Good day and welcome to the StealthGas Third Quarter 2016 Results Conference Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Harry Vafias. Please go ahead sir.

Good morning, ladies and gentlemen, and thank you for dialing into our third quarter 2016 earnings presentation and webcast. This is Harry Vafias, the CEO of the company and joining me on the call today is our Finance Officer, Ms. Sakellaris, who will discuss our company's financial performance. Before we commence our presentation, I would like for all of you to be reminded that we will be discussing forward-looking statements, which reflect current views with respect to future events and financial performance. At this stage, if you could all take a moment to read our disclaimer on Slide 2 of the presentation. It's noted that risks are further disclosed in StealthGas' filing with the SEC. I would also like to note that all amounts quoted, unless otherwise clarified, are implicitly stated in United States dollars. Starting on Slide 3, we are summarizing our company key highlights for the third quarter of ’16. We faced quite a difficult environment this quarter as rates in these three months dropped by an average of 5%. Very low rates along with weak seasonal demand suppressed revenues and consequently profitability. In this environment, we managed to end the quarter with an operational utilization of 88.1%, a rather low figure given that in Q3’15 our operational utilization was 94.4%. However, we managed to arrange several new charter arrangements and charter extensions resulting in 87% of our fleet base secured on period charters for the remainder of ’16 with a total of $175 million in pre-contracted revenues. In spite of the difficult market, we strive to manage our relatively young fleet as efficiently as possible. Due to the strong management, our board in close cooperation with the yard has rescheduled the deliveries of our 22,000 newbuildings so that the first will be delivered in Q2 ’17, the…

Thank you Harry. And good morning to everyone. In the third quarter of ’16, we faced a challenging market. Compared to the second quarter of ’16, rates declined even further by an average of 5% and poor demand due to seasonal factors was quite evident. Let us move on to Slide 7 where we see the income statement for the third quarter of ‘16 against the same period of the previous year. Our voyage revenues came at $34.4 million, marking a 4% decline compared to the same period of ‘15. Revenues declined primarily due to the low seasonal demand, which led to another low fleet utilization of 88% compared to 94.4% utilization in the third quarter of ‘15. In addition to these, half way into the third quarter of ’16, we had one of our product tankers switching from time charter to bareboat charter reducing the revenues from this vessel by approximately 50%. The voyage costs amounted to $4 million marking a 22% decrease compared to Q3 ‘15. The key driver of voyage cost reduction was the increase of time charter days by 19% and overall lower fleet utilization. Net revenues, that is revenues after deducting voyage costs, came at $30.4 million. Running costs at $14.6 million increased by 9% compared to the same period of last year given the net addition of one vessel plus two vessels coming off bareboat. At this stage, we need to note that compared to the previous quarter of the year our operating cost base was stable. This is an outcome of the following that took place. Factors that reduced our operating cost base this quarter were the receipt of an insurance claim and one of our product tankers going on bareboat. On the other hand, we had the contribution on our operating cost…

Let's proceed with Slide 11. The growth of the LPG market still stands strong despite of the oil price environment. In terms of export activity, even though U.S. oil production has seen a decline, US LPG exports have actually increased. LPG exports from the USA reached 20.5 million metric tons in the first eight months of ‘16 with a forecast of 26 million metric tons until the end of 2016 and just shy of 30 million metric tons in ‘17. In terms of imports, China continues to have a leading role importing around 1.5 million metric tons in the first eight months of 2016 marking a 25% increase against 2015 volumes. It's important to note that smaller but important markets for LPG trade are emerging. The activity in Iran has intensified while the country of Bangladesh has issued 38 new licenses in titling holders to build storage and bottling plants for LPG. The country’s demand is expected to rise significantly in the years to come. Although a small area of intensification of LPG trade will benefit greatly the segment of small pressurized vessels. In terms of the LPG price arbitrage that affects the LPG seaborne trade, we noticed in the third quarter a narrowing of price differentials. However this widened in October due to the seasonal demand picking up and an increase in oil prices evident during this interval. Overall should the price arbitrage widens even more, broader LPG trade is bound to intensify. Focusing on our segment, during Q3 ’16 the pressurized markets remained challenging. West of Seaways [ph] the shipping length has been substantial for long periods with low freight rates. There is definitely a seasonal factor explanation to part of the softness during this period but still the element of oversupply of ships negatively affects our segment.…

[Operator Instructions] We will now take our first question from David Sachs from Hockey Capital.

So on these four semi-refrigerated that you pushed out, was there any concessions that you had to make with the yard to accommodate them or to compensate them for that or –?

Not really. Just to cover some costs, which is the warehousing of the ships and painting of the hull because it would get, how you call it, dirty from grass by being idle in the yard for a couple of months.

Okay, and then if you could talk a little bit about -- narrowing down the third quarter into a couple of months and sort of we now have October and most of November under our belt, can you give us some sense of what was happening with rate as you went through the month or through the third quarter and as you're seeing now in October, November, and what makes you feel that we are, in your term here, at the bottom of the cycle?

We feel that we're near the bottom because we see charterers keener to take ships on period. It is not that the rates are suddenly booming. But when you see older ships getting snapped up by charterers, that's what I see is a good signal that some really major charters are calling the bottom. And hopefully we’re expecting a cold winter which means strengthening day rates and limited idle times between the cargoes.

Last question, if you can comment a little bit about your MR and your Aframax in terms of your – one, what you’re seeing happening in the market; two, your long term intention of staying in that asset class, as opposed to perhaps using those as the source of additional liquidity?

Yes, I think we've discussed that before. As I said before, these ships are still generating very good money for StealthGas. They are fixed. All of them at above the current market levels and the values of tankers, I don't know if you follow they have fallen dramatically since last year, so even if we sold the ships, if we deduct the debt, there won't be so much cost left anyway. So it wouldn't really help StealthGas in the end of the day. So the strategy is the same: keep fixing the ships on periods, but they have a second source of income for as long as the LPG rates are soft.

Thank you. We will now take our next question from Patrick Sheffield from Beach Point Capital.

Hey, just a couple of quick ones. One, I thought I heard you say something about $10 million of unrestricted cash getting released or something to that effect. Would you mind repeating the comment you made earlier in the call?

Yes, we had a legal claim in South Africa for one of our ships. It was a totally unfair legal claim against us. We won the case and the money we had to put down as a guarantee were returned back to us. It's a significant amount of money and that's why we thought it would be good to announce it.

Is that cash -- where was that cash in the balance sheet I guess prior –

It was in the balance sheet as a restricted cash. Now it’s back as unrestricted cash.

And that was $10 million, you said?

Correct.

And just sort of following upon David's question about rate, has there been any change I guess in October or November relative to the Q3 rates?

As I said, Patrick, it is a bit early to judge. I mean the winter is now starting and we actually see quite a rapid decline in temperatures. I don't know about the U.S. but at least in Europe, that's what we are seeing. We are hopefully going to have a cold winter which is good for the business. As I said the only significant signal that we have seen today – up to today are the increase period fixes on our older vessels because obviously the brand new vessels are easily to be – are easy to be fixed, but when you see vessels that are 18, 19, 20, 22 year olds getting fixed on periods, I think this is a good signal of what's coming. But I don't want to say too much because as you know we are quite conservative.

And then looking at CapEx for 2017, aside from the newbuilds that you laid out in the presentation, are there meaningful drydocking costs or any maintenance capital expenditures that you anticipate –?

No, not really. You know there's always drydockings but as you know drydockings for these ships are not significant amounts. The more significant amounts are obviously the newbuildings which are anyway pushed back and thus our equity contribution will be -- also be slightly pushed back anyway. So drydockings -- of course with such a big fleet, there are drydockings every single year.

And then as far as maturities of bank debt next year you just have, is it a $17.5 million facility that matures in December of ’17? Is that the only meaningful bullet?

Yes, yes, we have – as you know it's a bit forward, we cannot discuss with the bank 12 months or 13 months in advance. But the intention is to refinance it.

Thank you. We will now take our next question – a follow up question -- from David Sachs from Hockey Capital.

Hey Harry, in terms of environmental regulations that might be affecting the fleets of your characters, are there anything that’s projected or has been implemented that will happen over the next few years that will require fleet owners to invest significant money on environmental remediation for their assets and could that accelerate scrappage of the older vessels and maybe tighten this market up a little bit more?

David, you are a 100% correct. A very clever question. Indeed there are two sets of regulations coming within the next two to five years. One is water ballast treatment systems and the other is emissions, both are quite expensive. And obviously someone with 20, 25 year old ships would think twice before investing any money on such an old ship and I guess depending of course on the market would rather scrap I guess.

And can you give us some sense of what the capital upgrade costs would be for an existing vessel to modify it or achieve both ballast and emissions?

For the ballast there is no U.S. systems approved yet. So the answer is we don't know. For European systems it’s about $300,000 per ship. For U.S. as I told you we don't know yet. We're waiting for the U.S. Coast Guard to come out with approved systems. For the emissions there is no real cost because you can opt to burn distillates and therefore make no amendments to your ship. Or if it’s a brand new ship and you want to have an advantage over your competitors, you can install a scrubber, which means that you can burn much cheaper fuel in comparison to your competitors but of course a scrubber costs $2 million to $3 million.

And have you done an environmental assessment of your fleet and have a sense of where we would be looking either to put in scrubbers or your preference would be to burn more costly fuel?

Yes, we have done but our advisors cannot yet reach a conclusion as I told you since the U.S. Coast Guard has not yet approved the system. So without approved system it’s not very easy to reach a conclusion.

And what percentage of your fleet is compliant with what has been proposed as far as the environmental regs? I would assume some of your newer assets are all fully compliant at this point?

Some of the newbuildings have already water ballast treatment systems treated, not all of them.

And in the order book you mentioned only a few percent increase over the next two and a half years. And if I look further out 1920, those would be zeros right now on the chart?

100% zero.

And what would happen if we -- in your mind if we took 10% of the world’s fleet out based on the NAV exercise of investing $2.5 million, $3.5 million to upgrade a 20 plus year old vessel?

Not right, I told you, for a water ballast treatment which is obligatory is $300,000, not $2.5 million.

I know you're talking about the scrubber -- adding a scrubber that would be too high.

You don’t have to add a scrubber. Scrubber is only voluntary. If you want you can burn distillates and you make no changes to your ship as I mentioned.

Okay and in that case, you’d be passing that extra cost through -- it would just become an overall tax to the industry.

Yes, but it depends what you want. I mean if you want to put a scrubber you put an initial investment in but then you have a very attractive ship for the charterers. And you get your money back that way, or you don't invest anything, you have a normal ship let's say but you have to burn more expensive fuel. Depends what the strategy is and depends what your cash is and depends how you want to place yourself in comparison to your competitors I guess.

And just from an industry perspective we've had a series of deliveries of VLGCs, this was going to be – ’16 and ‘17 are big years for VLGC deliveries. Has that affected? It doesn't appear to have yet affected demand for your smaller pressurized vessels. Why hasn't that happened and will we see that happening in 2017? Is it yet another reason that the market becomes tighter or more dynamic?

David, as you know well, this coincided with the collapse in oil price and the weakening of most of the economies, right. So yeah, on one hand, we have a lot more bigger ships but on the other hand we have the problems we just discussed. So I think the one cancelled the other day. At the same time we had a big -- relatively always a big fleet of small ships and a big chunk of that fleet was over aged. But we have seen very few ships leaving the fleet. So that's what we have seen no real benefits but as we’ve discussed before the ships cannot trade forever. At some point they have to go.

And there's no clever alternative to moving these cargoes outside of using your small pressurized vessels to this secondary market.

No, not of what I know of. End of Q&A

[Operator Instructions] There are no further questions in the queue at this time. I will turn the call back to your host for any additional or closing remarks.

We’d like to thank all of you for joining us at our conference call today and for your interest and trust in our company. And we look forward to having you with us again at our next conference call for our fourth quarter ‘16 results sometime in February. Thank you.

Thank you ladies and gentlemen. That will conclude today's conference call and you may now all disconnect.