International Seaways, Inc. (INSW) Earnings Call Transcript & Summary

Good afternoon. Thank you, everyone, for joining us today, and welcome to the International Seaways 2020 Investor Day. I am David Siever. I'm Vice President of Chartering and Investor Relations. By way of a little background, I've been with the company for over a dozen years and have a very broad shipping background, covering everything from finance -- I have an MBA in finance from NYU -- to everything from bunkers to operations to chartering. Before we get started, I want to go over the safe harbor statement that we need to go through. During today's presentation, management will make forward-looking statements regarding the company and the industry in which it operates, including statements about the outlook for the tanker market, economic forecasts, our strategy, anticipated financing transactions, estimated bookings and TCE rates, estimated capital expenditures, projected dry-dock and off-hire costs, our ability to achieve our financing and other objectives and other economic, political and regulatory developments around the world. We'll pull that slide up. Any such statements take into account assumptions based on various factors, including our experience and perception of historical trends, current conditions and expected future developments. Forward-looking statements are subject to risks, uncertainties and assumptions, many of which are beyond our control that could cause actual results to differ materially from those implied or expressed by those statements. Factors, risks and uncertainties that could cause International Seaways' actual results to differ from expectations include those described in its annual report, quarterly reports and other filings with the U.S. Securities and Exchange Commission. Turning now to Slide 3. We're excited to have a number of International Seaways' leadership and management team members with us today who'll provide an overview of current tanker market fundamentals, International Seaways' strategy for capitalizing on the robust tanker market and creating long-term shareholder value. We're also pleased to have Erik Broekhuizen who's the head of tanker research and consulting at Poten & Partners, which is the largest U.S.-based shipbroker, and he's going to discuss implications of IMO 2020 and changing trade flows. Turning to Slide 4 here. I'll just go over our agenda here today. We're going to start off with a safety briefing from our Head of Fleet Operations, Bill Nugent. And then our CEO, Lois Zabrocky, will give an introduction to the company followed by a commercial update from our Chief Commercial Officer, Derek Solon. Following that, our CFO, Jeff Pribor, will give a financial update on the company. And then we'll hear from our Chief Administrative Officer and General Counsel on an update on our ESG efforts. And then finally, we'll hear from Mr. Broekhuizen on his IMO 2020 update. And after all that, we will have a Q&A session where you can ask any of us any questions. I would now like to introduce our Head of Fleet Operations, Bill Nugent, for safety briefing. Bill has a degree in naval architecture with nearly 30 years of industry experience. He's had a wide range of roles with our company over 16 years. He was the head of our newbuilding program and personally oversaw 50 ships being built. And he was the head of our global technical projects team, and he was the leader of a number of business transformation efforts. And he's now the head of our fleet operations and is responsible for the safe, reliable operation of our fleet. And he's also overseeing our Get to Green efforts, which addresses our environmental excellence programs, including emissions reductions, waste stream management and responsible recycling. These efforts are a cornerstone of our ESG efforts. Bill?

Thank you, David. And thank you all for joining us today. Safety is core to our culture. Our customers expect safe, reliable operations of our ships, and we make safety a key part of our daily conversations. We ensure that it remains at the forefront of everything that we do. And these safety moments are one of the tools in our toolbox to make sure this happens. First, a bit of housekeeping. Everyone should be aware, there are no scheduled drills for today. If an alarm sounds, it's an actual drill -- a natural alarm, and the building staff will direct us to the doors at the back-end side of the room and then out of the building. And please listen for their instructions if that should happen. Now please let me share a bit of an explanation in a personal safety moment. We start each day on our ships with a safety meeting and then each test that happens onboard, we have a toolbox talk. And during these sessions, we talk about what we're going to do, how we're going to do it, who's going to be there, what tools we need. And then we talk about what can go wrong. And this is the most important part. By talking about this in a meaningful way, we can, of course, avoid an incident from happening, but we also avoid what's known as risk normalization. Risk normalization is that instance when you've seen a -- done a task or seen a warning so many times, you just typically become numb to it. The tire gauge light on your car is a perfect example. It comes on. I've got to get to the gas station. [ Nothing's happened, ] I'll deal with it on Saturday. A month goes by, the light's still on. Then it rains, it snows and you press on the brakes, and the car reacts unexpectedly. Of course, it is avoidable because you've normalized that risk. A seafarer will bring a ship into port and tie it up at a terminal hundreds of times in his career, hopefully, never with an incident. But there's always that chance, he'll wear his gloves or wear his hard hat or put on his eye protection because "I've done this before, I'm in a rush, what could go wrong." And of course, that's the day, unfortunately, I'll get a phone call. We have an additional backstop to prevent an issue there. Should anyone onboard be less than fully prepared for their task, any other crew member is expected to -- more of a heavy obligation -- to stop the job. They -- the captain, the cook, it doesn't matter, can stop the captain if some -- if they believe, for any reason, an incident is -- or a situation is unsafe. And we train our people to be openly receptive to that feedback, so that they don't get that tense reaction when they're criticized or challenged and accept it and then can deal with the issue. [ We have ] meetings in our office, we have a safety moment to highlight any relevant personal safety experience. If you keep it personal, it's more effective. And then it also helps us maintain that shoreside safety focus but also remember what these sailors onboard our ships are dealing with every day. If I could share a recent instance where I became completely normalized to a risk, perhaps you might find it similar. In the past 10 years, I've traveled about 1.6 million miles for my job. The ships don't come to me. The shipyards don't come to me. I get to go to them. And I've boarded 100 aircraft. And if you get to know me, you'll understand that I will figure out how many times I've heard that safety briefing. I remember, it came up well over 1,000. I sit on the plane. Just like you, I get my papers out, text my wife and kids, let them know that I'm okay. I've got the fancy Bose headphones on. I haven't looked at the safety card, haven't paid full attention to the safety briefing in probably far too long. A few weeks ago, I was flying to London. I'm feeling exactly the same thing. We're taxiing out to the runway in JFK, thinking about what I have to do the next morning, how I'm going to get from Heathrow to downtown, what meetings I'm going to have, headphones are on and the flight attendant comes on the PA system, "Ladies and gentlemen, thank you for joining us this evening. We wish you a pleasant, restful flight. Hope you'll be able to get some sleep. We're going to make you as comfortable as possible. But please remember that our first and foremost responsibility is keeping you safe." Headphones are on. [ Heads ] all over the place. And then he said something that stopped me cold. "I know you've all heard this before, and that's why you don't have to pay attention, but if you can't close our eyes, if the plane is dark and reach down and grab your life jacket, you really need to pay attention," and I couldn't. [ Resonated with me ], he had stopped the job for me just as that cook or the cadet was supposed to do with the captain. And I thought to myself, "I'm the head of safety at a major oil tanker company and I have fallen into exactly the same trap that everyone of -- we try to warn every one of our seafarers about." When I had the chance, we were up in the air, they're making their rounds, I heard the flight attendant's voice, I called him over, told him my reaction, why it was so important to me, who I was and what I did. And I've said, "This is the most effective safety briefing I've heard in a long, long time. And I will feel this experience and then use it in every crew conference I go to, in every investor meeting I attend," so you get to share it as well. So my request of you to take away from this is please pay attention to those fire drills in your office, to take your briefings on the plane, they may help you one day. And then as that flight attendant reminded me, here's a good example, that nearest exit may be behind you, please be safe out there. And with that, I am pleased to introduce our President and Chief Executive Officer, Lois Zabrocky, a graduate of the U.S. Merchant Marine Academy in Kings Point and one of our longest-serving employees. Lois has worn nearly every hat at Seaways. Many in the industry know her from her time with a chartering desk, fixing ships at all hours of the day and night. Others know her from her days running Aframax and Clean Products Tankers pools. She served as the head of our Gas business unit. She served as the head of our International Flag business unit. And we're very, very proud to say that this year, she adds one more hat to her very impressive collection. The Connecticut Maritime Association in April will present Lois with their highest honor, the commodore's bicorn hat in recognition of her industry contributions through leadership and through integrity. Lois?

Thank you very much. Thank you, Bill. A big welcome to everyone today to International Seaways' third investor day. We're kicking off the year at Seaways in a fantastic place. We've all been waiting a long time for 2020 to get here. We're pleased to have so many of our stakeholders with us today: our investors, our analysts, our lenders, our team members, our advisers and members of our Board. We truly appreciate your support. Today, we will hear from each of Seaways' disciplines. And we will welcome your questions after the conclusion of the formal presentations. Today, we want your key takeaway to be: Seaways set out 3 years ago to rebuild our company, to enhance shareholder value, to put the company in the optimal position for this market upturn and we have executed each step of the way in a very disciplined manner. We will continue to grow our company in a disciplined manner as we go forward with Seaways, optimizing our value and taking this company to the next level. We are proud of the way that we've upgraded the 40 ships that make up the Seaways' diversified tanker fleet, and we are ready for the market. We've been busy over the last 24 months, positioning ourselves for the upturn in the market that we are now profiting from. We disposed of older, less [ efficient ] vessels that were facing extensive capital expenditures in sectors that we thought were underperforming. And we brought in larger, more efficient, more modern, higher earning ships that are now showing their true earnings capability. Right now, we're in the midst of installing scrubbers on our 10 [ modern ] VLCCs. This weekend, the [ Seaways McKinley ] sails from the yard with her working scrubbers to join the robust VLCC market. As the team who was spending [ bulks ] on the ship, they load up with fuel oil in Singapore, $700 a ton; high sulfur fuel oil, $350 a ton. We're looking at a $20,000 per day savings on the first bridge that will pay back the scrubber investment in about 8 months. Now do we expect for the [ ARB ] to be $350 per ton going forward infinitum? No. If you look at the third quarter of 2020, and they're just forward curves and projections, but it looks like $270 differential per ton. On that basis, would be $15,000 per day in savings of our bunkers, and it will take us just over a year to pay back that scrubber commitment. Now throughout the last couple of years, we have kept our very strong liquidity. We closed September 30 with $174 million of liquidity, including our $50 million of undrawn revolver. Importantly, looking at International Seaways shares, the average trading liquidity of Seaways shares has tripled year-over-year, with the average value of our shares traded daily for the last 90 days, $8 million, with some high-volume dollars -- some high-volume days reaching $18 million worth of shares traded daily. Investors can take comfort in the ability to move freely in our shares. Our market cap has nearly doubled over the last year. Some of our shareholders that were with us for 5 years, and were quite consolidated, sold throughout 2019. We've unlocked 25% of our shares into the marketplace. As a team, we unlocked trapped value with our LNG sale. And while we were upgrading the fleet in the background, the prospects for the tanker market were improving. We believe that we're just in the early innings of this market and that we are entering a period of increased cash flow, and vessel values will start to rise. Right now, there's a modern VLCC subject for sale at $106 million. The last done prior to that was $98 million. So that $8 million increase conveniently is roughly 8%. Once that sale is concluded, we anticipate a healthy amount of that will cascade through the rest of the tanker fleet and lift value. In addition to our conventional tanker fleet, we have 2 other businesses that should be recognized and counted in the Seaways portfolio. The first of this is our joint venture on our FSOs. In 2019, Seaways collected $18 million in cash from our FSO joint venture. Now remember that in 2018, we extended for 5 years through 2022 our contract with North Oil Company. At that time, we took $110 million out of this joint venture to put to use in our business. That's in addition to the $18 million that we took last year. These floating storage and offloading units performed steadily for North Oil Company and have not had 1 day of off-hire since 2010 when they were in the field. The revenue is presently locked in through 2022, and it will just require a bit of patience as we work to extend the contracts on these vessels on those fields. And as we seek to do that, we feel that, yes, the FSOs are not particularly core to our conventional tanker fleet; however, they are still very important and have a lot of embedded value. It's important for the ships to be run extremely well with a high safety culture, and then we will be able to unlock more value from these FSOs going forward. The second business, our Houston-based lightering operations. It keeps us very close to our customer base. And the lightering team has averaged $4.2 million of EBITDA over each of the last 3 years. This is throughout a downmarket and, on an annual investment, of something around $500,000 per year. That's what we call asset light. This small team down in Houston operates geographically operations on the West Coast, Panama, Bahamas. And there we handle not just crude[, but product ], LPG and LNG. They operate asset light and an intelligent heavy platform and are really a value-add to Seaways. Why invest in International Seaways? Five reasons. Number one, disciplined capital allocation. This is truly the language that just makes us speaking at International Seaways, and it's the correct language to look at how do we use every dollar that's generated at Seaways. It's the lens through which we gauge our decisions. The $650 million that we spent on [ modernizing ] vessels, upgrading ships and scrubbers were done at the bottom of the cycle without issuing any equity and without putting any debt on the scrubbers. We unlocked $123 million of trapped value with the sale of the LNG, and then we promptly paid down debt, saving $9 million per year and lining us up for the refinancing that we're working very hard on right now. Number two, low financial leverage. We did all the above, and we are still at 36% net loan to value. This lower financial leverage allows for the third reason to invest in Seaways, which is high operating leverage. We kept our ships open to the market recovery. Every $5,000 per day were $72 million in EBITDA to our bottom line. Number four, best-in-class technical and commercial performance. At Seaways, we're outsourced. So you say, "Well, how can we be best in class?" I'll tell you how. We are managing our partners and working in collaboration with them to manage the outcome, using the deep shipping knowledge that resides at Seaways to get the best results every day. And number five, very strong focus on environmental, social and governance. This is embedded in the culture of the company, the team, the Board, our seafarers. And we've been the #1 tanker company in Wells Fargo's rankings for 2 years running for governance. ESG is something that we will continue to define, refine, measure and improve as we go forward. Now if I take a deeper look at each one of these principles, the number one reason: disciplined capital allocation. Each one of the 9 ship purchases that you see up here on the screen, each of these vessels is worth more today than when we bought the ship. On average, we bought the ships 18 months ago, 2 years ago, something like this. We're in a depreciating business. So these vessels literally would have depreciated by 10%. In actuality, based on an independent broker assessment, the $600 million we spent on these ships, these ships are now worth $60 million more than when we bought them. So rather than having a 10% depreciation, these ships are worth 10% more than when we purchased them. And does that mean, oh, gee, developing tankers is [ on a low ]? It simply means that at Seaways, we were fortunate enough to get the very beginning of the uptick in the market recovery for asset values. And in fact, the 8% that I referenced with the VLCC that's on subject for sale right now is not built into this. And once that concludes, and you see those asset values increase and that cascade to the fleet, it just shows you the trajectory that shipping in the tanker market is on. Number two, lower financial leverage. That's us in the blue. We are now working with true relationship banks, lining up against the competition with lower leverage, reducing our interest expense by $15 million per year, pushing out our maturities to 2025. As soon as we sold the LNG, we knew what our next priority was, and that was to pay down debt and position ourselves to embark upon the refi that we're in the middle of right now. Once we complete this refinancing, that will open up flexibility to the company, and our next serious conversations will be with our Board to discuss how we will look at the return of cash to shareholders. Operating leverage. Each of our sectors is performing. And the often forgotten middle section, which I would count the 2 Suez, the 6 Afras and the 12 Panamaxes, that's 20 of the midsized ships. These classes of vessels have really been performing in the fourth and first quarters. You see the increase in exports coming out of the U.S. Gulf. A big share goes on these, but a big piece of this goes on Aframaxes, Suezmaxes and Panamaxes, and they're really reaping the rewards. When Jeff goes through his [ fixed ] to the quarter, you're going to see that. Number four, best-in-class commercial and technical. What does this mean? We pulled out some of our top pools and chose to highlight our V. Ships relationship. Tankers International. We've been part of Tankers International for 20 years since its inception. We own half of that pool. What does that mean? Right now, in the work, we've got, sitting right outside my office, guys that are trading VLCCs for Tankers International. We help develop and drive the strategy for TI. [ I met ] with the Head of Tankers International, with our customers, and we developed those relationships and that just gives us more and more access to cargoes, cargo flows and even time charters and relationship building. It also keeps us very close to all the happenings in the market, everything geopolitically that has upended our world in the last 6 months. We track the roughly 30 underutilized NITC, or the Iranian tanker fleet that's not really actively trading. And we get a report of the 24 VLCCs and a couple of [ units ] that are sitting in Singapore and [ Liang] and how much cargo is onboard. And we're looking at -- if you look week-over-week and you say, oh gee, maybe all those -- these are going to unwind, they come back into the marketplace. If you actually look week-over-week, there's still more variable sulfur fuel this week than they were last week. So we were able to kind of look at that. And then we see the oil traders, are they just offloading? Are they using that as a platform to keep adding on cargo and then take advantage of it in the marketplace? Panamax International. We've been part of Panamax International since 2005. This is a joint venture with Ultranav of Chile and Flopec of Ecuador. It is not an open pool. It's a joint venture. And basically, this fleet outearns all the competition, LR1s, Clean, Panamaxes that there are. And how do they do that? They have a lot of cargo excess out of Ecuador, and they're going back and forth through that Panama Canal fully loaded the majority of the time. And then [ V. Ships ]. In 2014, when we outsourced our technical management, we had to choose a company that had the breadth to take a big fleet like Seaways. We made sure that we were working with a company that could handle the transparency we require because we're a publicly listed company, and we are not a foreign filer. And then we invested our most precious resources, which is our time, our experience and our expertise. The people that we have on those teams, we decide what the seafarer wages are. We decide what their medical benefits will be. We speak to the captains and chief engineers when they're getting on the ship and when they get off the ship. Those teams did 30 visits along with senior management in 2019 to our ships because we need to be responsible for the quality and the way the ships look and the way the ships are performing. And number five, the ESG, in addition to this list, in 2019, Seaways, we were awarded with the Marine Environment Protection Award from NAMEPA from North America. Our focus is on the protection of the environment, and it's something that we take very seriously in the company. I'll now turn the podium over for the market section to Derek Solon. He's our Chief Commercial Officer. He's been with us 8 years. He's a Naval Academy graduate. He's a recently minted dual naval graduate, which was hard with 2 young kids, nights and weekends. And most importantly, the former Intelligence Officer for the Navy, which fits perfectly well on the commercial desk, because a lot of times, our advantage could just be that now is that he gets right ahead of the next guy. Derek?

Lois, thank you very much for that kind introduction. Ladies and gentlemen, good afternoon, and thank you for attending our Investor Day. This is a very exciting time to speak with all of you as our rates and our market have recovered, as you can tell from the graph on this slide. There are several drivers for this recovery, and we'll speak about them and how INSW is positioned exceptionally well to capture this hot market. Fundamentally vital to INSW and our industry is that oil demand remains strong. Key to a healthy oil demand picture is China, and that increased demand is on track to exceed 14 million barrels per day by the end of this year. Throughout 2019, the Chinese refining industry grew considerably, adding 1.5 million barrels per day of throughput capacity. That means, for us, increasing demand for seaborne crude oil to feed those refineries, and it also means increased demand for product carriers as a good portion of that refined product will be exported. In fact, earlier this month, China issued its first round of export quotas for refined products, and that amount surpassed 2019's first round quotas by some 30%. Looking at the supply side for a moment, yes, OPEC and some of its non-member partners have agreed to supply cuts, but non-OPEC production increased by 1.9 billion barrels per day in 2019 and is poised to increase by 2.1 million barrels per day in 2020, supposing to offset some of these OPEC cuts. We'll talk about that oil supply and about exports later in the presentation. We'll also cover the vessel supply side of things and why we see that picture as beneficial to INSW's future earnings. The graph on the left really helps demonstrate the impact of increasing demand for crude oil. So the latter half of 2019 saw the demand for crude oil rise at a pace of 1.6 million barrels per day. On the chart, you'll see that as that demand started to increase, we've gone from an average of 120 VLCC fixtures per month out of the back to above that Arabian Gulf level key of 140 VLCC fixtures per month. Unsurprisingly, that increase of fixtures coincided with the market improvement. Also, Atlantic Basin crude exports are rising, and that helps the various crude sectors, the Panamaxes, the Aframaxes, the Suezmaxes and the VLCCs. Now during that period where AG fixtures on VLCCs were increasing by 20 per month out of the AG, VLCC fixtures from the Atlantic Basin to Asia increased from 70 per month to around 80 per month. On the side of the U.S. Gulf exports, which we'll talk about on the next slide, we have Norway getting its production up out of its important Johan Sverdrup field with planned capacity of 440,000 barrels a day. Brazil is increasing its exports. And in the Western Hemisphere, we have a completely new country in the export market of Guyana, with initial production of around 120,000 barrels per day, and that's their planned exports as well. Let's look more closely at the activity in the U.S. Gulf in Americas and how INSW differentiates ourselves in this region. Interestingly, for a brief period of time last year, the U.S. went from being a net importer of oil, meaning product and crude, to becoming net exporter of oil. Now that dynamic didn't last very long, which is for a short period in September. But according to the IEA, the U.S. should become a consistent net exporter of oil in late 2020 or early 2021. U.S. crude exports, when comparing the fourth quarter of 2018 to the fourth quarter of 2019, increased by nearly 1 million barrels per day on average to take U.S. Gulf exports above 3 million barrels per day. According to preliminary data from the U.S. government, one of the last weeks of 2019, the U.S. Gulf crude exports soared above 4 million barrels a day. If you look at the graph on the right, you'll see how U.S. crude is being shipped. Now what ship size or class is used to export crude oil can depend on the geopolitical environment, freight rates and who the customer or the charterer actually is. But you know the healthy mix of VLCCs, Suezmaxes and Aframaxes in this export trade, all ship types that are owned by International Seaways. The headlines in recent times and mostly so have been focused on increasing U.S. crude exports. Let's not forget about the U.S.'s strong refining sector, fueled by lower-priced domestic oil. That engine continues to churn out refined product for export. And for 3 years in a row now, refined product exports from the U.S. have exceeded 3 million barrels a day. A lot of those exports are bound for Latin America and for Europe, which is very beneficial to our MR clean trade. From the previous slide, we see activity in the U.S. and Americas as a key driver of strong tanker markets. So how does International Seaways position itself fast for these markets? One way is through our 60-ship VLCC pool that we currently own and founded, Tankers International, which I'll just call TI. With the VLCCs, we really see that there's strength in numbers, strength in scale. That scale provides flexibility to our customers, therefore, allowing Tankers International to build an unrivaled cargo base by size that's particularly strong with Chinese customers. On the back of increasing U.S. Gulf exports and in partnership with our pool management and our other pool partners, we decided it was in everybody's best interest to establish a chartering team for TI here in the United States. So as you heard Lois say, we established TI USA right here in Seaways office in New York. That makes TI the largest VLCC operator with the U.S. chartering presence, which will enhance market intelligence and also enhance customer relationships right here. Additionally, TI is in the largest [ pool presence ] of scrubber VLCCs. So building a TI with a large number of scrubber-fitted VLCCs and non-scrubber-fitted VLCCs is advantageous to International Seaways as the pool can use that size and scale to purchase bunkers very competitively, and it can rely on that large cargo bays that we talked about to plan and fix voyages that optimize earnings for all its members. Another arm of International Seaways that is active in the Americas and active is in U.S. Gulf export markets is our Houston-based subsidiary, Lightering LLC, that Lois touched on. Our lightering company provides transshipment services like you see in the picture on the bottom right, across the Americas, with locations located on the map on the bottom left. We're the [ blue ] with our lightering company, if you can ship transshipment in oil, with refined products, LNG, LPG and other commodities. It's an asset-light expertise heavy business that provides positive cash flow through conducting service-only lighterings and by conducting full-service lighterings. The difference between the 2 being in a service-only lightering, we rely on our personnel and our gear like fenders to bring 2 ships together, to trainsship cargo from one ship to another while at sea. And in a full-service lightering, we provide other services of the service-only lightering, but we also provide one of the ships used in that transshipment, which is usually an Aframax tanker. Over the last few years, our lightering group averaged $4.2 million in EBITDA annually and was consistently additive to Seaways. With the U.S. Gulf exports increasing last year, our lightering group conducted 180 service operations to the export market. That equates to our transshipment of 320,000 barrels per day of U.S. crude oil exports. That helps ensure INSW has a great intelligence concerning the U.S. Gulf exports and also allows us direct access to key export customers. Another unique alliance we have in this region is our Panamax pool. Together with our partners, this pool of over 30 Panamaxes and LR1s trades predominantly in the crude oil market with a very high focus on trading in and around the West Coast of the Americas. Through our partners, Flopec, the state-owned oil tanker company of Ecuador, Panamax International works very closely with Equador's National Oil Company for its export business. A specific element to that pool's trade costs were delivering crude to the U.S. West Coast. A very high-profile environment where customers consistently choose to work only with the safest and most reliable transportation partners like International Seaways. As the graph shows you, and as Lois mentioned, this pool outperforms. Historically, Panamax International beats the closest benchmark by over 20%, and we expect that to continue. We continue to add to our stock presence in this pool for [ time traveling elements ] and we also have signed an agreed -- memorandum of agreement, or MOA, to purchase a modern LR1 one that will also trade in this pool. Moving on to the supply side. On top of positive oil fundamentals to the stronger freight market, we've had better supply disruptions that affect the market positively, mostly from geopolitical events. These disruptions exacerbate pressure on an already tightly balanced market by lowering vessel supply, which takes rates in turn to firmer and firmer levels. Firstly, the U.S. government sanctions on COSCO, the Chinese national carrier has filled confusion among customers, terminals, suppliers and insurers as to what is and is not a sanctioned ship. The result of that confusion is fewer vessels are available for charters, which diminishes vessel supply. If you look at the graph on the right, you can see a precipitous decline in that percentage of fixtures from AG, either to China or to all of the Middle East, done on Chinese-owned or Chinese-controlled tonnage. Newer fixtures on Chinese-controlled or owned tonnage lead to enhanced earnings for the rest of the market players like International Seaways. Also, U.S. sanctions on Iran have much of that country's national carriers, VLCCs, effectively barred from global trading. You'll see on the bottom graph, on the right, an increase in these yellow bars, signifying Iranian-owned VLCCs that have turned off their automated information system. So they're hiding. What they're doing, we don't really know. But we know that they're not trading in today's spot market. These sanctions, again, impact the VLCC market directly by removing tonnage available to charterers. We've seen this before as recently as 2015 and 2016 under the previous sanction regime, which also coincided with the very firm ticker market. Another circumstance impacting tanker supply is tied to IMO 2020 and scrubber retrofits. By our count, some 10% of the larger crude classes are still to lose the fleet and go to dry dock, take off-hire from around 30 days or longer to retrofit their scrubber. Again, it's shifting another pressure on supply for this market. Now aside the supply disruption, there's another element we can touch on concerning the supply side. We're headed into a period that has the lowest order book since the 1990s. With that low amount of supply heading into the fleet during a time of rising demand is, of course, beneficial to International Seaways. Now of concern to any shipping professional is, will these firm markets [ will always ] run out to shipyards, order a lot of ships and run the risk of oversupply. We think there are hurdles that will prevent that from happening. Firstly, and very fortunately for tanker owners, there's a large newbuilding project for LNG carriers emanating from Qatar. That is bound to shake up a lot of newbuilding births that could have otherwise been used to build new tankers. Also, the shipping industry is looking at a regulatory landscape over the next 10 to 30 years that should give them this cause for consideration before going out and ordering a conventional tanker with a conventional propulsion plant. So the incoming IMO regulation that I'm talking about calls for the shipping industry to significantly reduce carbon dioxide and other greenhouse gas emissions. To achieve these targets that you see on the graph on the right will require technological innovations, frankly, on a scale that's not yet available. From where we sit today, we're in a clear path to compliance with the statutory requirements through 2030, is to burn up something other than fuel or gas oil in a ship's main engine. This is why we're starting to see a few orders for tankers capable of burning LNG, as an example, and also capable of burning conventional-compliant fuel. That technology is fairly innovative, yes, but for owners like International Seaways active in the spot market, there's a big concern. That different technology is very expensive and the shore-side infrastructure to supply these alternative fuels is not yet well established. So the question for the owner community today is, go out and order a conventional tanker with a conventional propulsion plant that will be obsolete by regulations before the end of its designed useful life, or spend a significant additional CapEx to get that bullet-proof propulsion plant that cannot be fully optimized or fully utilized. That's phenomenon we think will the pressure on the owner community and should curb an over eagerness to contract new buildings in today's firm market. Now Erik Broekhuizen of Poten & Partners, coming up to join us today, will speak more about how IMO 2020 is impacting trade flows. So I'll talk about how we'll replace IMO 2020, both from an investment standpoint and from an operational standpoint. As Lois mentioned, we've decided to retrofit our 10 modern VLCCs with scrubbers, moving the rest of the fleet to burn compliant fuel, taking a balanced portfolio approach to this issue. The VLCCs were the logical choice for us as these 10 ships, bigger and traveling on longer voyages, account for around 40% of International Seaways' bunker consumption. Of the 10 ships getting scrubbers, the retrofit coincides with 6 of the vessel's natural dry dock numbers, meaning that those ships would have had to get to dry dock anyway, would have to incur the off-hire anyway without losing with the benefit of a retrofitted scrubber. The retrofits are going on now and our first ship, Seaways [ 8 ], has left the yard with its scrubber retrofit complete. The fuel changeover for IMO 2020 on our non-scrubber-fitted ships was managed very, very well by our operations and technical teams, working in close coordination with our commercial partners, resulting in no heavy sulfur fuel oil onboard any of the non-scrubber-fitted ships as of 31 December. This was all done without shifting to compliant fuel too early, which, of course, would have had a negative impact on our earnings. The fuel price differential, it's early days and vary by region, but as you heard Lois say, it's around $350 a day -- sorry, $350 a ton between heavy sulfur fuel and very low sulfur fuel. So in this kind of environment, with this kind of fuel out the scrubber -- the payback for the scrubber period is well under 1 year. I'll now cover our FSO joint venture. Seaways is a 50% owner -- has a 50% ownership of 2 converted ULCCs that are active in the Al Shaheen field offshore in Qatar. These larger FSOs with 0 off-hires since starting service in 2010, processed all of the oil from this field for export. Our customer is North Oil Company. It's out the joint venture between Qatar Petroleum and Total. As you heard Lois say, both arms are fixed for 5 years charter that started in 2017, providing Seaways with fixed cash flow through 2022. And in 2019, we received around $18 million in distributions from this project. In conclusion, we have a finely balanced market through strong fundamentals of increasing oil demand, increasing oil supply further away from the areas of increasing demand and we have a very, very limited order book. Our market hedge is covered, and INSW is well positioned to capture this offset. I'll now hand it over to our CFO, Jeff Pribor, for the financial overview. We were really excited that Jeff decided to join us from his position as Global Head of Investment Banking at Jefferies in 2016. Jeff's a well-known industry player with a great reputation. He's also our Ivy Leaguer hailing from Yale. And if that wasn't enough, he has both his MBA and his JD. And we are all lucky enough to work closely with him in his investment banking role so he knew this company inside and out before taking the job, and we knew he would make a great Seaway CFO. Jeff?

Sure. Thanks, Derek, for that very nice introduction. In this portion of the presentation, I'd like to discuss financial insights for International Seaways. Where we are today, how we got there and what we see going forward, including our new capital allocation principles. If you think about it, and this has been studied and written about quite extensively, if you're running a public company, there are a couple of ways -- really 2 ways, broadly, to create value. One is to really run a great company operationally. That's the first and most important way. If you're a tech company, innovate. If you're a hospitality company, provide best service. If you're a shipping company, that means really running the best company you can from a technical perspective, a commercial perspective, which you've heard about from Lois and Bill, Derek, and increasingly, from a sustainability perspective, and you'll hear about that from James in a little while. But in any industry, certainly in ours, as volatile as it is and also, the other way to create value is for capital allocation. I'm reminded, I was in London a year ago -- not in London yesterday, but I remember a year ago for the same reason, met with an investor, and he said, "Well, if all this comes to pass when we get to 2020, as things are looking up, and what are you going to do to distinguish yourself at that point from other shipping companies?" And I said, "Well, it's going to be -- it always is, that it will then especially become about capital allocation." And he said, "You remember this very well, because everybody talks about capital allocation." I said, "Yes. Yes. Yes. Everybody talks about it, but you've got to pay attention to who is actually getting it done quarter-by-quarter. You've got not just, as the saying goes, talk the talk but walk the walk." So it's also, I think, it's said, it's been a journey -- it's been a heck of a journey these 3 years. And I'm not saying that we still don't have a long way to go, but on the financial side, we clearly delivered on our promise and put the company in a good place in terms of delivering our shareholder value, including, in particular, the refinancing, which we'll talk about in a minute. So what do I mean by that turning to -- are we on Slide 26? Yes. Looking at Slide 26, here are some of the company's highlights. First, as Lois mentioned, we're low leverage, 36% net loan-to-value. After the sale of non-core JV interest in October, puts us at the low end of the range for all tanker peers and provides both security and optionality. The new financing, which I'll talk more about shortly, provides low interest costs and amortization profile that matches our depreciation, resulting, all things being equal in leverage calculator's net loan-to-value, which will be under 30% by the end of the year. The new debt facilities as we announced that we expected to close soon, probably by the end of the month, a total of $380 million, likely upside to $390 million and will allow us to retain our existing Term Loan B debt, which was $331 million at year-end; the BlackRock note, which is $28 million; an existing bilateral loan on one ship in $23 million. The largest tranche of this new loan called the core facility of $340 million will have an interest cost of LIBOR plus 260 basis points initially, expected to drop via pricing grid to LIBOR plus 240 by third quarter of this year, which compares to LIBOR plus 600 under Term Loan B, LIBOR plus 350 for bilateral loan and 10.75% for the BlackRock note. All of this more expensive debt serves an important purpose in allowing us to renew our fleet with $600 million of vessel acquisitions, as Lois mentioned, and $50 million of scrubber CapEx without issuing equity, but now it is time for them to be replaced. The lower cost of the new facilities means that we will have a further $15 million a year in interest expense or about over $0.50 a share in EPS accretion. The facilities are provided by a syndicate of really shipping banks, I'll name them, Nordea, ABN AMRO, Cr?dit Agricole, DNB and SEB, our MRAs and book runners. It really, we think, demonstrates the valuation of INSW's position in the marketplace and the things that we've accomplished in the last 3 years. To be clear, this is not a facility we could have put in place in 2017 given our newness at that time and the age of our fleet. So we're proud of the commitments and as I said, expect to close fully very soon. Crucially, in addition to lowering costs, the new financing means that in addition to having a rock-solid low leverage balance sheet, we'll have the flexibility that we did not have before, particularly with the terms of the Term Loan B, to allocate capital freely, for example, through share repurchase or dividends. I think all the 5 lead banks whom I mentioned are in the room. So I just want to say to all of you, thank you, and [ the crew is out to lunch, ] get back and finish the documentation. Moving on to the next point, the relative low cash breakeven. $20,500 a day, fleet-wide for the most recent 12-month period, giving effect to the FSO contribution, as Lois has mentioned. The combination of the deleveraging, which we have done and the new debt facility will bring those breakevens down a little bit by $100 or $200 a day, but equally important, a lot more of the cash for debt service will be, as you say, paying ourselves via scheduled amortization rather than cash out the door for interest expense. The solid balance sheet and lower financial leverage makes us very comfortable carrying maximum operating leverage into an up cycle, which is obviously what you want -- where we want to be positioned. With that [ 4 tankers on ] a [indiscernible] spot, every $5,000 increase in TCE fleet-wide mean there's an incremental $72 million in EBITDA and $2.46 in EPS annually. This brings us to capital allocation. And as I said earlier, we're walking the walk. Examples of a disciplined approach to capital are -- it's been 3 years ago, investing, as Lois said, $650 million in fleet renewal and scrubber upgrades without issuing equity. I guess, she said that a few times, but I take that and repeat. Selling other assets to help fund that renewal. Critically, being willing to let go of an attractive asset, our LNG joint venture interest that wasn't core and wasn't appreciated in our share price so selling was the right thing to do. Using proceeds from that sale to pay down debt substantially and pave the way to refinancing our balance sheet, as I just discussed, which in turn positions us to do the capital allocation, which is appropriate at this point of the cycle, which is deleveraging, largely accomplished, and returning cash to shareholders via share repurchase and dividend. Turning to Page 27. Let's quickly review the financial evolution that has gotten us where we are today. When we were spun off on December 2016, at that time, we had debt structure inherited from our predecessor, OSG, with a Term Loan B facility of $440 million at LIBOR plus 475, and leverage was just about 40%. As I stated earlier, in 2017, we were not in a position to refinance that debt in the shipping bank market with an average age of 12-plus years and many ships that were above 15 years old. So we refinanced that existing Term Loan B with a new capital markets loan, another Term Loan B, and a somewhat higher price, but also a higher loan amount and extended maturity, which was designed to help us finance our fleet renewal. And in fact, we did use that higher amount almost immediately to purchase the first 2 ships in our renewal program, which were 2 VLCC Suezmaxes. Given vessel sales and cash generation at year, we ended the year just slightly higher than leverage at 41%, as you see in the 217 column there or row there. In 2018, as many of you know, we were able to pull off a truly transformational deal, acquired 6 modern VLCCs from Euronav as part of their merger with Gener8. Now that turned out to be -- for $434 million, that turned out to be just about the very bottom of the cycle. This, along with the acquisition of another VLCC, the Seaways Raffles, was financed by a combination of assuming very attractive LIBOR plus 200 export agency loans on those vessels, but also by incurring the other bits of debt you see here in the middle of the page, $25 million Raffles loan, the baby bond, the BlackRock note. And also it involved coming to an accommodation with the Term Loan B investors to use their cash collateral -- part of their cash collateral in exchange for somewhat higher rate and call protection, which happens to have ended on January 1 of this year. So this debt-led season nearly ended the year with moderately more leverage at about 50% net loan-to-value. In 2018 and '19, which we -- until the second half of 2019, epically bad times for tankers. We were still able to generate cash because of our low breakeven and our program will continue to sell older assets, as mentioned. And as mentioned earlier, the critical decision to monetize an asset and allocate that cash to deleveraging. In October, when we announced the sale for $122 million, our market cap was about $100 million that day or within a day or 2. I don't think it was because the fleet -- the market value of that asset at only $22 million, I think it was that investors, and thank you all collectively, appreciated the capital allocation decision. As a result, we ended the year with that footnote at the bottom, the last period of the year we reported, which is September 30, the pro forma for that sale in October, at the lowest leverage we've had since our spin-off of 36% net loan-to-value. I've really summarized the 2020 event so far, which is the refinancing. So turning now to Page 28. As you can see by design, it's a leverage-neutral transaction, 36% before and after. This just gives you a picture of our debt before the refinancing and after. But the debt shows the shift very much from new tools to amortization and also significantly lowers our cost of capital. So the amortization goes up to a run rate of about $80 million, you see on the right-hand side of the page, but that would be about $10 million less this year because the amortization doesn't start right away. But interest expense will be $50 million less, which -- and this is not on the page, but if you do the math, the overall weighted average interest cost for the company will go down from 6.8% to 4.8%. So quite a significant savings. This page highlights another benefit of the refinancing. Looking at the dark blue bars, you can see [scale] amortization goes up a little bit versus where we are today. But modestly, and we know that having amortization, as I said, many times, is paying yourself and every dollar above equity and NAV and amortization that approximately equal to depreciation, which is where we're going to be when this deal is done is what we call prudent financing. Instruments like bond, Term Loan B, you have low amort, which is great in down markets, but then you build maturities like you see in 2022. So I move fairly -- remove fairly lumpy payments is exactly what -- is the right thing to do in a cycle like we are now. Cash breakeven. This is still the historical cash breakeven. And as I mentioned before, it will be $100 million to $200 million lower. So I won't look too much of an other than the composition of the right balance of financing will shift, as I said, to more amortization rather than interest. Now the next page gets us to capital allocation. If you were to look at the investor deck that we posted on our website, I welcome you to do so. There is a couple of slides there that have many, many words about capital allocation. And I invite you to read that or to e-mail me or just to call me up, and I can spend as much time as you like talking about capital allocation. But luckily, my colleague, David, here has come up with a very simple slide to allocate -- to illustrate how we look at capital allocation. So let's start at the bottom of the page. We -- [if you're a ] shipowner, bulk shipowner, at the bottom of the cycle or the trough, you should buy assets because the return on investment will be greater in shipping than any other shipping company given its depreciating nature of its asset, has to buy assets at some point. So you obviously want to buy them at the bottom, if you can. Now concentrate them, near the bottom is a better way to go. And so for example, our $600 million of investment amounted to 7.5 years of depreciation spent in a 1.5-year span. That's concentrating your purchases. So how much do you buy at the bottom? When do you stop? Well, first, you stop when you hit self-defined leverage limits, which, as we just went over, for us is about 50%. So when we hit that $600 million, got to that level that we yield, we said, "Okay. That's enough." Another aspect is if you're public, as we are, that share price, where did your shares -- where do your shares trade relative to NAV? [indiscernible] is imperative. You have to have a company that goes on. But at some point, if you've done enough renewal, which we had, and the share is still trading below NAV, it's better to be spending your money on your shares, which is a great segue to this middle of where we are finding ourselves today, which highlighted in the middle of the page. We're past the trough. We're now at the peak. We're happy about it. Here, it makes sense to stop buying assets and to use cash to delever and return cash to shareholders. In large -- I discussed earlier, we have already delevered substantially, it's at the low end of the peer group. So we -- and we'll naturally lever a bit more based on the new credit facility. So given the robust market that Derek and Lois had described and with the refinancing and -- I'm sorry, with the free cash flow that we'll surely generate in the next couple of years and hopefully longer, at this point of cycle, what will we do with cash in terms of capital allocation? Well, sorry, we have no announcements today. Our Term Loan B puts significant restrictions on dividends and share repurchases, and it wouldn't be appropriate to announce anything until that refinancing is complete. However, I can give you a good idea of how we look at this and where you should expect -- or you or existing potential shareholders should expect from International Seaways. The free cash flow, what will we do? Some companies, as similar to when we're building up a cash cushion, but as the liquidity, Lois mentioned earlier, we already have enough cash. We don't need to do that. So the box is checked. Some companies are telling me that they are continuing to use all their cash, as expected, they are and expected to earn to delever, either because they haven't reached the deleveraging leverage target or they have sale leasebacks or whatever. But with our -- we're happy we're going to reach where we are. We don't have that imperative. So again, the box is checked. Acquiring assets is another use of cash. And while we may make tactical renewal acquisition here and there such as the one Derek mentioned, when we look at buying, for example, a VLCC at $106 million price, as Lois mentioned, versus buying 2 ELVs at the [ $72 ] million that we did a few years ago, i.e., 25% cheaper, we don't see buying more ships with free cash. So turning cash to shareholders is the best capital allocation, as it says here in the middle part of the page, and expect to hear more from us on this after we conclude the refinancing and make no mistake of how we set our priorities. So I'll leave it there for now but happy to take questions later. And as I said, talk to you about it any time offline. It's my favorite topic. But another favorite topic, just as we come to -- before I wrap it up. Sorry, I guess we'll start here with the results. This is an update. Fourth quarter is done. It's not necessarily audited. But you can see that since the fourth quarter started weak, but ended very strong, it's a good rate for the fourth quarter, starting at $57,000 for the Vs on down to the middle classes -- middle sizes, as you can see here. Obviously, the first quarter has started off very strong. And while there's sort of low percentages of bookings on the smaller ships, a little bit higher on the bigger ships, with very strong bookings as we go into the first quarter, $94,000 on average so far for modern Vs and almost equally high even for the older Vs, which is what we'd say marks a high, high market. You don't get much differentiation there. What does -- what could that mean? As we always say, it's up to you to decide what you'd like to input the revenue or EBITDA or roughly, say, rent rates and revenue and therefore generate EBITDA and free cash. But this is an example. If we just look at the rates, on the far left column is a mid-cycle, 15-year average rates. For example, $43,500 for V and on down to other categories of vessels that we have. If we have mid-cycle rates, we would have $244 million of EBITDA or $3.65 a share. The column second from the right is a recent peak year. Nothing meant to be above average, 2015. If we had rates like we did in 2015, we would have $438 million EBITDA, over $10 a share in EPS. Now clearly, as I just showed you, rates are, at the moment, above that 15-year peak readout. As of [indiscernible] necessary, we're going to have those rates fall off through the year. And then as sighted as the market in the second column, I don't have the actual collection of all of the rates. It's a little difficult to compile all -- what's behind the consensus rates for all of the win rates. But if you look at the EBITDA and EPS, that is a result of the consensus view of International Seaways 2020. Our EBITDA is, by consensus, $325 million or $6 and just under $7 a share. That just gives you an idea of the operating leverage. And thereon, before I turn it over to James, a couple of trading highlights. The first is liquidity. We're very pleased that our company, compared to where we are today compared to when we were spun off, and at that point, there were 3 shareholders that had 40% of the stock. That overhang is largely gone. Our free float is close to 90%, and our liquidity and [ dollar rhyme, ] is quite healthy, as you can see on the left-hand side of the page and as Lois mentioned. So as an investor, you can get in and you can get out. Of course, we want you to stay in forever, but knowing you can get out is important. Finally, on the right-hand side of the page is share price performance. Since the spin-off, although we left off the first month of trading with December because the stock was briefly at $11, and that would have skewed this too high to the upside. So we didn't want the spin-off effect to be in there. But if you look at leaving that month out, just looking at January 1, 2017, until now, we're just about a double, which is pretty much at the top of the peer group, which is either at or tied to the top of the peer group. And importantly, I'd say, well, the period 2018, '19, when we may have lagged the peer group a little bit, but we were convinced that was technical factors around liquidating the overhang. And I think we're right about that as we ended up the year on the top of the chart, as you see here. So I'm not going to say that we're still inexpensive. That's up for you to decide. But as you make up your mind about rates and revenue and EBITDA in 2020, '21 and beyond, it should be instructive to think about potential appreciation, and it gives you a sense of the free cash flow conversion, what we can do with it, generation, what we can do with it. And it tells you of our capital allocation strategy. So hopefully, you find this one a good reason for staying in the stock if you're already there or if you're not considering getting into stock. Thank you very much. And now I'm going to turn it over to James, James Small, who is our Chief Administrative Officer. He's our General Counsel. He's a graduate of Williams and Stanford Law School. He is also an intelligence -- was an -- served in intelligence but for a civilian agency, shall we say. And most importantly -- not most importantly, but most recently and importantly, he's the Chairman of our ESG committee. So I'd like to invite James to come up and talk about our ESG policy.

Jeff, thank you for the introduction. Good afternoon, everybody, and once again, thank you for coming to our Investor Day. As Jeff mentioned, I wear a lot of hats at the company. I am not here as the General Counsel. So take that for what you will. I am here, however, as the Chairman of our internal ESG committee. Frankly, this is a really exciting time to talk about ESG. There's a lot of interest in the area. And we, as a company, are really quick focused on it. As you all know, ESG or sustainability means a lot of different things to different investors, and frankly, to different companies. For Seaways, I think the key takeaway is really that we're committed both to implementing and to advocating for industry-leading ESG practices as a core part of Seaways' culture. So you asked, what does that mean? Well, it means different things with respect to each of the different parts of ESG. I'll get into a little bit more detail in a bit. But let's start off by saying, on the environmental front, it means that we're really committed to all forms of pollution control and managing our waste streams, where we've established a compliance program for IMO 2020. We've installed and are installing ballast water treatment systems to encourage biodiversity. One of our initiatives that was mentioned, Get to Green, involves collecting and analyzing data to reduce fuel consumption and increase operating efficiency, which has the happy effect of also reducing CO2 and greenhouse gas emissions. We're also committed to environmentally responsible and socially responsible ship recycling. Turning to social. I think we, frankly, strive to meet or exceed all the legal and regulatory requirements around governing employee interactions. I think our case, it's very important because we have a very diverse workforce. We have seafarers from the Philippines, from India, from Russia, from Eastern Europe. We have the office employees here in Houston. We operate in jurisdictions around the world. So it's really important for us to focus on social issues and make sure that we're doing the right thing by everybody. Turning to governance. I mean I -- it's a New York Stock Exchange listed company. I think governance is obviously important to us. I think some of our differentiators include the majority independent board. The fact that we have 2 women directors of our 9 directors, both of whom are in the room today, I might add. And frankly, our robust and transparent governance structure, which allows us to really, I think, get input from investors and react to that appropriately. So let's turn that to the next slide. So this is our management structure. Frankly, I just want to think you've now heard from all 5 people who are on this slide. And I think that it's really important to recognize Lois as someone who has a lot of great leadership skills with 30 years of experience in the maritime industry. That really is a testament, I think, to what we focus on as a company, which is that all aspects of our operations are important to us. And Lois has been involved in all aspects of our operations for a long time. Turning also to the other people. I think we have a great balance of operational experience, public company experience, banking [ loaners ] experience, really a broad range of different people, all of whom add a lot when we create a collaborative leadership environment. And frankly, the team's got a lot of continuity. Jeff and I are the most recent additions. Jeff got and come in at the spin-off and myself having come in, in 2014 or 2015. Both of us have worked for the company for some time prior to that. But the other 3 members of the senior team have been with the company a lot longer and have worked together for a long time. Turning to the next slide. This is our Board. Frankly, our Board is one of our real strengths. We have a lot of multi-disciplinary capabilities. We have experience in maritime. We have experience in energy. We have experience with public companies. We have experienced service management. We also have other skill sets. And again, this is the Board that's really been continuous for us. Of the 9 directors, 7 of them have been involved with the company since 2014 and 1 either as director or officers. And the other 2 have either come in, in connection with there shortly after of the spin-off and have been, frankly, a vital part of that process as well. I think, ultimately, the Board members have provided us with a lot of guidance that's helped us as we move from success to success over the past few years. Turning to Slide 38. Let me give you a little bit more detail about environmental and political. First of all, let me take a half step back. I think one of the keys of our whole ESG initiative is the tone at the top. Ultimately, none of this is reflected in what we do on a day-to-day basis, unless it's something that we really strongly believe in as a management team and as a leadership team. And I think that Lois and Jeff and Bill and Derek and hopefully myself work every day to make sure that people understand that we really mean what we say when we talk about the ESG elements of our operations. Environmental, for example. I mean this is a constant focus area. Obviously, we're subject to a huge number of regulations, and we have to comply with all the rules, but it's also doing the right thing and making sure that we work in an environment where we're comfortable being compliant with the environmental rules. We have active compliance programs for IMO 2020 and the ballast water treatment rules. You've actually heard a lot about that from Derek and from Jeff and from others. So I won't spend a huge amount of time on that. But I think it's important to recognize the overlay of the regulatory with the commercial, with the general environmental concerns and how we try to integrate all of those things into what we do. We're also involved in industry efforts on those fronts. For example, Lois is a Director of the International Tanker Owners Pollution Federation, which is a pollution response entity. We also have members on Organization of the Trident Alliance, which is an industry initiative for ensuring robust compliance with the IMO 2020 low-sulfur rules. These and other environmental initiatives, I think, help us to demonstrate our leadership in the environmental front and the environmental space, particularly in maritime industry generally. And we have been recognized. We got awards. I think Lois mentioned this one, but we've received others. This is just a [ mix.] Turning to social. I think social, again, it's very important to us as an institution, social activity, social interactions. One of the prior slides talked about how our officers have been with us for 10 years on average. That's also true for most of our crew. It is Seaways crews on Seaways ships. And so this is part of the Seaways family is our crews. So we work to make sure that we're complying with the rules and the regs for them. We focus on safety concerns. As you can see, I mean, one -- just over 1 million incidents per man -- sorry, just over 1 incident per million man hours. That's a great record. It's substantially better than a number of industry averages. And we really believe in the safety culture. As Bill talked earlier about how important that everyone has the authority to stop something if there's a safety concern. And that is part of what we do, and it's part of how we operate day to day. Compliance among the employees or among the seafarers is also important. It's not just safety. It's reputation. It's making sure that we don't write out the rules in a way that not only would cause us to pay a fine, but would potentially create a bad impression of the company. We're a member of the Marine Anti-Corruption Network, which allows us to really benefit from the learning of other companies on the corruption front. Again, the Trident Alliance, a similar kind of industry-wide initiative working on a regulatory issue. These are things that we focus on. We mean what we say. And the tone at the top, I think, reflects that. Turning to the next slide. We talked a lot about governance already. I won't dwell too much on this. Ultimately, I've talked about the Board. We're independent. We focus on diversity. Diversity is important to us, diverse skill set. We have active shareholder representation, which has been mentioned. We have a shareholder in the room for every Board deliberation, which I think really enhances some of those discussions. And frankly, we have robust governance guidelines and policies. So that we are trying to be as responsive as we reasonably can be to investor concerns. And I think part of that is really demonstrated by the external validation that we've received, the National Directors Institute Award, the Wells Fargo Rankings, #1 tanker company among the maritime space. That's great. We think that's great. Turning to the last slide here. Let me give you some details about one of our environmental initiatives, green initiatives, that I think is concrete. This is Get to Green. Get to Green is -- it's an analytics-based approach to emissions reduction. How does it work? We optimize the vessel performance. What does that mean? We report a huge amount of data, both on the vessel and back to the home office that allows us to really optimize performance. By doing that, we have managed, frankly, to save -- in the 1-year period, we saved enough fuel to run a Suezmax tanker for a year. And that's a significant operational savings that goes pretty much straight to our results. We also have the dash -- and you can see the dashboard here, but -- sorry, the dashboard is -- it's available in the office. It's available on the ships. People can know where they are. And that's a really important part of having visibility and positive accountability for this initiative, in particular. We also do other things. One example of that is we have an on-vessel program for minimizing single-use plastics. You say to yourself, "Well, that's interesting. But what does it mean?" Well, what it means is, we try not to buy bottled water. We try to use bottled water -- or we use water we'd get on the ship that's purified. It's perfectly good water. And so that saves us cost. It saves the plastic recycling. So it's a win-win. And those are the kinds of things that we're trying to do every day and think of every day to make ourselves better off. So I'm going to turn it over here to Lois in a second so she can introduce our guest speaker. But let me just wrap up by saying this. I think ESG, all 3 aspects of it, environment, social and governance, is a really core part of who we are as a company. And we're really focused on these things. But I think an important part of that focus is demonstrating the benefit of that focus to shareholders and their stakeholders. So I hope we're doing that. Anyway, thank you.

Thank you, James. I'm very happy to introduce our speaker, which is Erik Broekhuizen, who is the Head of Tanker Research & Consultancy at Poten. They're the largest U.S.-based ship broker. But more importantly, I had the pleasure of working with Erik for quite a long time at the predecessor company, OSG, where he was Vice President of Corporate Development and Finance. And I can tell you that Erik is an independent thinker. He has a strategic mind, a research-based approach, and he is steeped in 30 years of shipping experience. So Erik?

Yes. Thank you very much, Lois, for the introduction. Thank you for the invitation. I'm happy to be among friends. A lot of familiar faces here. And I'm also happy that I have got the most difficult topic to talk about today. So what is the -- what are the trade flow implications of IMO 2020? And so can I see a show of hands who has never heard of IMO 2020? Okay. And it's what I thought. So I can probably skip this first slide, IMO 2020, all the emission regulations that started January 1 of this year. So my second slide is for the first 2 weeks of this year, what's actually happening in the market because there's a lot of preparations, a lot of talk, a lot of people who are sort of scared to what might happen, like Armageddon, ships will be stuck all over the world and with engines that don't work anymore. But I think so far, keep our fingers crossed, I think it seems that a lot of the industry has prepared well, the refinery industry as well as the shipping companies. So you see that there have been fairly limited number of incidents. There's some shortages locally that ships have to wait a few days to bunker-compliant fuels. But I think, overall, we have seen relatively few incidents. So let's hope it stays that way. We have seen price increases. I think Derek already mentioned that. I think most people were thinking maybe the -- after IMO that the difference between high sulfur and low sulfur would be like $250 a ton, give or take. It's obviously a lot higher now, depending on the region. But I agree with the previous speakers that, that probably settle down in the $250 to $300 per tonnage. But in the tanker business, we already say that you have to make hay while the sun shines. So we will take it when it is this high. And especially the ships with the scrubbers, as you see in the chart on the lower right that probably will make $20,000 to $25,000 a day more than ships that has to run compliant fuel. So to the topic at hand. Trade flows are changing as a result of IMO 2020. They're sort of the parameters that everybody has set prior to 2020, and it sort of it intuitively makes sense. But what's behind that parameters [ solution ]? First of all, we have 4.5 million to 5 million barrels a day of bunker fuel affected by IMO 2020. And that means that demand for high-sulfur fuel will decline rapidly, and we will see other fuels, the compliant fuels, will increase. Less sophisticated refiners. So the refiners have to make the fuel. The fuel doesn't show up of in your way. You have to make a fuel. So the less sophisticated refiners, they will -- they don't have significant upgrading capacity. So they will have to adjust their crude intake to reduce the output of less desirable residual fuel. So the other way for a simple refiner to adjust their output is to change their input. So they will have to go to lower sulfur, sweeter grades of crude. And that means mostly, they will change the geographical area where they source their crude. I will get to that in a little more detail. Then, of course, there's now an oversupply of high-sulfur fuel oil. So what do we do with that? So over time, refiners will, no doubt, find ways to reduce their high-sulfur fuel oil output. But there are also now surplus areas like Russia, who are moving their surplus high-sulfur fuel oil to other areas that they can use it as fuel. So some of the refiners in the U.S. Gulf are able to take a high-sulfur fuel oil blends and use it in their cokers. There are many areas in the world that have compliant with very low-sulfur fuel oil, but some areas are short and some areas are long. So you will see movements from long areas to short areas, surplus areas, the deficit areas on the very low-sulfur fuel oil. I'll show a slide on that as well. NGL, which is the alternative to very low-sulfur fuel oil. Those trades will also change, but it's a little more difficult to see how that will be impacted because other factors have a role to play there as well. It's not just the shipping industry. This is a busy slide, but I think it is interesting. This is the -- from Platts, the periodic table of oil. So it shows if you go from the top to the bottom, you go from light to heavy crudes. And if you go from left to right, you go from sweet to sour crudes. So this is a sort of a representative sample of all the crudes in the world. It's not all of them, it would be too big a slide, but it's a representative example. And if you -- because if you want to know what crude people used to use and what they might now be using, you want to see what are the geographical differences in these sources of crude. So let's take a few of the sources of crude. First, let's look at the United States. In the U.S., a lot of light sweet crude. If you see here, you have the Bakken crude, the Permian Basin crudes, the Eagle Ford crudes, they're all light sweet crudes. And then you see on the right-hand side some of the Canadian, Western Canadian Select. Those are heavy sour crudes. So attractive from an IMO 2020 perspective are, obviously, the lighter crudes, which are low-sulfur crudes, which are the ones from the United States. If you look at Europe, European crudes, very similar. A lot of the European crudes are lighter. And some of them are medium shallower or heavier, but most of the crudes are lighter. And U.S., Europe, low Atlantic Basin crudes, right? So then we have the other major source of Atlantic Basin crude, and that's West Africa. Again, a lot of it is light. And some of those crudes are actually -- the most attractive ones are the ones that are low sulfur and high in distal yields. So those are the light sweet crudes, so -- or the light heavy crudes or the heavy sweet crudes. We see them here at bottom, for example, the crudes that are 0.9% sulfur and the 21 API. Those are like would be very attractive crudes for refineries that don't have upgrade capacity because it's already low sulfur, and it will yield a lot of middle distillates. If you look at Asia Pacific, also very attractive crude. But obviously, Asia Pacific doesn't produce that much crude oil. So it's a very attractive crude, but it will not be able to supply all the needs of the region. And the source of crude that has a lot of fresh supply is only the Middle East. But if you look at where the other area as well, the Middle East seems to be in the wrong place. A lot of it is on the sour and not the sweet end of the spectrum. So that will make -- Middle Eastern crudes, relatively speaking, are less attractive for the less sophisticated refineries. And maybe if the pricing adjusts, more attractive for like U.S. Gulf Coast refineries, for example. After the Middle East, you get the Latin America grades. Latin American grades are typically also heavy sour grade. So you have Venezuela, Mexico. Those are grades that are very attractive for use to Gulf Coast refineries because they upgraded their refineries to attract those heavy crudes, but they are not the crudes that you want if you have a simple refinery. So we will see a lot more Atlantic-based light sweet crude move to more simple refineries either in Asia or in Africa or some of the Mediterranean region. So that is a change in trade flows. That has already started to happen. To show how that starts to happen, I show you where the light U.S. crude is going. So lightest crude is exported to only Canada and North America. That's where it has been going even before the crude export ban was lifted. Then it also goes to Europe. Canada is mostly Aframaxes. The Suezmaxes, Europe, same Suezmaxes and Aframaxes or an occasional V. If you also see, it's going into Europe. That's mostly Occidental takes VLCCs there every now and then. And down the map, Suez and Aframaxes. But if you look at the predominant trade for VLCCs, it's obviously Asia Pacific. You see the dark bars dominating that. It sort of makes perfect chance to use a VLCC when you move crude out of the U.S. Gulf. But U.S. Gulf light sweet crude, a lot of that, that is in demand in Asia. So that's why you see a lot of that light sweet crude over here. The heavy sour crude is coming from the Middle East. And you see that, that is -- has become less attractive, mostly because of the domestic production in the U.S. So you see VLCC movements into the U.S. Gulf, and Europe declined precipitously. So you only have like maybe 10 to 12 voyages a month at the moment of VLCCs coming in, while it used to be like 40-plus voyages per month. And that's obviously a result also of the high domestic production in the U.S. and a slowdown in growth in Europe. From a shipping perspective, what's interesting -- and this is a slide that I think maybe you need to have a little bit of a shipping background to understand. However, I'll explain it. In the past, the way trade flows work is you get crude from the Middle East on the VLCC went to the U.S. Gulf, discharged and then the ship would load from Israeli crude and go to the Far East, for example. That was a sort of a typical round-trip voyage. And after discharging in China, a ship would go either to West Africa or to the Aegean back to the Gulf. That will be a nice round-trip voyage. And after sanctions in Venezuela and after the boom in U.S. exports, the U.S. doesn't take that many VLCCs anymore. But we need a lot of VLCCs for our exports. So what has happened now, in the recent years, you can see that on the 2019 now, I think it's only 25% of the VLCCs that's fixed out of the U.S. Gulf and Caribbean actually come into the region laden. So -- and you can see the other 56% in 2019 of the ships that load in the Gulf actually have to [ ballast ] from Asia. So that -- if you talk about changes in trade flows is one thing. But if you see these changes in trade flows and the impact that has on the tanker market, that's very, very significant because obviously AG -- or U.S. growth through Asia has a very long haul. And then you have to ballast back to [ ahead ] because there's not enough ships in the area for the next loading. That's -- I think that has been a very significant contributor to the strong market that we are facing now. Just a quick update on [indiscernible]. This is an JVC and the consultant that we work with. And they show that, obviously, on the compliant fuels, North America seems to be long. Asia seems to be short. So it's a -- it's almost like a situation that happens in many other areas as well. So we might see some movements of very low-sulfur fuel oil from the surplus to the deficit area. So at some point, refiners will adjust. I think this is not a long-term phenomenon. So I think this is more something that you might see during 2020, but it is a fact that, that will drive trade flows. And obviously, we have to say that most of the fuels, high-sulfur and very low-sulfur fuel oils. So if there are fuel orders that probably can be carried on crude tankers. So to the extent that there's an impact of [ product ] tankers is mostly on the [ disbursement side ] there's more NGL that needs to be moved to deficit areas. And obviously, the areas where there is a deficit of very low-sulfur fuel oil, then NGL would be an alternative fuel. So NGL demand is expected to rise as well for the intermediate future. A couple of summary conclusion slides. So crude oil flows are changing, but I think a lot of that has already started in the last couple of years. It probably will continue. The traditional fuel oil trade, which was a lot Atlantic Basin, high-sulfur fuel oil would go Atlantic Basin to Asia because they were short. And that rate has disappeared mostly, but you might see alternative trades because the high-sulfur fuel oil has to go somewhere. And I think it's most likely to be moved on ships. And we've seen some movements into the U.S. Gulf already for coking facilities. So the low-sulfur fuel oil will be traded and distributed globally, as you saw in the previous chart. It looks like there is a trade from the U.S. to Asia. I sort of suspect that won't happen all that much because that would be very long-haul expensive trades. So you might see more regional movements. But we will see a lot more fuel SFO trading. And as I said earlier, I don't think it's clear yet how the gas oil trade, other than it will be increased, but exactly what areas will move to where or how much volume will move from what area to where is, at least to me, not yet clear. So that is -- I think I did it in 10 minutes or 20 minutes. So thank you very much.

Thank you very much, Erik. And we'd like to open it up to questions from the audience and see if we can quarterback this.

Go ahead. I think you've got a microphone.

Omar Nokta from Clarksons. Thanks for the discussion. And I think you've obviously spent the last 2 years to get to this point, modernizing the fleet, expanding your footprint in the VLCCs, deleveraging. And now you're talking about talking with the Board about a capital payment policy. How do you sort of balance the uncertainty ahead with the new regulations with IMO 2030, 2050 and the potential of changing to the propulsion systems in these vessels? How do you think about repaying shareholders, whether it's buybacks or dividends? Or thinking about that where we don't know when if it's next year or 5 years from now, when is it that you're going to potentially need to spend a bit more capital to adhere to potential new stricter regulations?

Thank you, Omar. I mean, we -- I think it's fairly well known we have not ordered any newbuildings at this point in Seaways in our life as an independent company. And one of the things that we continue to look at is buying some of the secondhand vessels that do have a good efficient earning profile, but still have a long ways to go. We would be hesitant to order a newbuilding without a lot of reflection. One of the things that I had picked up from there that we had seen in the reports was that there is a Chinese VLCC order placed where they [ build you an ] upgrade [ is $6 ] million. And I said, "Is that really true?" And the information that we've got back is, no, that's not the case. You will do a few VLCC, still looking at $15 million to $17 million. And that's really something that takes a lot of studies to look at before we make those decisions. So if there is a balancing things and returning capital to shareholders, one of the things we talk about around the table when Jeff and I are strategizing is that it just have to be only one thing that you do with your capital, but every decision has to be seen through that lens of what's the best use of our cash at this point in the cycle. Yes. They have a mic, if you want, that we're able to hear your questions, and I'll repeat it.

Richard [ Diamond ] at Castlewood Capital. Could you talk about the impact of environmental and society principles that favor the larger publicly traded company versus the smaller shipowner today?

Thank you, Richard. I'm going to give that to you, Jeff. Can you jump in there?

Well, I think it starts with being a publicly traded company and then the responsibility that comes with being a leading company based in the U.S. I think we probably have a mindset to focus on this. And being larger, I think we could use resources to be able to do it. I think you're right. I mean, with increasing regulation -- so I mean, it starts at the tone at the top. It isn't really sort of resource or cost-related. But I do think that as we look at putting in programs like Get to Green that we talked about or investigating what's going to be the technology of the future, like Omar is asking about, or making sure that we can be as compliant and forward-thinking and leaning as we can be, it's going to be easier when you're a bigger company. So I think that, that is one of the things that is gradually into the industry being a little less commoditized, and that can only be good for us. So I think you're right, Richard. I hope you're right.

Yes.

Yes. I'm going to steal the mic. I have 2 questions, and I'll try to get them out and be done with. The first industry you guys -- first of all, on your guidance page or whatever with the rates, some of those are really nice. And -- but it was interesting that there's a very tight spread between the older VLCCs and the more modern VLCCs, which is clearly a sign of desperation by people to actually get their hands on the ship, irrespective of the vintage. Does that -- is there anything to weight in there that maybe a similar in discretion or whatever that would be available for something that has a scrubber? Like you don't care if it has a scrubber or not? You're just going to pay the market rate? And also, is there a similar tightness in the spread between older and more vintage assets as you move down the asset curve? And then I have another one, but I'll let you.

Yes. So definitely, the way that we look at the marketplace, and I think the worry that we try to see chartering with LCC, for example, is what kind of freight are they going to pay from the U.S. Gulf to China? And what your efficiency factor is really on to the owner, right? So if they're going to pay $12 million for a scrubber B, they're going to pay $12 million for freight for a nonscrubber B. Now as things settle out, become more sophisticated, is it possible that there could be a bit of a differential? There could, but presently in the market, we're not seeing that. And then to your second part of your question. Definitely, when we're in a stronger market, you will see a mawing of the earnings between the more modern and the older ships. And we purposely have kept some of these vessels that we have, for example, in our Panamax fleet, that you see on Jeff's chart there, some of them are on 6-month rolling-time charters and the others that are in the spot market are facing the earnings are [ 30-year today.] And then you blend those, they are earning the same as a very modern vessel. This is the part of the cycle where you can really take advantage of that.

My next one, actually, maybe it's for Erik, if that's okay. I thought the presentation is very interesting. There has been a shift down in the last 6 months or so of VLCC loadings in the Gulf. Is that because do you think of -- as you were laying out so much of the vessels coming into the Gulf point of Ballast over? And so as a consequence of that, it becomes more efficient to use an Aframax or a Suezmax, which have subsequently been doing pretty well lately? Or is there something else in play behind the kind of the trim down in VLCC loading?

Yes. I think you're right. There has been a decline in recent months of less fees going from the U.S. Gulf to China. I think that's -- I wouldn't say that's necessarily related to the availability of ships in the region. It's probably -- and it's more -- a lot of the U.S. crude is like the sales are spot sales. They're not contract sales like Middle Eastern crudes. So they will look for highest landed value, the [indiscernible] in Gulf. And when trade rates go up so quickly so much, for some of the owners, you see that -- or some of the oil companies, it makes more sense to sell their crude to Europe or to [ Med ] rather than in Asia, but we don't see that there's a long-term trend to this. I think an indication of when the market spiked so suddenly, I think you saw some traders and oil companies taking a step back and say, "Wait a minute. The economics on our deals don't make sense on." Because then, we weren't talking about 11 million, 12 million, we were talking about 15 million, 16 million freight from the Gulf into Asia. So I think that might have given people pause, but I do believe that, that, that market will come back.

Erik, just here's one thing. We're signing the Trump-China [ Z ] trade act today, stage 1, right? And my understanding is that there is $50 billion of that, that's earmarked for natural gas and for oil exports out of the U.S. Gulf to China, but with very few details. And no surprise there. And do you think that then, there'll be, as there was before all of the trade difficulties arose, do you believe that then we'll start moving more directly to China, if at all?

Yes. Yes. I think we deal as brokers quite a bit with UNIPEC, and UNIPEC has been sort of absent from the U.S. Gulf. And it is my belief that they will -- that there's political reasons, and they will come back when the situation normalizes. And this deal being signed is probably something that would be important to them to come back, yes.

Yes. David Mack. Thanks for hosting this. Two questions. What are on the -- just an add-on to the comment about China coming back to the U.S. Do you also expect the sanctions against COSCO to come off? And would that be in conjunction, do you think, with U.S. buy -- sorry, with China buying more U.S. crude? And then the second question is more for the rest of the folks. TC rates right now, you could do a V for a year around $60,000. Is that attractive to you? Or do you believe that you'll do better in the spot market with the V?

That's a good question. If anybody in the room knows if and when those sanctions will come with, let me know. I have no idea. I think, obviously, better relationships between the U.S. and China would help. But in the -- remember that these sanctions came on because the Chinese vessels were moving Iranian oil. And I wouldn't say that our relationship with Iran has improved recently. So I think it's very hard to say and don't expect that to come off near term, and I don't think it's -- although I believe there were some reports that the Chinese might link the 2, the trade deal and the sanctions, I don't -- I haven't seen anything that it actually did. So I wouldn't venture a guess there.

Okay. And question #2, Derek. The interest in a $60,000 day 1-year V charter.

Right. So I think we look at the time charter market both in and out all the time, there was some pressure on us last year to do time charters when the market was down. We're happy we didn't do that then. What we're really more interested in is a VLCC charter for 1 year is getting close to almost a spot deal, especially if you're looking at doing longer-haul voyages from, say, to Gulf to Asia. What we're really looking on is longer-term deals like 3 years with good customers that meet our return criteria. That would become interesting. The 1-year charter in a soaring market like this? Not that much.

Thank you. Yes?

Jeff, how would you envision a dividend policy when you freed up to return cash to shareholders, balancing a consistent or payout to shareholders in a very cyclical business?

Yes. Thanks. As I said, we -- or I might as well start off by saying, we are working closely with our Board and studying this, but we very much feel it'd be premature to make an announcement about it or to be very direct about it before the Term Loan B and the other debt is paid off. So have to be a little, little disappointing there and say to just let's wait for it. But I think, generally, what we're saying, something else that we talked about a lot internally, and Lois mentioned this, is that there isn't only one way to return cash to shareholders. So I wouldn't expect us to come out some policy that just says, "Hey, this is going to be the one thing that's meant to move our share price." I think we see dividend share repurchasing at 2 different ways to return cash to shareholders. And it's not -- if anything we'll do, we'll expect to just hike our share price that day when we say something or any one time, but it's meant to be a body of work or capital allocation that over time we think will reward our shareholders and then that will be reflected in our share price. So don't expect some fancy, very high dividend or some crazy formula or a gimmick. But let us finish our study, and we'll be back to you. I think you'll see something that's responsible in terms of returning cash.

Fair enough. Lois, you want to add to that?

No. I think it was well stated. Yes? We'll just [indiscernible]. We'll quarterback, yes.

Yes. This could be for anyone, Erik, any of you. I'm just curious what your outlook is for how much you think asset values are going to appreciate, say, over the next 12 months, 24 months, given what you're seeing in terms of the rates?

Erik, why don't you start with that? Independent deals?

It's always as difficult as the sanctions question. I think that, obviously, it all depends on the rates. Earlier, we mentioned that there was a VLCC deal done like $6 million higher. I think the second-hand prices as well as newbuilding prices haven't really reflected yet the rise in rates. I think is a wait-and-see attitude, you can say, "Okay. Is this sustainable? And let's wait further into the quarter, the first half of the year." But if the rates, and we are fairly bullish on 2020 as well as 2021, I would see rates and all sort of prices increase quite significantly more in the like 25% range. It's always the second-hand prices, all the ships that go up more and quicker, but I think that would be a good number for maybe 5- to 10-year-old ship.

And I think our company view would be it's interesting in that you really want to see something that's sustainable. We really like to actually see things build on themselves and grow into that market. And I think it's going to happen a little bit longer in duration when we see that as opposed to a real spike, right? So it's nice to see the market building. Okay. Any other questions? If that's where we are, I'll give it a wrap. Well, we thank you again for your attendance today. And at Seaways, we're striving to be your top tanker pick. We want to earn that right, then your confidence based on the way that we execute and the way we add shareholder value, again, through those 5: disciplined capital allocation; low financial leverage, allowing that high operational leverage at this part in the cycle; being best-in-class, technically and commercially; and focusing increasingly on the ESG principles. Thank you all very much for joining us today.