively priced facilities.
Finally in regard to sale and purchase I am pleased to report the sale of the Gas Amazon, one of our older vessels, which will not only provide the Company with an attractive profit in November this year, which we will quantify upon her delivery, but will also free up cash resources, reduce somewhat our debt and help in keeping the average age of our fleet well below the industry average.
I am also pleased to announce the details of five new charters on our LPG vessels, which have been contracted at attractive rates. Two are one year time charters, one is a two year time charter and the other two are five year bare boat arrangements. The one year time charters as stated above evidence good increases over the prevailing rates on those vessels, while the bareboat charters are not only at higher levels on a TCE basis compared to their current charter rates, but they provide us with medium term secure employment on these two ships, without the Company being exposed in particular to crew and maintenance expenses over the next five years. The new charter arrangement for the Gas Tiny, our smallest ship presents us with some different challenges in terms of her employment, while at the same rate as her current charter, does now mean that the vessel has secure employment for the next two years. We believe that all these new charter arrangements will be accretive to our earnings over the next twelve months and beyond.
Finally, the announcements we have made today are a further step in the evolution of our company which in less than three years since going public has grown from nine to fifty three ships (including all newbuildings). Not only have we fully delivered upon the strategic plan we laid out in October 2005, but we continue to build upon the solid base provided by our business.
Fleet Profile and Fleet Deployment:
The table below show the Companyâs fleet development and deployment as of today:
LPG Carrier Fleet
Product Tanker Fleet
Suezmax Tanker Fleet
â¢Â F.P.: Fully-Pressurized
â¢Â S.R.: Semi-Refrigerated
â¢Â M.R.: Medium Range
â¢Â S.M.: Suez Max
(1)Â Earliest date charters could expire.Â Most charters include options to shorten or extend their term.
(2)Â Gas Amazon has been sold to an unaffiliated entity for delivery in November 2008.
(3)Â Lyne is employed under a bareboat charter until May 2009. Thereafter, at the chartererâs option, the bareboat charter can be extended for an additional year.
(4)Â Sir Ivor is employed under a bareboat charter until May 2009. Thereafter, at the charterâs option, the bareboat charter can be extended for an additional year.
(5)Â Gas Prophet has for the three year duration of bareboat charter been renamed the M.T. Ming Long.
(6)Â Gas Shanghai is currently employed under a time charter until September 2008, which has been extended until September 2009.
(7)Â Gas Czar upon the completion of her current time charter in December 2008 will commence a five year bareboat charter.
(8)Â Gas Fortune upon the completion of her current time charter in December 2008 will commence a five year bare boat charter.
(9)Â Gas Eternity has for the duration of bareboat charter been renamed the M.T. Yu Tian 9.
(10)Â Gas Sikousis is currently employed under a time charter until May 2009. Thereafter, at the chartererâs option, the time charter can be extended for two one-year periods, the first one to be negotiated in May 2009.
(11)Â Gas Natalie is expected to be delivered in October 2008, whereupon she will continue a bareboat charter for a further three years to a major international LPG operator. The charterer has an option in September 2009 and 2010 to cancel the existing charter upon the payment of a cancellation fee in the amount of $336,000, if exercised in 2009, or $180,000, if exercised in 2010.
Â (12)Â Gas Shuriken is expected to be delivered by the end of October 2008 whereupon she will commence a two year time charter to a major international gas trader.
(13)Â The Stealth S.V., a 46,000 deadweight M.R. type product carrier, is expected to be delivered to the Company in April 2009, whereupon she will commence a three year time charter.
(14)Â The Stealth Argentina, a 50,500 deadweight M.R. type product carrier, is expected to be delivered to the Company in November 2009, whereupon she will commence a three year bareboat charter.
(15)Â The to be named 156,000 deadweight Suezmax oil tanker is expected to be delivered to the Company in April 2011.
(16)Â The to be named 156,000 deadweight Suezmax oil tanker is expected to be delivered to the Company in July 2011.
(17)Â The Company has an option to order an additional 156,000 deadweight Suezmax oil tanker, which if exercised, delivery is expected to be in the first quarter of 2012.
(18)Â The Company has an option to order an additional 156,000 deadweight Suezmax oil tanker, which if exercised, delivery is expected to be in the second quarter 2012.
About STEALTHGAS INC.
Headquartered in Athens, Greece, STEALTHGAS INC. is a ship-owning company serving primarily the liquefied petroleum gas (LPG) sector of the international shipping industry.Â STEALTHGAS INC. currently has a fleet of 37 LPG carriers with a total capacity of 165,286 cubic meters (cbm) and two M.R. Product Tankers.Â In addition, the company has also entered into agreements to acquire one second-hand LPG carrier with expected delivery in September 2008; three resale new building LPG carriers with expected delivery from October 2008 until June 2009; five new building LPG carriers with expected delivery from September 2010 through December 2011, two resale new building M.R. Product Carriers with expected delivery in April and November 2009.Â The Company has also entered into agreements to construct in China two 156,000 deadweight Suezmax oil tankers for delivery in April and July 2011, respectively, plus it has an option to construct two additional such vessels for delivery in the first and second quarters of 2012.Â The Company has also contracted to sell one LPG carrier, the Gas Amazon, with delivery to its new owner scheduled for November 2008.Â Once these firm acquisitions and the sale are completed, STEALTHGAS INCâS fleet will be composed of 45 LPG carriers with a total capacity of 203,973 cubic meters (cbm), four M.R. Product Tankers with a total capacity of 190,500 deadweight tons (dwt) and two Suezmax Oil Tankers with a total capacity of 312,000 deadweight tons (dwt).Â STEALTHGAS INCâS shares are listed on the NASDAQ Global Select Market and trade under the symbol âGASSâ.
Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may 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 forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, managementâs examination of historical operating trends, data contained in our records and other data available from third parties. Although STEALTHGAS INC. believes 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, STEALTHGAS INC. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. 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 changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry dockings, changes in STEALTHGAS INC.âs operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by STEALTHGAS INC. with the U.S. Securities and Exchange Commission.
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Andrew J. Simmons
Chief Financial Officer