Eirik Uboe - CFO Ole Jacob Diesen - CEO

Seth Larry - Merrill Lynch Natasha Boyden - Cantor Fitzgerald

Good day, ladies and gentlemen, and welcome to the Q1 2008 Double Hull Tankers Incorporated Earnings Call. My name is Heather and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's conference. (Operator Instructions). As a reminder this conference is being recorded for replay purposes. I'd now turn the presentation over to your host for today's conference, Mr. Eirik Uboe, Chief Financial Officer of Double Hull Tankers. Please proceed, sir.

Thank you. Thank you and welcome to everybody. And before we get started, I'd just like to make the following remarks. This conference call is also being broadcast on our website, dhtankers.com and a replay of this conference call will be available on the website. In addition, our Form 6-K evidencing this news release will be filed with the SEC. As a reminder, this conference call contains forward-looking statements that are governed by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which includes statements regarding DHT's prospects, the outlook for tanker markets in general, expectations regarding daily charter hire rates and vessel utilization, forecast of world economic activity, oil prices and oil trading patterns, expectations regarding seasonal fluctuations in tank demand, anticipated levels of newbuilding and scrapping and projected drydocking schedules, involved risks and uncertainties that are more fully described in our filings made with the SEC. Actual results may differ materially from the expectations reflected in these forward-looking statements. And with that, I'd like to turn the call over to Ole Jacob Diesen, the CEO of Double Hull Tankers.

Well good morning. I shall go through the business situation of the company for the first quarter of 2008. Eirik will cover the financial aspect for the period. I take it that everyone has seen the press release earlier today, but I should like to point out that, yes, there is seasonality in the market. There is also volatility. And we are of the opinion that the comparison to previous quarter is more relevant than comparison to the same quarter of last year. Now, in general the first quarter of 2008 saw a continuation of the seasonal upturn in the freight market that started in the end of the fourth quarter. And we're in fact experiencing, well this in the first quarter's however, particularly for the VLCCs. Technically, the company's vessels have operated well over the period with only three days offhire. Concerning the market, China, India and the Far East remains the primary drivers in the growth in oil demand as well as in tanker demand growth. The oil demand growth in the Far East is about 10% per annum and substantially transported by sea and overshadows the weaker demand we currently are seeing in the US and Europe. Concerning the freight market, the tightening we see is substantially a result of a balanced tanker demand and supply situation. And this is a result of removal oil trading tankers, by increased conversion to dry cargo or offshore units, scrapping and not to forget the commercial obsolescence of the single-hull and over-aged tankers. And this is making the market less efficient. And this is all in advance of the mandatory phase out of the single-hull and over-aged vessels, coming into force in 2010. At the moment, the scrapping prices are almost $700 per lightweight and this implies that the VLCC can be scrapped for a price of about $25 million. We didn't see much scrapping in the 2007, but the scrapping is now coming about. The current stock market is over about in $130,000 for the VLCC and the single-hull ship however, it cannot benefit from this. They are usually takes that substantial discount and they also have longer waiting time for cargos than double-hull tankers. Double Hull Tankers current prime charters are all the vessels to OSG at the base hire rates of $37,500 for VLCCs, $24,800 and $18,800 respectively for the large transport Aframax tankers. Now, we also have two Suezmax tankers, but they're fixed on payable charters about $26,300 per day and $26,600 per day. Along with that, we have an element of profit-sharing. Now altogether, this really means that the company is provided with a steady minimum cash flow regardless of any negative fluctuation in the market rates, below the base hires. And at the same time, we benefit from the upside where the charters allow for profit-sharing, over and above the base hire or the threshold agreement. The additional hire arrangement under the charter with OSG, we are paid 40% of the average revenue that our VLCC and Aframax tankers are in any given quarter within the pools, over and above the base charter hire for that quarter, and we are paid 33% of the average revenue that the Suezmax tanker, Overseas Newcastle get over $35,000 per day. During the first quarter of 2008, Double Hull Tankers had generated additional hire under the profit-sharing arrangement to the extent of $2.8 million or over 2% of the total revenue, over the base hire. For the second quarter, OSG has reported that two thirds of the capacity of the Tankers International pool for the VLCCs, are fixed at $78,000 a day. And for Aframax International, the capacity is fixed at $48,000 or about 30% of the capacity fixed at $48,500 a day. I can only say that this bodes well for Double Hull Tankers to have profit-sharing also in the second quarter. While the oil price reached $120 during the quarter, it's even more today, of course, the price backwardation in the oil market is not encouraging holding on this inventory, but it's certainly -- the price is encouraging production of ample continuous supplies. OPEC is expected to continue to be the largest contributor to incremental oil supplies and this would lead to increased long-haul transportation and somewhat mild demand for the oil to reach the consuming markets. And again a result is good for the tanker market in the transportation of oil by sea. Concerning newbuilding prices, they remain strong and the yards are still quoting the delivery time of two year spans, but are now focusing more on haulage categories, which give a higher margin than production of tankers. But the contracting continues as a result of good cash flow and the confidence in the future shipping markets. Thus, all the factors, which are holding up the newbuilding prices beyond the fact that the yards that we do actually booked, are increases in steel costs and components. Steel costs represent about 25% of the vessel costs and is increasing steadily. The costs of engines are doubled in value over the last three years. And of course, there is the reduction in the value of dollar to local currency, which keeps the US dollar and denominated prices up. To strengthening the company's balance sheet, and position the company for a continued growth following the recent acquisition of two Suezmax tankers. The company has issued successfully in a recent public offering, common share to the extent of 2.9 million shares and by that raising $92 million in new capital. This is all done under the shelf that was registered with SEC earlier this year. Now, the good thing was that the offering was also oversubscribed and it had a strong demand from institutions as well as retail and was first upsized from 7 million shares to 8 million shares. Now, the banks are also exercising their over-allotment of 1.2 million shares. So, back to what I said, the total is 9.2 million new shares being issued. With these new capital in hand, we shall continue to see selective growth opportunities and we are much better positioned to raise the capital over of what we have it hand. Whether there is a tanker sector or a non-tanker sector, whether it's through selective acquisition of vessels or through transactions of corporate nature. In doing so, the focus continues to be on creating a value for our shareholders in term of return investment and accretion to the distributable cash flow. And that's my words with regards to the business activities. And I will leave the floor and hand it over to Eirik Uboe, the CFO.

Thank you, Ole Jacob. Q1 was another strong quarter for DHT, which provided for a significant profit sharing under the charters. Total revenues of $24.9 million for the quarter consisted of $22.1 million in base charter hire and $2.8 million in additional hire under the profit sharing arrangements with OSG. And we have now earned additional hire each quarter, since being listed on the stock exchange, in New York stock exchange in 2005. Net income for the period was $7.6 million or $0.25 per share and the Board of Directors of DHT has declared a dividend of $0.25 per share, which will be paid on June 11, to shareholders of record on May 30. And for the quarter, DHT's VLCCs and Aframax achieved average time charter equivalent revenues in the commercial pools of $96,100 for the VLCC and $33,600 per day for the Aframaxes. This is according to the data from the commercial pools. The Suezmax and Overseas Newcastle, which also have profit-sharing achieved a $38,000 per day during the quarter. And the additional hire is built as follows: $1.8 million relates to the VLCCs and $900,000 relates to the Aframax tankers and $0.1 million relates to the Suezmax tankers and Overseas Newcastle. And for the quarter, revenue days were 270 for the VLCCs and 364 for the Aframaxes. The two Suezmaxes of which the London was delivered on January 28, had a total of 154 earning days in the quarter, and a total offhire for the quarter was three days. And while the base hire rates for our vessels provide us stability in revenues in weak markets, the profit-sharing element gives us the benefit of sharing in the strong markets that the cyclicality of the tanker market can lead to from time-to-time. And for the first quarter 2008, DHT's vessel expenses, including insurance costs were $4.7 million. Depreciation and amortization expenses were $6.2 million and G&A were $1 million. And with that, I'll open up for questions. Operator?

(Operator Instructions) Your first question comes from the line of Ken Hoexter with Merrill Lynch. Please, proceed. Seth Larry - Merrill Lynch: Hi. This is [Seth Larry], stepping in for Ken, is traveling today. I was wondering if we could dig a little bit further into your outlook on rates going forward. Given what the current strength in the market you're seeing right now, how will your expectations change going forward for the third quarter and the fourth quarter? Do you see rates tracking at a higher rate in the last couple of years or do you see it falling back in line? Can you give us your thoughts on that?

Well, I think that what I can tell you, is that I think during 2008 will experience a stronger market than many people expected. And as you take the first quarter and the second quarter as any indications, I think you will have a good view that we're going to end up with a very good year. Even the second quarter, which is also a little weaker than the first quarter, I think give a good indication that the third quarter, which also is a weak quarter, but very often on the same level as the second quarter. And then with the fourth quarter usually being a very good quarter. If you take an average, I think we're going to end up with very good rates this year, and I think the first and second quarter give you a good base. Seth Larry - Merrill Lynch: Okay. And how well have you seen asset prices track in line with the increased rates. I mean, are you finding that it is harder to find an accretive acquisition, especially given your stronger balance sheet now or can you comment on that?

I think you're getting a little bit ahead of us. I mean, we obviously have been looking at transactions over there this beginning of this year too, but its only now and we are really getting somewhat little with small launches if you will to go forward. But I do believe that companies which have money available for acquisition and companies which are public, which can raise money in the public market, less dependent of the bank market could be in a position to see better returns on their investments as they go forward. Seth Larry - Merrill Lynch: Okay. Are you still open to diversifying into other sectors like dry bulk?

We are first of all a tanker company that I think that an initiating company. If we're going to do the best job for our shareholders, we shouldn't exclude other sectors of the company, if they are closely linked to what we're doing. Seth Larry - Merrill Lynch: Okay great. And then just another question on the conversions of a tanker to dry bulk vessel, we've heard commentary from other sources that there could be technical problems when you convert a tanker into a dry bulk vessel that we might start to see for these vessels as they first start to come on line. I was wondering if you could comment on the feasibility of the conversions and would you expect those to continue or do you expect more scrapping to continue if those problems do persist?

Well, I do not want to speculate on the problems in the conversion, I never go into details of that. But I think it's very clear that ships which have been converted are in fact operating as dry cargo ships and I think you will see more of it, but I also think you will see an accelerated scrapping. I think that is what -- with the scrap price of $700 per lightweight, then you can scrap the VLCC vessel, I'm using it as an example for $25 million and in a just a couple of years and with the commercialization obsolescence we are experiencing. And just in a couple of years these ships will in mandatorially phased out. I think that people will definitely look for a commercial as well as scrapping. Seth Larry - Merrill Lynch: Okay. Thank you very much.

(Operator Instructions). And you next question comes from the line of Natasha Boyden with Cantor Fitzgerald. Please proceed. Natasha Boyden - Cantor Fitzgerald: Thank you, operator. Good morning gentlemen.

Hi. Natasha Boyden - Cantor Fitzgerald: Hi. Just a couple of questions. Given the credit issues that are going on, I was wondering if you had seen any new build resale opportunities from buyers that are having trouble with any financing?

Well, we have seen in a couple, but that is really not what we are focusing on an exclusively. But I think we will be able to see more of our opportunities from ships that are ordered and may face finance difficulties. Natasha Boyden - Cantor Fitzgerald: I'm sorry. So you said it that isn't something that you might look to take (inaudible).

Yes. We will definitely look to it, but it is not the thing that has to focus. Natasha Boyden - Cantor Fitzgerald: Okay.

Is what I would say. Natasha Boyden - Cantor Fitzgerald: Okay, fine.

About the focus, I do think that a company like ours today, which is public and we have a better chance to take advantage of the situation for all the people who are suffering from the credit crunch to a greater extent as we are. Natasha Boyden - Cantor Fitzgerald: Sure.

Having the access to the (inaudible) market as we just proved that we have. Natasha Boyden - Cantor Fitzgerald: Absolutely. Okay. And then perhaps some more difficult questions and I'm sorry that, I still have to ask you, but with the earthquake in China going on right now and I just read a story recently that they have ordered a number of their oil and gas wells, for home production. Can you tell us what the impact, what do you see as the impact is being on the tanker market. Are we going to see more new imports flow in that?

I cannot comment on that Natasha. I have not seen the article, I do not know what that is all about, but I do believe strongly that China will continue to import oil. There is oil, they need it first of all for the transportation needs and I see that it's going to be very difficult for China to close down on the import of oil. I haven't seen your article. Natasha Boyden - Cantor Fitzgerald: Okay. That's fair enough. Thank you very much.

There are no further questions in queue at this time.

Okay. Well, if there are no further questions, it might be too early for a lot of people. Then the only thing I can say is to say, thank you for your participating and we will speak to you guys in another quarter. Thank you everybody.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.