Welcome to the Tsakos Energy Navigation Fireside Chat. My name is Robert Blum, Managing Partner here at Lytham Partners, and today I have the honor of moderating a Q&A discussion with Mike Kimble. Mike is at Tsakos here, heads Investor Relations. If you're not familiar, company trades under the ticker symbol TEN on the New York Stock Exchange. Mike, thank you so much for your participation here today. Thank you. There's been a lot of interest recently in TEN and the tanker sector, and I'm glad you asked me to talk. Absolutely. Certainly timely. For those that may not be familiar with the company, give a bit of a high-level overview of where you're at here today, what it is you transport, how your fleet's positioned, and sort of your strategy really across cycles here. Well, we transport oil and oil products. We are one of the largest seaborne energy transporters in the world. If you look at dedicated tanker companies, we're clearly in the top 10, and with recent orders, probably the top five within the next couple of years. Last year, we transported almost 600 million barrels. That's 12.5 days of U.S. consumption. We are the oldest publicly listed tanker company. 32 years ago, we went to Oslo. 23 years ago, the New York Stock Exchange. I think, quite uniquely, we have always paid a dividend, which is rare among shipping companies. Our customer base is basically the majors. We cater our business and everything we do to servicing the needs of the international oil majors like Exxon, Shell, Chevron, Equinor. That's our basic strategy. Talk a little bit about the business model in somewhat simple terms, right? You sort of try to lock in these sort of longer-term charters versus focusing much more on the spot market as others do. Help people understand the dynamics of how you guys operate. That's really important. Among all the publicly traded tanker companies, we're the only ones who really focus on long-term time charters. It's a different business model. Like, the way I like to think about it is take Coca-Cola, for example. They make Coke, and they market it. They really don't wanna be in the bottling business, so that's why they need Coca-Cola Bottling. It's a long-term relationship, and they need each other. Exxon doesn't wanna be in the shipping business, so we're one of a handful, five, six, seven at most, companies that they go to when they have a new project, when they need a ship, and the deal is we're long-term partners, so we're willing to give you long-term contracts. They manage us as we are the base load. On top of that, they'll do spot contracts, kind of like, in the electric business, base load and peakers in terms of managing things. Well, for us, it takes a lot of the cyclicality out of the business. My CEO's family founded this business in the 1970s. They've been here over 50 years managing ships or owning ships, and we wanna be here another 50 years. With that, dampening the cyclicality, that's why we've been able to pay dividends for so long. That's why we are in a strong financial position, and I think see opportunities that maybe others don't. Obviously, even heading into, you know, last probably two to three months, right, there's been a lot of interest. Even heading into that, there's sort of been this trend within the macro of the tanker market in terms of new builds. Talk a little bit about how you're thinking about that and what you see going forward. If you could, would you pull up that slide that we have in our presentation deck? By the way, there's a presentation deck on our website. Any investor can pull it up. I think there's a slide that really addresses why we're excited about the tanker market. I mean, essentially, there aren't enough tankers out there. The history of shipbuilding and the tanker market has been when times are good, suddenly companies or owners order a ton of new ships, and it crushes the market. For the first time ever, at least in our CEO's experience and his father's experience, that's not the case now. If you look at this slide, what it shows you is there are about 5,500 tankers in the world. If you look at the age, 20% is over 20 years old. In dog years, that's deceased. Basically, a tanker over 20 years old is not long for this world. Almost 50% of the fleet is over 15 years old. One of the advantages when you're trying to figure out the shipping cycle is it takes about three years to build a ship. We know what supply is coming online for the next three years. If you add up all the deliveries over the next three years, it's about 15% of the market. The deliveries are not enough to replace ships that are going to be coming offline sometime in the next few years. My boss has never seen this. We've never seen it, and that's why we've got the largest order book among our public competitors. That's why rates were tightening before the U.S. intervention in Venezuela. That only made things tighter, and similarly with Iran. We're very excited about where things are headed. All right, great. Let's sort of talk a little bit more about sort of the biggest drivers of tanker ton-miles here in 2026. You know, changes in crude and product trade routes, which have obviously been topical here, OPEC policy, you know, growth in different regions, Atlantic basin supply growth or just basic demand in Asia. Yeah. From that macro viewpoint, the slide we just looked at, you know, we're confident things are tightening, and they're going to continue to tighten. We've also, at least from an operator's point of view, had a few things that kind of accelerated that trade. For example, when Russian sanctions were introduced because of the Ukrainian war, you had Russian crude that had been going to Europe, and suddenly Europe wouldn't take it, so it went to Asia. That increased ton-miles. Similarly right now, the Houthis in making the Red Sea passage not so reliable caused a lot of oil to go around Africa. There have been some things that have increased ton-miles. Most recently, oil that has been going through the Strait of Hormuz, 20% of world oil supply, other regions have to make it up. As we talked about with the shuttle tankers, a lot of it's coming from deepwater off the coast of Brazil, Guyana, West Africa. Now we have oil going from the Atlantic to Asia, which is the biggest consumer, the biggest importer of oil. You've got a few other things that, in our view, counter that in the short run. For example, a lot of refining capacity in the world is in Asia. They can't get enough crude, so China had recently imposed an export ban on refined product. You know, it's hard to read all these minute adjustments, but at least in aggregate, it seems like what's happening is only gonna increase ton-miles. How are you underwriting, routing commercial terms when sort of the geopolitical risks can really disrupt some of these key choke points and change the voyage lengths rather quickly? Well, I think that's something we value about our model. It's not just guaranteeing revenues, but all these ancillary issues. You know, three-quarters of our fleet is on time charter. The time charter picks up so many things. For example, had we had a ship trapped in the Persian Gulf, which thank God we don't, chances are it would have been on time charter. If it's on time charter, whether it's empty, moving, not moving, Exxon pays for it, not us. Similarly, war insurance rates skyrocketed, went up six, seven, eight times. For our time charters, the time charter pays that. In terms of commercial terms, they haven't really changed much. I mean, there are a lot of ancillary risks that our model insulates us from to a great extent, and we value that. Sanctions enforcement and the shadow fleet, as I think more people have come to recognize that term lately, continue to really influence tanker supply and trade patterns. What is your view on how this affects mainstream rates, asset values, and really just general operational risk? I don't think it really affects operational risk, at least not for us. I mean, we don't go anywhere near an issue that might violate sanctions. I mean, we've got too much at stake. We've got 82 ships. We're firmly based in the West. You know, operational risk isn't really an issue. In terms of the overall market, I think the shadow fleet tended to decrease or put downward pressure on spot rates for the rest of the fleet. The shadow fleet was about 20%, getting paid maybe three times the prevailing spot rate for the routes they were running for taking the risk. Naturally, to the extent they carry oil and on ships that probably shouldn't be running anymore, that tends to depress spot rates here. As far as asset values, though, for the past four years or so, we consistently have been selling old ships at higher values, and that's because a lot of shadow fleet operators have been in the secondary market trying to buy the oldest ships they can, the cheapest ships they can, and that demand has caused asset values to be higher. Recently with U.S. actions in Venezuela and then Iran, we saw scrappage for the first time because the shadow fleet was having trouble operating, and so some owners scrapped ships. We didn't see much effect in the spot market. If anything, spot rates went up, and I guess that was because the idea was that this timeline of when the shadow fleet was going to get out went from when they can't run anymore to the U.S. won't let them operate, so that timeline accelerated, and that certainly pushed spot rates up. Recently, I don't think the shadow fleet's much of an issue. If anything, the relaxation of sanctions, at least temporarily, the regular fleet can carry Russian oil right now as well as Venezuelan oil. Sort of transition here for a moment. How are regulations, IMO carbon rules, Europe's emissions policies, how are they changing charter preferences and costs and maybe the economics on some of these older vessels? Surprisingly, the regulations aren't as far as you would expect. For example, the IMO standards haven't really come into play yet. European sanctions on sulfur and carbon emissions are being phased in. I think it just highlights the increased preference for newer vessels. Newer vessels are more fuel efficient. They're less polluting. We, for example, have the largest percentage of our fleet dual fuel, meaning it can burn LNG or regular fuel. That helps our customers deal best with these regulations. Again, just like what I said about insurance, at least for our time charters, the majors are the ones who bear the charges, the extra charges that Europe is imposing, for example, on sulfur and carbon. I think newer is better. We've got one of the newest fleets in the business, and we intend to keep it that way. On that point there, what is sort of the strategic logic behind your fleet mix, you know, sort of conventional crude tankers versus specialized assets, like shuttle tankers and LNG? And where do you see sort of the best risk-adjusted demand over the next few years? And maybe as an add-on to that, talk about maybe some of the new tankers coming online. Okay. I think it's simple. We build the ships that our customers want. I mean, we told you about the long-term relationship. When they need something, they call us, and unless we can't agree on price, we tend to build it. What we like about that is twofold. One is, if you look at the public companies, we've got the most diversified tanker fleet out there because of this way of doing business. Also, it tends to lead us to areas that we wouldn't have been in otherwise. For example, Exxon called us over 10 years ago, and they had a deep water well. They needed a shuttle tanker. Would we build it? We hadn't done it before, but we did it. Essentially, that led us into this business. As I said, it's the fastest-growing oil production in the world. There are only five companies in the world that do this. It's been by far our most profitable line of business, and that's why we're growing into it. I think, yeah, the relationship explains the fleet, and it also explains opportunities. Again, maybe talk about some of the new tankers that are coming online and sort of how you think about, you know, I kinda call it effective supply, right? New deliveries versus scrapping or slowing down others. Well, the scrapping is easy. Until recently, until Venezuela, scrapping had almost gone to nothing, which again shows you if you take a look at demand in the aggregate, how short we are on tankers. In any event, in terms of our new build program, we've got of the 20 ships, eight are shuttle tankers, which we're very excited about. Three are VLCCs. We've got four Panamax. Almost everything we do is driven by the majors, and so it's on by the time the ship gets delivered, it has a long-term contract with the major that initiated the process. With respect to the VLCCs, that also kind of highlights our unique position. The majors give us first look, but because of our new build activity and who our customers are, the South Korean shipyards love us. When some slots unexpectedly opened up for VLCCs, we took them. We have three VLCCs, and instead of the three-year timetable, it's more like one year and two years. We expect they will be under long-term contract before they're built or finished building. That was an opportunistic play that ties into the strength we have as an organization. The shipyards also know we can move quickly. That's another reason why we tend to keep cash and make sure we always have the balance sheet that can handle opportunities. You've talked on a number of occasions here how your customers' base is heavily weighted to the majors here. Talk about the visibility that provides you and sort of the rolling nature of these charters and at what point do you sort of look at allocating more towards spot versus rolling into another charter? That's a really good question. These are long-term relationships, and some of our contracts, for some of the recent shuttle tankers, we have a 15-year contract. But if you look at the fleet as a whole, our average duration for the whole fleet is between two and three years. There's constantly rollover. To the extent the market improves, our contracts do reprice. We're not big at playing the spot market. It's not a question of where do we think things are going, so maybe we'll drop from, you know, 20%-25% spot to 50% spot. It's more short-term, making sure we're getting priced correctly. I'll give you an example. VLCC rates have gone crazy. I just mentioned they. You know, before Venezuela, maybe there were $70,000 a day spot rates for VLCCs. In the aftermath of Maduro, they blew through $100,000, went up to $120,000, $130,000, $140,000. Iran occurred, and it's gone crazy. It's $750,000 a day was one of the prints. You have to be careful though. It's kind of like Uber peak pricing. You know, just because there was one spot traded at $750,000 doesn't mean that's where things are. It takes a while for people entering into long-term contracts to really internalize it, accept it and say, "Okay, I was at $90,000 a day. Okay, I'll go to $150,000," or I'll, you know, whatever. For example, right now we are letting a little bit of spot exposure stay out there, things that are rolling, just to make sure that we get a very good rate for the three-year charter we enter into or whatever it is. How do you sort of decide the pace and timing of fleet renewals, right? Especially in a market where you're having to look so far- Mm-hmm. You can also buy, and so- Yeah. Yeah, go ahead, Mike. Well, I mean, it's the firm's been around a long time. There are people with a lot of experience, so it's a little bit of an old-fashioned answer. You're subjectively balancing a lot of things. You know, in simple terms, our clients demand a new, efficient, modern fleet. If a ship is 15 years old, you can safely say that it's on our radar screen to sell it and rejuvenate the fleet. Beyond that, it gets very opportunistic. We are making very good money and particularly in the current rate environment. Recently, I'm sure you've heard of Sinokor, a South Korean firm, has been buying. Essentially, they're trying to corner the VLCC market. They've bought at least 60 ships so far and keep buying. For one of our 10-year-old VLCCs, we, you know, a new build might be $125 million. We were paid $109 million a couple of months before the five-year special survey, which is sort of a once-over that costs $5 million and takes a ship out of service for a month. If you kind of equated that 10-year-old ship, I mean, that was so far above our depreciated value, and maybe it was a little premature, but we sold it. And that also factored into why we thought picking up these three new VLCCs made sense. I guess what I'm trying to say is there's no formula. It's a lot of subjective decision. Makes sense. Couple of minutes remaining here. How do you sort of look at the key milestones that we should be paying attention to and some of the macro drivers that, you know, we started this conversation off with the supply, demand and balance of new ships coming online, absent all of the macro issues that have played out here in the last couple of months, and then sort of how you look to navigate through this time as well as? Mm-hmm. You know, wherever the, you know, we come out on the other side of all this. Yeah, well, I think the macro, we're somewhat powerless to really manage. You just react to it. I guess what we have confidence in is we're on the risk-averse side. For example, we're not trying our luck running tankers through the Strait of Hormuz. We're not putting our ships in harm's way. Our customers don't want us to do that. That's the last thing they want. We take a lot of confidence that whatever happens in the short run. As I said, one of the fears out there is that aggregate demand takes a significant hit and therefore ton-miles will go down a lot just because the volumes go down. You know, that's a risk. In the long run, we've structured the business to go through that. Where rates are at the moment, you know, you can take a big hit and we're still very profitable. In the long run, we're a good shipping company. We run the business well, and we intend to keep running it well. Good on the technical side, new modern ships. We're the only shipping company I know of that has its own merchant marine academy. So we have some of the best seafarers in the business. Yeah, I think we're optimistic that this is going to be a very profitable long cycle. Fantastic. Well, Mike, again, thank you so much for your participation here in the Lytham Partners Summit here. Greatly appreciate it. To everyone that's watching here today, thank you for your participation as well. If there's anything that we can do to help facilitate any getting any additional questions answered or perhaps a meeting with management, please feel free to reach out to Lytham Partners here. Be happy to do so. Again, we have a few more presentations, fireside chats, coming up here throughout the day, so please stick around. Again, Mike, thank you very much. Thank you.