Press release from Nordic American Tankers Limited (NYSE
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NAT).
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0 KommentareHamilton, Bermuda, December 12, 2014
Below is a press release that was issued by Nordic American Offshore Ltd. (NYSE:NAO) earlier today, containing a letter to the NAO shareholders from the Chairman of NAO.
NAT owns 19.2% of the shares in NAO.
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Press release from Nordic American Offshore Ltd. (NYSE:NAO) - Letter to Shareholders from the Chairman.
Hamilton, Bermuda, December 12, 2014
Dear Shareholder,
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As the year draws to a close, I would like to share with you some reflections on the state of our business and in particular how Nordic American Offshore (NAO) differentiates itself from the competition.
NAO is essentially based on the same business model as Nordic American Tankers Limited (NYSE:NAT) in its industry, with a modern and cost effective homogenous fleet, a strong balance sheet and a quarterly dividend pay-out policy. We at NAO have a cash break-even level of about $12,000 per day per ship, which is considered low. NAT owns 19.2% of the shares in NAO which became stocklisted on NYSE June 12, 2014.
The last few months have seen significant changes in the price of oil, spurring confusion among some investors who have fled from oil-related securities. By doing so, many of them have, in my opinion, "thrown out the baby with the bath water."
Most industry observers were surprised by the rapid decline of the price of oil - but it is important for investors to understand why such a shift happened. Our view is that there is no systemic problem in the oil market. Demand remains healthy and is growing. Oversupply of oil is one important issue, but supply can be controlled. Therefore, we must consider the situation in the context of geopolitics. Who gains and who loses from a low oil price? Why would OPEC choose to maintain high production?
The low price of oil brings with it severe economic pressure for countries like Russia, Iran and Venezuela, all of whom have sensitive relations with the United States. I do not wish to speculate, but it seems clear that the current situation is a geopolitical issue. It is also a fair assumption that political accords may indirectly trigger or encourage production cuts, thus bringing up the price of oil. After all, the price of oil stayed high for several years until the last few months, suggesting a market generally in balance.
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