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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission file number 000-51412
 Quintana Maritime Limited
  Republic of the Marshall Islands
(State or other jurisdiction of incorporation or organization)
    
    98-0453513
(I.R.S. Employer Identification No.)
 c/o Quintana Management LLC
Attention: Stamatis Molaris
Pandoras 13 & Kyprou Street
166 74 Glyfada
Greece
 011-30-210-898-5056
 þ £
 £ þ
 £ þ




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TABLE OF CONTENTS
 FORM 10-Q
 PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    25PART II. OTHER INFORMATION
    
    
    26Item 1. Legal Proceedings
    
    
    26Item 6. Exhibits
    
    
    26SIGNATURES
    
    
    28Memorandum of Agreement - Iron BeautyMemorandum of Agreement - KirmarCertification of CEO pursuant to Section 302Certification of CFO pursuant to Section 302Certification of CEO pursuant to Section 906Certification of CFO pursuant to Section 906




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Quintana Maritime Limited
Consolidated Balance Sheets
 September 30,2005(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    9,246,005Inventories
    
    
    265,527Due from charterers
    
    
    83,551Other receivables
    
    
    348,827Prepaid expenses and other current assets
    
    
    1,025,813Total current assets
    
    
    10,969,723Non-current assets:Vessels, net of accumulated depreciation of
$5,731,349
    
    
    324,892,301Advances for vessel deposits
    
    
    13,680,000Other fixed assets, net of accumulated
depreciation of $37,002
    
    
    219,259Deferred financing costs, net of accumulated
amortization of $3,586,453
    
    
    1,510,843Deferred dry docking costs, net of accumulated
amortization of $160,575
    
    
    1,043,753Total non-current assets
    
    
    341,346,156Total assets
    
    $
    352,315,879LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    723,213Sundry liabilities and accruals
    
    
    1,068,533Deferred income
    
    
    1,104,072Term loan facility
    
    
    100,550,000Total current liabilities
    
    
    103,445,818Shareholders equity:Common stock at $0.01 par value  23,554,617 shares
issued, authorized and outstanding
    
    
    235,546Additional paid-in capital
    
    
    251,891,615Deferred stock-based compensation
    
    
    (2,870,423
    )Accumulated deficit
    
    
    (386,677
    )Total shareholders equity
    
    
    248,870,061Total liabilities and
shareholders equity
    
    $
    352,315,879




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Quintana Maritime Limited
Consolidated Statement of Operations
 Period fromJanuary 13,Three Months
    
    
    2005Ended
    
    
    (inception) toSeptember 30,
    
    
    September 30,2005
    
    
    2005(unaudited)
    
    
    (unaudited)Revenues:Voyage revenue
    
    
    13,542,694
    
    
    
    20,805,604Commission
    
    
    (549,492
    )
    
    
    (834,861
    )Net revenue
    
    
    12,993,202
    
    
    
    19,970,743Expenses:Vessel operating expenses
    
    
    2,335,960
    
    
    
    3,622,100General and administrative expenses
    
    
    1,555,332
    
    
    
    2,704,246Management fees
    
    
    473,990
    
    
    
    591,190Depreciation and amortization
    
    
    4,030,574
    
    
    
    5,928,926Total expenses
    
    
    8,395,856
    
    
    
    12,846,462Operating profit
    
    
    4,597,346
    
    
    
    7,124,281Other expenses:Interest expense
    
    
    (1,281,405
    )
    
    
    (2,903,044
    )Interest income
    
    
    132,702
    
    
    
    159,970Finance costs
    
    
    (3,226,090
    )
    
    
    (3,586,453
    )Foreign exchange losses and other, net
    
    
    21,172
    
    
    
    (3,700
    )Total other expenses
    
    
    (4,393,621
    )
    
    
    (6,333,227
    )Net income
    
    
    203,725
    
    
    
    791,054Earnings per common shareBasic
    
    
    0.01
    
    
    
    0.07Diluted
    
    
    0.01
    
    
    
    0.07Weighted average shares outstandingBasic
    
    
    19,517,470
    
    
    
    10,971,653Diluted
    
    
    19,627,598
    
    
    
    11,010,472
  4




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Quintana Maritime Limited
Consolidated Statement of Shareholders Equity
(unaudited)
 Number
    
    
    
    
    
    
    Additional
    
    
    Deferredof
    
    
    Common
    
    
    Paid-in
    
    
    stock-based
    
    
    AccumulatedShares
    
    
    Stock
    
    
    Capital
    
    
    compensation
    
    
    Deficit
    
    
    TotalBalance,
January 13, 2005
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Issuance of common
stock & capital
contributions
    
    
    6,319,492
    
    
    
    63,195
    
    
    
    68,342,442
    
    
    
    
    
    
    
    
    
    
    
    68,405,637Initial public
offering, net of
issuance costs
    
    
    16,968,500
    
    
    
    169,685
    
    
    
    180,592,301
    
    
    
    
    
    
    
    
    
    
    
    180,761,986Deferred
stock-based
compensation
    
    
    266,625
    
    
    
    2,666
    
    
    
    2,956,872
    
    
    
    (2,959,538
    )
    
    
    
    
    
    
    Amortization of
deferred
stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,115
    
    
    
    
    
    
    
    89,115Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,177,731
    )
    
    
    (1,177,731
    )Net income for the
period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    791,054
    
    
    
    791,054Balance, September
30, 2005
    
    
    23,554,617
    
    
    $
    235,546
    
    
    $
    251,891,615
    
    
    $
    (2,870,423
    )
    
    $
    (386,677
    )
    
    $
    248,870,061
  5




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Quintana Maritime Limited
Consolidated Statement of Cash Flows
(unaudited)
 Period fromJanuary 13, 2005(inception) toSeptember 30,2005(unaudited)Cash flows from operating activities:Net income
    
    
    791,054Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    5,928,926Amortization of deferred finance and legal costs
    
    
    3,586,453Changes in assets and liabilities:Increase in inventories
    
    
    (265,527
    )Increase in due from charterer
    
    
    (83,551
    )Increase in other receivables
    
    
    (348,827
    )Increase in prepaid expenses and other current assets
    
    
    (1,025,813
    )Increase in accounts payable
    
    
    723,213Increase in sundry liabilities and accruals
    
    
    1,068,533Increase in deferred income
    
    
    1,104,072Deferred dry-dock costs incurred
    
    
    (1,204,328
    )Net cash from operating activities
    
    
    10,274,205Cash flows from investing activities:Vessel acquisitions
    
    
    (330,623,650
    )Advances for vessel deposit
    
    
    (13,680,000
    )Purchases of property, plant and equipment
    
    
    (256,261
    )Net cash used in investing activities
    
    
    (344,559,911
    )Cash flows from financing activities:Proceeds from long-term debt
    
    
    411,621,351Repayment of long-term debt
    
    
    (311,071,351
    )Payment of financing costs
    
    
    (5,097,296
    )Paid-in capital and common stock
    
    
    68,664,437Proceeds from initial public offering
    
    
    182,771,956Issuance costs of initial public offering
    
    
    (2,179,655
    )Dividends paid
    
    
    (1,177,731
    )Net cash from financing activities
    
    
    343,531,711Net increase in cash and cash equivalents
    
    
    9,246,005Cash and cash equivalents at beginning of period
    
    
    Cash and cash equivalents at end of period
    
    
    9,246,005Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    2,093,044Deferred stock-based compensation
    
    $
    2,959,538
  6




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 1. Basis of Presentation and General Information
 The Company
     DeadweightTonnage (in
    
    
    
    
    DeliveryCompany
    
    Vessel
    
    Agreement Date
    
    metric tons)
    
    
    Built
    
    DateFearless Shipco LLC
    
    Fearless I
    
    February 18, 2005
    
    
    73,427
    
    
    1997
    
    April 11, 2005King Coal Shipco LLC
    
    King Coal
    
    February 25, 2005
    
    
    72,873
    
    
    1997
    
    April 12, 2005Coal Glory Shipco LLC
    
    Coal Glory
    
    March 21, 2005
    
    
    73,670
    
    
    1995
    
    April 13, 2005Iron Man Shipco LLC
    
    Iron Man
    
    March 15, 2005
    
    
    72,861
    
    
    1997
    
    May 6, 2005Coal Age Shipco LLC
    
    Coal Age
    
    March 15, 2005
    
    
    72,861
    
    
    1997
    
    May 4, 2005Barbara Shipco LLC
    
    Barbara
    
    March 24, 2005
    
    
    73,390
    
    
    1997
    
    July 20, 2005Coal Pride Shipco LLC
    
    Coal Pride
    
    March 29, 2005
    
    
    72,600
    
    
    1999
    
    August 16, 2005Linda Leah Shipco LLC
    
    Linda Leah
    
    March 24, 2005
    
    
    73,390
    
    
    1997
    
    August 22, 2005Iron Beauty Shipco LLC
    
    Iron Beauty
    
    September 2, 2005
    
    
    165,500
    
    
    2001
    
    October 18, 2005Kirmar Shipco LLC
    
    Kirmar
    
    September 2, 2005
    
    
    165,500
    
    
    2001
    
    Expected mid-November 2005
  7




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Significant Accounting Policies
 Basis of presentation
  Principles of consolidation
  Use of estimates
  Other comprehensive income/(loss)
  Foreign currency translation
  Cash and cash equivalents
  8




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Summary of Significant Accounting Policies  Continued
 Inventories
  Impairment of long-lived assets
  Vessel cost
  Vessel depreciation
  Drydocking costs
  9




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Summary of Significant Accounting Policies  Continued
 Financing costs
  Pension and retirement benefit obligationscrew
  Revenues and expenses
  Iron Beauty
  Repairs and maintenance
  Income taxes
  10




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Summary of Significant Accounting Policies  Continued
 Segment reporting
  Derivatives
  Earnings/(loss) per share
  Share-based Compensation
    11




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 Share-based Compensation (continued)
     Recent accounting pronouncements
  3. Vessel Acquisitions
 Barbara, Coal Pride, Linda Leah
 4. Advances for Vessel Deposits
 Iron Beauty Kirmar Iron Beauty
 12




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 Advances for Vessel Deposits (continued)
 Kirmar
 5. Financing Costs
  6. Sundry Liabilities and Accruals
  7. Borrowings
   8. Related Party Transactions
   13




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 Related Party Transactions (continued)
  9. Technical-management company
  10. Commitments
  AmountOctober 1, 2005 to September 30, 2006
    
    $
    94,822October 1, 2006 to September 30, 2007
    
    $
    100,561October 1, 2007 to January 31, 2008
    
    $
    34,061Total
    
    $
    229,444
 Iron Beauty Kirmar
 Vessel to be
    
    PurchaseCompany
    
    Acquired
    
    Price
    
    
    Delivery DateIron Beauty Shipco LLC
    
    Iron Beauty
    
    $
    68,400,000
    
    
    October 18, 2005Kirmar Shipco LLC
    
    Kirmar
    
    
    68,400,000
    
    
    Expected mid-November 2005Total cost
    
    
    
    
    136,800,000Less: 10% deposit
    
    
    
    
    (13,680,000
    )Total commitment
    
    
    
    $
    123,120,000
 14




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Quintana Maritime Limited
Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 11. Stock Split and Stock Dividend
  12. Cash Dividend
  13. Stock Incentive Plan
  14. Subsequent Events
 
    
    On October 4, 2005, the Company entered into a $250-million revolving credit agreement.
On October 7, 2005, the Company drew down $103.0 million under the revolving credit
facility and repaid in full the amounts outstanding under its existing term loan facility,
which was terminated upon repayment, and paid fees and expenses related to the revolving
credit facility. On the same day, the Company entered into an interest-rate hedge on the
$103.0 million in borrowings, which locked LIBOR at 4.29% for six months, which was the
period of the loan. On October 17, 2005, the Company drew down an additional $62.0 million
under the revolver to finance the balance of the purchase price of the Iron Beautyand
entered into another interest-rate hedge for the six-month period of the borrowings, which
locked LIBOR on the $62.0 million at 4.35%.
    
    On November 1, 2005, the Company declared a cash dividend of $0.20 per common share.
The dividend will be payable on November 22, 2005 to shareholders of record on November 11,
2005.
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of financial condition and results of operations should
be read in conjunction with our historical consolidated financial statements and the notes thereto
included elsewhere in this filing.
 This discussion contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as
amended and the Private Securities Litigation Reform Act of 1995 and are intended to be covered by
the safe harbor provided for under these sections. These statements may include words such as
believe, estimate, project, intend, expect, plan, anticipate, and similar expressions
in connection with any discussion of the timing or nature of future operating or financial
performance or other events. Forward looking statements reflect managements current expectations
and observations with respect to future events and financial performance. Where we express an
expectation or belief as to future events or results, such expectation or belief is expressed in
good faith and believed to have a reasonable basis. However, our forward-looking statements are
subject to risks, uncertainties, and other factors, which could cause actual results to differ
materially from future results expressed, projected, or implied by those forward-looking
statements. The principal factors that affect our financial position, results of operations and
cash flows
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include, charter market rates, which have recently increased to historic highs, and periods of
charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S.
dollars, depreciation expenses, which are a function of the cost of our vessels, significant vessel
improvement costs and our vessels estimated useful lives, and financing costs related to our
indebtedness. Our actual results may differ materially from those anticipated in these forward
looking statements as a result of certain factors which could include the following: (1) changes in
demand in the dry-bulk market, including changes in production of, or demand for, commodities and
bulk cargoes, generally or in particular regions; (2) greater than anticipated levels of
dry-bulk-vessel newbuilding orders or lower than anticipated rates of dry-bulk-vessel scrapping;
(3) changes in rules and regulations applicable to the dry-bulk industry, including legislation
adopted by international bodies or organizations such as the International Maritime Organization
and the European Union or by individual countries; (4) actions taken by regulatory authorities; (5)
changes in trading patterns significantly affecting overall dry-bulk tonnage requirements; (6)
changes in the typical seasonal variations in dry-bulk charter rates; (7) changes in the cost of
other modes of bulk commodity transportation; (8) changes in general domestic and international
political conditions; (9) changes in the condition of the Companys vessels or applicable
maintenance or regulatory standards (which may affect, among other things, our anticipated
drydocking costs); (10) and other factors listed from time to time in our filings with the
Securities and Exchange Commission, including our Registration Statement on Form S-1 filed with the
Securities and Exchange Commission. We disclaim any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
 Executive Overview
  Results of Operations
  Charters
  16




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Period fromThree Months
    
    January 13, 2005Ended
    
    (inception) toSeptember 30,
    
    September 30,2005
    
    2005Ownership days
    
    
    619
    
    
    
    973Operating days
    
    
    613
    
    
    
    899Fleet utilization
    
    
    99.0
    %
    
    
    92.4
    %
 
    
    Ownership days.We define ownership days as the aggregate number of days in a period
during which each vessel in our fleet has been owned by us. Ownership days are an
indicator of the size of our fleet over a period and affect both the amount of revenues
and the amount of expenses that we record during a period.
    
    Operating days.We define operating days as the number of our ownership days in a
period less the aggregate number of days that our vessels are off-hire due to any
reason. The shipping industry uses operating days to measure the aggregate number of
days in a period during which vessels actually generate revenues.
    
    Fleet utilization.We calculate fleet utilization by dividing the number of our
operating days during a period by the number of our ownership days during the period.
The shipping industry uses fleet utilization to measure a companys efficiency in
finding suitable employment for its vessels and minimizing the amount of days that its
vessels are off-hire for reasons other than scheduled repairs or repairs under
guarantee, vessel upgrades, special surveys or vessel positioning.
    
    TCE rates.We define TCE (Time Charter Equivalent) rates as our voyage and time
charter revenues less voyage expenses during a period divided by the number of our
ownership days during the period, which is consistent with industry standards. TCE rate
is a shipping industry performance measure used primarily to compare daily earnings
generated by vessels on time charters with daily earnings generated by vessels on voyage
charters.
    
    Spot Charter Rates.Spot charter hire rates are volatile and fluctuate on a seasonal
and year to year basis. The fluctuations are caused by imbalances in the availability of
cargoes for shipment and the number of vessels available at any given time to transport
these cargoes.
    
    Voyage and Time Charter Revenue.Our revenues will be driven primarily by the number
of vessels in our fleet, the number of days during which our vessels operate and the
amount of daily charter hire rates that our vessels earn under charters, which, in turn,
will be affected by a number of factors, including:
 °
    
    the duration of our charters;°
    
    our decisions relating to vessel acquisitions and disposals;°
    
    the amount of time that we spend positioning our vessels;°
    
    the amount of time that our vessels spend in dry-dock undergoing repairs;°
    
    the amount of time that our vessels spend in connection with maintenance and upgrade work;°
    
    the age, condition and specifications of our vessels;°
    
    levels of supply and demand in the drybulk shipping industry; and°
    
    other factors affecting spot market charter hire rates for drybulk carriers.
 17




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Net Revenues
  Commissions and Other Voyage Expenses
  Vessel Operating Expenses
  General and Administrative Expenses
  Management Fees
  18




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Depreciation
  Drydocking
  Financing Costs
  Inflation
  Liquidity and Capital Resources
   19




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Term Loan Facility
  Revolving Credit Facility
 General . Iron
Beauty
 Fees and Interest.
  Term and Facility Limit.
  Prepayments.
 20




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Guaranty; Security.
 Conditions.
 Financial Covenants.
 
    
    a ratio of total debt to total capitalization (each as defined in the credit
agreement) of no more than 0.65 to 1.00;
    
    minimum liquidity on the last day of each quarter of $525,000 per vessel;
    
    a ratio of EBITDA to cash interest expense (each as defined in the credit
agreement) of no less than 2.00 to 1.00 on a trailing four-quarter basis;
    
    the fair market value of collateral of at least 135% of outstanding loans and letter of credit; and
    
    consolidated net worth (as defined in the credit agreement) of at least 80% of $248.0 million.
 Restrictive
Covenants.
   Off-balance Sheet Arrangements
  Contractual Obligations
  21




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##### Table of Contents



One to
    
    
    Three
    
    
    MoreWithin One
    
    
    Three
    
    
    Years to
    
    
    Than FiveYear
    
    
    Years
    
    
    Five Years
    
    
    Years
    
    
    Total(Dollars in thousands)Term-loan facility (1)
    
    $
    30,550
    
    
    $
    22,350
    
    
    $
    14,430
    
    
    $
    33,220
    
    
    $
    100,550Vessel purchase agreements(2)
    
    
    123,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123,120Office lease(3)
    
    
    95
    
    
    
    135
    
    
    
    
    
    
    
    
    
    
    
    230Total
    
    $
    153,765
    
    
    $
    22,485
    
    
    $
    14,430
    
    
    $
    33,220
    
    
    $
    223,900
 
 (1)
    
    The outstanding term loan facility as at September 30, 2005 amounting to $100.6 million was
fully repaid on October 7, 2005 with borrowings under our new revolving credit facility. The
term-loan facility was terminated on that date.(2)
    
    As of September 30, 2005, we had entered into vessel purchase agreements for two vessels for
an aggregate purchase price of $136.8 million, of which we paid a 10% deposit on those
vessels, or $13.7 million. Subsequent to September 30, 2005, we took delivery of one of those
vessels and paid the $61.6 million balance that was due on that vessel. We financed the
balance of the payment with borrowings under our revolving credit facility. We expect the
other vessel to be delivered in mid-November 2005; the balance of the purchase price for that
vessel will also be financed with borrowings under our revolving credit facility.(3)
    
    Represents the U.S. Dollar equivalent of lease payments in Euros as calculated in accordance
with the rate of $1.204 to 1.00 as of September 30, 2005. Such rate was $1.206 to 1.00
as of October 31, 2005. Our office lease has a three-year term. Critical Accounting Policies
  Impairment of long-lived assets
  Vessel depreciation
  Drydocking costs
  22




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Recent accounting pronouncements
   Risks Related to our Business
 
    
    Because we are a new company with a limited operating history, we may be less successful
in implementing our business strategy than a more seasoned company.
    
    We cannot assure you that our board of directors will declare dividends.
    
    Our earnings may be adversely affected if we do not successfully employ our vessels on
medium- or long-term time charters or take advantage of favorable opportunities in the spot
market.
    
    We may have difficulty properly managing our planned growth through acquisitions of
additional vessels.
    
    We cannot assure you that we will be able to borrow further amounts under our revolving
credit facility, which we may need to fund the acquisition of additional vessels.
    
    Restrictive covenants in our revolving credit facility impose, and any future debt
facilities will impose, financial and other restrictions on us.
    
    Servicing future indebtedness would limit funds available for other purposes, such as
the payment of dividends.
    
    Unless we set aside reserves for vessel replacement, at the end of a vessels useful
life our revenue will decline, which would adversely affect our cash flows and income.
    
    Purchasing and operating secondhand vessels may result in increased operating costs and
reduced fleet utilization.
    
    When our initial time charters end, we may not be able to replace them promptly or with
profitable ones.
    
    The international dry-bulk shipping industry is highly competitive, and we may not be
able to compete successfully for charters with new entrants or established companies with
greater resources.
    
    We may be unable to retain key management personnel and other employees in the shipping
industry, which may negatively impact the effectiveness of our management and results of
operations.
    
    Risks associated with operating oceangoing vessels could negatively affect our business
and reputation, which could adversely affect our revenues and stock price.
    
    The operation of dry-bulk carriers has certain unique operational risks.
    
    Our vessels may suffer damage and we may face unexpected costs, which could adversely
affect our cash flow and financial condition.
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
    
    The shipping industry has inherent operational risks that may not be adequately covered
by our insurance.
    
    If our dry-bulk carriers are not delivered on time or are delivered with significant
defects, our earnings and financial condition could suffer.
    
    The aging of our fleet may result in increased operating costs in the future, which
could adversely affect our earnings.
    
    We may earn United States source income that is subject to tax, thereby reducing our
earnings.
    
    U.S. tax authorities could treat us as a passive foreign investment company, which
could have adverse U.S. federal income tax consequences to U.S. holders.
    
    The enactment of proposed legislation could affect whether dividends paid by us
constitute qualified dividend income eligible for a preferential rate of federal income
taxation.
    
    Because we expect to generate all of our revenues in U.S. dollars but may incur a
significant portion of our expenses in other currencies, exchange rate fluctuations could
hurt our results of operations.
    
    We depend upon a limited number of customers for a large part of our revenues and the
loss of one or more of these customers could adversely affect our financial performance.
    
    We are a holding company, and we depend on the ability of our subsidiaries to distribute
funds to us in order to satisfy our financial obligations and to make dividend payments.
    
    As we expand our business, we may need to improve our operating and financial systems
and will need to recruit suitable employees and crew for our vessels.
    
    The international dry-bulk shipping sector is cyclical and volatile, which may lead to
reductions in our charter hire rates, vessel values and results of operations.
    
    Charter hire rates in the dry-bulk sector will depend on continued economic growth in
the world economy that exceeds the capacity of the growing world fleets ability to match
it.
    
    We may not be able to draw down the full amount under our revolving credit facility if
the market value of our vessels, which are currently near historically high levels,
declines.
    
    We may breach some of the covenants under our revolving credit facility if the market
price of our vessels, which are currently near historically high levels, declines.
    
    Our substantial operations outside the United States expose us to political,
governmental and economic instability, which could harm our operations.
    
    Seasonal fluctuations in industry demand could adversely affect our operating results
and the amount of available cash with which we can pay dividends.
    
    We are subject to regulation and liability under environmental laws that could require
significant expenditures and affect our cash flow and net income.
    
    We are subject to international safety regulations and the failure to comply with these
regulations may subject us to increased liability, may adversely affect our insurance
coverage and may result in a denial of access to, or detention in, certain ports.
    
    Maritime claimants could arrest one or more of our vessels, which could interrupt our
cash flow.
    
    Governments could requisition our vessels during a period of war or emergency, resulting
in a loss of earnings.
    
    Increased inspection procedures and tighter import and export controls could increase
costs and disrupt our business.
    
    An economic slowdown in the Asia Pacific region could have a material adverse effect on
our business, financial position and results of operations.
    
    World events could affect our results of operations and financial condition.
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Interest Rates
  24




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Currency and Exchange Rates
  
 Item 4. Controls and Procedures
   25




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  Legal Proceedings Related to Mr. Molaris
   
 Item 6. Exhibits
 ExhibitNo.
    
    Description3.1*
    
     Amended and Restated Articles of Incorporation3.2*
    
     Amended and Restated By-laws4.1*
    
     Form of Share Certificate10.1*
    
     Form of Vessel Management Agreement10.2*
    
     Agreement Related to Credit Facility10.3*
    
     First Supplemental Agreement to US$262,456,000 Credit Facility10.4*
    
     Second Supplemental Agreement to US$262,456,000 Credit Facility10.5*
    
     Registration Rights Agreement10.6**
    
     Memorandum of Agreement for purchase of Iron Beauty10.7**
    
     Memorandum of Agreement for purchase of Kirmar10.8*
    
     2005 Stock Incentive Plan10.9
    
     Form of Phantom Stock Award Agreement (incorporated by reference
to Exhibit 10.2 to Current Report on Form 8-K filed November 3, 2005)10.10
    
     Form of Restricted Stock Award Agreement (incorporated by reference
to Exhibit 10.2 to Current Report on Form 8-K filed November 3, 2005)10.11
    
     Revolving Credit Facility (incorporated by reference to Exhibit
10.1 to Current Report on Form 8-K filed October 6, 2005)
 26




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##### Table of Contents



ExhibitNo.
    
    Description10.12
    
     Services Agreement between Quintana Maritime Limited and Quintana
Minerals Corporation, dated as of October 31, 2005 (incorporated by
reference to Exhibit 10.1 to Current Report on Form 8-K filed
November 3, 2005)31.1**
    
     Certification pursuant to Section 302 of the Sarbanes- Oxley Act of
2002 by Chief Executive Officer.31.2**
    
     Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 by Chief Financial Officer.32.1***
    
     Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 by Chief Executive Officer.32.2***
    
     Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 by Chief Financial Officer.
 
 *
    
    Incorporated by reference to the Companys Registration Statement filed on Form S-1 (File No.
333-124576) with the Securities and Exchange Commission on July 14, 2005.**
    
    Filed herewith***
    
    Furnished herewith 27




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##### Table of Contents



SIGNATURES
  QUINTANA MARITIME LIMITEDBy:
    /s/ Stamatis MolarisStamatis MolarisChief Executive Officer, President and Director
(Principal Executive Officer)/s/ Paul J. CornellPaul J. CornellChief Financial Officer
(Principal Financial Officer; Principal Accounting Officer)




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description3.1*
    
     Amended and Restated Articles of Incorporation3.2*
    
     Amended and Restated By-laws4.1*
    
     Form of Share Certificate10.1*
    
     Form of Vessel Management Agreement10.2*
    
     Agreement Related to Credit Facility10.3*
    
     First Supplemental Agreement to US$262,456,000 Credit Facility10.4*
    
     Second Supplemental Agreement to US$262,456,000 Credit Facility10.5*
    
     Registration Rights Agreement10.6**
    
     Memorandum of Agreement for purchase of Iron Beauty10.7**
    
     Memorandum of Agreement for purchase of Kirmar10.8*
    
     2005 Stock Incentive Plan10.9
    
     Form of Phantom Stock Award Agreement (incorporated by reference
to Exhibit 10.2 to Current Report on Form 8-K filed November 3, 2005)10.10
    
     Form of Restricted Stock Award Agreement (incorporated by reference
to Exhibit 10.2 to Current Report on Form 8-K filed November 3, 2005)10.11
    
     Revolving Credit Facility (incorporated by reference to Exhibit
10.1 to Current Report on Form 8-K filed October 6, 2005)10.12
    
     Services Agreement between Quintana Maritime Limited and Quintana
Minerals Corporation, dated as of October 31, 2005 (incorporated by
reference to Exhibit 10.1 to Current Report on Form 8-K filed
November 3, 2005)31.1**
    
     Certification pursuant to Section 302 of the Sarbanes- Oxley Act of
2002 by Chief Executive Officer.31.2**
    
     Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 by Chief Financial Officer.32.1***
    
     Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 by Chief Executive Officer.32.2***
    
     Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 by Chief Financial Officer.
 
 *
    
    Incorporated by reference to the Companys Registration Statement filed on Form S-1 (File No.
333-124576) with the Securities and Exchange Commission on July 14, 2005.**
    
    Filed herewith***
    
    Furnished herewith