The maritime shipping industry is fundamental to international trade because it is the only practicable and cost effective means of transporting large volumes of many essential commodities and finished goods. In 2004, total annual world seaborne trade amounted to 6.5 billion tonnes, of which drybulk cargoes amounted to 2.3 billion tonnes and oil cargoes to 2.4 billion tonnes. Shipping is a global industry and its prospects are closely tied to the level of economic activity in the world. The world deep-sea cargo ship fleet comprises approximately 22,000 ships with a total capacity of 850 million dwt. There are four main segments in the shipping industry, namely tankers carrying such cargo as crude oil, petroleum products etc.; bulk carriers, which carry coal, grain etc; containerships, which carry only containers; and gas tankers, which carry mostly LPG and LNG. The charter market is highly competitive. Competition is based primarily on the offered charter rate, the location and technical specification of the vessel and the reputation of the vessel and its manager. Typically, the agreed terms are based on standard industry charterparties prepared to streamline the negotiation and documentation processes.

The Company’s tanker fleet consists of 12 vessels with a total capacity of approximately 945,000 dwt. The Company currently owns nine of these vessels, consisting of two Suezmax crude oil tankers, four Handymax product tankers and three Panamax product tankers. All the vessels in the Company’s tanker fleet are double hull in order to meet IMO regulations banning all single hull tankers by 2010 or 2015 depending on the port or flag state.

The Company’s product tankers, such as Panamax and Handymax tankers, are generally used to transport refined petroleum products to consuming regions of the world, primarily the United States, Europe and Asia. The Company’s product tankers are designed to transport several different refined petroleum products simultaneously in segregated, coated cargo tanks that are coated with an epoxy-based paint that allows the Company to carry an array of petroleum products. These petroleum products typically include gasoline, jet fuel, kerosene, naphtha, and heating oil. The Company’s crude oil tankers, such as Suezmax tankers, are used to transport crude oil typically from oil producing regions, such as West Africa and the Arabian Gulf, to refining regions located throughout the world. The average age of the Company’s tanker fleet is approximately 0.6 years, compared to a worldwide tanker fleet average of 12 years (calculated for vessels above 10,000 dwt).

Voyage expenses increased by $2.8 million to $3.8 million for the three-month period ended March 31, 2005, compared to $1.0 million for the three-month period ended March 31, 2004.

Operating income for the three-month period ended March 31, 2005 was $18.1 million compared to operating income of $1.9 million for the three-month period ended March 31, 2004.

Interest expense was $2.3 million for the three-month period ended March 31, 2005, and was primarily due to the increase of long-term debt to $422.1 million for the three-month period ended March 31, 2005, from $145.3 million period ended December 31, 2004.