Frontline Ltd. (the “Company” or “Frontline”) has entered into a contract with Jiangsu Rongsheng Heavy Industries Co., Ltd. for the delivery of two 156,900 dwt Suezmax newbuildings. The vessels are expected to be delivered in February and May 2013. Frontline has also secured options for two similar Suezmax newbuildings. The contract price for the newbuildings is 15-20 percent lower than indicated price levels for 2010 delivered tonnage. These contracts help to renew the fleet and provide an opportunistic investment approach with great flexibility.
In June 2010, Frontline received notices from the owners of the two chartered-in 2001-built Suezmax tankers, Front Melody and Front Symphony, and the two chartered-in 2000-built VLCCs, Front Tina and Front Commodore, to exercise their option to extend the charter period for two years to the end of 2013 from the expiry of the mandatory lease period at the end of 2011. The Company believes the charter-in rates are attractive compared to current time charter rates. The owners have the option to further extend the charter periods until the end 2015.
With reference to the press release from the Company dated April 19, 2010, we are pleased to announce that we have successfully taken delivery of the two 2009-built VLCCs, Front Eminence and Front Endurance, in June 2010. In addition, the third VLCC newbuilding from Shanghai Waigaoqiao Shipbuilding Co., Ltd., Front Cecilie, was delivered according to schedule on June 10, 2010.
July 1, 2010
The Board of Directors
Questions should be directed to:
Jens Martin Jensen: Chief Executive Officer, Frontline Management AS
+47 23 11 40 99
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 76
Forward Looking Statements
This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Frontline management’s examination of historical operating trends. Although Frontline believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Frontline cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in this press release include the strength of world economies and currencies, general market conditions including fluctuations in charter hire 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 the Company’s operating expenses including bunker prices, dry-docking and insurance costs, 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, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission.