Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the First Quarter 2017 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. [Operator Instructions]. I must advise you the conference is being recorded today. And I now pass the floor to Mr. Nicolas Bornozis, President of Capital Link, Investor Relations Adviser of Tsakos Energy Navigation. Please go ahead, sir.

Thank you very much, and good morning to all of our participants. This is Nicolas Bornozis of Capital Link, Investor Relations Adviser to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the first quarter of 2017. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or e-mail us at ten@capitallink.com, and we will e-mail a copy to you right away. Please note that parallel to today's conference call, there's also a live audio and slide webcast, which can be accessed from the company's website 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 on the webcast -- on the website. Please note that the slides of the webcast presentation will be available as an archive on the company's website after the conference call. And please note that the slides 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 contain 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. Such risks are more fully disclosed in TEN's filings with the Securities and Exchange Commission. Ladies and gentlemen, at this point, I would like to turn the call over to Mr. Takis Arapoglou, the Chairman of the Board of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir.

Thank you, Nicolas. Good morning, everyone. That's another profitable quarter, beating expectations in a challenging market. This is proof that management executes the strategy that we all agreed to. Our strategy, conservative to some, has helped us manage 24 years of profitable performance through four shipping crises. So the new industrial model that the company represents, providing the full range of vessels to its very broad high-quality customer base, the prudent way to commit vessels over time and given the good market early last year, we gradually started chartering a larger percentage of the fleet. Today, we are well over 70% time-chartered, benefiting from the high charter rates for an average period of about three years going forward. This guarantees that for the next few years, we have covered costs and any other obligations the company has, leaving less than 30% of the fleet to take all the opportunities that come to the market to even more enhance profitability and other benefits value-added to the investors. So this is a unique model. This is a model built on prudence, guarantees shareholder value, and hopefully, we'll see the results of this reflected on the stock price because we believe in it. And you'll see, as the market evolves, there'll be more benefits coming out, especially with the full program, a very big program of the 15 vessels that we've had, which will be closing by the end of the year with all vessels delivered. And then this model will be at full throttle, flexible enough yet predictable enough to reward the shareholders. So congratulations again to management and best wishes for another successful quarter coming up.

Chairman, thank you very much, and over to Nikos Tsakos.

Thank you, and good morning from Athens, Greece. It's been, again, a successful quarter for TEN in a difficult environment. And as the Chairman said, we are putting the final touches of TEN of the 21st century, as we call it, which is the new model of our industrial business. We have always been a very conservative company. We have always looked at long-term relationships. I think at this stage, we are approaching almost 80%, we are at 77% of coverage and with the interest that is coming out from our major clients, I think we will be locking up much more business and more strategic relationships as we go forward. And albeit [ph] has always been a conservative company, but this allows us to pay our dividends, make sure that we have a very low and conservative leverage, a very strong cash position and be ready for opportunities. We are all enjoying the challenging times that we're going through, and we're looking forward to the end of this year. By the time, we will have taken the last of our 15 newbuilding vessels that would create a state-of-the-art fleet of 69 -- 65 vessels with a significant amount of forward fixed cash flow. And we're very proud of this fact. We are looking always at the bottom line because we are aware that the time that you stop looking at your expenses, that's when your downfall starts, and this is something that we pride ourselves and our technical managers, the own-hands management of our vessels. And right now, we have had another reduction of our operating expenses within this quarter. It's been a very exciting quarter. A lot of things have gone forward. And I would like George Saroglou, our COO, to talk to us about this quarter and the prospects. Thank you.

Thank you, Nikolas. The company reported today another profitable quarter. TEN embarked since last year in the biggest fleet expansion program of its history with 15 newbuilding vessels in total. Eight vessels were delivered last year. All 15 ordered vessels had medium to long-term employment attached, with first-class charters ranging from approximately two years to up to 11 to 12 years. Since the start of the year, TEN took delivery of four vessels, with three more expected in the next few quarters. For those who are connected to the Internet and our website, there is an online slide presentation, whose format we will follow during the call. Let's turn to slide number 3 with the key corporate highlights. As you can see, we have 65 vessels. This is a pro forma fleet, 62 currently in operation and 25 vessels have ice-class capability. The average age of the fleet is 7.4 years versus 10.2 years for the world tanker fleet, so we have a very modern fleet. That is balanced -- has a balanced employment strategy that takes advantage of market peaks with profit-sharing arrangements. Currently, we have 50 vessels on secured employment with average time charter tenor of two and half years. Minimum contracted secured revenue of $1.4 billion, with potential additional revenue from profit-sharing arrangements. The fleet is modern, diversified, covering client transportation requirements in crude, product, shuttle and LNG and has become the carrier of choice for many of the top oil majors, commodity traders, and refineries. We are a very high, efficient operator with consistent high fleet utilization, with over 97% as reported for the first quarter of 2017. The next slide has the main financial highlights of our press release, which Paul will present in more detail. I just would like to stress again the profitability…

Thank you, George. As George has said, TEN enjoyed another profitable quarter, albeit operating in a softer market than in quarter one 2016. But a market that still provided enough demand to keep our fleet at full utilization. Our net income was $17.5 million or $0.16 EPS, helped by a 9% increase in net revenue. Despite the spot markets being weaker, our time charters alone generated adequate cash to cover the operating, overhead and finance costs of the whole fleet, while our spot vessels were still able to contribute $30 million to revenue. All vessels had posted EBITDA apart from two in dry dock. Average daily OPEX per vessel decreased by 4% to below $7,600 mainly due to continued tight cost controls by our affiliated technical managers, TCM. Our daily overhead costs per vessel have also fallen by 3% due to savings in office costs. Management fees per vessel have not increased for over five years. Finance costs increased $4 million mainly because of the new loans related to the new vessels and due to lower capitalized interest as the new vessels were delivered. In addition, although there have been increases in interest rates, this is offset in the quarter, to an extent, by gains from interest rate swap early terminations. We drew down $100 million relating to the three newly delivered vessels in quarter one and paid down $44 million in repayments. So at the end of quarter one, we had $1.82 billion outstanding in debt. And net debt-to-capital was a comfortable 54%. Our all-in average cost of debt still remained under 3% for the quarter. As of March 31, we had four Aframaxes with charters still to be delivered. We took delivery of Sola in April and paid the final $33 million accordingly, $24 million in debt and $9 million in cash. We will pay $100 million for the remaining three Aframaxes to be delivered this year, $70 million from debt and $30 million from cash. At that stage, our newbuilding program of 15 vessels will be complete, and TEN will be in a strong position for 2018, generating a secure cash flow with most of its modern fleet employed on time charters to leading oil majors. And this concludes my comments, and now I'll hand the call back to Nikolas.

Thank you, Paul and I think we would like to open the floor for any questions. Thank you very much.

[Operator Instructions]. Your first question is from Gregory Lewis from Credit Suisse.

Good morning and good afternoon. This is Joe Nelson on for Greg today. And thank you for taking the question.

Alright, thank you.

So just, I guess, just thinking about the fleet you guys are just coming out of a big growth program, and in your release you sort of highlighted potentially maybe selling some non-core assets later this year. How should we think about the sort of fleet mix going forward, is it may be leaning more towards crude versus product or any particular size class within that framework?

Well, as I said, we do not have a specific type of vessel. We always want to renew our fleet. Of course, the older ladies, as we call them because the ship is a she, are really cash cows because they've been very well depreciated over the years. So there has been a bottom line, but we would be open to offers when the time is right for our older vessels, regardless of type.

Okay, thanks and maybe just one kind of follow-up to that. I mean, we've all seen the headlines. The newbuild prices are low. It seems to have maybe triggered some ordering over the last few months. Do newbuild pricings factor at all in how you guys think about fleet growth or is it really just going to be more of a customer-led model on the back of long-term charters and maybe away from some of the speculative ordering we've seen lately?

Well, thank you for the opportunity. All our 15 vessels have long-term -- or build on long-term charters, as George said, ranging from a couple of years up to 11, 12 years. So if we do anything and at this stage, we are not looking to do anything on any speculation. And I think one of the things that we should not forget is we are at a turning point, and that's why we went through a very extensive newbuilding program, building modern and highly efficient vessels, all with the new regulations of technologies because we are in a turning point of technological requirements and environmental requirements of shipping. So we must make sure that the ships we are building today, if anybody's building, and I hope they are not because the market does not need any more vessels, are vessels that will be there for the future. And as we speak today, we do not know what the future holds. All the legislations that has been discussed before has not again -- it's not yet solid. So from our side, of course, we will not do anything without a long-term employment, and we don't have anything in the cards right now.

Thank you very much, appreciate the time today guys.

Thank you.

Your next question is from the line of Spiro Dounis from UBS. Your line is open.

Hey, good morning gentlemen. Thanks for taking the questions. I just want to start off on the capital raise you guys did over the quarter. You raised a pretty decent amount of cash there and really padded the balance sheet. I guess I'm just wondering if that was the motivation behind it, seeing a lot of your peers go out there and, I guess, sell vessels to boost the balance sheet to get through, I guess, what's expected to be some tough times here in the middle of the year. Is that how you're looking at it or are you raising capital more from an offensive standpoint to jump on opportunities now as they arise?

Well, I think we have always been criticized, perhaps, not by you, Spiro, but other and that we always hold a lot of cash on our balance sheet. So for sure, we're not planning to hold cash just to look at it. We are looking at opportunities and, hopefully, second-hand opportunities. So it's more offensive than defensive at this stage, I would say.

Great, okay. And then just as far as the strategic relationship goes, and I guess you had a press release out in April on it with a major U.S. oil company, I realize there's some commercial sensitivity there, I'm guessing. But is this a new relationship and is this something that could maybe turn into something bigger, like what you've got with Statoil or is this kind of it for now?

It is not a new relationship, but it is something that has only started. It started with four vessels. And it certainly can get bigger significantly, as big as Statoil, at least.

Got it, alright, appreciate the color. Thanks everyone.

Okay, your next question is from the line of Mike Webber from Wells Fargo. Your line is open.

Hey, good morning guys. How are you?

Hey, hi Mike.

I wanted to follow up a bit on Spiro's question around -- effectively around kind of forward kind of capital allocation. You're in pretty good shape from a balance sheet perspective, and you got, as always, a decent amount of cash. And when you look at your core markets, it seemed pretty topped up on the crude side, but on the -- when you look at the LNG and the shuttle tanker side, their counterparties and I guess competitors, rather, in both of those industries, they might not be as well capitalized or free to deploy that cash as you all are now. So I'm curious as to what kind of opportunity set do you see within both of those relatively niche markets but kind of points of diversification for you guys. So when you think about allocating capital over the next year or two, do you see maybe a slightly better opportunity set within maybe those ancillary businesses?

Thank you. On that I have to say that we are -- we have invested a lot in the LNG and the shuttle space. And as you rightly say, these are spaces where -- because they're so tough operationally, we face a smaller group in competition and, perhaps, a weaker group in competition. And I think the board has identified that, and we are looking to expand in that segment. So I think you are correct.

Got you, okay. That's helpful. And Nik, just to move back to crude maybe, and you touched on this in one of your earlier answers around technology risk and making sure that you guys are basically owning the right tonnage going forward, which certainly seems like it makes sense. But just curious from an industry perspective, you've got kind of prompts or kind of resale VLCC prices that are at 10-year lows. But we've also seen things like every time we turn around, we're reading about a new order in the last month or so. So I'm curious, maybe from an industry perspective, how much does this rush of ordering dampen any optimism for the back end of this year and/or 2018 in the sense of an asset recovery if you were bidding up second-hand assets in early trade there or just purely future fundamentals?

Well, as you know, those ships that have been ordered, and as I said, we do not need any more vessels in the market today. And for sure, we don't need any new vessels until the ball stops on technology and on the environmental legislations. And those ships will be most probably started being delivered in early 2019. So we still feel very strong for the second half of this year and strong for this -- very strong for 2018. And if owners show some control, I think 2019 will be a better year. But I think those ships are 2019 vessels. And of course, if owners continue ordering, it will not be as well balanced as we expect the market to be. I think one of the positive issues that has come out, and there's not a lot of positive news coming out of Korea recently, but one of the positive news that has come up from Korea is that the new government there that was elected a couple of days ago, first of all, are planning to impose a significant ban on any more expansion of nuclear power and also closed some of the older facilities there, which I think is good news for the gas market, considering that they're a huge importer of gas. And on top of that, he has ordered no more subsidized newbuilding for the Korean yards. And I think that also is good news in the sense that there will be less capacity and the values are going to be less attractive for owners to order. We're always looking for a silver lining somewhere, and I think that's we got right now.

Well, they've got to stop the losses [ph] at some point, right. So that definitely makes sense. One more for Paul, actually, before I hop off just on the average OPEX per vessel or DVOE. As you start layering in the remaining Aframaxes, it seems like that number should naturally start to come down, although that is kind of counterbalanced with the fleet kind of actually aging. Can you give us some color on where you expect that figure to go through the end of the year and what the right balance point is for it with the future fleet mix?

Well clearly the new vessels do help in bringing down overall costs. They're effectively eco-ships and have lower running costs than the older vessels. Generally speaking, where do we expect it to go? Well, we're very, very pleased with where it is at the moment, to be honest. It's being held now for several, several quarters. We believe we can bring it lower. We have our eye very closely on our affiliated TCM technical managers. We watch what they do very closely, and we make sure that any variances in the original budgets are closely monitored and if there is a problem, that they are corrected immediately. So by putting pressure on our technical managers on a continuous basis, we feel that we are able to bring costs down. And of course, the very fact that they are associated with a big company like Columbia Shipmanagement that have such a vast number of vessels, we're talking about 400 or 500 vessels purchasing power. So that helps a lot. And another factor possibly is the dollar impact. And the euro still accounts for about 25% of our expenditure, so as the dollar strengthens, the better it is for us.

Okay, great. That's helpful, I will turn it over. Thanks for your time guys.

Thank you.

And your next question is from Noah Parquette from J.P. Morgan.

Thanks. I want to ask, just following up on Joe's question. We've all seen the newbuild prices, particularly for the larger ships, fall last year or so, when you have your discussions with customers regarding potentially long-term contracts or needs, does that newbuild price factor in, in any way, I mean, are you guys looking at a breakeven plus a profit or is it not a factor?

I would say this is a very significant factor. What we try to do and I think if you look at our breakeven, when we talk to our customers, we try to agree with them a rate that allows us for -- a minimum rate that allows us a full breakeven with a very small return. And then an upside, sometimes, we keep all to ourselves or we share with them. That is the icing of the cake, and it's the profitability. And I think this is the model that we have discussed with the board. Mr. Arapoglou, I think this is the model that we feel comfortable with.

Yes. It provides you with a flow on your revenue plus any upside, especially when you take the view that we're taking, that markets will gradually improve from here. And it makes absolute sense.

It makes us not very greedy, which means that we are willing to share with our clients the upside. So I think it's a company strategy that we have got for decades now, and it has served us well. And we feel stronger that that's the way to go for an industrial shipping model. As we have said in the past, oil companies really do not -- the price of transportation is such a small part of the whole picture that as long as they do not pay more than their competitors, they are not so interested to bring the rates down. Of course, it's an open supply and demand, so they are happy to share profits, and so are we.

Okay. And I want to ask, you spent -- your focus lately on expansion has been on the crude side, and your product fleet is aging. Is there -- when you look at the different two markets, is there kind of a desire or demand for product exposure or is it still on the crude side?

Well, we believe that you cannot have a strong crude trade without a significant product trade. And if you look in slide that George presented before, you'll see that we are still quite overbalanced on the crude side. So product is a segment that we like to participate, perhaps, more but again, only through long-term contracts with our clients.

And this is a very important point, that if we were to decide that the product market would increase dramatically in the next 12 months, we're not the type of company that will go order 50 fleet tankers. We would do it gradually in a systematic way and not really go up on a limb to order vessels without having long-term contracts together with these orders.

I think this is very correct. And if you look at slide 5, you will see that we still have more than 10, we have more than 10, I think 10 or 12 of our products right now trading on the fuel and crude, which means that without having -- if the market really erupts on that side, with a delay or perhaps, a two week delay and a minimal cost of about $250,000 on average...

To clean it up.

Per vessel to clean it up, we can turn those ships in products because they're very -- they are with very high quality, and they are very modern, and they can trade both trades. So we have this flexibility, and I think this is an important part if you look on trade, that we have the flexibility within a fortnight to turn a significant number of our existing crude carriers or fuel carriers into clean traders.

Okay, that is helpful, thank you. That's all I have.

And your next question is from Fotis Giannakoulis from Morgan Stanley.

Yes, hello gentlemen and thank you for taking my questions. Nik, I want to ask you about the impact of the better-than-expected U.S. oil production to the tanker trade. On the one hand, we have the U.S. exports that is a new phenomenon, but on the other hand, there is the risk of continuing OPEC cuts. How imbalanced these two different dynamics impact the crude tanker markets?

Yes, thank you. Thank you for those, Fotis. I think we have a significant increase of ton miles, thanks to the U.S. exports, and I think something that we will see increasing further. I mean, we were one of the guinea pig vessels, I think our Suezmax Arctic, when last year we took one of the first cargoes from the -- one of the first sizeable cargoes, more than 1 million barrels, from the -- that came through the Cactus pipeline down to the OXY terminal in the Gulf. And I mean, we are in discussions now with the major oil companies that are looking to create a VLCC trade for that. So as much as -- we actually brought that cargo into Milan, into Italy. So that's a huge ton mile positive discrepancy here. So I think as you correctly said, yes, there is a significant increase. So I think overall, we have had a 3.5% increase of ton miles mainly for cargoes that are coming to Europe because of these factors. On the other hand, we seeing that there is oil out there. Iran is trying to go back to its 4 million barrel per day target, which was the pre-sanction level that they were out there. Europe is importing more and more oil. We have already imported more oil in Europe than we did same time last year. So there is, as you said, there is a balance, we think. Libya trying to -- and Libya, as you know, for us here in Europe, is the main -- is the Venezuela of Europe, as we call it, for many reasons, that is. And they usually -- they were down to 300,000 barrels, and now they have doubled that. More so, there's more action. So we have seen I would say, Suezmaxes and Aframaxes being positively affected by these changes.

Thank you Nik. I hear, once again, your concern or encouragement to your fellow ship owners to constrain from additional newbuilding orders. I'm not sure if you're this encouragement has been heard. Year-to-date, we have seen 31 VLCC. Of course, based on the 1.3 million barrels demand growth, it seems manageable. At what point do we have to start worrying about it, is it at 40, is it at 50 VLCCs, how many do you think that they will pose a threat to your anticipated recovery?

Well, Fotis, our motto is that every single vessel, regardless if it's a VLCC, right now, the market does not need any more tonnage. And we do not need any more tonnage because, first of all, we do not know, as I mentioned before, what type of tonnage we need. I mean, there is a lot of talk about vessels with scrubbers. There's a lot of talk about vessels that will be gas, LNG, LNG fuel. So I mean, to just order ships right now, that will not be on the forefront I don't think it's a good business decision. But as you rightly said, we are a fragmented industry. We love to try to get all this all of the fundamentals in the room and we will I think, agree that no one should order any newbuilding, and as soon as the lunch is over, they order on phone they order new ships. So there's so much we can do. Joking apart, I believe that it is manageable, and the magic figure we have had in the past on VLCCs is if we see, on an annual basis, more than two VLCCs a week, I think that's bad news.

Thank you Nik. I wanted to return to the previous questions about your expansion. I know that you've been in discussions with customers about new shuttle tanker builds you had talked about in your previous calls. But I want to focus a little bit more on the LNG market. What has gone wrong so far this year, rates, they started very positively at the beginning of the year, but now they have come back to the 30s, at what point do you see the market tightening and are we expecting to see more opportunities for long-term volume? You talked about the Korean opportunity. I was wondering if you see the possibility of new final investment decisions this year or sometime next year, that they will give you the chance to invest again into the LNG sector with long-term contracts.

Well, I think, Fotis, first of all, I have to say that we are very glad. Although we were thinking that we were leaving money on the table, we are very glad that about six months ago, we chartered our LNGs for the next three years. And this does not mean that we do not believe in gas. We certainly believe, but it seems that the postponement of the LNG's market recovery, I think it's in parallel with the postponement of the Greek economy recovery. And because you have a Greek background, I think you understand. We are looking -- every year seems to be the year that things will start to be moving positive, but it has not happened. It was -- I have to say, to be fair, that it was the second half of 2017 and 2018, that all the major companies are expecting, I mean the gas producers, they're expecting the market to firm. I hope they are right. Quite a few of them are out in the market with big orders for future business, which is a good sign. But as you correctly say, this has been delayed for too long.

But it is true to say, Nikos, that over and above when will the next cycle up or down being LNG, the company takes a very long-term view on LNG as an industrial part in our profile.

Thank you both of you. I had a little bit higher expectations for the LNG market compared to the Greek economy. But I want to ask you about the demand for LNG. How do you view the demand for LNG, where can be the surprises are, from the upside or the downside? And we have heard a lot of people talking about FSRUs, some companies are trying to enter this market, is this a sector that you can potentially explore to expand into?

It is something that we are looking at, but as long -- as far as one of our clients does not require us to do something like this, we are not going to invest a significant amount of money to order these very expensive vessels. One of our ships, you might recall from our last call, is actually acting as an FSU right now, which is a very good learning curve for us and an experience. I think India is a place where gas is going to be very important as we go forward. I think China is working to reduce significantly its coal, so at least they can breathe in Beijing and Shanghai. And it's not so much the demand. It's so much where gas is going to be produced. And right now, there are gas findings in places like in Africa, East and West Africa, in Mozambique, in Nigeria, that I think one of the infrastructures is -- are going to be increasing in ton miles for that. It is a slower process than we ever dreamed, but in 2007, when we ordered -- or took delivery of our first vessel and that's why we have not over-expanded. Although as the Chairman said, we are very strong believers on the long-term. And perhaps, during my son's period, we will have a significant, more balanced LNG and tanker fleet.

Thank you Nik. One last question for Paul, I saw in this quarter, your interest expense was quite low. If I calculate well, it's around 2.5% of your loan at the end of the quarter. Is this a number that we should look for, why is this so low? And also, if you can also comment about your ATM program, if it's still in place and if you plan to continue using it.

Let's talk about the interest thing first. There are a lot of factors that go to make up that number. As far as this particular quarter was concerned, the final number, about $12 million, it did benefit from the termination of some interest rate swaps. We'd extract that, and going forward given that there's going to be an extra $100 million or so of debt, we would anticipate that on a quarterly basis, the number would be between $14 million and $15 million for interest and finance costs.

Can you also comment about the ATM, is it still in place?

It's been suspended temporarily. It's there in -- kind of reserve tool if we require, but we haven't been in action very much over the past few months.

Thank you very much gentlemen. That was very helpful.

Thank you.

[Operator Instructions]. And your next question is from the line of James Jang. Your line is open.

So I have a couple of quick ones. So on the release with the strategic relations, you guys mentioned chartering VLs and Suezmaxes. And are you looking to expand in the VL sector since you only have, I guess, like...

Three.

Three already chartered out, right? So...

Yes. I mean, we do not -- I mean, as you know, we just took delivery of our last two VLs earlier this year, so they're a recent acquisition bought against long-term contracts. So we are not looking, of course, to order or build any of those vessels, and we are not specific on the type of ships. If we have interest from clients, we will purchase VLCCs, probably second-hand VLCCs. There's a big number of very good vessels that are five years, and they are at very good prices, that we might look to take an interest from charterers. However, we are looking at more specialized vessels like shuttle tankers and ice-class vessels.

Okay, great, thanks. And for the -- I know you mentioned the fleet renewal on some of the older tonnage. So if you were to sell, let's say, the three Suezmaxes that you have 12 to 15 years, would you look to replace that with the same segment or would that just open up the possibility to build out, like you mentioned, ice-class or more shuttle tankers?

Suezmaxes are the -- together with the Aframaxes, are the workhorses of our industry, and I think we would be looking at Suezmaxes because they are an integral part. As we said jokingly, we are the likely -- we are the herds of shipping. I mean, we actually rent out to our clients whatever -- if they want a stretch limo, we give them a VLCC. If they want a compact car, we give them an MR so we have all the vessels, all the assets out there for our clients. But a lot -- I would say the sweet spot of our clients are Suezmaxes and Aframaxes. So we might be replacing them with Suezmaxes.

Great, thank you. And one final one, so just your thoughts on the MR1 segment, do you think that's going to be a focus of yours moving forward or are you guys trying to move towards the MR2s?

There is -- because the Mediterranean market is and kind of the MR1s, we call them, I would say, Handysize vessel, is a Handysize vessel market. We might be looking to continue our presence in that market.

Okay. So you haven't seen any expansion there, where that's kind of being phased out even in the Mediterranean for larger vessels?

No, no, no. Actually, I would say there is a lot of interest for the 40 sub or 40,000 ton vessels in the Mediterranean and the Far East. Those are the markets that those ships are trading. They are popular. The MR2s, as you call them, which are the medium-range ships, are Atlantic. They are more popular in the Atlantic. So they all have their own position.

Got you, okay, thank you guys.

There are no further questions at this time. Speaker, please continue.

Well, thank you very much and hopefully, we will be able to present positive results very soon to you for the following quarter. Thank you. All the best.

Alright, bye.