The loading of refined marine fuel into a ship\'s fuel tank, or bunkering, is an integral part of the marine industry, as fuel costs often represent a large percentage of a ship\'s operating costs. It is estimated that marine petroleum costs for a typical containership of 4,800 TEU, a bulk carrier of 150,000 dwt, and an oil tanker of 280,000 dwt carrying capacity, amount to 80%, 62% and 60% of operating costs, respectively.

The marine industry is linked directly to international trade, with ocean-going vessels representing the most efficient, and often the only method, of transporting large volumes of basic commodities and finished goods. In 2004, approximately 7.0 billion tons of cargo were transported by 46,222 ships, with 597,709,000 of combined gross tonnage. Fuel consumption by ships comprises approximately 20% of the world\'s fuel demand. It is estimated that commercial shipping consumes approximately 150.0 million metric tons of marine fuel per year. Considering the price levels as of May 2005 this amounts to annual business revenues of over $40 billion.

The exact size of the marine fuels supply market is not easily determined due to the extent of supply locations worldwide and other common defects in data collection such as double-counting of traded quantities, unreliability of official sources in certain countries, particularly in developing regions. The most conservative estimates, as stated by a report to the European Commission—Director General Environment, prepared by the private consultancy firm BeicipFranlab (October 2003), give an indication of the global marine fuel sales development over the thirty-year period from 1971 to 2001 and the approximate share of main geographical regions. According to this report, over that period, world marine bunker sales fluctuated from 109.2 million tons in 1971 to 86.6 million tons in 1983 (during the last large freight recession) and up to 143.6 million tons in 2001.

The Company provides fueling services to virtually all types of ocean-going vessels and many types of coastal vessels, such as oil tankers, container ships, drybulk carriers, cruise ships, naval vessels and ferries. The Company’s customers include a diverse group of ocean-going and coastal ship operators and marine fuel traders, brokers and other users, including the United States Navy. The Company is a newly formed Marshall Islands holding company. The Company conducts its business through operating subsidiaries that were previously separate, privately-held related entities.

The Company currently has a well-maintained, high quality fleet of double hull bunkering tankers with an average age of 10.7 years. Seven of its nine bunkering tankers are double hull. In addition to bunkering tankers, The Company owns one single hull Aframax tanker with a cargo-carrying capacity of approximately 92,000 dwt.

The Company intends to expand its business and marine fuel delivery capability. In furtherance of this objective, the Company has entered into newbuilding contracts with a Chinese shipyard for the construction of ten new double hull bunkering tankers, which are due to be delivered between October 2006 and August 2008, and it has an option to build five additional vessels at that shipyard. The Company expects to enter into agreements with third party sellers to purchase additional double hull bunkering tankers.

In the event that the Company purchases and takes delivery of six secondhand double hull bunkering tankers and sells both of its single hull bunkering tankers in the open market, and following the delivery between October 2006 and May 2009 of the ten newbuildings it has under contract and the five additional vessels subject to an option, the Company expects to have 28 double hull vessels in its operating fleet of bunkering tankers.

Gross spread on marine petroleum products increased by $3.5 million, or 27.6%, to $16.2 million for the six months ended June 30, 2005, compared to $12.7 million for the same period in 2004.

Voyage revenues decreased by $1.2 million, or 18.2%, to $5.4 million for the six months ended June 30, 2005, compared to $6.6 million for the same period in 2004.

Vessel hire charges decreased by $1.4 million, or 87.5%, to $0.2 million for the six months ended June 30, 2005, compared to $1.6 million for the same period in 2004.

Interest and finance costs increased by $0.5 million to $0.8 million for the six months ended June 30, 2005, compared to $0.3 million for the same period in 2004.