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HAMILTON, Bermuda, Jan. 15, 2014 (GLOBE NEWSWIRE) -- Nordic American Tankers (NAT) announced today that NAO yesterday took delivery of the last of the six recently built Platform Supply Vessels (PSVs) from the Ulstein Group of Norway. NAO is fully operational. NAT is the sponsor of NAO, owning 26% of the share capital in NAO. A subsidiary of NAT is the manager of NAO.
The PSV vessels play an integral role in the logistical chain in offshore exploration and production of oil and gas. NAO has its six PSV vessels in the demanding North Sea market, where there are numerous offshore oil platforms that need to be served. PSVs are highly sophisticated vessels. The NAO vessels represent the latest in design and technology.
NAO is an important investment for NAT. Three vessels were delivered from the seller to NAO in December 2013. The last three were delivered in January 2014, a few days later than planned because of bad weather which delayed necessary underwater inspections. The vessels were delivered from the yard to the seller between January 2012 and September 2013.
Five of the six vessels are now on contract employment. Unlike the NAT crude tanker business in which the spot market plays a larger role, contract employment is more the norm in the PSV charter market. The PSV vessels are on contracts to major energy companies with an average duration (including options) of a little over two years with rates between $25,000 and $29,000 per day per vessel. Like NAT, NAO is expected to have a cash breakeven rate of around $12,000 per day per vessel.
NAT participated in the private placement of NAO shares in November 2013 with an investment of $65 million, which was financed by a follow-on equity offering in NAT at the same time. NAT has previously announced that it expects NAO to list its shares on the New York Stock Exchange as early as possible, hopefully during the first quarter of 2014. NAT is considering distributing to NAT shareholders about $10 million worth of NAO shares as a dividend in kind around the time of listing. This dividend equates to about $0.13 per NAT share. In addition, NAT is planning to declare a cash component to the NAT dividend expected to be paid in late February, 2014. Further information will be available when NAT releases its 4Q2013 results on February 10, 2014.