Nordic American Tanker (NAT) CEO Hansson Issues Shareholder Update; Sees Balanced Growth in 2016

Nordic American Tanker (NYSE: NAT) CEO Herbjorn Hansson issued the following letter to shareholders:

Dear Shareholder,

As we approach the end of a good year for Nordic American, I would like to share with you some thoughts about our company and our industry. This is an exciting time for us in the tanker industry, with strong bookings and high profits. Nordic American is in excellent shape. I believe that our well-defined and well-executed strategy will continue to propel NAT going forward. Key elements of our strategy are our quarterly dividends for 74 successive quarters since the autumn of 1997 coupled with minimal debt.

Below is a synopsis of the strategy of Nordic American:

Link to the graph: http://hugin.info/201/R/1970475/720392.pdf

OPEC's decision in the autumn of 2014 to raise oil production has helped our industry. Wrongly, some investors seem to consider NAT as part of the energy sector. While many companies exposed to the oil price have been negatively affected, we must keep in mind that the low oil price is a result of large volumes of oil being produced, shipped and also stored. This has increased demand for our vessels, while the lower oil price has reduced our fuel expenses. A low oil price is good for the world economy and hence for the tanker industry.

The world, from the eyes of a tanker owner, has changed significantly in recent years. Trade patterns are constantly shifting and the flow of crude from the West to the East has now become a larger trade than in the past. A new feature over the last few years is that oil to a larger extent also is being transported the other way; from East to the West.

Domestic production of crude in the United States has been affected by the objective of Middle East countries to retain market share. At the same time China, India and other countries in the area are rapidly catching up and China can now be expected to become the world's largest importer of crude oil in a few years. We believe oil demand is developing in a way that will continue to boost demand for transportation.

As things appear, fleet growth and transportation demand growth in 2016 look well balanced, setting the tone for a healthy tanker market. We expect that the fourth quarter 2015 will be good as we approach a strong winter market. As a shareholder you can expect this market strength to enable NAT to continue to pay healthy dividends. The excellent quality of our fleet is encouraging, showing our keen willingness to comply with the strict requirements of the major oil companies when it comes to safety for crew, the environment and assets. We took over two 2010 built suezmaxes in September and October this year and Nordic American has two newbuildings joining the fleet in 2016 and 2017. We are then at 26 vessels.

This brings me to the core of what we do at Nordic American - we focus on satisfying our clients and maximizing total return to our shareholders. As one of the largest shareholders myself, every decision made by our team affects me and my family in the same way as it does every other shareholder. As matters stand, our newbuildings and the two second-hand vessels acquired earlier this year do not require any additional equity to be issued. We are always looking at opportunities to grow. There are always ships for sale. Our focus will remain on making any transactions add value to the shareholders.

We continue to believe in our way of doing business. Our focus on quality and the strength of our balance sheet are compelling reasons to be an investor in Nordic American. We are the most liquid tanker stock, underlining that NAT is a popular way to gain exposure to the volatile tanker market. We look forward with optimism to what the tanker market may bring in 2016, realizing the volatility in the market place.

As always, please feel free to email me with any comments you may have at [email protected]

I wish you and your families all the best for the holidays.

Kind regards, Herbjorn Hansson Chairman & CEO

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