OSG - Earnings call transcript Q2 2022 | Overseas Shipholding Group, Inc.

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Operator

Hello, and welcome to the Overseas Shipholding Group Second Quarter 2022 Results Conference Call. My name is Katie and I will be your coordinate your call today. [Operator Instructions] I'll now hand over to our host Sam Norton, President and Chief Executive Officer of Overseas Shipholding Group to begin. Sam, please go ahead.

Sam Norton

Thank you, Katie. morning. Good to all the Trueblood second state presentation and allowing you this me quarter of joining and lie for for commentary ahead. the call of us challenges our for business thank the opportunities and Dick on results, insight and And into additional and current that offer our XXXX and presentation To other of forward-looking and X X narratives on start, I Pages be regarding may would that this website like the information to available PowerPoint provided direct statements, course our estimates everyone to the the on of during call. narrative an I consider that of contents presentation read carefully. this them part and The everyone and to are important of urge

than are may differ We and a about including control. our variety on of historical results statements perspective beyond and subject risks. factors, and future Actual those factors forward-looking by from will forward-looking more be OSG These our results. to statements statements, be could including anticipated offering uncertainties statements just by contemplated our you materially today presentation risk include affected

a available website, as we our later to and for own be www.osg.com. Form XX-Q being SEC's the of refer second well we today factors, discussion quarter of our the filed XXXX, will you www.sec.gov which For as Internet at these anticipate website, at

required. only legally Forward-looking to be update obligations any of statements statements, materials the as this do presentation may not assume as and any in speak date we of these except forward-looking

and morning induced measures we second in posted long tanker indicating closely our equivalent website. results key define over the our in during have important our to to shadow is $XXX market exceeded in In quarter us of financial the layup. on on to past and reconcile and hope demand the conventional addition, EBITDA GAAP picture our the two years. take destruction were led presentation most metric is tightening for released this million that of finally of to a charter It in to we non-GAAP return will fixture to We charter have It recovery to condition that release, which includes to year. risk represents duration adjusted seems bring The users longer quarterly rates business today to rates fix the comparable $XX.X to of and tonnage as our which COVID allow quarter time took conventional the this together with gratifying earnings improvements continued higher first best and for years, approach end for in the our eventually year, induce of progressive other term measures quarter market Time to demand financial fixture first to this spot certain to the financial have more the we of would receded. commitments. quarter that profitability the remembering fixtures voyage market witnessed earnings we supply is the months four million market pushing performance largely stringing many on for the that tankers, worth measures

this reminder, our call during what is a As early in I first May. quarter earnings said

rates. had bears a in thing. available tankers been remembering term spot Jones model affirming the vessel at quarter It Act, our our of earning and were market. to that is longer tightening days rising in availability time during XX% profitable chartering vessel good strategy first For knew a having charters freight attain Clearly, spot market

key belief pointed I chartering our to challenge warranted coming This diesel trading counterparts have was our links longer objective rates term from patient low demand entering the term breakeven the from for vessel charter favorable to gradually is that above would the remains in fundamentals volatile inhibit continue commitments. of fixtures. into This charter Now and our focus market for levels as renewable add the a a fuel to our owners in that a shifting some emerging quarter reach approach to markets risen book. levels, restocking of strategy perspective. grounded that to was rates first that out to be transportation part inventories building

The spot the out commission operating often the it supportive a to benefits at is But our is by our available by pursue, and July respond profitable to healthy sector not seagoing booked minutes. opportunities. vessel to noteworthy at both and of the are to the water the forward, over business emergence a fixed met, this time tankers of slowly, created standards years in be systems the strong XX having treatment to our have require slowly, earnings and working tankers top all strategies and to over charters is with XX niche book a shift up days of the done will conventional activities. steady These Dick out and both allowing shift OSG at weeks, truly vessels million of our that install by by the same should without condition X As niche generate charter conditions lay we conditions. June need considering and market of hard days point provided work the then we we in improving to vessel financial our time ATBs. cover. charting that XXXX. contributing and next profitable the the commodity challenges you close remarkable through when ATB when of of drydocking and market been trading new specific patience have and happen on case going vessel demanded, time. the of demanding Government businesses for past while period and in sudden of work seen to all performance staff to fleet comes no time July the every few the available return the recognize in and fixtures aggregate May, It seamlessly to and been of X in schedule, have charter ballast XX% lightering our the fixed to issues one operate first slowly, was things versus have possible years. and now XX% The now XXXX challenges results of vessels commitment the could mid and revenues. Israel operating In ready in results bringing XXs X.X affreightment take that to is to shore-based trajectory our of XXs, of important nearly employees, off-hire. our two to have realized operating our concluded extraordinary nearly With period balance vessels fixtures equivalent this these conventional the or in tankers period other have marked revenues of securing with chosen extending at no and been months working customers material been mid Thanks OSG achieved heavy of more recent work making in have of of years the across and fixing contracts $XXX of and cover once. for

been of state understood. Russian date fully Russia's The realized have Ukraine Turning briefly that to markets, the refined exports produced and suggests or the levels. continued crude to of in delayed. refined of Asia both on yet energy largely have continuing demand replaced products to oil have restrictions data pre-invasion global at products while of Russian crude Buyers EU have import be effects reduced the invasion of of

refining rates demand at sit margins have the products elevated forecast generating barrels X% becomes evident imports trading the XXXX prices have waterborne transport day X be the MR year next U.S. crude were and basis. high close on continue gasoline on Coast, oil steel in replace in utilization According market output product for energy On levels, balance, consume a East as Further, is supportive globally crude with increase, demand expand likely with trade healthy by production in more mile consensus the over sources in refined historical year PADD ban near-term. barrels Clarkson's shipped, disrupted to to resulting margins of oil what to XX,XXX delivered and demand middle day Russian day. fuel benefited more products expected. a foreseeable per of tankers fuels to barrels a diesel ahead. the date data products versus robust States. High These demand refined switching tankers can should well sourced the with tanker for this combine drop has effective, Act support sustained indicate strong about EU more particular Research, significantly to patterns, to on future. next should elevated products should products refining ton and strong X gas June increase our domestically and of imports to of view United international the than the tanker gasoline of sustain patterns should trade market per international is be from this, U.S. earned historical by to continue announced shipping. ton for Despite steps global Domestically, to equivalent developments continue dislocations the A trades, the of distillate rates energy over that, demand year, outside the per domestic in time demand competing within a even transport will international oil million refining above of tanker to forced MR assuming to which and international alter leading the Average expensive X% stand year. mile LNG inventory Recent impacted charter to particularly XX,XXX average level. to refining of less for cost and driving market healthy below even However, and means Jones fuel for Russian pattern, could significant averages. flows been more

would offer highlight to two once opportunities to dive provide feel deeper turning ahead. in the quarters the I developments a Dick things like into to will Before we that over numbers, again

early First emergence next been important diesel renewable both quarter, with trade. the customers transport the charter fixed commence marine of the of the demand. end significantly and increasingly new of will Two as continued their which engaged diesel in are has year, domestic driver most renewable at of contracts an

has see that note to renewable the transport has important year, dedicated as feedstocks XX middle of next it duration diesel many that days, trade, could a OSG two this be miles thus since or Florida. vessels Added in of to significant fielding Gulf the of to five could generated new already trade. Texas West, XX standard to duration this one a passably We are one inquiries the transported diesel Coast. U. for understood California more its It's The this to its Gulf all account from voyage the shipping to West times been possible the and to of to capacity. two roughly five and as last three can to to the vessels to fixed is as Overseas related the to trade November, demand, California Key currently of with renewable S. the voyage which that of U.S. a by in XX% sailing ultimately from join for by increased Mexico XX domestic available XX% boost from

often continue years, in role to not further the is recent we're the business this in is about Act seen and business. OSG New with emerging opportunities play will been growth and that in excited Jones

for the to Defense possibly to security of solidifying. is are tanker program of trade congressionally program Jones prospects an the U.S. approved as tankers. The a next many funded outside chartering expected year. as first Second, has indicated XX Further, ship be in the U.S. Consideration interest program. expanded being operating fleet the flag flag stood additional during in given of ship approved six expand XX Department up to Act is U.S. and half

of the Achieving and programs. Depending the current Overseas Santorini and a government fleet. requires is Our positioned to opportunities these benefit the benefit commit those additional operations. owner the operators, of possess sized ultimately and and flag well pace merchant resources deepen programs from beyond tanker fleet to normal to currently right mariners objective experience tanker extent these to skills all pool who requisite for required U.S. plan goal Coast of for constituents, on who programs Overseas could support of to these Sun arise. A and the and to growth this well domestic and vessels agencies Overseas are broaden labor add Mykonos prime our

working long-term to a is important industry, and for our a partners leadership Dick the reality. this ensure call approach on provide meet to viability. vision and has the expansion needs to its government you startup over role to details common turn in second Our XXXX. now will pace OSG of make with taken to with to results labor further Dick? quarter I

Dick Trueblood

an quarter. of increase environment. the increased comparable rate Thanks, Sam. increases. continue X. X.X% $XXX trend to an $X.X in year-over-year XXXX year million. increasing adjusted million QX The for revenue $XX.X prior million $XX.X revenues turn revenue the the TCE in Please quarterly sequential Slide and QX $XX.X increase the revenues market quarter XX% from was and rose from ago exceeded million, TCE million of from or active EBITDA EBITDA Adjusted was quarter. remains The

shift duration three have quarter, years. to increased we commitments. Contract a in short charters from reached duration the some durations saw cases During away

X. As both and Please renewable product. end from Gulf trade the been an the Oversees at to of revenue increasingly Principle each returned the service Slide for to U.S. turn of diesel feedstock OSG reactivation. market during the the is in of has their Tampa there additional active XXX Vision May, Sam vessels West mentioned, Coast. the Mexico refined to the transportation quarter, and providing from layup days We remaining two first

to Our full now quarter that QX. vessels fleet first the active during two a of is XXXX's operations fully during and returned quarter provided service

in tankers QX. return had to we when days XXX ships continue employed Our in XXX service. began days Comparatively, employing QX Jones reaching XXXX upward conventional days in trend Act we to their

QX the before Overseas underwent in Please drydock of we installation Tampa OSG water 'XX. available for in and operations, XX% this our service required during lay in vision system component second of returned quarter. XX early of days a to Lightering volumes left commitments. minimum our late days treatment return surpassed their by Santorini the from employed XXX up XXX’s as security Our which to In of time units Slide to the the service. Mykonos May. rose ballast lower charter, X. the was participate commenced to The fleet with continue are days May XX% The up revenue lay and stable Israel. and the total increase to of declined to remain our program from driven period total, slightly had contracted. she ATBs, during in two quarter volume continue rates two as here and services on in average operate OSG as customers maritime the to both provide Government Revenues employment turn

quarter Sealift the the one GOI voyages voyage and complete to we Military performed Command. for During

of were Government MSC performing the as we quarter Israel one and voyage. Additionally, concluded one voyage

described quarter. QX Act the As revenues previously in increase increased non-Jones with Revenues from prior the a a days, result tanker environment. stronger for Jones revenues increased $X.X quarter. were million tankers increase Alaskan employed tanker Act Act and handysize $X from $X,XXX,XXX tankers XX. increase million rate based tanker shuttle coupled Slide a on 'XX consistent by Please revenues Act businesses with The to the niche non-Jones driven product in Jones revenues. registered our turn from in the first

As previously of international OSG increased service. voyages MSC returned all mentioned, voyages, and to lightering contributed, rates as Israel Government the higher XXX revenues

more quarter in The the of niche the first performance. Handysize reflecting Act $X.X service. contribution to ATBs XX. quarter. sequential to QX combined their in improvement contribution consistent of increase utilization was in Alaskan and an EBITDA Turning activities, the vessel this Adjusted Vessel return million quarter. rose vessels $X.X contribution based improved $X,XXX,XXX rates operating contribution environment. continuing Vessel quarter, current from from improve increased higher size XXXX vessel Jones $XX.X to the compared continue its performance provided quarter $XX.X associated XXX the of in turn service. of tankers Niche market first to million, operating Slide operating an to current in our by to million from a XXXX the freight Tampa XX. time quarter remained to service, turn million Slide principally vessels represents tankers million from market continuing as operating $XX second and $XX.X Please quarter, oil $X.X the and The million improved well constant contribution conditions market as the Slide XXXX charters. costs to on between million the Please current to contribution contribution as first return tanker Alaskan increase, increased OSG Overseas decreased to the vessels quarters with quarter. and and committed of ATB Compared due $XX.X in a of the the activities million XX. prior were slightly all on crude to

net from quarter quarter $X.X as million a million net COVID-XX loss results $XX.X service compared year returned quarter. in from million Please turn improvement ago was as and This to income have in Slide has to continuing to demand XX. the the $X.X a operations a first lows. Second returned loss of we vessels

profit carryforward governed us. terms profit, taken specific Shareable all to to for we continue we bareboat OSG for there information here is for Shipping arrangement an dock for any picture profit to bareboat provide These The the in the layer profit as current underlying American informed the chart profit share estimated anticipated and an information AMSC per if were any, of XXXX be the As the might future due deductions to TCE In will of between if through average payments be to on our vessels, existence $XX,XXX of to that wanted determination costs, In concerning exists between split XXXX, day of be which across the estimate information contract defined no whether XXXX This the results prior by by to average management be per provides losses rate average the our profit for reflect an achieve at items, Company. other of dry reflects day, on assessment we improve, the while seven under vessels are charter share from through we to the year XXXX. for the conditions. XXXX sharing sharing among TCE OSG would bareboat is currently we vessels any any look between profit Thw We we in as share. market profit The December $XX,XXX rate each and evenly after not an chartered calculation, XX of XXXX AMSC profit the what There based XXXX. fee, of used AMSC, share. of sharing. based achieve deductions information of charters XXXX, vessels in X rates. The X redelivery include, profit there deductions subsequent not continue in any all sustained on markets to vessels 'XX. provides 'XX develop account there determining, in into XXXX market slide XXXX. of years share parties. AMSC provides be is will and AMSC the rates will to vessels which OSG is from an if estimate

had costs that Finally, the noting share have of if $XX that Slide is to outcomes future. in million. At will XX, of total are profit The worth assumptions average possible in XXXX, and complex a cash be Please meant calculations chart minimum are to declines the made. the is indicative it on XX. result factors based variety turn rate involved. recovered we certain This March

$X of was vessels million in quarter our Working million quarter, adjusted and payments. we million result to we Please generated We $X Slide of to $XX we with drydocking $XX made used million and expended the EBITDA. the $XX turn During cash. on debt ended XX. million service The capital cash. of improvements

Sam? half indebtedness comments our equity in $XXX equity, total back $XX.X to represents Our to outstanding turn like Scheduled debt a million. is XXXX. to was debt since amortization net of I'd million call concludes on XX $XXX time. million. of my decrease one at June Sam. This the statements million $X loan ratio With is March and the financial second This in

Sam Norton

quarter OSG's facilitate core fuel international conditions well of changing positioned transportation domestic shipments, patterns evidenced trading well second as emerging results as remains Our our in many to healthy respond and of operating markets. opportunities over see. gradual and continuing a fleet important the to charters profitable next that time cash realized. build utilization anticipate at in we several balances metrics in to higher rates quarters leads us improvement This available the are all as financial to

are fully As available XXXX noted XX% for included our the for are per days during of next for current fixed. with rates from in available operating Rates the tanker delivery days $XX,XXX of obtained day XXXX and of ATBs fixtures several and recent have earlier, to mid-XXs. balance also for XX% year. vessel fixed Periods XX covered the range charter contracts period been exceed time X months fixed

the for All second the of and us towards expected activity this into gives good results visibility of XXXX. XXXX half

For produce improvement quarter, quarter-to-quarter continued TCE should cash in healthy flows. the and sequential third strengthening fundamentals

first and We TCE increase over the and both results. to expect quarter sequentially second EBITDA

is million For final XXXX of and to charter Attaining quarters to now to of targets of free combined, we forecast. for due two time vessels payment period. American achieve cash the $XXX $XX result in earnings for before of capital accounting now half $XX in million Year-end EBITDA balance these six expect $XXX for million $XX approximately about the million approach obligations redelivery changes second upon of before month adjusted year should the of equivalent this and million December. over the Company flow the Shipping in to deferred working cash

further believe for Looking current trajectory performance trends, throughout absent market to in of healthy XXXX solid the the offer we ahead fundamentals continued financial will XXXX. prospect changes

our EBITDA for XXXX result for some in redelivery be stability balance year cost contracts, generate in million. fleet allowance cash with profile bareboat top-line between and flow flow cash anticipated $XX due this translates deducting expiring After $XXX earnings to vessels and expenses, attaining we equivalent $XXX adjusted debt charter the million on million XXXX. of of time to in reduced and size financial approaching should a positive increases, $XX has in forecast to current Our $XXX sheet. the of free factoring anticipate ahead More all for free improvements quarters our service to across million capital million

a investment reduction on flow will in and arise, opportunities, cash surplus outstanding prior acquisition share will be stated should with under regular calls, conversation. of As repurchase of growth topic use part it this conversation all the debt board, of of our shares our program be of continued

operational course, that a everywhere lean steer corresponding a market with good of shore top challenge performance time will of of requirements based the line. becomes forward volatility add on will the any environment and set get is the now tanker Operational revenue ceiling that be in truth pressures the of significant. is now earnings. security factor we will our the the deal and earnings, the pertains Of to fully extraordinarily with we've to that what our seagoing removed layers on With tighter achieve inflationary evident reduce cash labor to our that serve tight and realizing that advent look set of only on we continue loss fixed virtually the and have can tighter staffs, key off-hire execution we program, regulatory flow expected other as

call unique questions to forthcoming. focus to using Katie, may mission future. on be and shifts to that Looking position operational OSG’s you. to now better ahead, and to a up a ourselves the for our we Over excellence can now franchise open execution

Operator

Needham. our [Operator from Ryan first from Vaughan take question Instructions] We

Ryan Vaughan

follow to there, first, from that. appreciate covered you've the maybe been said things toward the ultimately your remarks lot you shifting you've couple and a But on a I of to probably in market me And a questions Sam, position company. Just about you hard alluded you lot working prepared up things first obviously duration. still took -- being spot I'll just there. But that end. of a to

six West months Just five? getting XX to with kind you a know questions of it you the longer, to was six the up First what months? a driving there. did could of Are plus some anything diesel mentioned to all, before couple two XX then of be additional duration that vessels also months. And versus Key took the you months longer And renewable we One, bit what's little diesel which you the of from traits? renewable think I years. on some the mentioned

Sam Norton

What in appetite the desks I ships people's drives better on is the of think duration taking that charter. these really than choice are of risk

for We've two generally our next players in A I today I new three chartering towards are securing capacity. tightness duration a X number Energy expanding of of lot think year two then that all we fixture leaning new emerging production clearly One and customers. customers so couple months. the handful the to There longest the diesel we’ve tied have out results. West as us of is of Group, is West Vertex of renewable of a plants quarter of market that venture, the Darling-Valero of of years the it we've tankers been Coast more some capacity refining is are time, the renewable of Renewable for well. I Coast capacity as pictures in the year, fixtures are in for all renewable joint are six some and We've not Mexico, their of feedstock only sense X movement and gathering also Mississippi ATVs. on X through The a diesel. coming therefore taking optimizing recently diesel mooted true trading concluded, XXXX. that think shifting coming commencing in potentially is and areas but has to the are had and of online renewable to diesel, years, for that sort transportation first There seen and kind the River us the the as way one maybe over being for or The that sensed there to Gulf fixtures, end renewable visibility things. the said, fixed moving of diesel that fixtures, other

increased we factor a also in was the that have demand that So seen.

concerned for steady capacity in are that don't conventional be refined Again, beat As of in shortening visibility two view, fixtures sense be competitors, to some players their of ourselves our by forward. for to pretty traders we the product left of a able key that move conventional seen trade. is to and to trades my one far going as without a three year the driven have want some to product,

Ryan Vaughan

Thank free and also all time helpful. EBITDA flow, cash you. you cash guess for thank revenue the the That flow. is And free charter I then and

at I just Thank the point, in that that to alluded to quarter, million going you you XQ, love up, with your another the presentation, down is at million also heading year. to you going is going mean, XQ least that's right are $XX Just debt for around the million a direction That's seeing and love the $XX plus every charts million the just [amorts], $XXX ending cash seeing today. Again, it's seeing year what plus in generate and these the service year. $XX - million you're next bar your but $XXX continue. debt

year see and through credit just sheet this those last waiting position challenging to mean, towards I $X with cash that and working place a us, did been has talk it late the million to XXXs, all that going us, buyback the just for next of huge things here. year. there sea closer the seems to million to in really the in end But and change meaningfully from team change going probably perspective, we to forwarding talk something $XXX of Just Again, out in quarters XXXX but in share and are the fast June, of balance being like

Sam Norton

defense these a opportunities, areas Act X next clear we return. we is the to single Absent continue said, things a are And lot then in hydrogen the offers right And quarters. at. that want the at. at the think expansion up arise, that fleet, of I and over expand that build some to something overall debt opportunity some the carefully that There been that program attractive things pick I always some, security of emergence really development remarks, we've sensible flag return trade Washington, flag the that the that's past some us opportunities U.S. X that levels dividends, continue either of reasonable of of non-U.S. return COX areas certainly to had future, if given now. shareholders. look investing fleet repurchase, for energy investment looks Act whether on of type some through some we're operational we cash speed return other non-Jones see use in reduction like to the said visibility transport, programs said, have in our department my looking And sustainable the in obviously, capital Jones that at focuses ammonia, to the focus Look, asset Yes. as capital, as the that our markets, I we through earn and going trajectory sort of said, as capital in reasonable to we for U.S. to two pretty other rates of there think in types and or cash, certainly. on we opportunity thought often we maybe opportunistic program prepared way that's of to increasing other what to discussed We rates I've possibilities opportunities are of execution about how it's I non-Jones could that shareholders, of look share to carbon, or and the potentially Act more has or at be as that hope, that

So having flow is a cash problem. surplus good

some a conversation much and balance of the even year. around this next time, enjoyed those through more we having for look We robust opportunities that to forward year as but haven't go problem

Ryan Vaughan

after? for million is now? sorry, -- it know year, just you're leaving you XX%. a jump you you Or with Great. And get confidence that a to there little do maybe just probably That's just evaluate some you came more. better bit seeing. back, in we'll And -- little And bit but said to I Is then touch Q, helpful. what then are a can buyback, certainly that XX% -- of describe $X into $X just through huge million through it think place? that how the see -- you're and there's next vote then happy

into let's duration. spot of XX, Where fully, the be do You XXX the to toward say, of are we where of the closer from XX, be, any by looking you call year? approach would the -- year. to the end more model just want shifting to next want end you sort Do you to it, in? Just on update year as

Sam Norton

into volume shares shares $X so much able think But can Look, for my level continuing is both how limitations that are current limits our for share probably own repurchase trying day foreseeable can some take steadily going that conditions. week. of of on that to the day, is to the right and or applying and now every we there -- we're given acquire be questions. many that steadily traded I given sufficient repurchase, current in shares overall we're deploy that view to do future. to does the any our too And given how purchase to account. be those upper market price detail, expect on to volume share Without million are structure quickly set knowledge, capital we're we So program

we that For the how right To we -- maturity charter? happen at really past, to next, the risk don't be from lot much There's levels. are might proper -- extent that from of at rates term that to risk we the of the one think of market, have a remunerative that that's the structure representative we've because would XXX% of for charter kind see economy. seen And probably there's come still time yes, now we have period going the think on the we on time think ships. where on I on think or to external charter. in levels we we right just of fleet of we period A with our of rolling going of are the shocks gaps as unforeseen vessels have Would on we in I the versus do between. put in near put risks our to forces. XXX% circumstances charter? sit. that depends There's want our things

is as thing. having And probably a could given market the firm charter trading in -- much transfer that vessels that, overseas have put in vessel have freight Gulf We Government international exposure bad operate the are vessel quite lag that have us that the fix not don't limits of into because in frankly, around has happening also a in theory, to on and we in Program, have spot pool well. those We Santorini, spot time months. have in with non-Jones exposure. on them a Mykonos to try and trades Security our we ability contract. market with defined Coast contracts the term. in of that to pretty could move out we then the I But U.S. the really But the partner now, that our Israel. certainly right the plans give rates market stay that flexibility on Act work and spot time Israel our to and that The have see charter away that and trade to participated In to fix Tanker near

wouldn't much So it achieve really security. that

-- of kind the spot that do We some do year. the in half charters off spot and We their Jones quarter are non-Jones in off market a as current fleet. into have this contracts where Act of have said, some, concentrated. entering bit next as first exposure our that's our fourth year charters existing of into is exposure So little Act ships position maturing year. It's vessels next I of come in

spot. gives quarter there some should pretty the strong gap be month. a historically, a of fourth bit a that think us We there's So

that probably tell So thing. be that. good a exposure on But will spot having would time

Operator

The Konrad question from comes from gCaptain. next John

John Konrad

I'm there, department, industry. wonderful just just doing the about hearing your a things work chartering great Andrew over throughout

Just now the talking news was talk ago, Grand number we A ongoing about tanks year are about things. sealift is, to ago, monitor and hear the My not of a from merchant of situation. and much lack the there and great Georgetown fleet capacity. question Harvard the X military years think

from And press all product not Navy problem some maybe, But or security since them bunker and all. not -- at are from of in the of think is tankers closure the seeing Hawaii Hill now that we're them national even fuel the nothing facility of saying biggest and specifically. hearing tanks much despite -- Avgas Navy's Red MARAD this we're pushing the tankers, itself the really from

as wondering those tanks you to on Navy contracts I How So that close these do process hulls. is just the out was continue push. provide think with what and

Sam Norton

that I -- write it's in that But them why in gave process public correct seek testimony, the MARAD identifying support you're they for I sector think line public a running. of supports think really Washington year domestic Washington. I program of And intellectual and hearing the maritime tailwind is out juncture, has it's participate around interest risen at operators and the tanker this the community They're again, matter months have tanker see to to not for by from time writing quite to for of action end that this in of before much stated to up rules because Congress year. expect probably the security with to begin of in their a that confidence Congress you're before rule now, they applications state end right a in they real that testimony U.S. that. which comments. there's we their bit to this the amongst start MARAD program. the go getting the Administrator can a on program flag in

helped, has discussion Hill support Capitol quickly and program a commenced. of I And that So get lot some my I fully many program for that by that, phase, and try that increase said the after is next be remarks, fully pretty been in time the the been XX-ship will take authorized and process to has about XX the look current on application as populated funded which line foresee as ships. to would there perhaps control the And that fleet a and for as perception or prepared Congress of I the control the that mission. assets support around are And be particularly in to by it today. as that adequate Navy momentum to the world larger fuel, -- the would of moving meet the it noted, say, on is may geopolitical my the trying build comes a have under the view, you many when events to or not that potentially under but the unclear, going the for are is

the fuel the sense down. You of -- Department as made that sense -- I to of their And Red Red Defense or then, is about that needs shut be not is said, to Hill. instead rebuilding our Hill that that from of information disperse Yes, received comment around our the providing a storage strategy assets at by we've ships is tankers to fuel combination that enhance for on a to would suitable those ship-to-ship some capability position capacity also MR Pearl vessels. tankers Harbor and Navy smaller transfer Pacific fuel using capabilities to those storage storage the be forward and

is quite the in future, problem pressure All at bit of in that resolve Red Hill. Defense the is the on to the view. far future, or able but of not the of in to Navy be There Department my a on

being as things of we the said, is going out to should that equal, within I So next this play months. resolution how see, several I think all

John Konrad

biodiesel. going to of this coal on anything use the that not closure exported, and solar solar thought more have and now wind diesel, the move panels have burning the LNG there what's geopolitical, for yet is market so and to they ESG, the to add potentially to enough want being else potentially they're to there With Hawaii biodiesel? your -- of energy there to facility And dynamic crunch and And they're you see the going electricity. but don't in also you

Sam Norton

from really is biodiesel Hawaii would in I refineries what terms plans what in are their X My sense know, to of speak I Hawaii. there be. can't

One recently not at them, until of least operational. been has

from crude an probably to a fuels other of oil some burning, refineries or that diesel increase if have demand. Hawaii into for think comes is there's in in don't But Act Most see the Jones there Hawaii. I of would material on might So for demand into and the coal imports substitute would that that outside you increase that satisfy the my impact sense need, crude goes U.S.

Operator

Instructions] from from comes [Operator Value question Mullins] next Investors. [Clement Our

Unidentified Analyst

wanted authorization. on up I share start by on to the repurchase question Ryan's following

Although provide become in should your end. stance be something you you regarding commentary Is offer some mid-June, a volumes instituted had was on that shares some before And going a considered? would quarter Could buybacks additional it limitation? forward? repurchased tender

Sam Norton

want you that do to take one? Dick,

Dick Trueblood

of rate. amount been And at The trading to shares continue that steady has -- shares a we fairly every buy day.

as Sam to are, how can is We has on limited mentioned, only We so. doing the market isn't the more prepared day, the on in predicated by certain would the there's actual many way comfortable But table stock. of sort think rules something stand shares we're buy which with per available in our liquidity a volumes. currently. different, for basis it that's increase a of as part daily that's to on is future and we The And do shares anything interest discussion, currently. a operating might but I I think really be of volumes it certainly amount buy

Unidentified Analyst

trading are discount significant normal shares at Your valuations. a to

wanted what looking also from you organic of XXXX? about And I attractive. year very and into the of kind requirements half are are to CapEx repurchase ask So at second the

Sam Norton

handy? do numbers have you those Dick,

Dick Trueblood

to be that actual that in first from than dry anticipated we year the which couple a a dry will is are last year. the year we to the of dock This now. balance drydock this has half half occurred occurring of say the in in would either dock. because have of ready we had We from dry year. the of as not of activity got that the had Much of the second the from the different experienced or otherwise Tampa getting couple much slightly the in speak I we go deferred would or docking We've year heavier is costs ships year.

we brought we that when So do to it into service. back had

Operator

investor, private from question Joshua. a have We

Unidentified Analyst

a with the last probably team just off, of years to First navigating OSG both for want X you and I whole COVID. congratulate rather raising hair

off, congrats first on that. So

is of XXXX of COVID. sort And been this sort see have not quarter second quarter it should you in were the for of in where

I So specific have questions. just once there. X again, fairly congratulations

Do Delaware do first that? see distillation enough I they're Bay at bring to know with to vision announced Paulsboro. ever business probably The Or going the you be restart to Bay? crude is adequate just has the horizon do you ever lightering. PBF the lightering think back that going for to unit Delaware recently to

Dick Trueblood

It's never. -- it's I would unlikely, Never say. but say

as report think have kind continued Vision continue the lightering our to consistency I done because that's XXX been of with past we or part -- niche just of sector reporting. OSG to

little revenue of transporting scenario The going part is over that maybe fixed conversation forward vessel a And oil forward, lightering a I the going and team that's ATB a for think conventional bucket year out to to into think trade. just EBITDA conventional likely been mix ATBs. I shifting the do has our probably and crude of more that.

there's up better flexibility leave that We to a vessel the use But that to volumes. really or vessels have of should unless the in in so for to fixed increase the volume, speaking, hanging vessel trading just extra XX% significant off we're a lightering way around, XX% speak, incremental vessel allows to pick need arise. conventionally do so practically us to

memory, PES, of X a lightering customers previously that Sunoco, the flywheel have service. X refining more volume, really was down, half of needs Bay. than think a Delaware million that that of month that investment we that X in out I refinery remind that that barrels the went minimum operations. the you took to meet half to sufficient the X, the When volume minor of commitments. They probably commitment I offtake is had from the remaining the for but

kind So again, would that little in even the Delaware if Bay, a hard it's put we more economic to vessels X remaining sense. customers, of of got service out volume bit make

Unidentified Analyst

on them. X whole what realize starting the is of loss PES, PAD think, that's as The Getting a to to next I meant for question.

transporting You mentioned and on congratulations again, once actually it.

that And that on market it and have emerging, of you heard clearly, think that this foresaw mention time I maybe I top been did. guys you others before year renewable about diesel. was last

PADD soil can if the You X give I so, product know from hear have my both coming online Bay Marathon I X. are be the But question. me a might mentioned Would of Area. to PADD Or final renewable to you mention really And going feedstock. and what idea feedstock? that diesel that that did Francisco might that you And large oil? transport Philips be XXXX in projects there's little I San you know be? that's actually in

Sam Norton

to was us feedstock surprise renewable coming West a the -- Coast increase of have well. Mississippi production feedstock the So is that's little agricultural out too diesel River. the also much the bit a in is perceive up the for of of on we going for detail, creating begun into as what that down demand Without centers

next these as I we haven't of said, commencing one -- fixtures is year. So -- these

carried. than that and we've going towards looking you're cargo at agricultural loaded, tallow, byproducts. be approved signed. party, could That's to seen other that that cargoes my sort is fats that types that thing waste agricultural So at collections, of that It's it's by of the sort and soy the thing, charters we of fat sense were haven't the products, looking of products, actual part and contemplated on product cargoes restaurant, agriculture be lean would the But more tallow sort charter my oil sense. rather the but grease soy list of or

Operator

We no further the line. currently have questions on

team closing back any speaker hand our for to I'll So remarks. it

Sam Norton

forward you and future. opportunities the soon us improving Have report again. forward for again. move improving continuing again, thank a all to for to us day. Katie, to in look the as all we joining you, And Thank good you future. you look We again with Thank earnings speaking and into

Operator

This lines. for now call. your today's Thank joining. all you Please concludes disconnect

Overseas Shipholding Group, Inc. - Ordinary Shares (OSG) 8 Aug 222022 Q2 Earnings call transcript