Jens Martin Jensen – CEO, Frontline Management AS Inger Klemp – CFO, Frontline Management AS

Scott Burk – Oppenheimer Justin Yagerman – Deutsche Bank Doug Garber – FBR Capital Markets Anders Hagen – ABG David Neuhauser – Livermore Partners Fotis Giannakoulis – Morgan Stanley Zou Dazou [ph] – Sterne Agee

Good day and welcome to the Frontline Q2 2010 results presentation conference call. For your information, today’s conference is being recorded. And at this time, I would like to turn the conference over to Jens Martin Jensen, CEO, and Inger Klemp, CFO. Please go ahead.

Good morning and good afternoon, and welcome to our Q2 presentation. I think we had a good second quarter, and again we outperformed our benchmark competitors. We will follow our usual program for this presentation with our CFO, Inger Klemp, going through the Q2 highlights and transactions to offer a financial view of the quarter. After that, I will go through some market slides, fleet development, and outlook on how we see things. Finally, after that, there should be time for some questions. Inger, please?

Thanks, Jens. And good morning and good afternoon, ladies and gentlemen. I will guide you through the highlights and the financial review in the second quarter 2010 together with a run-through of newbuilding program, as Jens just said. Moving to slide four and five, in March 2010, Frontline announced the successful completion of its $225 million convertible bond offering. And in April, Frontline completed the issuance of the bond loan and the loan will disperse. The third and the fourth Suezmax newbuildings from Rongsheng, Front Odin and Front Njord were delivered in May and August 2010 respectively. The third and the fourth VLCC newbuildings from Waigaoqiao, Front Cecilie, and Front Signe were delivered in June and August 2010 respectively. Then in April 2010, Frontline announced the acquisition of the two 2009-built double hull VLCC tankers. And the first vessel, Front Eminence, was delivered in May the 18th, 2010; and the second vessel, Front Endurance, was delivered on June 28, 2010. Further in May, we secured long-term bank financing for these vessels, representing 70% of the purchase price. Then in June 2010, the single hull VLCC Front Duke was redelivered from her time charter agreement and subsequently entered into a bareboat charter agreement expiring at the end of 2012. The vessel will be operating as a floating storage unit and has ceased to trade as a regular tanker. Further in June 2010, Frontline received notices from the owners of two chartered-in 2001-built Suezmax tankers and two chartered-in 2000-built VLCCs that the owners exercised 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. In June, we also ordered two new Suezmax newbuilding contracts with expected delivery in February and May 2013, and we secured two options for similar Suezmax newbuildings from Rongsheng. Moving to slide six, I will then go quickly through the financial highlights in the second quarter. Frontline reports net income of $81.3 million equivalent to earnings per share of $1.04 in the second quarter of 2010. This is an improvement compared to the first quarter 2010 of $1.6 million. The net income includes a gain of $6.7 million relating to the amortization of a deferred gain on three lease terminations and a gain of $3 million relating to a lease termination. On this basis, we announced dividend of $0.75 per share for the second quarter. Moving to slide seven. Net income, excluding gain, is about $1.8 million better than in the first quarter 2010. The increase can mainly be explained by that we have had an increase in the contract equivalent earnings in the second quarter compared to the first quarter due to more trading days, slightly offset by lower TCEs per day, which has led to an increase in income on time charter basis by $60 million. The profit sharing payable to Ship Finance is in line with the previous quarter. Ship operating expenses increased by $1.8 million compared with the preceding quarter, primarily as a result of increase in running cost of $2.8 million mainly related to the four newbuildings, which were delivered in the period, and then partially offset by a $1 million decrease in dry-docking costs. Charterhire expenses have increased by $8.6 million in the second quarter compared with the first quarter primarily due to an increase in the number of Nordic American Tanker Shipping vessels, which entered the Gemini pool and had a corresponding increase in pool earnings. Please note that with effect from July 1, 2010, these NATS vessels became a full pool partner in the Gemini pool and we no longer charter in the NATS vessels. This will result in a decrease in charterhire expense in the third quarter with a corresponding decrease in operating revenues. Then the financial expenses have increased about $2 million due to the convertible bond loan issued in April and a drawdown of financing for the delivery of newbuildings as well as drawdown of this on delivery of Front Eminence. Other financial items have increased about $3 million mainly due to costs of approximately $2.7 million, which were paid in connection with the early redemption of the debt on Front Voyager. The minority interest in the second quarter is $900,000 less than in the first quarter due to the low results in ITCL in the second quarter. Moving then to slide eight, Frontline double hull VLCC fleet, excluding the vessels on floating time charter earned in the spot market approximately $51,900 per day. Including the vessels on floating time charter, the VLCC fleet earned $50,000 per day for doubles and $22,100 per day for singles, with an average spot earnings of $49,500 per day. The average for the whole fleet, including the converted vessels was about $46,600 per day in the quarter. The Suezmax fleet earned in the Gemini pool $29,800 per day. As a consequence of that, some of our Suezmaxes will stay outside of pool at somewhat higher TCE rates. We earned an average in the spot market approximately of $30,300 per day, giving an average spot earnings of $30,100 per day, with clearly no singles in the quarter. The average for the whole Suezmax fleet, including the converted vessels, was about $31,000 a day in the quarter. The OBOs earned $47,700 per day in this quarter. The TCE numbers show that Frontline this quarter has traded considerably above our competitors with respect to the VLCC fleets and slightly below, but we expect that to again improve. And the ITC vessels are not included in these rates. Moving then to slide nine, as we can see from this slide, we had average OpEx for the fleet of approximately $10,100 per day in the second quarter of 2010 compared to approximately $9,800 per day in the first quarter of 2010. We entered our three vessels in the second quarter of 2010, which is one more than in the first quarter. Off-hire days were 131 days in the second quarter compared to 112 days in the first due to one more docking in this quarter. And expect dry-dock two vessels in the third quarter of 2010. Moving then to slide 10, total balance sheet is approximately $310 million higher than in the first quarter of 2010. The main items explaining the changes are, first of all, the cash position, which has increased with $83 million compared to the previous quarter, principally due to that proceeds from the convertible bond issue have only been partly used in the quarter. In this connection, I would like to mention that as per June 30, 2010, we have paid cash for delivery of the Front Endurance. The corresponding loan of $73.5 million was most drawn down until the beginning of the third quarter. Other current assets had decreased by $55 million mainly due to decrease in receivables related to the pre-payment of $110 million gross charterhire to Ship Finance for the six-month period starting April 1, 2010. Newbuildings are reduced with $73 million and portfolio vessels are increased with $336 million, following the delivery of one Suezmax newbuilding to Front Odin and one VLCC newbuilding to Front Cecilie in the quarter and the purchase of the Front Eminence and the Front Endurance. The Front Vista is booked as investment in financial lease. Short-term and long-term part of long-term debt has increased with $340 million as a consequence of the issuance of the $225 million convertible bond loan, drawdown of debts in relation to deliver on newbuildings and drawdown of the Front Eminence. This is partly offset by repayment of loan on the Front Voyager, repayment of remaining short-term loan on the newbuildings, and ordinary repayment of debts in the quarter. Obligations under capital leases have decreased by $37 million due to ordinary repayments. Asset sale is included in the balance sheet with a total of $475 million of debt and obligations under capital leases. Debt related to three of the CalPetro Suezmax vessels are not consolidated in the balance sheet with $48 million. Then moving to slide 11, the cash cost breakeven rates are approximately $30,900 per day for VLCCs, $26,400 per day for Suezmaxes, and $24,500 for the OBOs. These trades on a daily rate of vessels earned to cover the budgeted operating costs, the estimated interest expense, the scheduled loan principal repayments, bareboat hire and corporate overhead costs. These breakeven rates do not take into account the capital expenditures or loan balloon repayment at maturities. Furthermore, vessels on short-term TCM and vessels on bareboat out are not included in the cash cost breakeven rates. In the second and the third quarter of 2010, the cash cost breakeven rates will be reduced as a consequence of prepayment that we did of 80% of the charterhire for 31 vessels to Ship Finance, following the release of the restricted cash taken place in first quarter 2010. When calculating the reduction in the breakeven rates, you have to remember that the OpEx of $6,500 per day was prepaid 100% by Ship Finance in the first quarter of 2010. This means that the reduction in breakeven rates is 80% of the bareboat rate. This has no P&L implications. Moving then to slide 12 and 13, as per June 30, 2010, total number of vessels in Frontline’s newbuilding program is three Suezmax and five VLCCs, which constitute the contractual cost of $800 million. This is a decrease of $48 million compared with the end of March 31, 2010 following the delivery of one Suezmax tanker and one VLCC in the second quarter combined with entering into two new Suezmax newbuilding contracts. Also the total financial exposure on two VLCCs of $252 million can be limited to the $54 million already paid in installments. Thus the financial exposure is $601.7 million. Then as of June 30, 2010, installments of $246.4 million have been paid on the newbuilding compared to $313.0 million at the end of the first quarter, which included payments of the vessels delivered in the second quarter of 2010. Remaining installments to be paid for the newbuildings amount to $355 million, and $269 million if you exclude the Front Njord and the Front Signe delivered in August 2010, with expected payments of approximately $139 million in 2010, only $63 million if you exclude the Front Njord and the Front Signe delivered in August 2010, then $113 million in 2011, $21.8 million in 2012, and $81.2 million in 2013. These numbers exclude the payments on the two VLCCs that have a financial exposure that can be limited to the $54 million already paid in installments. Moving then to slide 14, the company has long-term pre and post-delivery of newbuilding financing, representing 80% of the contractual cost, four of the newbuildings being – that was built on Rongsheng and two of the newbuildings built on SWS. As of June 30, 2010, five of these vessels have been delivered and $334 million have been drawn down on this facility. And the remaining amount of $39.6 million was drawn down in August 2010 in connection with the delivery of Front Njord. In the second quarter of 2009, we established also long-term pre and post-delivery of newbuilding financings, representing 70% of the contractual costs of the last two newbuildings that was built at Waigaoqiao. And as of June 30, 2010, one of these vessels has been delivered and $110 million is outstanding on the facility. Remaining amount of $36.6 million was drawn down in August 2010 in connection with delivery of Front Signe. The company has not yet secured financing for the two VLCCs and the two Suezmax tanker newbuildings to be delivered between 2011 and 2013. However, based on the recently secured financing for Front Eminence and Front Endurance and indications from banks, we assume a 70% financing of market value for these newbuildings. The net remaining equity investment is thus approximately $41 million, which is fully covered through the recent completion of the $225 million convertible bond offering. Moving then to slide 15, in this graph, we showed installments to be paid under the newbuilding contracts related to the newbuilding contracts in 2010 to 2013 with a total amount of $355 million in the light blue column. The dark blue column includes established financing and the soon obtainable financing for the newbuilding contracts of 70% of market value in the 2010 to 2013, with a total of $314 million. The gray column includes funds used from the convertible bond offering to fully finance the newbuilding program with a total of $41 million. And this shows the cash flow from operation doesn’t have to support financing of the newbuilding program. Moving then to slide 16 and 17, the number of vessels in the Frontline fleet is 80 vessels, including the vessels of commercial management and the ITC vessels, and is compounded by 46 double hull VLCCs, five single hull VLCCs, 21 double hull Suezmaxes, and eight OBOs. We had a contract coverage of 34% in 2010 and 22% in 2011. And in addition to this fixed rate time charter coverage, we also have an additional 11% time charter coverage on floating income in 2010 and 13% in 2011. The average net TC rates for the total fleet is about $45,500 per day in 2010 and $48,000 per day in 2011. And we aim to increase the fixed charter coverage for 2011 to 2013 from the present level. And with this, I'll leave the word to Jens again.

Thank you, Inger. There was a lot of information you came with there. We are now at slide 18, which is about earnings and market factors. The second quarter was a healthy quarter with VLCC earnings around $50,000 per day and Suezmaxes around $32,000 per day. But contributed positive to this was the ability of limited fleet growth in the quarter. Net newbuilding was delivered and a number of VLCCs and Suezmaxes were removed from trading. Also up to 50 VLCCs were tied up with our storage business. Also what contributed positively in the market was that the whole Iranian owned VLCC fleet was tied up in old storage plus of course the strong demand for China’s oil imports. If we move to slide number 19 regarding the VLCC fleet, as mentioned, we had a limited fleet growth in the second quarter of 2010, with VLCC delivery slipping back around 20%. I’ll go back to that in another slide a little bit later. The order book on paper for 2011 looks challenging. But as we have said before, next year the expense of VLCC order books starts with average ship costing more than $135 million per ship. So there could be some changes through the order book going forward. Now to slide 20, on the Suezmax fleet, we have seen about a 30% slippage in newbuilding that delivered in the Suezmax segment during the first six months of 2010, and we expect the same for the balance of the year as well. So there will also be changes to the Suezmax fleet. As Inger mentioned, our own newbuildings in Rongsheng has been delivered. And some of these ships were up to 18 months delayed. Extensive ordering in the Suezmax segment during the first half of 2010 could though put a damper on the party going forward. We are now at slide number 21. Newbuilding prices for VLCCs of a proper specification is around $105 million, and around $67 million to $68 million of a Suezmax also have a decent specification. Three-year time charter rates for VLCCs is around $42,000 per day and high-20s for Suezmaxes with relatively healthy rates in the historical levels. We are now at slide 22. Regarding the actual deliveries, as I mentioned, in 2009, we saw a slippage of around 20% for VLCCs and more than 30% for Suezmaxes. And this trend has carried on into 2010. And we expect the same slippage also for this year. Slide 23, waiting time. I have been quoted in the media quite a lot lately regarding our waiting policy or non-fixing policy. It does not make any sense to fix $100 million assets with $150 million cargo value on board a $10,000 per day or below, in our opinion. One waiting day in today’s market would cost you about 0.4 Worldscale point basis, a standard Persian Gulf, Singapore voyage. That means you can basically sit and wait for 25 days and you only need a wait increase of 10 Worldscale point to make the same return on the bottom line. So we believe it makes more sense to wait, take some capacity out of the market. So slowly we sit down, do some maintenance work, and maybe let the crew do some fishing instead that would help the market for sure. We are now down to the outlook section. I think the popular phrase goes, there is nothing wrong with the total demand picture if you take the positive to mild effect China has created in the picture, but the problem lies on the supply side. I guess this is the easy way of explaining what is happening right now. However, positive signs in 2010, we will see, as I mentioned, a limited fleet growth in 2010 for VLCC storage or contango will come back. In fact, we have already been approached with various enquiries mainly related to Brent positions during the fourth quarter that keep single hull VLCCs as soon a thing of the past, which will also improve the market. And hopefully, the continued strong bulk market and reemerging container market will take away some newbuilding capacity for end 2012 and 2013, which before is giving some breathing space to the supply side. World demand, yes, we need to see America back on track. However, at present, that looks a bit uncertain. However, the diversification of the Chinese crude oil imports, i.e. [ph], the positive to a mild effect are compensated somehow for this. Plus, we need some weather delays and a few strikes, which we have seen before in some of the European ports. All of this will benefit the market positively. Regarding our own company, we are working, as Inger mentioned, on increasing our contract power, both on a fixed rate basis but also on floating spot-related basis. So we are able to capitalize on the improved market, which we expect will come in Q4. As Inger mentioned also, our breakeven rates due to the rearrangement with Ship Finance has been reduced, which makes our situation more competitive. And also, our continued outperformance over main competitors will hopefully lead us to be able to attract more ships and commercial management, i.e., we should be able to further consolidate the tanker fleet. With that, we are ready to take your questions. Thank you.

Thank you. (Operator instructions) Our first question today comes from Scott Burk from Oppenheimer. Please go ahead. Scott Burk – Oppenheimer: Good morning, guys. I just had a couple questions. First of all, you talked about the increase in charter coverage for 2011. Is that 2011 to 2013? Would you be going to the same kind of contract coverage level you have for 2010 of around 30%, 35% or something more than that?

No, it would be around that. Around 30% to 35% is fixed, and then the rest up to 50% with the floating rates. That’s what we prefer to do. Scott Burk – Oppenheimer: Okay. And would that be focused on your Suezmax fleet or VLCC fleet or just balanced across the two?

It will be one or two ships from each segment. Scott Burk – Oppenheimer: Okay. Okay. And then I had a question about your OBO fleet. That starts to roll off the nice charters that you had there in 2011. Do you plan to, at that point, continue to operate those OBOs or do you think you might sell them at that point? What's kind the plan for the OBO fleet?

Well, we have these ships on a lease arrangement from Ship Finance, and they are running up to 2015. So we will continue to trade the ships as bulk carriers until that date. Some of the ships potentially will already expire during the middle of Q4. And we are already in discussion with the various channels of extending these periods. But of course, it will be at different levels than they are now. But they are still – will still be positive to our bottom line. Scott Burk – Oppenheimer: Okay. And actually, you kind of answered one of my other questions about it. So all the OBOs are still trading as dry bulk vessels? None of them are trading as Suezmaxes?

All of them are trading in dry. They will not come back in the tanker mode. Scott Burk – Oppenheimer: Yes, okay. Okay. And then I had a question about the Front Duke. You said that's gone to bareboat charter doing storage. Can you give me some more details about that, where it's being used for storage? And then, does this forestall it being eventually scrapped as a single-hull vessel or, I mean, can it be used as storage long term or does it eventually run up against the single-hull restrictions and can't even be used as a storage vessel?

Well, the ship got of time charter in March, in the spring, and that we have fixed it for 2.5 years bareboat at the FSO and see it operating off Singapore – or in actually Malaysia water to Singapore, and she will not come back to regular tanker trading. And a ship like that, under the present rules and regulation, can sit as a floating storage for some time. So hopefully we can keep employed with that. Scott Burk – Oppenheimer: Okay. What level is the charter at?

We don’t normally say that. But I would say it’s at a profitable rate, but I don’t think it’s something to write home about. But it’s still positive for us. Scott Burk – Oppenheimer: Okay. So I assume the operating expenses also go way down once you're just kind of floating there.

It’s bareboat. So – Scott Burk – Oppenheimer: Oh, sorry.

Yes. Scott Burk – Oppenheimer: Yes, okay. Okay. And then you kind of talked a little bit about kind of going fishing with your VLCC fleet, just waiting for better days. Can you talk about the number of vessels that you have that are kind of – that are idle at this point versus active?

I got the same question this morning, and I think I replied, a handful. So I think I will give you the same reply if that’s okay. Scott Burk – Oppenheimer: Okay. So a handful of vessels and –

I have a quite big hand. Scott Burk – Oppenheimer: Yes, it would depend on whose hand it is. That's right. And then, you also kind of gave the timeframe, which was the other question that I had, so 20, 25 days. What if we don't see a rebound in rates by – in the next few weeks or next month or so? At what point do you just say, we've got to earn cash flow and you just start putting them back to work?

Well, I think we have a very competitive breakeven level. So probably some of our competitors will have bigger problems than us and that should maybe improve the market. I think the bottom of the market has been found and certain number of fixes being done every month. And I think it’s not so imbalanced as it looks in paper. So we are positive for Q4. Scott Burk – Oppenheimer: Okay. And when you say you are positive, can we get back to the same kind of rate levels we have seen in the beginning of the year or what’s kind of your view where we can go in the fourth quarter?

Well, it happened last year. In the beginning of Q4, the market took off and we – that market continued into Q1 of this year. So hopefully we will see the same scenario again. Scott Burk – Oppenheimer: Yes, okay. Thank you very much.

Thank you.

Thank you.

Our next question today comes from Justin Yagerman from Deutsche Bank. Please go ahead. Justin Yagerman – Deutsche Bank: Hey, guys. I was curious – I mean, you called out a current market rate of 25,000 on the VLs, 15 on the Suezes in your release. And at current levels, given the coverage that you are at, I mean, would the expectation be, if we don’t see a pickup in September, that you would be at a loss in Q3 or is that too severe do you think you’d still be earning at least with your coverage some positive EPS?

Those rates mentioned the 25 and the 15 is actually from Clarksons’ tanker (inaudible) I think they called us what they predict to be the average rate for Q3. It does not necessarily say what we will aim at. But that’s what they believe, the rates will end up. And of course, we hope our rates will be better than that. Justin Yagerman – Deutsche Bank: Okay. If you are around a cash break even type of levels slightly in a loss or slightly above in the quarter, how do you think about the dividend in relation to that for Q3? Would you keep it the same given that your Q4 outlook sounds like it’s quite a bit better or is that something that you think you would have to take down in the current market?

With respect to dividend policy, it’s mostly a fixed policy with a fixed amount per share per quarter. I mean, our dividend policy is that we are paying out the excess cash flow that the company has. And obviously, of course, if we don’t earn up much money in the quarter, usually we pay less dividend. That’s just how it is. Justin Yagerman – Deutsche Bank: Okay. And from a storage standpoint, with the oil price having gone down the way it has in the last few weeks, are you guys seeing more enquiry for storage demand on your ships?

Yes, we have seen it mainly relating to Brent – Brent oil. So ships that delivering UK, October, November onwards doesn’t enquire there. I believe actually a time charter was done earlier in the week for 30 to 90 days at 38,000. There seems to be a flow building up, which could help the market. Justin Yagerman – Deutsche Bank: Okay. So that could be helpful from an employment standpoint. Would you guys necessarily talk about that if that was coming out in the quarter or would we find out about that probably just later on?

The good thing about the tanker industry, there is not many secrets. So I’m sure you will be able to see some things being done. Justin Yagerman – Deutsche Bank: Fair enough. And lastly, you indicated 70% advance rates on future newbuilding financing. Just curious what the banks are that are offering those kinds of rates where you’ve gotten indications? Are they Asian banks, European banks, little combination of both? That’s a little bit better than what we’ve been hearing from your peers. So I was curious if that’s real time in terms of what’s out there in the marketplace right now.

It is actually a combination of Asian, European and all sorts of banks in a way. So it doesn’t – not a specific type of bank. Justin Yagerman – Deutsche Bank: Okay. But I’m assuming you’ve done 80% on a couple of those ships that’s not available right now. So 70% is kind of where indications are at the moment?

I would say, that 80% is not available now. That would be overdoing it. Justin Yagerman – Deutsche Bank: Okay. Fair enough. Thank you so much.

Thank you.

Thank you.

Our next question today comes from Rob Mackenzie from FBR Capital Markets. Please go ahead. Doug Garber – FBR Capital Markets: Hi, guys. This is actually Doug Garber filling in for Rob.

Okay. Good morning.

Good morning. Doug Garber – FBR Capital Markets: Most of our questions have already been asked. But I do have one more. I was curious if you guys are interested in sale-leasebacks at all. I know most of the capacity you’ve added has been owned capacity. And I was curious what kind of rates you’re looking at if you are to do something like a 10-year charter rent on a sale-leaseback.

We look at sale-leasebacks, but of course, normally that’s a quite expensive way of financing – securing your financing needs. But we have been offered deals like that and we look at them, but so far we have not found them what’s right compared to what the banks can offer and the use of our own cash. So – but we look at those, but right now it’s not attractive. Doug Garber – FBR Capital Markets: So would it be fair saying, going forward, as we add capacity, it’s going to be own capacity as opposed to charter-in capacity?

We will take some ships on a charter-in and not on a long-term basis. I think then we’ll prefer to own. It will be a mix of short to medium-term charter-in and tonnage, putting on our own book. Doug Garber – FBR Capital Markets: And if you work to charter-in something on a long-term basis, let’s say, maybe seven to ten years, what would be an attractive rate for that in your opinion?

That’s a difficult question. I think we will only do – I will not give you any rate examples because then my phone will ring here afterwards. But I would say we will only do long-term deals like that if we can get purchase options or other kickers in the deal. We will not do it straight deal. Of course, it is a very low rate, but otherwise not, no. Doug Garber – FBR Capital Markets: Okay. And can you remind me right now you guys currently have the purchase options? Are they in the money? Are there any plans on any of your purchase options currently?

We have purchase options on some of the KD [ph] ships, both Suezmax and VLCCs. And of course, we look at that. But we also have charter options. And right now it’s cheaper for us just to continue the charter than to declaring the purchase option and financing it ourselves. But we were looking at that, and I think it’s safe to say that the purchase options are in the money if we want to do something with that. Doug Garber – FBR Capital Markets: Okay, great. Thanks, guys. I’ll turn it back.

Thank you.

Thank you.

Our next question today comes from Anders Hagen of ABG. Please go ahead. Anders Hagen – ABG: Hey, guys. Just one quick question about the third quarter. Do you expect to be profitable?

I think that’s a question for you, Inger.

We don’t normally comment on these things. So I don’t think we will have any more comment on that. Anders Hagen – ABG: Okay. Thanks.

Thank you.

(Operator instructions) We will now take a follow-up question from Mr. Scott Burk from Oppenheimer. Please go ahead. Scott Burk – Oppenheimer: Hi. I have one more question about your order book. You talked about these two VLCCs where you could essentially walk away and then have – when we lose the deposit essentially. Now that the VLCC price has come back up, you guys ordered few more vessels. What’s the likelihood that you actually would walk away from those two VLs where we have that option?

We are actually in a splendid discussion with Iraq now and trying to see if we can find a solution, which will suit both of us. So we are working on that right now, and I’m sure within the next weeks we will come out with some different position than we are in now. So with that, I think that’s all I can say of it right now. Scott Burk – Oppenheimer: Okay. And what’s the timeframe for delivery for those two VLCCs or – what would be the delivery timeframe?

That would be first half of 2012. Scott Burk – Oppenheimer: Okay. Okay, thank you.

Thank you.

Our next question today comes from David Neuhauser from Livermore Partners. Please go ahead. David Neuhauser – Livermore Partners: Hey, good morning, Jens and Inger.

Good morning.

Good morning. David Neuhauser – Livermore Partners: I want to ask you what do you think – what's your view currently of your competitors at this point? I mean, you’ve described that you have a competitive advantage as far as operating expenses. And if the current rates stay this way for the next several quarters, how do you – are you positioning yourself in that way?

I think we have been fortunate that the way our company has been structured in our strategy that we have always been what we say, lean and mean. We don’t have to spend a lot of management time in the cost-cutting exercises and the other things like that, which I know other people have been using a lot of time on. I think we try to operate the same in the high and the low market and that we’d make sure to keep costs and the breakeven that is competitive, I think, that has shown – if you look at our results now and some of the other tanker owners for the second quarter, and we were quite happy with that. David Neuhauser – Livermore Partners: And what’s your view here currently on your capital structure? Are you pretty satisfied with that at this point?

Yes, we are satisfied with that. David Neuhauser – Livermore Partners: Okay. And just lastly, again, on the M&A front, do you have any views you’d find that we will see further consolidation, again, if the spot rates stay pretty low?

I think everybody is looking around at opportunities right now, and we are not the only company doing that. There have been some newcomers in the field. And I think that some bigger transactions could probably happen in the fourth quarter of this year if the market remains as it is and the stock values and so on. And so I wouldn’t be surprised if that could happen. David Neuhauser – Livermore Partners: And are you guys running for things like that? I mean, are you looking for sort of larger transformational-type events that could take advantage of the current environment if it stays weak?

We are looking at a few things, yes. David Neuhauser – Livermore Partners: Okay. All right. That sounds good. Thank you, guys.

Thank you.

Our next question today comes from Fotis Giannakoulis from Morgan Stanley. Please go ahead. Fotis Giannakoulis – Morgan Stanley: Yes, good morning. I would like if you can give us some guidance on the dividend. And you declared very high dividend this quarter very similar to the previous one. And if you can give us some guidance for the next quarter and how shall we start thinking about the next quarter dividend.

Like I just said, I mean, we don’t give any guidance with respect to the dividends. But our policy is that we pay the excess cash flow that the company has. As I just stated when I went through the presentation, there is no need for the cash from operation to support the financing of the newbuilding program. So in that sense, you are pretty – get to a pretty good idea about what is actually available for dividend going forward based on your estimates. Fotis Giannakoulis – Morgan Stanley: Okay. Thank you.

Thank you. Fotis Giannakoulis – Morgan Stanley: Fine. Thank you.

(Operator instructions) We’ll now take a question from Zou Dazou [ph] from Sterne Agee. Please go ahead. Zou Dazou – Sterne Agee: Yes. Good afternoon, gentlemen. I have a question. For the second quarter, how many ships – how many VLCCs and Suez total ships were used in floating storage?

You mean – first quarter, it was up to as high as around 50 years, it is. Right now, I would guess – it's only guesswork, I haven’t – I would say probably between five and ten VLCCs. We had one VLCC in use for some short-term storage right now. So my guess is five to ten VLCCs; very few Suezmaxes right now. Zou Dazou – Sterne Agee: No, I’m sorry, I apologize. I meant how many Frontline’s vessels in the second quarter were being used for floating storage?

Apart from the single hull, which we have in the long-term, floating storage was as five ships. We have one double hull doing some kind of short-term storage right now. Zou Dazou – Sterne Agee: Okay. And then for the second quarter, can you give a sense – I'm not sure if that’s a statistic that you provide, but can you give a sense for what the utilization rate was? So put another way, what percentage of your available ship days were employed in the second quarter?

We don’t normally give that guidance. We have given some guidance on all five, but of course we also have what we call commercial waiting time where we decide a few days. But we don’t normally give that out. Zou Dazou – Sterne Agee: Okay. But just in order of magnitude, was it higher than in the second quarter – than in the first quarter?

It’s around the same in the second quarter and the first quarter. Zou Dazou – Sterne Agee: Around the same. Okay. And then just a clarification on the guidance you provided earlier, did you say that for 2011 that you want your contract coverage to get to about 33%, something like that?

Yes, it doesn’t have to be exactly 33%. But as you can see, we have around 34% and fixed coverage right now. And we would like to be around there, let’s say, around 35%. So we need to put in few more ships on charter next year and 2012. Zou Dazou – Sterne Agee: And that would be up from the current – on slide 17, it’s 22%. Right?

Yes, that’s right. That’s right. A few more ships. Zou Dazou – Sterne Agee: So – and that charter-in activity you would expect to happen in – well, at this point we are at the end of August, probably in the fourth quarter, I assume?

We are in some discussions now already. So it will happen within the next one or two or three months, yes. Zou Dazou – Sterne Agee: Does that represent the change from your prior views? So let’s say, like last quarter’s conference call, which was late May, was your intention at that point to be at about 35% for 2011?

No. I think we always sort of had a big chunk on our fleet in the spot market. And if we increase a little bit to 30%, 35%, we will still have 65%, 70% of the spot market, and that’s a level we are comfortable with. Zou Dazou – Sterne Agee: Right. So roughly two-third spot, one-third fixed is a level that long-term you want to be at?

Yes, that was right. Zou Dazou – Sterne Agee: Okay. And then just – you expressed some caution earlier about US oil demand. I guess if US oil demand – because I think the International Energy Agency, their forecast for US oil demand is for slight growth. Correct?

Yes, that’s right. Zou Dazou – Sterne Agee: So if – this actually turns out to be little lower than that, like maybe 0.2% or 0.3% decline. Does that materially change your view of the tanker market for the fourth quarter?

I think of course for the US market, you also have to look at the domestic oil production. So I think some people are predicting also maybe the domestic production can go down a little bit and then you will of course have to compensate with imports. But that varies – there are many reports on this. They are all almost coming out daily and quite contradicting. So let’s just say we hope that the import volumes of America will be increased. Zou Dazou – Sterne Agee: Okay. Thank you very much. I appreciate it.

Thank you.

Thank you.

We will now take a follow-up question from David Neuhauser from Livermore Partners. Please go ahead. David Neuhauser – Livermore Partners: Yes. I just want to follow up quickly on my capital structure question earlier. Meaning, if you’re going out there and looking obviously at some M&A activity, what are some of the options that you are looking at to finance something and what sort of the metrics that you are looking at? Meaning, are you comfortable with your current leverage ratio or if you would acquire a company, let’s say, any ideas as far as how financing would be – options would be open for you?

I would say that all sorts of financing options would be considered and open. I think it is hard in a way to be precise on that. Sorry about that. David Neuhauser – Livermore Partners: That’s okay. That’s okay. I know that’s kind of a tough question to answer. And then also, Jens, I want to ask you specifically if – what is sort of your global macro outlook at this point? There is lot of talk on China, lot of talk on – we are seeing waning demand. Is your view is it short-term or for a quarter or two, or do you think this could go well into 2011?

I think I’m very pro-China and the China oil demand, which of course we had seen been compiling and just going up. Now, there are various storage – strategic storages have been – the second phase has been completed. So I wouldn’t be surprised if there is suddenly a little dip in the oil price. You can see these strategic storage facilities being filled up, and that will of course be positive for tanker market. I think that the Chinese oil demand with the diversified sources of oil, I think it’s very important for the tanker market, and we’d be fairly positive going forward. David Neuhauser – Livermore Partners: All right. That sounds good. Thank you, guys. Appreciate it.

Thank you.

Thank you.

(Operator instructions) It appears there is no further questions in the queue. And at this time, I’d like to turn the call back over to your host today for any additional or closing remarks.

I’d just like to say thank you for dialing in and I’d like to thank everybody in the company for the good work during the first half of this year. And I hope we can of course carry that on for the rest of the year. Thank you.

Thank you. Ladies and gentlemen, that concludes today’s conference call. You may now disconnect your lines.