Louis McKibben

Louis McKibben referenced historical VLCC rates from 2006-2008 and during COVID, asking if rates reached $240,000-$300,000 per day, and if similar rates today would yield over $20 per share in free cash flow. He also inquired about age restrictions for tankers in India (22 years) and China.

Answer

CEO Lars Barstad confirmed that historical VLCC rates did reach the $240,000-$300,000 per day range and that sustaining such rates for a full year would indeed generate over $20 per share in free cash flow. Regarding age restrictions, Mr. Barstad noted that China's policy is fluid, with government systems (like UNIPEC) typically having a 15-year threshold and rarely accepting ships over 17 years, while private terminals may differ. He added that India-flagged ships for Indian owners have historically been accepted for trade up to 25 years.

Louis McKibben referenced Frontline's slide 7, which shows $11.50/share generated at $149,000 daily VLCC rates, and asked if free cash flow would exceed $20/share if rates reached $240,000-$300,000 as seen in 2006-08 or during COVID. He also asked if China has a similar policy to India regarding not accepting tankers over 22 years old.

Answer

CEO Lars Barstad confirmed that free cash flow would exceed $20/share if such high rates were sustained for 365 days. Regarding age restrictions, Mr. Barstad clarified that China's policy is not uniform; while government systems (like Unipec) typically have a 15-year threshold and rarely take ships materially above 17 years, private refineries may have different requirements. He noted that he had not heard of a 22-year ban for India, and Indian-flagged ships for Indian owners have historically traded up to 25 years.