Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the Third Quarter 2021 Financial Results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr.

George Saroglou, Chief Operating Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. . I must advise you that this conference is being recorded today.

I will now pass the floor to Mr. Nicolas Bornozis, President of Capital Link, Investor Relations Advisor of Tsakos Energy Navigation. Please go ahead, sir.

Nicolas Bornozis: Thank you very much, and good morning to all of our participants. I'm Nicolas Bornozis of Capital Link, Investor Relations Advisor to Tsakos Energy Navigation.

This morning, the company publicly released its financial results for the third quarter and nine-month period ended September 30, 2021. In case you do not have a copy of today's earnings release, please call us at (212) 661-7566 or email us at ten@capitallink.com, and we will have a copy for you emailed right away. Please note that parallel to today's conference call, there is also a live audio and slide webcast, which can be accessed on the company's Web site on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please we urge you to access the presentation slides on the company's Web site. Please note that the slides of the webcast presentation will be available and archived on the Web site of the company after the conference call.

Also, please note that the slides of the webcast presentation are user-controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect TEN's business prospects and results of operations. And at this moment, I would like to pass the floor to Mr.

Takis Arapoglou, the Chairman of Tsakos Energy Navigation or TEN. Please go ahead, sir.

Takis Arapoglou: Thank you, Nicolas. Good morning, all. Thank you for joining our call today.

Nothing much for me to say other than that we managed, as always, in a difficult countercyclical fashion to grow the company within an extremely challenging market, probably the worst market ever, and have come out unscathed. We booked new incremental accretive business with state-of-the-art, environmentally-friendly vessels. And now we're perfectly positioned to capture the market recovery. That seems to be around the corner, as indicated by the recent improvement in MR and LNG rates. Nothing else for me other than wish you all Happy Holidays and a Happy New Year.

So Nikolas Tsakos, over to you. Thank you.

Nikolas Tsakos: Thank you, Chairman, and good morning and good afternoon to all of you. Thank you for joining our call. And sorry for having our third quarter earnings so late this year.

It's the fault of our good friend, Nick Bornozis. For the last 15 years, we usually are in New York and we report live from New York and ringing the bell for a Greek Day. This year, thanks to Omicron we were not able -- it was canceled, but our date was set anyway. But it's better later than ever as I would say. And also, we are able to give you a better overview of where things seem to be going.

As our Chairman said, the first nine months and mainly the third quarter was one of the worst quarters in recent memory. I was reading it's the worst quarter in 20 years. I'm almost old enough to remember that since the days there in the '80s. However, we have been able to maintain a very steady course with them. Our modern fleet, our long-term relationships, our strategy of utilizing as much as possibly the resources of the fleet has given us good growth prospects.

And we are in a good position to know that the fourth quarter, which is coming to an end, is going to be a significantly better quarter for us as a company because of the measures we took. We took 17 vessels who were dry docked in the first nine months, out of which half of them were prematurely dry docked in order to have the vessels ready when the market turns a corner. The signs are there. The LNG market reminds us of the container market finally and then we will be earning more on LNG which is going to be delivered in two weeks in triple digit figures. I think their last average was around $200,000 a day.

And we are a market-related territory with our charters, which we're very happy about. Our LNG is also -- the ones that are coming for charter we'll be taking advantage of this just shortly after in March and April. And of course, the new acquisition of our 17 tankers together with our dual fuel ships are going to create a very solid core of growth for the company, which we're very proud of. We are seeing the product carrier market very strong here in the West right now. We have 36 product carriers, which one-third of them right now are taking full advantage of the spot market through our pooling arrangements with big pool partners like Cargill and Maersk and on the spot market.

So I think the plan set is starting to take in more and more positive features as we talk right now. And on top of this, of course, our new arrangements and the new vessels that we have target forward for dual fuel vessels. And with this, the long-term the International Energy Association announces that there is a very good chance, because of the lack of energy, that we will be looking at the significant contango in February 2022, very similar to what happened two years ago when the outburst of the virus started. If half of this is true, I think we are in for a much better first quarter for sure. And with this, I will not take any more of the time and I will ask George to give us a quick overview of what has happened in the nine months.

George?

George Saroglou: Thank you very much, Nikolas. Good morning to all of you joining our call today. Let's go to the slides of our online presentation. Starting with Slide 3, we see that in TEN, since inception in 1993, we have faced four major crises and each time the company thanks to its operating model has come out stronger. This time is no exception.

While we navigate through the challenges the COVID pandemic has created, we have grown the company and prepared the company for its next phase. In September, we signed newbuilding contracts to build four up to six duel fuel LNG powered Aframax tankers against long-term employment to a major oil concern. Factoring the latest orders and considering the company's start in 1993 with four modern tankers, we currently have a pro forma fleet of 71 vessels for an average annual growth of 15% in terms of deadweight tons. In Slide 4, we see the pro forma fleet and its current employment profile. We have a combination of vessels in fixed time charters and in flexible employment contracts, time charters with profit sharing, contracts of our payments and spot rate investors that capture the market's upside.

All that blue color vessels, 24 in the slide, are on fixed rate time charters while the light blue and red color vessels or 63% of the fleet currently in the water have exposure in the market's upside. This means that TEN is well positioned to capture the positive tanker market fundamentals and the expected recovery in freight rates. And in fact, in product tankers, we have seen the recovery starting this quarter and we expect this to be shown in our results for the fourth quarter of '21. We took advantage of the low freight market environment to bring forward the number of scheduled special surveys repairs to have these vessels available once the freight market for tankers would rebound. Fleet modality is also a key element to our operating model.

During the year, we concluded the sale of three of our older tankers and we replaced them with the newbuilding order for the six dual fuel Aframax tankers that will enhance the company's environmental footprint as these LNG dual fuel powered vessels are the first such investments in the company's history. In addition, we are building one more DP2 Shuttle Tanker and one LNG carrier. All six newbuildings are coming with long-term employment attached. Our newest LNG vessel will enter the market in mid-January and will significantly contribute to our bottom line as the LNG sector is currently very strong, as our CEO has also mentioned. On Slide 5, we see the left side represents the all-in breakeven cost for the various vessel types that we operate in TEN.

We have a low cost base, as you can see. During the nine months of the year, the revenue generated from the time charter contracts were again sufficient to cover for the company's cost expenses, paying for the vessel operating expenses, overheads, chartering costs and loan interest. I'll also highlight the purchasing power of Tsakos Columbia Shipmanagement, our technical managers and the continued cost control efforts by management to maintain a lower OpEx average for the fleet while keeping the high fleet utilization rates quarter-after-quarter. Despite scheduled and forward dry dockings of 17 vessels during the year, we achieved over 91% utilization for the fleet. And thanks to the profit sharing element, which is a cornerstone of our chartering strategy, for every $1,000 increase in spot rates, we have a positive $0.48 impact in annual EPS based on the number of vessels that currently have exposure to spot rates.

Slide 6, debt reduction is an integral part of the company's capital allocation strategy. Since the company's debt peaked in December of 2016, we have repaid 368 million of debt and repurchased 100 million in two Series of step-up preferred that we had outstanding. In addition to paying down debt, dividend distributions are important for common shareholders and for the management team. TEN has always paid the dividend irrespective of the market cyclicality. About 0.5 billion in dividend payments have been distributed since the New York Stock Exchange listing in 2002.

Global oil demand continues to recover. There is a slowdown as a result of the new Omicron variant. However, experts believe that the effect is going to be small and this will mainly affect air travel and essential demand of around 100,000 barrels per day. Still the prediction is that oil demand will increase by 5.5 million barrels per day in 2020 and another 3.3 million barrels per day in '22 when it will return to the pre-pandemic levels of close to 100 million barrels per day. On the global oil supply front, OPEC plus producers continue to manage supply with discipline and global oil stocks are now 240 million barrels below the most recent five-year average.

Non-OPEC production is set to increase in 2022. And in the near term, we had a coordinated effort to release in total approximately 70 million barrels from the strategic petroleum reserves of the United States, China, India, South Korea, Japan and the United Kingdom in an effort to ease energy prices, which was successful as oil prices are now trading $10 per barrel below the levels we had at the start of November. With oil demand recovering, let us look in Slide 9 at the forecast for the supply of tankers. The order book stands at around 6.6% or 340 tankers over the next three years, the lowest it has been in more than 20 years. At the same time, a big part of the fleet, almost 20% is over 15 years, and almost 7.2% or 390 tankers are currently over 20 years.

As the next slide shows, 2018 was one of the highest scrapping years of record with 22 million deadweight ton removed from the market. Last year and the year before as expected, scrapping was lower. We had a strong August and September this year and with scrapping prices at very high levels in excess of $600 per lightweight ton, we have so far seen 170 vessels or 13.3 million deadweight tons exit the global fleet. With more environmental regulations coming, discussions for alternative fuels and 7.2% of the global fleet over 20 years, we expect scrapping activity to remain high and a balancing act for fleet supply going forward. To summarize, oil demand, we see that the recovery of oil demand continues.

Oil supply monthly production increases by OPEC plus. Non-OPEC production is also set to rise in 2022, bringing more cargoes to the market at the time when global oil stocks are below the five-year levels and demand is increasing towards the pre-COVID levels. Order book, supply of tankers. The order book to current fleet ratio is at historical low levels. A big part of the fleet is reaching phase-out age pointing to a tighter supply of tankers for the next 18 to 24 months.

If we look at the company, we have a modern fleet well positioned to capture the expected recovery of the market. We continue to reduce debt. We have a strong balance sheet, strong banking relationships that will allow the company to take advantage of the opportunities that will be presented. With the expectation of better days ahead, I will ask Paul to walk you through the financial highlights of the third quarter and nine months of the year. Paul?

Paul Durham: Welcome to everybody from the London office of Tsakos.

So as indicated, we are beginning to see market conditions improve. Given the market conditions up to now, we feel the quarter three net loss of $25 million to be comparatively mild, and indeed a possible turning point, with the product market leading the way and at least possibly resulting in breakeven and profitability of the new year. Despite the market, our time charters, which represented half the fleet, were able to generate $66 million and our spot vessels provided a further $65 million, bringing total revenue in quarter three to over $130 million. For the nine-month period, revenue reached over $400 million, further indicating that the sector is bouncing from the bottom of the trough. Daily TCE per vessel in quarter three averaged nearly $15,700 and $17,100 for the nine months, again exceeding average market rates in both periods.

Fleet utilization in quarter three reached 90% despite nine vessels in dry dock. Prospects for the near future are promising. We are expecting soon to add two new vessels that together should provide $9 million extra revenue each quarter. That includes the LNG carrier that alone is expected to generate about $100,000 a day net income. There was some increase in total expenses in the quarter, partly due to the dry dockings and associated voyages while rising fuel costs which are included in the voyage expenses also increased.

The increase, however, was offset by a 9% fall in operating expenses, the daily OpEx per vessel falling to $7,300 due to savings on the part of our technical managers. A large part of these expenses were covered by the revenue generated by our time charters. Finance cost fell 39% to just over $8 million, as interest rates and margins were reduced, keeping our average cost of debt to only 2%. The repayment of debt by $115 million since the start of the nine-month period, including $46 million in quarter three, also resulted in reduced interest. Bunker hedge gains provided a further $2 million.

Despite debt repayments and CapEx commitments, we continue to strengthen our balance sheet through the ATM program and by securing our vessel revenue, and as in the nine month selling three vessels. In addition, we have refinanced the loans of several of our vessels at mutually beneficial terms. At the same time, we continue to consider opportunities for disposal of older vessels that may further reduce debt and free up cash to be effectively replaced by new vessels, such as the Aframaxes recently ordered. And now I'll return the call back to Nikolas.

Nikolas Tsakos: Thank you, Paul, and keep safe in London.

I hope you and your family are safe and I'm looking forward to see you here. And thank you for your input. With that, I would like to open the floor for any questions. Thank you very much.

Operator: Thank you.

We will now begin the question-and-answer session. . We will now take our first question. Please go ahead. Your line is now open.

Randy Giveans: Howdy, gentlemen. It’s Randy Giveans from Jefferies.

Nikolas Tsakos: Hi, Randy.

Randy Giveans: Howdy, gentlemen. It’s Randy Giveans from Jefferies.

How's it going?

Nikolas Tsakos: Really well, thank you, Randy.

Randy Giveans: Great. I got two questions. First, can you discuss the decision to put those 10 vessels on time charters? What are the terms of those time charters duration and rate? And then is the expectation of further kind of locked away tonnage in the near term?

Nikolas Tsakos: Well, I will give you a very, very I think nice overview and then we will have a private call, because we don't want industrial espionage. As you know, we are always a long-term relation company and that's why we are weathering relatively unscratched and growing the company.

So we had our two VLCCs and VLCCs are -- our two largest vessels and we charted them out based on profit sharing arrangements with a minimum, which if you go back to George's -- the breakeven that George portrayed covers the all-in breakeven costs of those ships. If you see, this is around the $26,000 range, even more than that and that allows us then a significant upside in the market of a 50-50 split based on the index. I think that has been a decision we, like most of the owners, were waiting for the right time to do so. We had been approached -- having very more than ships like ours, we've been approached to charter those ships for the last years. But of course, it didn't make any sense of the rates that they were offering.

Now I think we are way above average breakeven and we have an upside. So I think that has to do very similar situations with four Aframaxes. Again, you can see they're breakeven. So that's always our goal, recover our breakevens a little bit more. I think Aframaxes were closer to 19 as a minimum, and then a 50-50 upside on those.

So I think this is day-to-day business that keeps the shop open and helps the growth of the company. So we're very happy that we had -- finished our own transactions that we've done on the fourth quarter. And we stopped some of the down of the third quarter -- the third quarter which was actually historically one of the lowest quarters in the history of tankers was not the time to do so. But the fourth quarter, things turned around.

Randy Giveans: Got it, okay.

And then I guess secondly on the ATM, you issued 14.4 million new shares in the third quarter, another 32 million or so in the fourth quarter I believe. On the last call, you had 15 million remaining in authorization. So just curious how that 32 million came about and what is the current remaining authorization?

Nikolas Tsakos: When we had our Board meeting, which was in November, I authorized another 100 million of ATM program to top up this program. It took us to go through the last 100 million about 10 years. So it's not that we're spending, but as you know we are growing the company with opportunities and I am always someone that likes to keep very solid cash balances.

Randy Giveans: And how much is your current remaining authorization?

Nikolas Tsakos: I think about 85 million.

Randy Giveans: All right. And then I guess conceptually here, your shares are trading at a steep discount to NAV. We have at least a double digit NAV, but yet you're issuing some diluted shares to purchase vessels. So why is that?

Nikolas Tsakos: Well, we are not totally -- we are issuing a combination of preferred, which, as you know, preferreds are trading very well at around 24, 25.

So we try to make a combination of issuing our preferreds which are trading very, very at par. And then at good times, some shares too, because we believe that the growth prospects that we are seeing in there -- because we are in a very, very exciting part of the industry right now, but very similar to a big number of our ships had to be changed from single dollar to double dollars. So we had to start turning our fleet into dual fuel or even hydrogen or ammonia. So we have to be liquid and ready to go. We are a growing business, as George said.

We've been growing 15% since inception, and this is a business.

Randy Giveans: Okay. And then I guess lastly just on the OpEx, it seemed to have fallen from 2Q to 3Q. Is that the new run rate, or is there some one-off items that you expect to have increased here in the fourth quarter?

Nikolas Tsakos: Well, as you know, when things are bad, you have to start -- you guys if you watch a lot of basketball, we start with defense. So the first thing, there's not much we can do in TEN in the market conditions.

But what we can do is be more defensive. And I'm very glad with George and all of the technical managers for the results they are making down there on the second floor, which you've been. That's the beauty of running everything within one building inside here, so we can just stop as many expenses as possible when we need to. And this has been done in a very difficult environment where more than $20 million in our expensive budget come from direct or indirect COVID-related burdens. We had to navigate ships to change crew at huge costs.

We had at the same time to wait outside the Chinese ports for two weeks for current teams losing -- this was our lowest utilization ever, which compared to a peer group it's still very high, 90%. But if you go back to the last 20 years, because we had also to wait currently in our before we go for repairs. So it's been a tough patch, but I think the team has navigated it very well.

Randy Giveans: Got it. All right.

Well, that’s it for me. Merry Christmas.

Nikolas Tsakos: Thank you. Same to you.

Operator: Thank you.

We will now take our next question. Please go ahead. Your line is now open.

Magnus Fyhr: Good afternoon, Nik and team. This is Magnus Fyhr with H.C.

Wainwright. Just a couple of questions here, starting with the -- going back to your comments on spot rates in the fourth quarter. You mentioned that they're significantly higher than 3Q, whereas 3Q was probably the lowest in history. But can you give us some kind of magnitude? Are they up at least 20% in 4Q or what should we expect? I'm just trying to get kind of --

Nikolas Tsakos: I think if I had to give a figure, without the infusion of the Q1 from our LNGs, because the way we have structured the pricing of the LNGs, we know that for the first quarter they will be earning in excess of $100,000, the way the pricing works, because it works in a retrospective manner, which I do not want to get into too many details here, I'll bore you. But I think for the rest of the fleet, I would say it's at least 25% betterment which is I would say more than 500% betterment on the LNG, a 50% betterment on our Aframaxes.

And then, of course, a fivefold -- half of the fourth quarter, a fivefold effect of the market on the MRs where we have 12 of them directly taking advantage of the older market as we speak today. I would say if you put it, it's between 25% and 30% average.

Magnus Fyhr: Okay, very good. And you have secured a couple of time charters in the quarter. Do you have a different strategy on the products versus the period going forward, or given that this seems like the products are picking up or are you still kind of focused on kind of covering your fixed costs and then 50-50 profit sharing?

Nikolas Tsakos: On the products, as you know -- utilization is very important for us and we are strategic participants in values with a very good name like Maersk and then Cargill.

So what we do, we have full utilization of our product fleet which is very important. So we are never offside and we get the upside of the market. So I think I am supportive of full and that's what we're doing with our modern ships.

Magnus Fyhr: Okay. And then as far as the appetite for more time charters, do you see a change here with the charters coming into the market? You seem like you have been able to secure a couple of charters, but what's the appetite for more from your side as you think there's more appetite from the progress?

Nikolas Tsakos: We showed the appetite on the VLs, we showed a big appetite on Aframaxes and we are seeing now appetite for Suezmaxes.

Magnus Fyhr: All right, very good. Just one more question for Paul perhaps. You mentioned that you issued both equity on the ATM and also the preferreds. Can you give us a sense of how many -- what's the outstanding amount on the preferreds by the end of 3Q and did you share any in the third quarter?

Nikolas Tsakos: George, please answer that.

George Saroglou: I think all the preferreds .

Then we have three Series, a little over 15 million press; D, E and F.

Magnus Fyhr: Okay. And that’s as of Q2?

Nikolas Tsakos: That's right now.

Magnus Fyhr: Okay, very good. All right.

That’s it for me. Happy Holidays and we’ll see you --

Nikolas Tsakos: Thank you. Same to you. And stay away from the tornadoes down there.

Magnus Fyhr: Okay.

Nikolas Tsakos: Stay safe.

Operator: Thank you. We will now take our next question. Please go ahead. Your line is now open.

J Mintzmyer: Hi. Good afternoon, gentlemen. It's J Mintzmyer from Value Investor's Edge. I haven't talked to you in a while, but congrats on the quarter here. So I joined a little late on the call and I heard the last gentleman asking about the ATM.

I just wanted to get some details on that. You mentioned 14.4 million in the third quarter, 31.9 million thereafter. I'm curious about the split between the common and the preferred, like how much dollars in each amount and also the average share sale price?

Nikolas Tsakos: Well, Paul will have the -- as George said, it’s 15 million of the preferred. The remaining is on the common for this year period. And I think we can have -- please call George if you need the latter to give you more of the dates -- on the actual figures the price.

J Mintzmyer: Okay. Are you planning to file like a Form 6-K or something with more financial details on that?

Nikolas Tsakos: Of course. We always file our 6-K, and I think it's going to be filed early in the year.

J Mintzmyer: Excellent. And then you have the one Shuttle Tanker? My understanding is the original newbuilding contract included two options for those.

Has there been any decision on those options?

Nikolas Tsakos: Naturally, you're very correct. You have a very good memory. But we took this -- the one we are building now is the second option. We had the first , which we took over a couple of years ago. Then we had an option, which we're building now, the Porto .

And there is a third option which we're currently discussing. However, as you understand, the price -- and this is something we didn't mention, the price of steel has skyrocketed. The newbuilding prices, the value of our fleet and of our existing new building ships is right now -- it has at least 30% increased. So we've done two out of the three options.

J Mintzmyer: Yes, I was curious on those options because I imagine they're significantly in the money on those.

Nikolas Tsakos: We took -- the first vessel, we called it . The second is the Porto which will be delivered -- as the second option, which will be delivered in June or July as part of our newbuilding department against the very long-term contract in Brazil.

J Mintzmyer: Yes. What's the timeline on that third option? How long do you have to exercise it and what would the lead time be for building that ship?

Nikolas Tsakos: We are currently negotiating it. We're negotiating for a very long contract, which I believe we might have news this side of the year.

J Mintzmyer: I will look forward to that news. And then last question just kind of general, specific on the company. Look, Tsakos has been public for a very long time. You have a very impressive fleet, a long storied management. There's been a recent trend towards reporting extremely late.

It's two and a half months late.

Nikolas Tsakos: You missed my introduction, but I wouldn't say it again because I apologized. And I said that the reason for the last two delays had to do with -- I was joking, but it’s true with Nick Bornozis events that we do the Capital Link, because as you know we have not been able to travel to the United States, which the majority of our shareholder base is. So we were taking the opportunity on yesterday, the 15th of December, was a typical day of ringing the bell and we were going to report today. So then we would spend -- before everybody gets into the Christmas spirit to do a road show.

However, all of this fell apart because of the Omicron. But our date was set because of that. So I think as we go back from March, we're going to be back to normal again. Hopefully, we can travel within the timeframe.

J Mintzmyer: All right.

I look forward to earlier results. Very last question, again I appreciate your time today. Do you have a current number? I think it's 23 million. Is that still current for the common shares?

Nikolas Tsakos: Yes. It's just shy of 23 million.

That's right.

J Mintzmyer: As of today, okay, excellent. Thank you, gentlemen, for your time.

Nikolas Tsakos: Thank you, guys. All the best for the holidays.

Paul Durham: Thank you very much from London.

Operator: We have no further questions at this time. Please continue.

Nikolas Tsakos: Thank you very much. And we wish all of you a very stay safe holidays, and hopefully early in the new year we can report better news to you.

Merry Christmas, Happy New Year and Happy Holidays.

Operator: That does conclude our conference for today. Thank you for participating. You may all disconnect.