UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 2054




FORM
20-F




(Mark
One)


REGISTRATION
      STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
      OF 1934


OR


x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
fiscal year ended December 31, 2008


OR


TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
transition period from _________________ to ________________




OR


SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934


Date of
event requiring this shell company report ________________




Commission
file number:  001-32640




DHT
MARITIME, INC.


(Exact
name of Registrant as specified in its charter)


Not
Applicable


(Translation
of Registrant’s name into English)


Republic of the Marshall
Islands


(Jurisdiction
of incorporation or organization)


26
New Street


St.
Helier, Jersey, JE23RA


Channel
Islands


(Address
of principal executive offices)


Eirik
Ubøe


Tel:
+44 1534 639759


26
New Street


St.
Helier, Jersey, JE23RA


Channel
Islands


(Insert
name, telephone, e-mail and/or facsimile number and address of company contact
person)




Securities
registered or to be registered pursuant to Section 12(b) of the
Act.


Title of
each
class                                                                            Name
of each exchange on which registered


Common stock, par value
$0.01 per
share                                 New York Stock
Exchange




Securities
registered or to be registered pursuant to Section 12(g) of the
Act.


None


Securities
for which there is a reporting obligation pursuant to Section 15(d) of the
Act.


None


Indicate
the number of outstanding shares of each of the issuer’s classes of capital or
common stock as of the close of the period covered by the annual
report.




39,238,807 Common stock, par
value $0.01 per share




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes  oNo  x


If this report is an
annual or transition report, indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.


Yes  oNo  x
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes  xNo  o
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.











Large Accelerated Filer 
o  Accelerated Filer  x   Non-accelerated Filer 
o


Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:.


U.S. GAAP  x  International Financial Reporting
Standards as issued by the International Accounting Standards
Board o   Other o


If
“Other” has been checked in response to the previous question, indicate by check
mark which financial statement item the registrant has elected to
follow.


Item 17
o   Item
18  o


If this
report is an annual report, indicate by check mark whether the registrant is
shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes  oNo  x
















TABLE OF CONTENTS




PAGEINTRODUCTION AND USE OF CERTAIN
    TERMS
                                  1CAUTIONARY NOTE REGARDING FORWARD-LOOKING
      STATEMENTS
                                  3PART IITEM 1.
                                  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
      ADVISORS
                                  4ITEM 2.
                                  OFFER STATISTICS AND EXPECTED TIME
TABLE
                                  4ITEM 3.
                                  KEY INFORMATION
                                  4ITEM 4.
                                  INFORMATION ON THE COMPANY
                                  19ITEM 4A.
                                  UNRESOLVED STAFF COMMENTS
                                  36ITEM 5.
                                  OPERATING AND FINANCIAL REVIEW AND
      PROSPECTS
                                  36ITEM 6.
                                  DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES
                                  45ITEM 7.
                                  MAJOR SHAREHOLDERS AND RELATED PARTY
      TRANSACTIONS
                                  53ITEM 8.
                                  FINANCIAL INFORMATION
                                  54ITEM 9.
                                  THE OFFER AND LISTING
                                  55ITEM 10.
                                  ADDITIONAL INFORMATION
                                  57ITEM 11.
                                  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
                                  69ITEM 12.
                                  DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES
                                  69PART IIITEM 13.
                                  DEFAULTS, DIVIDEND ARREARAGES AND
      DELINQUENCIES
                                  70ITEM 14.
                                  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
      AND USE OF PROCEEDS
                                  70ITEM 15.
                                  CONTROLS AND PROCEDURES
                                  70ITEM 16A.
                                  AUDIT COMMITTEE FINANCIAL EXPERT
                                  71ITEM 16B.
                                  CODE OF ETHICS
                                  71ITEM 16C.
                                  PRINCIPAL ACCOUNTANT FEES AND
SERVICES
                                  71ITEM 16D.
                                  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
      COMMITTEES
                                  72ITEM 16E.
                                  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
      AFFILIATED PURCHASERS
                                  72ITEM 16F.
                                  CHANGE IN REGISTRANT’S CERTIFYING
      ACCOUNTANT
                                  72ITEM 16G.
                                  CORPORATE GOVERNANCE
                                  72PART IIIITEM 17.
                                  FINANCIAL STATEMENTS
                                  73ITEM 18.
                                  FINANCIAL STATEMENTS
                                  73ITEM 19.
                                  EXHIBITS
                                  73
  i
 Table of Contents





INTRODUCTION AND USE OF CERTAIN TERMS




Unless we
specify otherwise, all references and data in this report to our “business,” our
“vessels” and our “fleet” refer to the seven vessels comprising our initial
fleet (our “Initial Vessels”) that we acquired simultaneously with the closing
of our initial public offering, or “IPO,” on October 18, 2005 and the two
Suezmax tankers we acquired subsequent to our IPO. Unless we specify otherwise,
all references in this report to “we,” “our,” “us” and “our company” refer to
DHT Maritime, Inc. and its subsidiaries and references to our “common
stock” are to our common registered shares. The shipping industry’s functional
currency is the U.S. dollar. All of our revenues and most of our operating costs
are in U.S. dollars. All references in this report to “$” and “dollars” refer to
U.S. dollars.




The
following are definitions of certain terms that are commonly used in the tanker
industry and in this report.




Term
                          DefinitionABS
                          American
      Bureau of Shipping, an American classification society.Aframax
                          A
      medium size crude oil tanker of approximately 80,000 to 120,000 dwt.
      Aframaxes operate on many different trade routes, including in the
      Caribbean, the Atlantic, the North Sea and the Mediterranean. They are
      also used in ship-to-ship transfer of cargo in the US Gulf typically from
      VLCCs for discharge in ports from which the larger tankers are restricted.
      Modern Aframaxes can generally transport from 500,000 to 800,000 barrels
      of crude oil.Annual
      Survey
                          The
      inspection of a vessel pursuant to international conventions by a
      classification society surveyor, on behalf of the flag state, that takes
      place every year.Bareboat
      Charter
                          A
      charter under which a charterer pays a fixed daily or monthly rate for a
      fixed period of time for use of the vessel. The charterer pays all voyage
      and vessel operating expenses, including vessel insurance. Bareboat
      charters are usually for a long term. Also referred to as a “demise
      charter.”Bunker
                          Fuel
      oil used to operate a vessel’s engines, generators and
      boilers.Charter
                          Contract
      for the use of a vessel, generally consisting of either a voyage, time or
      bareboat charter.Charterer
                          The
      company that hires a vessel pursuant to a charter.Charter
      hire
                          Money
      paid by a charterer to the ship-owner for the use of a vessel under a time
      charter or bareboat charter.Classification
      Society
                          An
      independent society that certifies that a vessel has been built and
      maintained according to the society’s rules for that type of vessel and
      complies with the applicable rules and regulations of the country in which
      the vessel is registered, as well as the international conventions which
      that country has ratified. A vessel that receives its certification is
      referred to as being “in class” as of the date of
  issuance.Contract
      of Affreightment
                          A
      contract of affreightment, or “COA,” is an agreement between an owner and
      a charterer that obligates the owner to provide a vessel to the charterer
      to move specific quantities of cargo over a stated time period, but
      without designating specific vessels or voyage schedules, thereby
      providing the owner greater operating flexibility than with voyage
      charters alone.Double
      Hull
                          A
      hull construction design in which a vessel has an inner and outer side and
      bottom separated by void space, usually 2 meters in
  width.Drydocking
                          The
      removal of a vessel from the water for inspection and/or repair of those
      parts of a vessel which are below the water line. During drydockings,
      which are required to be carried out periodically, certain mandatory
      classification society inspections are carried out and relevant
      certifications issued. Drydockings are generally required once every 30 to
      60
months.




1
 Table of Contents








Term
                    Definitiondwt
                    Deadweight
      tons, which refers to the carrying capacity of a vessel by
      weight.Hull
                    Shell
      or body of a ship.IMO
                    International
      Maritime Organization, a United Nations agency that issues international
      regulations and standards for shipping.Lightering
                    To
      partially discharge a tanker onto another tanker or
  barge.LOOP
                    Louisiana
      Offshore Oil Port, Inc.Lloyds
                    Lloyds
      Register, a U.K. classification society.Metric
      Ton
                    A
      metric ton of 1,000 kilograms.Newbuilding
                    A
      new vessel under construction or just completed.Off
      Hire
                    The
      period a vessel is unable to perform the services for which it is required
      under a time charter. Off hire periods typically include days spent
      undergoing repairs and drydocking, whether or not
    scheduled.OPA
                    U.S.
      Oil Pollution Act of 1990, as amended.OPEC
                    Organization
      of Petroleum Exporting Countries, an international organization of
      oil-exporting developing nations that coordinates and unifies the
      petroleum policies of its member countries.Petroleum
      Products
                    Refined
      crude oil products, such as fuel oils, gasoline and jet
    fuel.Protection
      and Indemnity (or P&I) Insurance
                    Insurance
      obtained through mutual associations, or “clubs,” formed by ship-owners to
      provide liability insurance protection against a large financial loss by
      one member through contribution towards that loss by all members. To a
      great extent, the risks are reinsured.Scrapping
                    The
      disposal of vessels by demolition for scrap metal.Special
      Survey
                    An
      extensive inspection of a vessel by classification society surveyors that
      must be completed at least each five year period. Special surveys require
      a vessel to be drydocked.Spot
      Market
                    The
      market for immediate chartering of a vessel, usually for single
      voyages.Suezmax
                    A
      crude oil tanker of approximately 130,000 to 170,000 dwt. Modern Suezmaxes
      can generally transport about 1 million barrels of crude oil and operate
      on many different trade routes, including from West Africa to the
      U.S.Tanker
                    A
      ship designed for the carriage of liquid cargoes in bulk with cargo space
      consisting of many tanks. Tankers carry a variety of products including
      crude oil, refined petroleum products, liquid chemicals and liquefied
      gas.TCE
                    Time
      charter equivalent, a standard industry measure of the average daily
      revenue performance of a vessel. The TCE rate achieved on a given voyage
      is expressed in $/day and is generally calculated by subtracting voyage
      expenses, including bunker and port charges, from voyage revenue and
      dividing the net amount (time charter equivalent revenues) by the
      round-trip voyage duration.Time
      Charter
                    A
      charter under which a customer pays a fixed daily or monthly rate for a
      fixed period of time for use of the vessel. Subject to any restrictions in
      the charter, the customer decides the type and quantity of cargo to be
      carried and the ports of loading and unloading. The customer pays the
      voyage expenses such as fuel, canal tolls, and port charges. The
      ship-owner pays all vessel operating expenses such as the management
      expenses, crew costs and vessel
insurance.





2
 Table of Contents








Term
                        DefinitionVessel
      Operating Expenses
                        The
      costs of operating a vessel that are incurred during a charter, primarily
      consisting of crew wages and associated costs, insurance premiums,
      lubricants and spare parts, and repair and maintenance costs. Vessel
      operating expenses exclude fuel and port charges, which are known as
      “voyage expenses.” For a time charter, the ship-owner pays vessel
      operating expenses. For a bareboat charter, the charterer pays vessel
      operating expenses.VLCC
                        VLCC
      is the abbreviation for “very large crude carrier,” a large crude oil
      tanker of approximately 200,000 to 320,000 dwt. Modern VLCCs can generally
      transport two million barrels or more of crude oil. These vessels are
      mainly used on the longest (long haul) routes from the Arabian Gulf to
      North America, Europe, and Asia, and from West Africa to the U.S. and Far
      Eastern destinations.Voyage
      Expenses
                        Expenses
      incurred due to a vessel traveling to a destination, such as fuel cost and
      port charges.Worldscale
                        Industry
      name for the Worldwide Tanker Nominal Freight Scale, which is published
      annually by the Worldscale Association as a rate reference for shipping
      companies, brokers, and their customers engaged in the bulk shipping of
      oil in the international markets. Worldscale is a list of calculated rates
      for specific voyage itineraries for a standard vessel, as defined, using
      defined voyage cost assumptions such as vessel speed, fuel consumption,
      and port costs. Actual market rates for voyage charters are usually quoted
      in terms of a percentage of Worldscale.Worldscale
      Flat Rate
                        Base
      rates expressed in U.S. dollars per ton which apply to specific sea
      transportation routes, calculated to give the same return as Worldscale
      100.Worldscale
      Points
                        The
      freight rate negotiated for spot voyages expressed as a percentage of the
      Worldscale Flat
Rate.





CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS




This
report contains certain forward-looking statements and information relating to
us that are based on beliefs of our management as well as assumptions made by us
and information currently available to us, in particular under the headings
“Item 4. Information on the Company” and “Item 5. Operating and Financial Review
and Prospects.” When used in this report, words such as “believe,” “intend,”
“anticipate,” “estimate,” “project,” “forecast,” “plan,” “potential,” “will,”
“may,” “should,” and “expect” and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such
statements. These statements reflect our current views with respect to future
events and are based on assumptions and subject to risks and uncertainties.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. We discuss many of these risks in this report in
greater detail under the subheadings “Item 3. Key Information─Risk Factors” and
“Item 5. Operating and Financial Review and Prospects─Management’s Discussion
and Analysis of Financial Condition and Results of Operations.” These
forward-looking statements represent our estimates and assumptions only as of
the date of this report and are not intended to give any assurance as to future
results. Factors that might cause future results to differ include, but are not
limited to, the following:




●
            future
      payments of dividends and the availability of cash for payment of
      dividends;




●
              future
      operating or financial results, including with respect to the amount of
      basic hire and additional hire that we may
  receive;


3
 Table of Contents




●
            statements
      about future, pending or recent acquisitions, business strategy, areas of
      possible expansion and expected capital spending or operating
      expenses;




●
            statements
      about tanker industry trends, including charter rates and vessel values
      and factors affecting vessel supply and
demand;




●
            expectations
      about the availability of vessels to purchase, the time which it may take
      to construct new vessels or vessels’ useful
  lives;




●
            expectations
      about the availability of insurance on commercially reasonable
      terms;




●
            our
      ability to repay our credit facility, to obtain additional financing and
      to obtain replacement charters for our
vessels;




●
            assumptions
      regarding interest rates;




●
            changes
      in production of or demand for oil and petroleum products, either globally
      or in particular regions;




●
            greater
      than anticipated levels of newbuilding orders or less than anticipated
      rates of scrapping of older
vessels;




●
            changes
      in trading patterns for particular commodities significantly impacting
      overall tonnage requirements;




●
            changes
      in the rate of growth of the world and various regional
      economies;




●
            risks
      incident to vessel operation, including discharge of pollutants;
      and




●
            unanticipated
      changes in laws and regulations.




We
undertake no obligation to publicly update or revise any forward-looking
statements contained in this report, whether as a result of new information,
future events or otherwise, except as required by law. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
report might not occur, and our actual results could differ materially from
those anticipated in these forward-looking statements.




PART I
  ITEM 1.
                  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
      ADVISORSNot
      applicable.ITEM 2.
                  OFFER STATISTICS AND EXPECTED TIME TABLENot
      applicable.ITEM 3.
                  KEY
      INFORMATIONA.
                  SELECTED
      FINANCIAL DATA





4
 Table of Contents





The
following selected combined financial and other data summarize historical
financial and other information for DHT Maritime, Inc., or “DHT,” for the period
from January 1, 2008 through December 31, 2008, January 1, 2007 through December
31, 2007, January 1, 2006 through December 31, 2006 and October 18, 2005 through
December 31, 2005 and for our predecessor for the periods January 1, 2005
through October 17, 2005 and January 1, 2004 through December 31, 2004. (In this
report, we refer to the companies that owned our Initial Vessels prior to our
IPO collectively as our “predecessor,” or, in the financial statements that form
a part of this report, as “OSG Crude.”) We have derived the selected statement
of operations data set forth below for the years ended December 31, 2008, 2007,
2006 and the period October 18, 2005 to December 31, 2005 and the selected
balance sheet data as of December 31, 2007 and 2006 from DHT’s audited financial
statements. The selected financial and other data set forth below as of December
31, 2004 and for the year then ended and the period from January 1, 2005 to
October 17, 2005 have been derived from our predecessor combined carve-out
financial statements not included in this report.  This information
should be read in conjunction with other information presented in this report,
including “Item 5. Operating and Financial Review and Prospects—Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
our historical predecessor combined carve-out financial statements and the notes
thereto.




Year ended
      December 31,
                                                                                                            
                                                                                                            Year
      ended December 31,
                                                                                                            
                                                                                                            Year ended
      December 31,
                                                                                                            
                                                                                                            2005
                                                                                                            
                                                                                                            Year ended
      December 31,Successor
                                                                                                            
                                                                                                            Successor
                                                                                                            
                                                                                                            Successor
                                                                                                            
                                                                                                            Successor
                                                                                                            
                                                                                                            Predecessor
                                                                                                            
                                                                                                            Predecessor2008
                                                                                                            
                                                                                                            2007
                                                                                                            
                                                                                                            2006
                                                                                                            
                                                                                                            Oct
      18 -

                                                                                                              Dec
      31
                                                                                                            
                                                                                                            Jan
      1 -
                                                                                                              Oct
      17
                                                                                                            
                                                                                                            2004Statement
      of operations data:
                                                                                                            
                                                                                                            (in thousands, except per
      share data)Shipping
      revenues
                                                                                                            
                                                                                                            $
                                                                                                            114,603
                                                                                                            
                                                                                                            $
                                                                                                            81,427
                                                                                                            
                                                                                                            $
                                                                                                            86,793
                                                                                                            
                                                                                                            $
                                                                                                            20,173
                                                                                                            
                                                                                                            $
                                                                                                            84,134
                                                                                                            
                                                                                                            $
                                                                                                            136,205Total
      ship operating expenses
                                                                                                            
                                                                                                            
                                                                                                            52,123
                                                                                                            
                                                                                                            
                                                                                                            40,469
                                                                                                            
                                                                                                            
                                                                                                            37,994
                                                                                                            
                                                                                                            
                                                                                                            7,899
                                                                                                            
                                                                                                            
                                                                                                            35,426
                                                                                                            
                                                                                                            
                                                                                                            40,870Income
      from vessel operations
                                                                                                            
                                                                                                            
                                                                                                            62,480
                                                                                                            
                                                                                                            
                                                                                                            40,958
                                                                                                            
                                                                                                            
                                                                                                            48,799
                                                                                                            
                                                                                                            
                                                                                                            12,274
                                                                                                            
                                                                                                            
                                                                                                            48,708
                                                                                                            
                                                                                                            
                                                                                                            95,335Net
      Income (loss)
                                                                                                            
                                                                                                            
                                                                                                            42,148
                                                                                                            
                                                                                                            
                                                                                                            27,463
                                                                                                            
                                                                                                            
                                                                                                            35,750
                                                                                                            
                                                                                                            
                                                                                                            9,469
                                                                                                            
                                                                                                            
                                                                                                            43,641
                                                                                                            
                                                                                                            
                                                                                                            86,690Net
      income per share – basic and diluted
                                                                                                            
                                                                                                            
                                                                                                            1.17
                                                                                                            
                                                                                                            
                                                                                                            0.91
                                                                                                            
                                                                                                            
                                                                                                            1.19
                                                                                                            
                                                                                                            
                                                                                                            0.32
                                                                                                            
                                                                                                            
                                                                                                            62,344
                                                                                                            
                                                                                                            
                                                                                                            123,843Balance
      sheet data (at end of year):Vessels,
      net
                                                                                                            
                                                                                                            
                                                                                                            462,387
                                                                                                            
                                                                                                            
                                                                                                            398,005
                                                                                                            
                                                                                                            
                                                                                                            322,577
                                                                                                            
                                                                                                            
                                                                                                            339,491
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            355,571Total
      assets
                                                                                                            
                                                                                                            
                                                                                                            532,496
                                                                                                            
                                                                                                            
                                                                                                            422,208
                                                                                                            
                                                                                                            
                                                                                                            349,040
                                                                                                            
                                                                                                            
                                                                                                            364,062
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            388,518Current
      liabilities
                                                                                                            
                                                                                                            
                                                                                                            40,673
                                                                                                            
                                                                                                            
                                                                                                            96,633
                                                                                                            
                                                                                                            
                                                                                                            9,625
                                                                                                            
                                                                                                            
                                                                                                            10,828
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            7,243Long-term
      liabilities(1)
                                                                                                            
                                                                                                            
                                                                                                            344,000
                                                                                                            
                                                                                                            
                                                                                                            253,700
                                                                                                            
                                                                                                            
                                                                                                            236,000
                                                                                                            
                                                                                                            
                                                                                                            236,000
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            256,477Stockholders’
      equity
                                                                                                            
                                                                                                            
                                                                                                            147,823
                                                                                                            
                                                                                                            
                                                                                                            71,875
                                                                                                            
                                                                                                            
                                                                                                            103,415
                                                                                                            
                                                                                                            
                                                                                                            117,234
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            124,798Weighted
      average number of shares (basic)
                                                                                                            
                                                                                                            
                                                                                                            36,055,422
                                                                                                            
                                                                                                            
                                                                                                            30,024,407
                                                                                                            
                                                                                                            
                                                                                                            30,007,000
                                                                                                            
                                                                                                            
                                                                                                            30,006,250
                                                                                                            
                                                                                                            
                                                                                                            700
                                                                                                            
                                                                                                            
                                                                                                            700Weighted
      average number of shares (diluted)
                                                                                                            
                                                                                                            
                                                                                                            36,055,422
                                                                                                            
                                                                                                            
                                                                                                            30,036,523
                                                                                                            
                                                                                                            
                                                                                                            30,016,352
                                                                                                            
                                                                                                            
                                                                                                            30,008,190
                                                                                                            
                                                                                                            
                                                                                                            700
                                                                                                            
                                                                                                            
                                                                                                            700Dividends
      declared per share
                                                                                                            
                                                                                                            
                                                                                                            1.15
                                                                                                            
                                                                                                            
                                                                                                            1.58
                                                                                                            
                                                                                                            
                                                                                                            1.74Cash
      flow data:Net
      cash provided by operating activities
                                                                                                            
                                                                                                            
                                                                                                            65,016
                                                                                                            
                                                                                                            
                                                                                                            49,363
                                                                                                            
                                                                                                            
                                                                                                            53,998
                                                                                                            
                                                                                                            
                                                                                                            15,893
                                                                                                            
                                                                                                            
                                                                                                            83,039
                                                                                                            
                                                                                                            
                                                                                                            84,248Net
      cash (used in) investing activities
                                                                                                            
                                                                                                            
                                                                                                            (81,185
                                                                                                            )
                                                                                                            
                                                                                                            (101,845
                                                                                                            )
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            (412,580
                                                                                                            )
                                                                                                            
                                                                                                            (830
                                                                                                            )
                                                                                                            
                                                                                                            (9,696
                                                                                                            )Net
      cash provided by (used in) financing activities
                                                                                                            
                                                                                                            
                                                                                                            64,824
                                                                                                            
                                                                                                            
                                                                                                            45,167
                                                                                                            
                                                                                                            
                                                                                                            (52,511
                                                                                                            )
                                                                                                            
                                                                                                            412,580
                                                                                                            
                                                                                                            
                                                                                                            (82,209
                                                                                                            )
                                                                                                            
                                                                                                            (74,582
                                                                                                            )Fleet
      data:Number
      of tankers owned (at end of period)
                                                                                                            
                                                                                                            
                                                                                                            9
                                                                                                            
                                                                                                            
                                                                                                            8
                                                                                                            
                                                                                                            
                                                                                                            7
                                                                                                            
                                                                                                            
                                                                                                            7
                                                                                                            
                                                                                                            
                                                                                                            7
                                                                                                            
                                                                                                            
                                                                                                            7Revenue
      days(2)
                                                                                                            
                                                                                                            
                                                                                                            3,190
                                                                                                            
                                                                                                            
                                                                                                            2,514
                                                                                                            
                                                                                                            
                                                                                                            2,482
                                                                                                            
                                                                                                            
                                                                                                            520
                                                                                                            
                                                                                                            
                                                                                                            1,987
                                                                                                            
                                                                                                            
                                                                                                            2,451Average
      daily time charter equivalent rate:VLCCs(3)
                                                                                                            
                                                                                                            $
                                                                                                            52,300
                                                                                                            
                                                                                                            $
                                                                                                            41,500
                                                                                                            
                                                                                                            $
                                                                                                            46,900
                                                                                                            
                                                                                                            
                                                                                                            50,300
                                                                                                            
                                                                                                            
                                                                                                            53,392
                                                                                                            
                                                                                                            $
                                                                                                            77,422Aframaxes(3)
                                                                                                            
                                                                                                            $
                                                                                                            26,700
                                                                                                            
                                                                                                            $
                                                                                                            25,700
                                                                                                            
                                                                                                            $
                                                                                                            26,200
                                                                                                            
                                                                                                            
                                                                                                            30,200
                                                                                                            
                                                                                                            
                                                                                                            33,296
                                                                                                            
                                                                                                            $
                                                                                                            38,831Average
      daily bareboat rate:Suezmaxes(4)
                                                                                                            
                                                                                                            $
                                                                                                            28,900
                                                                                                            
                                                                                                            $
                                                                                                            27,400





(1)
              Includes
      loans payable to Overseas Shipholding Group, Inc., or “OSG,” for the
      periods until October 17, 2005.(2)
              Revenue
      days consist of the aggregate number of calendar days in a period in which
      our vessels are owned by us less days on which a vessel is off hire. Off
      hire days are days a vessel is unable to perform the services for which it
      is required under a time charter. Off hire days include days spent
      undergoing repairs and drydockings, whether or not
    scheduled.





5
 Table of Contents








(3)
              Average
      daily time charter equivalent rates, or TCE rates, are a standard industry
      measure of daily revenue performance. We calculate TCE rates by dividing
      our time charter equivalent revenues in a period by the number of revenue
      days in the period. Time charter equivalent revenues represent shipping
      revenues less voyage expenses. Voyage expenses consist of cost of bunkers
      (fuel), port and canal charges and brokerage commissions. For the period
      commencing on October 18, 2005, TCE revenue is the sum of the basic hire
      earned by our vessels under our time charters with subsidiaries of OSG and
      the additional hire, if any, earned by the vessels pursuant to the Charter
      Framework Agreement between DHT and OSG. Revenue days consist of the
      aggregate number of calendar days in a period in which our vessels are
      owned by us less days on which a vessel is off hire. Off hire days are
      days a vessel is unable to perform the services for which it is required
      under a time charter. Off hire days include days spent undergoing repairs
      and drydockings, whether or not scheduled.


(4)
            The
      2008 column includes Overseas London from
      January 28, 2008and the Overseas
      Newcastle for the whole period.The 2007 column
      includes the Overseas
      Newcastle for the 27 day period from December 4, 2007 to December
      31, 2007. Includes 33% profit sharing above TCE earnings of $35,000 per
      day for the Overseas
      Newcastle.




B.
                                    CAPITALIZATION
      AND INDEBTEDNESSNot
      applicable.C.
                                    REASONS
      FOR THE OFFER AND USE OF THE PROCEEDSNot applicable.D.
                                    RISK
      FACTORS




If
the events discussed in these Risk Factors occur, our business, financial
condition, results of operations or cash flows could be materially, adversely
affected. In such a case, the market price of our common stock could decline.
The risks described below are not the only ones that may exist. Additional risks
not currently known by us or that we deem immaterial may also impair our
business operations.




RISKS
RELATING TO OUR COMPANY




We
cannot assure you that we will pay any dividends.




During
the period from our IPO through the fourth quarter of 2007, we paid dividends on
a quarterly basis in amounts determined by our board of directors substantially
equal to the available cash from our operations during the previous quarter,
less cash expenses and any reserves established by our board of directors. In
January 2008, our board of directors approved a new dividend policy whereby
shareholders of record are intended to be paid a fixed quarterly dividend.
Commencing with the first dividend payment attributable to the 2008 fiscal year,
the dividend was $0.25 per share.  The dividends paid related to the
four quarters of 2008 amounted to $0.25, $0.25, $0.30 and $0.30 per share,
respectively.




The
timing and amount of future dividends, if any, could be affected by various
factors, including our earnings, financial condition and anticipated cash
requirements, the loss of a vessel, the acquisition of one or more vessels,
required capital expenditures, reserves established by our board of directors,
increased or unanticipated expenses, including insurance premiums, a change in
our dividend policy, increased borrowings, future issuances of securities or the
other risks described in this section of the report, many of which will be
beyond our control. In addition, the declaration of dividends is subject at all
times to the discretion of our board of directors. As a result, the amount of
dividends actually paid may vary from the amounts currently estimated and such
variations may be material. Also, these factors could result in a high degree of
variability from period to period in the amount of cash that we have available
for the payment of dividends.







6
 Table of Contents





Our
ability to pay dividends is limited by our secured credit facility.




We have
entered into a $420 million secured credit facility with The Royal Bank of
Scotland, or “RBS.” Our secured credit facility provides that we may not pay
dividends if the charter-free market value of our vessels that secure the credit
facility is less than 135% of our borrowings under the facility plus the actual
or notional cost of terminating any interest rate swaps that we enter, if there
is a continuing default under the credit facility or if the payment of the
dividend would result in a default or breach of a loan covenant. Our ability to
declare and pay dividends will therefore depend on whether we are in compliance
with our credit facility, the market value of our vessels and the value of our
swap agreements. The difference between the market value of our vessels and the
outstanding borrowings under our credit facility may decrease over time, as
vessels generally decrease in value as they age. Therefore, our ability to
comply with our financial ratio covenants and to make dividend payments under
our credit facility may decrease over time. Subsequent to the repayment of $75
million in October 2008, the outstanding amount under our secured credit
facility was $344 million as of December 31, 2008. Starting in January 2011, we
will be required to make principal repayments of approximately $9 million
per quarter on our secured credit facility until its final maturity in 2017,
when a final payment of approximately $109 million will be
due.




Restrictive
covenants in our secured credit facility may impose financial and other
restrictions on us.




Our
secured credit facility with RBS imposes operating and financial restrictions on
us. These restrictions may limit our ability to, among other
things:




●
            pay
      dividends if the charter-free market value of our vessels that secure our
      obligations under the credit facility is less than 135% of our borrowings
      under the credit facility plus the notional or actual cost of terminating
      any interest rate swaps to which we are a party, if there is a continuing
      default under the credit facility or if the payment of the dividend would
      result in a default or breach of a loan
  covenant;




●
            incur
      additional indebtedness, including through the issuance of
      guarantees;




●
            change
      the management of our vessels without the prior consent of the
      lender;




●
            permit
      liens on our assets;




●
            sell
      our vessels;




●
            merge
      or consolidate with, or transfer all or substantially all of our assets
      to, another person;




●
            enter
      into certain types of charters; and




●
            enter
      into a new line of business.




Therefore,
we may need to seek permission from our lender in order to engage in some
corporate actions. Our lender’s interests may be different from ours and we
cannot guarantee that we will be able to obtain our lender’s permission when
needed. This may limit our ability to pay dividends to you, finance our future
operations, make acquisitions or pursue business opportunities.




We
cannot assure you that we will be able to refinance any indebtedness incurred
under our secured credit facility.




In the
event that we are unable to service our debt obligations out of our chartering
activities, we may need to refinance our indebtedness and we cannot assure you
that we will be able to do so on terms that are acceptable to us or at all. The
actual or perceived credit quality of our charterers, any defaults by them, and
the market value of our fleet, among other things, may materially affect our
ability to obtain new debt financing. In addition, our charters include
provisions that will generally require us to use our best efforts to
(i) negotiate security provisions with future lenders that would allow the
charterers to continue their use of our vessels so long as they comply with
their charters, regardless of any default by us under the loan agreement or the
charters and (ii) arrange for future lenders to allow the charterers to
purchase their loans and any related security at par if we default on our
obligations under our charters or their loans. These provisions may make it more
difficult for us to obtain acceptable financing in the future, increase the
costs of any such financing to us or increase the time that it takes to
refinance our indebtedness. If we are not able to refinance our indebtedness, we
may choose to issue securities or sell certain of our assets in order to satisfy
our debt obligations. If we are unable to meet our debt obligations for any
reason, our lenders could declare their debt, together with accrued interest and
fees, to be immediately due and payable and foreclose on vessels in our fleet,
which could result in the acceleration of other indebtedness that we may have at
such time and the commencement of similar foreclosure proceedings by other
lenders.







7
 Table of Contents




We
are highly dependent on the charterers and OSG.




All of
our vessels are chartered to wholly-owned subsidiaries of Overseas Shipholding
Group, Inc., or “OSG,” (which we refer to collectively as the “charterers”)
pursuant to either time charters or bareboat charters. The charterers’ payments
to us under these charters are our sole source of revenue and we are highly
dependent on the performance by the charterers of their obligations under the
charters. OSG has also guaranteed the payment of charter hire by the charterers
under these charters. Any failure by the charterers or OSG, as the guarantor of
charter hire payments under the charters, to perform their obligations would
materially and adversely affect our business, financial position and cash
available for the payment of dividends. Our stockholders do not have any direct
recourse against the charterers or OSG.




We
may have difficulty managing our planned growth.




We intend
to grow our fleet by acquiring additional vessels in the future. Our future
growth will primarily depend on:




●
            locating
      and acquiring suitable vessels;




●
            identifying
      and consummating acquisitions or joint
ventures;




●
            adequately
      employing any acquired vessels;




●
            managing
      our expansion; and




●
            obtaining
      required financing on acceptable terms so that the acquisition is
      accretive to earnings and dividends per
share.




Growing
any business by acquisition presents numerous risks, such as undisclosed
liabilities and obligations, the possibility that indemnification agreements
will be unenforceable or insufficient to cover potential losses and difficulties
associated with imposing common standards, controls, procedures and policies,
obtaining additional qualified personnel, managing relationships with customers
and integrating newly acquired assets and operations into existing
infrastructure. We cannot give any assurance that we will be successful in
executing our growth plans, that we will be able to employ acquired vessels
under charters or ship management agreements with similar or better terms than
those we have obtained from OSG and its subsidiaries or that we will not incur
significant expenses and losses in connection with our future
growth.




Our
dividend policy is subject to change at the discretion of our board of
directors.




Our
dividend policy is subject to change at any time at the discretion of our board
and our board may elect to change our dividend policy by establishing a reserve
for, among other things, the repayment of our credit facility or to help fund
the acquisition of a vessel. Our board may also decide to establish a reserve to
repay indebtedness if, as the maturity of our credit facility approaches in
2017, we are no longer able to generate cash flows from our chartering
activities in amounts sufficient to meet our debt obligations and it becomes
clear that refinancing terms, or the terms of a vessel sale, are unacceptable or
inadequate. If our board were to establish such a reserve, the amount of cash
available for dividend payments would decrease by the amount of the reserve. In
addition, our ability to pay dividends is limited by Marshall Islands law.
Marshall Islands
law generally prohibits the payment of dividends other than from surplus or
while a company is insolvent or if a company would be rendered insolvent by the
payment of such dividends. In addition, any dividend may be discontinued at the
discretion of our board.







8
 Table of Contents







Certain
agreements between us and OSG and its affiliates may be less favorable than
agreements that we could obtain from unaffiliated third parties.




The
memoranda of agreement, time charters and other contractual agreements we have
with OSG and its affiliates with respect to our Initial Vessels (other than the
new ship management agreements entered into on January 16, 2009) were made in
the context of an affiliated relationship and were negotiated in the overall
context of the public offering of our shares, the purchase of our Initial
Vessels and other related transactions. Because we were a wholly owned
subsidiary of OSG prior to the completion of our IPO, the negotiation of the
memoranda of agreement, the time charters for our Initial Vessels, the ship
management agreements and our other contractual arrangements may have resulted
in prices and other terms that are less favorable to us than terms we might have
obtained in arm’s length negotiations with unaffiliated third parties for
similar services.




Our
charters begin to expire in 2012 unless extended at the option of the
charterers, and we may not be able to re-charter our vessels
profitably.




At the
time of our IPO, we entered into time charters with respect to our seven Initial
Vessels whereby four charters would expire approximately six years after the
date of delivery of the chartered vessel to us and three would expire
approximately five years following such date, unless in each case extended at
the option of the applicable charterer for additional one, two or three-year
periods. The charterers have the sole discretion to exercise those options. We
cannot predict whether the charterers will exercise any of their extension
options under one or more of the time charters. The charterers do not owe any
fiduciary or other duty to us or our stockholders in deciding whether to
exercise the extension options, and the charterers’ decisions may be contrary to
our interests or those of our stockholders.




On
November 26, 2008,we entered in agreements withOSG
whereby OSG exercised part of the extension options for the Initial Vessels upon
expiry of the vessels’ initial charter periods. For two of the vessels, the
charters were extended for 18 months following the expiry of the initial charter
periods and for five of the vessels, the charters were extended for 12 months
following the expiry of the initial charter periods between April 2011 and April
2012.




We cannot
predict at this time any of the factors that the charterers will consider in
deciding whether to exercise any further extension options under the charters.
It is likely, however, that the charterers would consider a variety of factors,
which may include the age and specifications of the chartered vessel, whether
the vessel is surplus or suitable to the charterers’ requirements and whether
more competitive charter hire rates are available to the charterers in the open
market at that time.




If the
charterers decide not to further extend our current time charters, we may not be
able to re-charter our vessels with terms similar to the terms of our charters.
We may also employ the vessels on the spot charter market, which is subject to
greater rate volatility than the long-term time charter market in which we
operate. If we receive lower charter rates under replacement charters or are
unable to re-charter all of our vessels, the amounts that we have available, if
any, to pay distributions to our stockholders may be significantly reduced or
eliminated.




If a time
charter is extended further, the charter terms providing for profit sharing will
remain in effect and the charterer, at the time of exercise, will have the
option to select a basic charter rate that is equal to (i) 5% above the
published one, two or three-year time charter rate (corresponding to the
extension length) for the vessel’s class, as decided by a shipbrokers’ panel
(subject to specified floors, for certain of our vessels for the declared
extension period), or (ii) the basic hire rate set forth in the charter.
The shipbrokers’ panel will be The Association of Shipbrokers and Agents Tanker
Broker Panel or another panel of brokers mutually acceptable to us and the
charterer. If a charterer were to renew a charter, the renewal charter rate
could be lower than the charter rate in existence prior to the renewal.
Furthermore, if our charters were to be extended further, we would not be able
to take full advantage of more favorable spot market rates, should they exist at
the time of renewal. As a result, the amounts that we have available, if any, to
pay distributions to our stockholders could be significantly
reduced.







9
 Table of Contents









With
respect to our two Suezmaxes currently on bareboat charter, one charter expires
in 2014 and the other charter expires in 2017. We may not be able to re-charter
our Suezmaxes with terms similar to the terms of our current bareboat charters.
We may also employ the vessels in the spot charter market, which is subject to
greater rate volatility than the long-term time charter market in which we
operate. If we receive lower charter rates under replacement charters or are
unable to re-charter our vessels, the amounts that we have available, if any, to
pay distributions to our stockholders may be significantly reduced or
eliminated.




Our
Initial Vessels, of which six currently operate in pools, may cease operating in
those pools.




Our three
VLCCs currently participate in the Tankers International Pool, which consists of
OSG and eight other tanker companies, and three of our four Aframaxes currently
participate in the Aframax International Pool, which has eight members,
including OSG. The Overseas
Ania left the Aframax International Pool in July 2008. In a pooling
arrangement, the net revenues generated by all of the vessels in a pool are
aggregated and distributed to pool members pursuant to a pre-arranged weighting
system that recognizes each vessel’s earnings capacity based on its cargo
capacity, speed and consumption, and actual on-hire performance. The Charterers
currently operate our VLCCs in the Tankers International Pool and three of our
four Aframaxes in the Aframax International Pool. Under our charter arrangements
for these vessels, we are entitled to share in the revenues that the charterers
realize from operating the vessels in these pools in excess of the basic hire
paid to us. Pooling arrangements are intended to maximize tanker utilization. We
cannot assure you that OSG will continue to use pooling arrangements for those
vessels or any of the vessels it manages. Our two Suezmaxes do not operate in
pools and we cannot assure you that any additional vessels we acquire would
operate in pools. Further, because OSG voluntarily participates in the pools, we
cannot predict whether the pools in which our vessels participate will continue
to exist in the future. In addition, the European Union has adopted rules which
substantially reform the way it regulates traditional agreements for maritime
services from an antitrust perspective. These changes may alter the way the
pools are operated. If for any reason any of our vessels cease to participate in
a pooling arrangement or the pooling arrangements are significantly restricted,
their utilization rates could fall and the amount of additional hire paid could
decrease, either of which could have an adverse affect on our results of
operations and our ability to pay dividends. Our Suezmaxes, the Overseas London and Overseas Newcastle, do not
operate in pools.




Under
the new ship management agreements entered into with respect to the Initial
Vessels, our operating costs could materially increase, as compared to our
historical operating costs associated with the management of such
vessels.




Under the
Initial Vessels’ new ship management agreements, effective January 16, 2009,
Tanker Management Limited, or “Tanker Management,” a wholly owned subsidiary of
OSG, is responsible for all of the technical and operational management of the
Initial Vessels and receives a technical management fee for its
services.  Under the Initial Vessels’ old ship management
agreements, we paid a fixed daily fee for the cost of the vessels’ operations,
including scheduled drydockings, for each vessel.  However, under the
new ship management agreements, we will pay the actual cost related to the
technical management of the Initial Vessels, plus an additional management
fee.  The amounts that we have available, if any, to pay distributions
to our stockholders could be significantly impacted by changes in the cost of
operating our vessels.




OSG’s
other business activities may create conflicts of interest.




Under our
time charters with OSG, we are entitled to receive variable additional hire in
amounts based on whether a vessel is part of a pooling arrangement, is
subchartered by the charterer under a time charter or is used on the spot
market. While the Overseas
Ania left the Aframax International Pool in July 2008, we currently
expect OSG to continue to operate our three VLCCs in the Tankers International
Pool and three of our four Aframaxes in the Aframax International Pool. When
operated in a pool, chartering decisions are made by the pool manager and vessel
earnings are based on a formula designed to allocate the pool’s earnings to
vessel owners based on attributes of the vessels they contributed, rather than
amounts actually earned by those vessels. For these reasons, it is unlikely that
a conflict of interest will arise with respect to our Initial Vessels between us
and OSG while such vessels are operated in a pool. However, if OSG withdraws
from a pool or any further vessels cease operating in a pool for any other
reasons, chartering decisions will effectively be made by OSG. Although our time
charter arrangements expressly prohibit OSG from giving preferential treatment
to any of the other vessels owned, managed by or under the control of OSG or its
affiliates when sub-chartering any of our vessels, conflicts of interest may
arise between us and OSG in the allocation of chartering opportunities that
could reduce our additional hire, particularly if our vessels are sub-chartered
by OSG in the time charter market outside of a pool. The Overseas Ania, which left the
Aframax International Pool in July 2008, is currently on charter to OSG
Lightering, a subsidiary of OSG, until October 2010 at a daily rate of $29,000,
which also serves as the basis for the fleet wide four quarter rolling profit
sharing calculation. We are also entitled to receive additional hire with
respect to our Suezmax, the Overseas Newcastle. This
vessel is not operating in a pool and chartering decisions are made by OSG.
Therefore, conflicts of interest may therefore arise between us and OSG in the
allocation of chartering opportunities that could reduce our additional hire for
this vessel.







10
 Table of Contents




We
are leveraged and subject to restrictions in our financing agreements that
impose constraints on our operating and financing flexibility.




We have
entered into a $420 million secured credit facility with RBS under which we
initially borrowed approximately $236 million under a term loan to finance
a portion of the cash purchase price for our Initial Vessels. In addition, on
December 4, 2007 we borrowed $92.7 million and, on January 28, 2008, a further
$90.3 million to fund the acquisition of our Suezmaxes. Subsequent to the
repayment of $75 million in October 2008, the outstanding amount under the
credit facility is $344 million. We are required to apply a substantial portion
of our cash flow from operations to the payment of interest on borrowings under
the facility. Our credit facility, which is secured by, among other things,
mortgages over all of our vessels, assignments of earnings and insurances and
pledges over our bank accounts, requires that we comply with various operating
covenants and maintain certain financial ratios, including that the charter-free
market value of our vessels that secure the credit facility be no less than 120%
of our borrowings plus the actual or notional cost of terminating any swap
agreements that we enter into to satisfy collateral maintenance requirements and
that the charter-free market value of our vessels that secure the credit
facility be no less than 135% of our borrowings plus the actual or notional cost
of terminating any swap agreement that we enter into to pay dividends. We pay a
floating rate of interest under our credit facility, although at the time of our
IPO we fixed the interest rate for five years on $236 million of our outstanding
debt at a rate of 5.6% through a swap agreement effective as of October 18,
2005, and on October 16, 2007 we fixed the interest rate for five years on $100
million of our outstanding debt at a rate of 5.95% through a swap agreement with
respect to $92.7 million effective as of December 4, 2007, and a further $7.3
million effective as of January 18, 2008.




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 and other
obligations.




We are a
holding company and have no significant assets other than the equity interests
in our subsidiaries. Our subsidiaries own all of our vessels, and payments under
our charters are made to our subsidiaries. As a result, our ability to pay
dividends depends on the performance of our subsidiaries and their ability to
distribute funds to us. Our ability or the ability of our subsidiaries to make
these distributions could be affected by a claim or other action by a third
party, including a creditor, or by Marshall Islands law which regulates the
payment of dividends by companies. If we are unable to obtain funds from our
subsidiaries, we will not be able to pay dividends.




Certain
adverse U.S. federal income tax consequences could arise for U.S.
stockholders.




A foreign
corporation will be treated as a “passive foreign investment company,” or
“PFIC,” for U.S. federal income tax purposes if either (1) at least 75% of
its gross income for any taxable year consists of certain types of “passive
income” or (2) at least 50% of the average value of the corporation’s
assets produce or are held for the production of those types of “passive
income.” For purposes of these tests, “passive income” includes dividends,
interest, and gains from the sale or exchange of investment property and rents
and royalties other than rents and royalties which are received from unrelated
parties in connection with the active conduct of a trade or business. For
purposes of these tests, income derived from the performance of services does
not constitute “passive income.” U.S. stockholders of a PFIC are subject to a
disadvantageous U.S. federal income tax regime with respect to the income
derived by the PFIC, the distributions they receive from the PFIC and the gain,
if any, they derive from the sale or other disposition of their shares in the
PFIC. In particular, U.S. holders who are individuals would not be eligible for
the 15% tax rate on qualified dividends.







11
 Table of Contents




Based on
our operations, representations previously made by us (and prior representations
made by OSG), including representations that certain terms of our ship
management agreements and our time charters with OSG’s subsidiaries are
consistent with normal commercial practice and the opinion of our tax counsel
dated August 8, 2008, we believe that it is more likely than not that we are not
currently a PFIC (even after taking into account the fact that our two
Suezmaxes, the Overseas
Newcastleand Overseas
London, are subject to bareboat charters). In this regard, we intend to
treat the gross income we derive or are deemed to derive from our time
chartering activities as services income, rather than rental income.
Accordingly, we believe that it is more likely than not that our income from our
time chartering activities does not constitute “passive income,” and that the
assets we own and operate in connection with the production of that income do
not constitute passive assets.




There is,
however, no direct legal authority under the PFIC rules addressing our current
and projected future operations. In addition, our tax counsel’s opinion was
based on representations made by us (and prior representations made by OSG) that
were not reviewed by the U.S. Internal Revenue Service, or “IRS.” Accordingly,
no assurance can be given that the IRS or a court of law will accept our
position, and there is a risk that the IRS or a court of law could determine
that we are a PFIC. Moreover, no assurance can be given that we would not
constitute a PFIC for any future taxable year if there were to be changes in the
nature and extent of our operations.




If the
IRS were to find that we are or have been a PFIC for any taxable year, our U.S.
stockholders will face adverse U.S. tax consequences. Under the PFIC rules,
unless those stockholders make an election available under the Internal Revenue
Code of 1986, as amended, or the “Code,” such stockholders would be liable to
pay U.S. federal income tax at the then prevailing income tax rates on ordinary
income plus interest upon excess distributions and upon any gain from the
disposition of our common stock, as if the excess distribution or gain had been
recognized ratably over the stockholder’s holding period of our common stock.
The 15% maximum tax rate for individuals would not be available for this
calculation. See “Item 10. Additional Information—Taxation—United States Federal
Income Tax Considerations” for a more comprehensive discussion of the U.S.
federal income tax consequences to U.S. stockholders if we are treated as a
PFIC.




In
addition, even if we are not a PFIC, under proposed legislation, dividends of a
corporation incorporated in a country without a “comprehensive income tax
system” paid to U.S. individuals would not be eligible for the 15% tax rate.
Although the term “comprehensive income tax system” is not defined in the
proposed legislation, we believe this rule would apply to us, and therefore that
dividends paid by us would not be eligible for the 15% tax rate, because we are
incorporated in the Marshall Islands.




Our
operating income could fail to qualify for an exemption from U.S. federal income
taxation, which will reduce our cash flow.




Under the
Code, 50% of the gross shipping income of a vessel-owning or chartering
corporation, such as us and our subsidiaries, that is attributable to
transportation that begins or ends, but that does not both begin and end, in the
United States is characterized as U.S. source shipping income and such income is
subject to a 4% U.S. federal income tax without allowance for any deductions,
unless that corporation qualifies for exemption from tax under Section 883
of the Code and the Treasury regulations promulgated thereunder in August of
2003.Based on our
review of the applicable United States Securities and Exchange Commission, or
“SEC,” documents, we believe that we do qualify for this statutory tax exemption
and we will take this position for U.S. federal income tax return reporting
purposes.




However,
there are factual circumstances beyond our control that could cause us to lose
the benefit of this tax exemption in the future and thereby become subject to
U.S. federal income tax on our U.S. source income. For example, if stockholders
with a 5% or greater interest in our common stock were to collectively own 50%
or more of the outstanding shares of our common stock on more than half the days
during the taxable year, we might not be able to qualify for exemption under
Code Section 883.







12
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If we are
not entitled to this exemption under Section 883 for any taxable year, we
would be subject for those years to a 4% United States federal income tax on our
U.S. source shipping income. The imposition of this taxation could have a
negative effect on our business and would result in decreased earnings available
for distribution to our stockholders.




We
may be subject to taxation in the United Kingdom, which could have a material
adverse effect on our results of operations.




If we
were considered to be a resident of the United Kingdom or to have a permanent
establishment in the United Kingdom, all or a part of our profits could be
subject to UK corporate tax. We intend to operate in a manner so that we do not
have a permanent establishment in the United Kingdom and so that we are not
resident in the United Kingdom, including by locating our principal place of
business outside the United Kingdom, requiring our executive officers to be
outside of the United Kingdom when making any material decision regarding our
business or affairs and by holding all of our board meetings outside of the
United Kingdom. However, because certain of our executive officers and directors
reside in the United Kingdom, and because UK statutory and case law fail to
definitively identify the activities that constitute a trade being carried on in
the United Kingdom through a permanent establishment, the UK taxing authorities
may contend that we are subject to UK corporate tax. If the UK taxing
authorities made such a contention, we could incur substantial legal costs
defending our position, and, if we were unsuccessful in our defense, our results
of operations would be materially and adversely affected.




RISKS
RELATING TO OUR INDUSTRY




Vessel
values and charter rates are volatile. Significant decreases in values or rates
could adversely affect our financial condition and results of
operations.




The
tanker industry historically has been highly cyclical. If the tanker industry is
depressed in the future when our charters expire or at a time when we may want
to sell a vessel, our earnings and available cash flow may decrease. Our ability
to re-charter our vessels on the expiration or termination of the charters and
the charter rates payable under any renewal or replacement charters will depend
upon, among other things, the conditions in the tanker market at that time.
Fluctuations in charter rates and vessel values result from changes in the
supply and demand for tanker capacity and changes in the supply and demand for
oil and oil products. Vessel values have declined significantly during 2008 and
there can be no assurance that vessel values will not decline further from
current levels or that future charter rates will be sufficient to provide us
with additional hire payments.




The
highly cyclical nature of the tanker industry may lead to volatile changes in
charter rates from time to time, which may adversely affect our
earnings.




Factors
affecting the supply and demand for tankers are outside of our control, and the
nature, timing and degree of changes in industry conditions are unpredictable
and may adversely affect the values of our vessels and result in significant
fluctuations in the amount of additional hire we earn, which could result in
significant fluctuations in our quarterly results. The factors that influence
the demand for tanker capacity include:




●
            demand
      for oil and oil products, which affect the need for tanker
      capacity;




●
            global
      and regional economic and political conditions which, among other things,
      could impact the supply of oil as well as trading patterns and the demand
      for various types of vessels;




●
            changes
      in the production of crude oil, particularly by OPEC and other key
      producers, which impact the need for tanker
  capacity;




●
            developments
      in international trade;







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●
            changes
      in seaborne and other transportation patterns, including changes in the
      distances that cargoes are
transported;




●
            environmental
      concerns and regulations;




●
            weather;
      and




●
            competition
      from alternative sources of energy.




The
factors that influence the supply of tanker capacity include:




●
            the
      number of newbuilding deliveries;




●
            the
      scrapping rate of older vessels;




●
            the
      number of vessels that are out of service;
and




●
            environmental
      and maritime regulations.




An
oversupply of new vessels may adversely affect charter rates and vessel
values.




If the
capacity of new ships delivered exceeds the capacity of tankers being scrapped
and lost, tanker capacity will increase. In addition, the newbuilding order book
equaled approximately 40% of the existing world tanker fleet as of February 2009
and we cannot assure you that the order book will not increase further in
proportion to the existing fleet. The newbuilding order book is not fully booked
for 2011. If the supply of tanker capacity increases and the demand for tanker
capacity does not increase correspondingly, charter rates could materially
decline and the value of our vessels could be adversely affected.




The
amount of additional hire that we receive under our charter arrangements, if
any, will generally depend on prevailing spot market rates, which are
volatile.




Our
Initial Vessels are operated under time charters with the charterers, and
additional hire is paid to us pursuant to a charter framework agreement among us
and OSG International, Inc., or “OIN,” and certain of our and its subsidiaries.
Under the time charters, we receive a fixed minimum daily basic charter rate and
under the charter framework agreement we may also receive additional hire.
Additional hire, if any, is paid quarterly in arrears. The amount of additional
hire is subject to variation depending on the charter hire received by the
charterers through their pooling arrangements or, if a vessel is not operated in
a pool, charter rates in the time charter or spot charter markets, each of which
is highly dependent on general tanker market conditions. One of our Suezmaxes,
the Overseas Newcastle,
which was delivered to us on December 4, 2007, is operated under a bareboat
charter pursuant to which we receive a fixed minimum daily basic charter rate
and may also receive additional hire. Additional hire, if any, is paid quarterly
in arrears. The amount of additional hire is subject to variation depending on
the charter hire received by the charterer in the time charter or spot charter
markets, each of which is highly dependent on general tanker market conditions.
We cannot assure you that we will receive additional hire for any
quarter.




Terrorist
attacks and international hostilities can affect the tanker industry, which
could adversely affect our business.




Terrorist
attacks, the outbreak of war or the existence of international hostilities could
damage the world economy, adversely affect the availability of and demand for
crude oil and petroleum products and adversely affect our ability to re-charter
our vessels on the expiration or termination of the charters and the charter
rates payable under any renewal or replacement charters. We conduct our
operations internationally, and our business, financial condition and results of
operations may be adversely affected by changing economic, political and
government conditions in the countries and regions where our vessels are
employed. Moreover, we operate in a sector of the economy that is likely to be
adversely impacted by the effects of political instability, terrorist or other
attacks, war or international hostilities.







14
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Our
vessels call on ports located in countries that are subject to restrictions
imposed by the U.S. government, which could negatively affect the trading price
of our common stock.




From time
to time, vessels in our fleet call on ports located in countries subject to
sanctions and embargoes imposed by the U.S. government and countries identified
by the U.S. government as state sponsors of terrorism. From January 1, 2008
through December 31, 2008, vessels in our fleet have made seven calls to ports
in Iran out of a total of 313 calls on worldwide ports. Although the sanctions
and embargoes imposed by the U.S. government do not prevent our vessels from
making calls to ports in these countries, potential investors could view such
port calls negatively, which could adversely affect our reputation and the
market for our common stock. Investor perception of the value of our common
stock may be adversely affected by the consequences of war, the effects of
terrorism, civil unrest and governmental actions in these and surrounding
countries.




The
value of our vessels may be depressed at a time and in the event that we sell a
vessel.




Tanker
values have generally experienced high volatility. Investors can expect the fair
market value of our tankers to fluctuate, depending on general economic and
market conditions affecting the tanker industry and competition from other
shipping companies, types and sizes of vessels and other modes of
transportation. In addition, as vessels grow older, they generally decline in
value. These factors will affect the value of our vessels at the time of any
vessel sale. If for any reason we sell a tanker at a time when tanker prices
have fallen, the sale may be at less than the tanker’s carrying amount on our
financial statements, with the result that we would also incur a loss on the
sale and a reduction in earnings and surplus, which could reduce our ability to
pay dividends.




Vessel
values may be depressed at a time when we are required to make a repayment under
our credit facility, or when our credit facility matures, which could adversely
affect our liquidity and our ability to refinance our credit
facility.




In the
event of the sale or loss of a vessel, our credit facility requires us to prepay
the facility in an amount proportionate to the market value of the sold or lost
vessel compared with the total market value of all of our vessels before such
sale or loss. If vessel values are depressed at such a time, our liquidity could
be adversely affected as the amount that we are required to repay could be
greater than the proceeds we receive from a sale. In addition, declining tanker
values could adversely affect our ability to refinance our credit facility at
its maturity in 2017, as the amount that a new lender would be willing to lend
on the same terms may be less than the amount we owe under the expiring
facility.




We
operate in the highly competitive international tanker market which could affect
our financial position if the charterers do not renew our charters.




The
operation of tankers and transportation of crude oil and petroleum products are
extremely competitive. Competition arises primarily from other tanker owners,
including major oil companies, as well as independent tanker companies, some of
whom have substantially larger fleets and substantially greater resources than
we do. Competition for the transportation of oil and oil products can be intense
and depends on price, location, size, age, condition and the acceptability of
the tanker and its operators to the charterers. During the term of our charters,
our exposure to this competition is limited because of the predominantly fixed
rate nature of our charters. In the event that the charterers do not further
renew the charters when they expire (beginning in 2012) or terminate the
charters for any reason, we will have to compete with other tanker owners,
including major oil companies and independent tanker companies, for charters.
Due in part to the fragmented tanker market, competitors with greater resources
may be able to offer better prices than us, which could result in our achieving
lower revenues from our vessels.




Compliance
with environmental laws or regulations may adversely affect our
business.




Our
operations are affected by extensive and changing international, national and
local environmental protection laws, regulations, treaties, conventions and
standards in force in international waters, the jurisdictional waters of the
countries in which our vessels operate, as well as the countries of our vessels’
registration. Many of these requirements are designed to reduce the risk of oil
spills and other pollution, and our compliance with these requirements can be
costly.







15
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These
requirements can affect the resale value or useful lives of our vessels, require
a reduction in carrying capacity, ship modifications or operational changes or
restrictions, lead to decreased availability of insurance coverage for
environmental matters or result in the denial of access to certain
jurisdictional waters or ports, or detention in, certain ports. Under local,
national and foreign laws, as well as international treaties and conventions, we
could incur material liabilities, including cleanup obligations, in the event
that there is a release of petroleum or other hazardous substances from our
vessels or otherwise in connection with our operations. We could also become
subject to personal injury or property damage claims relating to the release of
or exposure to hazardous materials associated with our current or historic
operations. Violations of or liabilities under environmental requirements also
can result in substantial penalties, fines and other sanctions, including in
certain instances, seizure or detention of our vessels.




We could
incur significant costs, including cleanup costs, fines, penalties, third-party
claims and natural resource damages, as the result of an oil spill or other
liabilities under environmental laws. The United States Oil Pollution Act of
1990, or “OPA,” affects all vessel owners shipping oil to, from or within the
United States. OPA allows for potentially unlimited liability without regard to
fault for owners, operators and bareboat charterers of vessels for oil pollution
in U.S. waters. Similarly, the International Convention on Civil Liability for
Oil Pollution Damage, 1969, as amended, which has been adopted by most countries
outside of the United States, imposes liability for oil pollution in
international waters. OPA expressly permits individual states to impose their
own liability regimes with regard to hazardous materials and oil pollution
incidents occurring within their boundaries. Coastal states in the United States
have enacted pollution prevention liability and response laws, many providing
for unlimited liability.




OPA
provides for the scheduled phase-out of all non double-hull tankers that carry
oil in bulk in U.S. waters. The International Maritime Organization, or “IMO,”
and the European Union also have adopted separate phase-out schedules applicable
to single-hull tankers operating in international and EU waters. These
regulations will reduce the demand for single-hull tankers, force the remaining
single-hull vessels into less desirable trading routes, increase the number of
ships trading in routes open to single-hull vessels and could increase demands
for further restrictions in the remaining jurisdictions that permit the
operation of these vessels. As a result, single-hull vessels are likely to be
chartered less frequently and at lower rates. Although all of our tankers are
double-hulled, we cannot assure you that these regulatory programs will not
apply to vessels acquired by us in the future.




In
addition, in complying with OPA, IMO regulations, EU directives and other
existing laws and regulations and those that may be adopted, ship-owners may
incur significant additional costs in meeting new maintenance and inspection
requirements, developing contingency arrangements for potential spills and
obtaining insurance coverage. Government regulation of vessels, particularly in
the areas of safety and environmental requirements, can be expected to become
more strict in the future and require us to incur significant capital
expenditures on our vessels to keep them in compliance, or even to scrap or sell
certain vessels altogether. For example, various jurisdictions are considering
imposing more stringent requirements on air emissions, including greenhouse
gases, and on the management of ballast waters to prevent the introduction of
non-indigenous species that are considered to be invasive. As a result of
accidents such as the November 2002 oil spill from the Prestige, a 26-year-old
single-hull tanker unrelated to us, we believe that regulation of the shipping
industry will continue to become more stringent and more expensive for us and
our competitors. In recent years, the IMO and EU have both accelerated their
existing non-double-hull phase-out schedules in response to highly publicized
oil spills and other shipping incidents involving companies unrelated to us.
Future accidents can be expected in the industry, and such accidents or other
events could be expected to result in the adoption of even stricter laws and
regulations, which could limit our operations or our ability to do business and
which could have a material adverse effect on our business and financial
results.







16
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The
shipping industry has inherent operational risks, which could impair the ability
of the charterers to make payments to us.




Our
tankers and their cargoes are at risk of being damaged or lost because of events
such as marine disasters, bad weather, mechanical failures, human error, war,
terrorism, piracy, environmental accidents and other circumstances or events. In
addition, transporting crude oil across a wide variety of international
jurisdictions creates a risk of business interruptions due to political
circumstances in foreign countries, hostilities, labor strikes and boycotts, the
potential for changes in tax rates or policies, and the potential for government
expropriation of our vessels. Any of these events could impair the ability of
the charterers to make payments to us under our charters.




Our
insurance coverage may be insufficient to make us whole in the event of a
casualty to a vessel or other catastrophic event, or fail to cover all of the
inherent operational risks associated with the tanker industry.




In the
event of a casualty to a vessel or other catastrophic event, we will rely on our
insurance to pay the insured value of the vessel or the damages incurred. Under
the old ship management agreements for our Initial Vessels, Tanker Management
was responsible for arranging insurance and under the new ship management
agreements, which became effective as of January 16, 2009, Tanker Management
will, upon instruction by the Company, continue to be responsible for arranging
insurance against those risks that we believe the shipping industry commonly
insures against, and we are responsible for the premium payments on such
insurance. With respect to our two Suezmaxes, the Overseas Newcastle and the
Overseas London, which
are on bareboat charters, the charterer is responsible for arranging and paying
insurance. This insurance includes marine hull and machinery insurance,
protection and indemnity insurance, which includes pollution risks and crew
insurance, and war risk insurance. Tanker Management is also responsible for
arranging loss of hire insurance in respect of each of our Initial Vessels, and
we are responsible for the premium payments on such insurance. This insurance
generally provides coverage against business interruption for periods of more
than 21 days (in the case of our VLCCs) or 14 days (in the case of our
Aframaxes) per incident (up to a maximum of 120 days) per incident,
following any loss under our hull and machinery policy. We will not be
reimbursed under the loss of hire insurance policies, on a per incident basis,
for the first 21 days of off hire in the case of our VLCCs and for the
first 14 days in the case of our Aframaxes. Currently, the amount of
coverage for liability for pollution, spillage and leakage available to us on
commercially reasonable terms through protection and indemnity associations and
providers of excess coverage is $1 billion per vessel per occurrence. We
cannot assure you that we will be adequately insured against all risks. If
insurance premiums increase, we may not be able to obtain adequate insurance
coverage at reasonable rates for our fleet. Additionally, our insurers may
refuse to pay particular claims. Any significant loss or liability for which we
are not insured could have a material adverse effect on our financial condition.
In addition, the loss of a vessel would adversely affect our cash flows and
results of operations.




Maritime
claimants could arrest our tankers, which could interrupt the charterers’ or our
cash flow.




Crew
members, suppliers of goods and services to a vessel, shippers of cargo and
other parties may be entitled to a maritime lien against that vessel for
unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien
holder may enforce its lien by arresting a vessel through foreclosure
proceedings. The arrest or attachment of one or more of our vessels could
interrupt the charterers’ or our cash flow and require us to pay a significant
amount of money to have the arrest lifted. In addition, in some jurisdictions,
such as South Africa, under the “sister ship” theory of liability, a claimant
may arrest both the vessel that is subject to the claimant’s maritime lien and
any “associated” vessel, which is any vessel owned or controlled by the same
owner. Claimants could try to assert “sister ship” liability against one vessel
in our fleet for claims relating to another vessel in our fleet.




Governments
could requisition our vessels during a period of war or emergency without
adequate compensation.




A
government could requisition one or more of our vessels for title or for hire.
Requisition for title occurs when a government takes control of a vessel and
becomes her owner, while requisition for hire occurs when a government takes
control of a vessel and effectively becomes her charterer at dictated charter
rates.  Generally, requisitions occur during periods of war or emergency,
although governments may elect to requisition vessels in other circumstances.
Although we would be entitled to compensation in the event of a requisition of
one or more of our vessels, the amount and timing of payment would be uncertain.
Government requisition of one or more of our vessels may negatively impact our
revenues and reduce the amount of cash we have available for distribution as
dividends to our stockholders.







17
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RISKS
RELATING TO OUR COMMON STOCK




The
market price of our common stock may be unpredictable and volatile.




The
market price of our common stock may fluctuate due to factors such as actual or
anticipated fluctuations in our quarterly and annual results and those of other
public companies in our industry, mergers and strategic alliances in the tanker
industry, market conditions in the tanker industry, changes in government
regulation, shortfalls in our operating results from levels forecast by
securities analysts, announcements concerning us or our competitors and the
general state of the securities market. The tanker industry has been highly
unpredictable and volatile. The market for common stock in this industry may be
equally volatile.  Therefore, we cannot assure you that you will be
able to sell any of our common stock you may have purchased at a price greater
than or equal to the original purchase price.




Future
sales of our common stock could cause the market price of our common stock to
decline.




The
market price of our common stock could decline due to sales of a large number of
our shares in the market or the perception that such sales could occur. This
could depress the market price of our common stock and make it more difficult
for us to sell equity securities in the future at a time and price that we deem
appropriate, or at all.




We
are incorporated in the Marshall Islands, which does not have a well-developed
body of corporate law.




Our
corporate affairs are governed by our amended and restated articles of
incorporation and bylaws and by the Marshall Islands Business Corporations Act,
or the “BCA.” The provisions of the BCA resemble provisions of the corporation
laws of a number of states in the United States. However, there have been few
judicial cases in the Marshall Islands interpreting the BCA, and the rights and
fiduciary responsibilities of directors under the laws of the Marshall Islands
are not as clearly established as the rights and fiduciary responsibilities of
directors under statutes or judicial precedent in existence in the United
States. Therefore, the rights of stockholders of the Marshall Islands may differ
from the rights of stockholders of companies incorporated in the United States.
While the BCA provides that it is to be interpreted according to the laws of the
State of Delaware and other states with substantially similar legislative
provisions, there have been few, if any, court cases interpreting the BCA in the
Marshall Islands and we can not predict whether Marshall Islands courts would
reach the same conclusions that any particular United States court would reach
or has reached. Thus, you may have more difficulty in protecting your interests
in the face of actions by the management, directors or controlling stockholders
than would stockholders of a corporation incorporated in a United States
jurisdiction which has developed a relatively more substantial body of case
law.




Our
bylaws restrict stockholders from bringing certain legal action against our
officers and directors.




Our
bylaws contain a broad waiver by our stockholders of any claim or right of
action, both individually and on our behalf, against any of our officers or
directors. The waiver applies to any action taken by an officer or director, or
the failure of an officer or director to take any action, in the performance of
his or her duties, except with respect to any matter involving any fraud or
dishonesty on the part of the officer or director. This waiver limits the right
of stockholders to assert claims against our officers and directors unless the
act or failure to act involves fraud or dishonesty.




18
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We
have anti-takeover provisions in our bylaws that may discourage a change of
control.
  Our
bylaws contain provisions that could make it more difficult for a third party to
acquire us without the consent of our board of directors. These provisions
provide for:


●
            a
      classified board of directors with staggered three-year terms, elected
      without cumulative voting;




●
            directors
      only to be removed for cause and only with the affirmative vote of holders
      of at least a majority of the common stock issued and
      outstanding;




●
            advance
      notice for nominations of directors by stockholders and for stockholders
      to include matters to be considered at annual
  meetings;




●
            a
      limited ability for stockholders to call special stockholder meetings;
      and




●
            our
      board of directors to determine the powers, preferences and rights of our
      preferred stock and to issue the preferred stock without stockholder
      approval.




These
provisions could make it more difficult for a third party to acquire us, even if
the third party’s offer may be considered beneficial by many stockholders. As a
result, stockholders may be limited in their ability to obtain a premium for
their shares.




ITEM 4.
                          INFORMATION
      ON THE COMPANYA.
                          HISTORY
      AND DEVELOPMENT OF THE
COMPANY


General
Information




DHT
Maritime, Inc was incorporated under the name of Double Hull Tankers, Inc. in
April 2005 under the laws of the Marshall Islands. In June 2008, the
shareholders voted to approve an amendment to the Company’s articles of
incorporation to change the Company’s name to DHT Maritime, Inc. Our principal
executive offices are located at 26 New Street, St. Helier, Jersey, Channel
Islands, JE23RA and our telephone number at that address is +44 (0) 1534
639759.




B.
                              BUSINESS
      OVERVIEW




We
operate a fleet of double-hull tankers. As of March 12, 2009, our fleet consists
of three very large crude carriers, or “VLCCs,” which are tankers ranging in
size from 200,000 to 320,000 deadweight tons, or “dwt,” two Suezmax tankers,
which are tankers ranging in size from 130,000 to 170,000 dwt, and four Aframax
tankers, which are tankers ranging in size from 80,000 to 120,000 dwt. Our fleet
principally operates on international routes and had a combined carrying
capacity of 1,656,921 dwt and a weighted average age of 8.7 years as of
December 31, 2008, compared with an average age of approximately 10.5 years
for the world crude tanker fleet.




We
acquired our seven Initial Vessels from subsidiaries of OSG on October 18, 2005
in exchange for cash and shares of our common stock and have time chartered
these vessels back to subsidiaries of OSG. In addition, on December 4, 2007 and
January 28, 2008, we acquired two Suezmaxes, the Overseas Newcastle and Overseas London,
respectively, in exchange for cash and have bareboat chartered these vessels to
subsidiaries of OSG. OSG, one of the world’s largest bulk-shipping companies,
owns and operates a modern fleet of 154 vessels (including newbuildings on
order) that have a combined carrying capacity of 15.9 million dwt and
865,000 cbm as of December 31, 2008. OSG’s fleet consists of both
internationally flagged and U.S. flagged vessels that transport crude oil,
petroleum products and dry bulk commodities.




Our
strategy is to charter our vessels primarily pursuant to multi-year charters to
take advantage of the stable cash flow associated with long-term charters. In
addition, the majority of our charter arrangements include a profit sharing
component that gives us the opportunity to earn additional hire when vessel
earnings exceed the basic hire amounts set forth in the charters. Six of the
seven Initial Vessels are operated in the Tankers International Pool and the
Aframax International Pool and we expect our potential to earn additional hire
will benefit from the higher utilization rates realized by these pools. In a
pooling arrangement, the net revenues generated by all of the vessels in a pool
are aggregated and distributed to pool members pursuant to a pre-arranged
weighting system that recognizes each vessel’s earnings capacity based on its
cargo capacity, speed and consumption, and actual on-hire
performance.







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On
October 18, 2005, we agreed to time charter our Initial Vessels to subsidiaries
of OSG for terms of five to six and one-half years. Each time charter may be
renewed by the charterer on one or more successive occasions for periods of one,
two or three years, up to an aggregate of five, six or eight years, depending on
the vessel, from the initial expiration date. On November 26, 2008, we entered into an agreement with OSG whereby OSG
exercised its optionto
extendthe charters for the Initial Vessels upon expiry of the
vessels’ initial charter periods. For two of the vessels, the charters were
extended for 18 months after the initial charter periods expire in October 2010
and for five of the vessels, the charters were extended for 12 months following
the expiry of the initial charter periods between April 2011 and April 2012.
When a time charter is renewed, the charter terms providing for profit sharing
will remain in effect and the charterer, at the time of exercise, will have the
option to select a basic charter rate that is equal to (i) 5% above the
published one, two or three-year time charter rate (corresponding to the
extension length) for the vessel’s class, as decided by a shipbrokers’ panel
(subject to specified floors, for certain of our vessels for the declared
extension period), or (ii) the basic hire rate set forth in the applicable
charter. The shipbrokers’ panel, which we call the “Broker Panel”, will be The
Association of Shipbrokers and Agents Tanker Broker Panel or another panel of
brokers mutually acceptable to us and the charterer. Upon delivery to us of our
Suezmax, the Overseas
Newcastle, on December 4, 2007, the vessel was bareboat chartered to a
subsidiary of OSG for a term of seven years at a basic bareboat charter rate of
$26,300 per day for the first three years of the charter term, and $25,300 per
day for the last four years of the charter term. In addition to the bareboat
charter rate, we will, through the profit sharing element of the charter
agreement, earn 33% of the vessel’s earnings above the time charter equivalent
rate of $35,000 per day for the first three years of the charter term and above
$34,000 per day for the last four years of the charter term, calculated on a
four quarter rolling average. At the end of the seven year charter term, OSG has
the right to acquire the vessel for $77 million.




Upon
delivery to us of our other Suezmax, the Overseas London, on January
28, 2008, the vessel was bareboat chartered to a subsidiary of OSG for a term of
10 years at a basic bareboat charter rate of $26,600 per day for the term
of the charter. There is no profit sharing element under this bareboat
charter.  OSG has the right to acquire the vessel at the end of the
eighth, ninth and tenth year of the charter term at a price of $71 million, $67
million and $60 million, respectively. If OSG elects to exercise its purchase
option, we will, in addition to the purchase option price, receive an amount
equal to 40% of the difference between the market price of the vessel at the
time the purchase option is exercised and the purchase option
price.






CHARTER
ARRANGEMENTS




The
following summary of the material terms of our charters does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
of the provisions of the charters. Because the following is only a summary, it
does not contain all information that you may find useful. For more complete
information, you should read the entire time charter party with amendments for
each vessel listed as an exhibit to this report.




General
– Time Charters




Effective
October 18, 2005, certain of our wholly owned subsidiaries time chartered our
Initial Vessels to the charterers for a period of five to six and one-half
years, as set forth in the table below. Each time charter may be renewed by the
charterer on one or more successive occasions for periods of one, two or three
years, up to an aggregate of five, six or eight years, depending on the vessel.
The charterer must exercise its renewal option in writing at least 90 days
prior to expiration of the existing charter period. If a time charter is
renewed, the charter terms providing for profit sharing will remain in effect
and the charterer, at the time of exercise, will have the option to select a
basic charter rate that is equal to (i) 5% above the published one-, two-
or three-year time charter rate (corresponding to the extension length) for the
vessel’s class, as decided by a shipbrokers’ panel, or (ii) the basic hire
rate set forth in the charter. The shipbrokers’ panel, or “Broker Panel,” will
be The Association of Shipbrokers and Agents Tanker Broker Panel or another
panel of brokers mutually acceptable to us and the charterer.




20
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On
November 26, 2008, we entered into an
agreement with OSG whereby OSG exercised its optionto extendthe charters for the Initial Vessels
upon expiry of the vessels’ initial charter periods. For OverseasRebeccaand Overseas Ania, the charters
were extended for 18 months after the initial charter periods expire in October
2010 at the basic charter rate. With regards to the remaining five vessels, the
charters were extended for 12 months after the initial charter periods expire
between April 2011 and April 2012, with the basic charter hire rate for the
declared extension periods being either the basic charter rate stipulated in the
applicable charter or, if the one-year time charter rate is lower, a base rate
which is no more than $5,000 per day below the basic charter rate stipulated in
the charters.




We
guarantee the obligations of each of our subsidiaries under the time charters
and OSG guarantees each charterers’ obligation to make charter payments to
us.




Vessel
                                  
                                  Term
      of Initial
                                    Charter
                                  
                                  Expiration
                                    of
      Initial Charter
                                  
                                  Expiration
                                    After
      Extension
                                  Maximum
                                    Remaining
                                    Extension
      TermOverseas
      Ann
                                  
                                  61⁄2  years
                                  
                                  April
      17, 2012
                                  
                                  April
      16, 2013
                                  7
      yearsOverseas
      Chris
                                  
                                  6 years
                                  
                                  October 17, 2011
                                  
                                  October
      16, 2012
                                  7
      yearsOverseas
      Regal
                                  
                                  51⁄2
      years
                                  
                                  April
      17, 2011
                                  
                                  April
      16, 2012
                                  5
      yearsOverseas
      Cathy
                                  
                                  61⁄4
      years
                                  
                                  January 17, 2012
                                  
                                  January
      16, 2013
                                  7
      yearsOverseas
      Sophie
                                  
                                  53⁄4
      years
                                  
                                  July 17, 2011
                                  
                                  July
      16, 2012
                                  7
      yearsOverseas
      Rebecca
                                  
                                  5 years
                                  
                                  October 17, 2010
                                  
                                  April
      16, 2012
                                  3
      1⁄2  yearsOverseas
      Ania
                                  
                                  5 years
                                  
                                  October 17, 2010
                                  
                                  April
      16, 2012
                                  3 1⁄2
      years




The
charterers are wholly owned subsidiaries of OSG. Under the time charters, we are
required to keep the vessels seaworthy, and to crew, operate and maintain them,
including ensuring (i) that the vessels have been approved for trading
(referred to in the industry as “vetting approvals”) by a minimum of four major
oil companies and (ii) that we do not lose any vetting approvals that are
required to maintain the vessels’ trading patterns. Tanker Management performs
those duties for us under the ship management agreements described below. If
structural changes or new equipment is required due to changes mandated by
legislation or regulation, the vessel classification society or the standards of
an oil company for which vetting approval is required, the charterers will be
required to pay the first $50,000 per year per vessel for all such changes. To
the extent the cost of all such changes exceeds $50,000, the excess cost will be
apportioned to us and the charterer of the vessel on the basis of the ratio of
the remaining charter period and the remaining useful life of the vessel
(calculated as 25 years from the year built), with the charterers paying
50% of the apportioned cost. Each charter also provides that the basic hire will
be reduced if the vessel does not achieve the performance specifications set
forth in the charter. Pursuant to the charters, the charterers have agreed to
endeavour to avoid or limit any liability to their customers for consequential
damages. In addition, the charterers and OSG International, Inc., or “OIN,” have
agreed to use their commercial best efforts to charter our vessels on market
terms and to ensure that preferential treatment is not given to any other
vessels owned, managed or controlled by OIN or its affiliates.




The
charterers have a right of first offer over the sale of the applicable vessel,
which, in the event we wish to sell such vessel, requires us to offer to sell
the vessel to the applicable charterer at a price determined by a shipbrokers’
panel. The charterers are not obligated to pay us charter hire for off hire days
that include days a vessel is unable to be in service due to, among other
things, repairs or drydockings. However, we have obtained loss of hire insurance
that will generally provide coverage against business interruption for periods
of more than 21 days (in the case of our VLCCs) or 14 days (in the case of our
Aframaxes) per incident (up to a maximum of 120 days per incident),
following any loss under our hull and machinery policy.




The terms
of the time charters do not provide the charterers with an option to terminate
the charter before the end of their respective terms. However, the charterers
may terminate in the event of the total loss or constructive total loss of a
vessel, if the vessel fails an inspection by a government and/or a port state
authority, in the event the vessel fails to comply with the charter’s vetting
requirements, or in the event that the vessel is rendered unavailable for
charterers’ service for a period of thirty days or more as a result of detention
of a vessel by any governmental authority, or by any legal action against vessel
or owners, or by any strike or boycott by the vessel’s officers or
crew.







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General
– Bareboat Charters




On
December 4, 2007, our Suezmax, the Overseas Newcastle, was
bareboat chartered to a subsidiary of OSG for a term of seven years at a basic
bareboat charter rate of $26,300 per day for the first three years of the
charter term, and $25,300 per day for the last four years of the charter term.
According to the terms of the bareboat charter, we will be paid this basic hire
even for the days on which the vessel is not able to be in service. In addition
to the bareboat charter rate, we will, through the profit sharing element of
this charter agreement, earn 33% of the vessel’s earnings above the time charter
equivalent rate of $35,000 per day for the first three years of the charter term
and above $34,000 per day for the last four years of the charter term,
calculated on a four quarter rolling average. At the end of the seven year
charter term, OSG has the right to acquire the vessel for $77
million.




On
January 28, 2008, our other Suezmax, the Overseas London, was bareboat
chartered to a subsidiary of OSG for a term of 10 years at a basic bareboat
charter rate of $26,000 per day for the term of the
charter.  According to the terms of the bareboat charter, we will be
paid this basic hire even for the days on which the vessel is not able to be in
service.  There is no profit sharing element under this bareboat
charter. OSG has the right to acquire the vessel at the end of the eighth, ninth
and tenth year of the charter term at a price of $71 million, $67 million and
$60 million, respectively.  If OSG elects to exercise its purchase
option, we will, in addition to the purchase option price, receive an amount
equal to 40% of the difference between the market price of the vessel at the
time the purchase option is exercised and the purchase option
price.




Basic
Hire




Under
each time charter for our Initial Vessels, the daily charter rate for each such
vessel, which we refer to as “basic hire,” is payable to us monthly in advance
and will increase annually. The basic hire under the charters for each vessel
type during each year of the initial fixed term of the charter and the extension
periods agreed to on November 26, 2008 is as follows:




Charter
      Year
                      
                      End of Charter Year(1)
                      
                      VLCCs
                      
                      Aframaxes
                        (Overseas Cathyand Overseas Sophie)
                      
                      Aframaxes
                        (Overseas RebeccaandOverseas Ania)1
                      
                      October
      17, 2006
                      
                      $   
      37,200/day
                      
                      $   
      24,500/day
                      
                      $  
      18,500/day2
                      
                      October
      17, 2007
                      
                      37,400/day
                      
                      24,700/day
                      
                      18,700/day3
                      
                      October
      17, 2008
                      
                      37,500/day
                      
                      24,800/day
                      
                      18,800/day4
                      
                      October
      17, 2009
                      
                      37,600/day
                      
                      24,900/day
                      
                      18,900/day5
                      
                      October
      17, 2010
                      
                      37,800/day
                      
                      25,100/day
                      
                      19,100/day6
                      
                      October
      17, 2011
                      
                      38,100/day
                      
                      25,400/day
                      
                      19,100/day7
                      
                      October
      17, 2012
                      
                      38,500/day
                      
                      25,700/day
                      
                      19,700/day8
                      
                      October
      17, 2012
                      
                      38,800/day
                      
                      26,000/day


(1)
            The charters,
      including the extension options agreed to on November 26, 2008,
      expire as follows for the Overseas Ann, Overseas Cathy, Overseas Chris,
      Overseas Sophie, Overseas Regal, Overseas Ania and Overseas Rebecca: April 16, 2013;
      January 16, 2013; October 16, 2012; July 16, 2012; April 16, 2012; April
      16, 2012 and April 16, 2012,
      respectively.





Under
each time charter, the charterer has the option to renew the charter on one or
more successive occasions for periods of one, two or three years, up to an
aggregate of five, six or eight years, including the extensions agreed to on
November 26, 2008, depending on the vessel. Each such option will be
exercisable not less than three months prior to the then effective charter
expiration date. If a time charter is renewed, the charter terms providing for
profit sharing will remain in effect and the charterer, at the time of exercise,
will have the option to select a basic charter rate that is equal to (i) 5%
above the published one, two or three-year time charter rate (corresponding to
the extension length) for the vessel’s class, as decided by the Broker
Panel (subject to specified floors, for certain of our vessels for the declared
extension period), or (ii) the basic hire rate set forth in the
charter.




22
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With
respect to our Suezmax, the Overseas Newcastle, the basic
bareboat charter rate will be $26,300 per day for the first three years of the
charter term and $25,300 per day for the last four years of the charter term.
With respect to our other Suezmax, the Overseas London, the basic
bareboat charter rate will be $26,600 per day for the entire ten year term of
the charter. Under each bareboat charter, the charterer does not have the option
to renew the charter at the end of the seven year and ten year charter period,
respectively.




Additional
Hire




Pursuant
to the charter arrangements for our Initial Vessels, the parent of each of the
charterers, OIN, has agreed to pay us quarterly in arrears a payment, which is
in addition to the basic hire we will receive under our charters, that we refer
to as additional hire. OIN will pay us additional hire on a quarterly basis
equal to 40% of the excess, if any, of the aggregate charter hire earned (or
deemed earned in the event that a vessel is operated in the spot market outside
a pool) by the charterers on all of our vessels above the aggregate basic hire
paid by the charterers to us in respect of all of our vessels during the
calculation period. OSG has guaranteed the additional hire payments due to us
under the charter framework agreement. If we sell a vessel to a third party, the
vessel will continue to be subject to the charter framework agreement and will
continue to earn additional hire, but will not be included in our fleetwide
calculations. Additional hire is calculated on a time charter equivalent, or
“TCE,” basis, regardless of whether the charterers operate our vessels in a
pool, on time charters or in the spot market. However, the manner in which
charter hire is calculated for a given period depends on whether our vessels are
operated in a pool or in the time or spot charter market. Currently, all of our
VLCCs are operated in the Tankers International Pool and three of our Aframax
vessels are operated in the Aframax International Pool. The Overseas Ania left
the Aframax International Pool as of July 1, 2008 and is on a charter to OSG
Lightering until October 2010.




General
provisions regarding additional hire for our Initial Vessels.




For the
First Four Fiscal Quarters. Additional hire was calculated at the end of
each quarter through and including the quarter ending September 30, 2006
for the period commencing on the effective date of the charters and ending on
the last day of the applicable quarter, as follows:




●
            TCE
      revenue earned or deemed earned by the charterers for all of the
      applicable vessels over the calculation period is
    aggregated;




●
            the
      basic hire earned by all of the applicable vessels during the calculation
      period is aggregated;




●
            additional
      hire for the calculation period is equal to 40% of the excess, if any, of
      the TCE revenue earned or deemed earned by the charterers over the basic
      hire earned by all of the applicable
vessels;




●
            additional
      hire payable for the relevant quarter is equal to the excess, if any, of
      the additional hire for the calculation period over the amount of
      additional hire paid in respect of previous quarters;
  and




●
            the
      calculation period for each of the four quarters beginning on the
      effective date and ending on September 30, 2006 is the period
      commencing on the effective date and ending on the last day of such
      calendar quarter.




In
Subsequent Fiscal Periods. Additional hire for any calendar quarter
subsequent to September 30, 2006 will be equal to an amount that is 40% of
the excess, if any, of (i) the aggregate of the rolling four quarter
weighted average hire for all of the applicable vessels in the calendar quarter
over (ii) the aggregate of the basic hire earned by all of the applicable
vessels in that calendar quarter. The weighted average hire for each vessel is
determined by:







23
 Table of Contents





●
            aggregating
      all TCE revenue earned or deemed earned by the vessel in the four quarter
      period ending on the last day of the quarter and dividing the result by
      the number of days the vessel was on hire in that four quarter period;
      and




●
            multiplying
      the resulting rate by the number of days the vessel was on hire in the
      calendar quarter.




OIN is
responsible for performing the additional hire calculations each quarter,
subject to our right to review its calculations. Additional hire, if any, is
payable on the 35th day following the end of each calendar quarter. We will not
be required to refund any additional hire payments made to us by OIN in respect
of prior periods due to our vessels earning less than the basic hire
amounts.




Additional
hire for vessels operating in a pool.




General.  In
order to enhance vessel utilization and earnings, OSG is a member of the Tankers
International Pool, which operates VLCCs and V Pluses, and the Aframax
International Pool, which operates Aframaxes. Our VLCCs and three of our
Aframaxes are currently operated in these pools. The Tankers International Pool
currently consists of 41 VLCCs and V Pluses, including our three
VLCCs, and the Aframax International Pool consists of 43 Aframaxes, including
three of our four Aframaxes. The large number of vessels managed by these pools
allows them to enhance vessel utilization, and therefore vessel earnings, with
backhaul cargoes and contracts of affreightment, or “COAs,” which minimize idle
time and distances traveled empty. We therefore believe that, over a longer
period of time, our potential to earn additional hire will be enhanced by the
higher utilization rates and lower overhead costs that a vessel operating inside
a pool can achieve compared with a vessel operating independently outside of a
pool.




Allocation of pool
revenues.  Earnings generated by all vessels operating in a pool are
expressed on a TCE basis and then pooled and allocated based on a pre-arranged
weighting system that recognizes each vessel’s earnings capacity based on its
cargo capacity, speed and consumption and actual on-hire performance. Earnings
from vessels operating on voyage charters in the spot market and on COAs within
the pool need to be converted into TCE revenues (by subtracting voyage expenses
such as fuel and port charges) while vessels operating on time charters within a
pool do not need to be converted. For vessels operating on voyage charters in
the spot market and on COAs, aggregated voyage expenses are deducted from
aggregated revenues to result in an aggregate net revenue amount, which is the
TCE amount. These aggregate net revenues are combined with aggregate time
charter revenues to determine aggregate pool TCE revenue. Aggregate pool TCE
revenue is then allocated to each vessel in accordance with the allocation
formula. Because OSG currently operates the majority of the VLCCs and Aframaxes
it owns and charters in the Tankers International and Aframax International
Pools, respectively, we expect that most of our VLCCs and Aframaxes will
continue to be operated in these pools and that each charterer will earn its
vessel’s share of the respective pool’s TCE revenue from the commencement of our
time charters with OSG’s subsidiaries and for so long as OSG maintains its
membership in that pool. However, OSG can withdraw from either pool at any time,
and the members of either pool can agree to change the terms of their respective
pools at any time. Furthermore, under the current terms of the respective pool
agreements, OSG may withdraw a particular VLCC (including any of ours) from the
Tankers International Pool and time charter it to a third party for a term
exceeding five years and may withdraw a particular Aframax (including any of
ours) from the Aframax International Pool and time charter it to a third party
for a term in excess of three years.  The Overseas Ania, one of our
Aframaxes, was withdrawn from the Aframax International Pool in July 2008 and is
chartered to OSG Lightering until October 2010.




The
amount of TCE revenue earned by our vessels that operate in pools is equal to
the pool earnings for those vessels, as reported to each charterer by the
respective pool manager.







24
 Table of Contents





Additional
hire for vessels operating outside of a pool.




Regarding
the Overseas Ania, and if OSG withdraws more of our vessels from a pool or if a
pool disbands, the methodology for calculating TCE revenue for determination of
additional hire will differ. TCE revenue for the Overseas Ania, or any affected
vessel will be equal to:




●
            for periods under time
      charters:  actual time charter hire earned by the
      charterer under time charters to third parties for any periods during the
      quarter that the vessel operates under the time charter, less ship broker
      commissions paid by the charterer to unaffiliated third parties in an
      amount not to exceed 2.5% of such time charter hire and commercial
      management fees paid by the charterer to unaffiliated third parties in an
      amount not to exceed 1.25% of such time charter hire;
  plus




●
            for periods in the spot
      market:  the TCE revenue deemed earned by the charterer
      in the spot market, calculated as described under the special provisions
      referred to below. We define “spot market” periods as periods during the
      quarter that a vessel is not subchartered by the charterer under a time
      charter or operating in a pool and during which the vessel is on hire
      under our time charter with the
charterer.




Special
provisions regarding the calculation of additional hire when vessels are
operated outside of a pool and not in the time charter market.




If a
vessel is operated by a charterer outside of a pool and not in the time charter
market (i.e., in the spot market) TCE revenue will be deemed earned for the
period that the vessel is operating on the spot market and is on hire under our
time charter. TCE revenue will be calculated each quarter using averages of the
daily spot rates (expressed in Worldscale Points) for the routes specified
below, as determined by the Broker Panel. We refer to these averages as the
average spot rates and we refer to these routes as the notional routes. The
average spot rates will be determined for the notional routes as
follows:




●
            multiplying
      the daily spot rate expressed in Worldscale Points (first divided by 100)
      by the applicable Worldscale flat rate (expressed in U.S. dollars per ton
      of cargo) for the notional route as set forth in the New Worldwide Tanker
      Nominal Freight Scale issued by the Worldscale Association for the
      relevant period and multiplying that product by the cargo size (in tons)
      for each vessel type to calculate freight
  income;




●
            subtracting
      voyage costs consisting of brokerage commissions of 2.5% and commercial
      management costs of 1.25%, bunker costs and port charges from freight
      income to calculate voyage income;
and




●
            dividing
      voyage income by voyage duration, including time in
  port.




A TCE
per-day rate will be calculated based on the average spot rates reported by the
Broker Panel and weighted by the notional routes as described below. TCE revenue
for the vessel will be calculated by multiplying the TCE per-day rate by the
number of days the vessel was operating on hire under our time charter during
that quarter.




The
Broker Panel will be The Association of Shipbrokers and Agents Tanker Broker
Panel or another panel of brokers mutually acceptable to us and OIN. If
Worldscale ceases to be published, the Broker Panel shall use its best judgment
in determining the nearest alternative method of assessing the market rates on
the specified voyages.




On the
last day of each calendar quarter, OIN will instruct the Broker Panel to
determine for each notional route the average spot rate for the relevant period
during that quarter that the vessel was on hire. Periods for which a vessel is
off hire under our time charter for any reason will be excluded from the
calculation. The Broker Panel will be instructed to deliver their assessment of
the average spot rates no later than the fifth business day following the
instruction date to make such assessment. Upon receipt of the Broker Panel’s
assessment of the average spot rates, OIN will calculate the TCE revenue deemed
earned by each charterer for the relevant periods during that quarter, and will
deliver such calculation to us no later than the fifth business day following
the date on which it receives the average spot rate assessment from the Broker
Panel. Such TCE revenue amounts will be included in the additional hire
calculation for the quarter. Determinations of the Broker Panel will be binding
on us and OIN. We and OIN will share equally the cost of such Broker Panel
assessment and of any experts engaged by the Broker Panel.





25
 Table of Contents




The
notional routes, cargo sizes and the weighting to be applied to each route in
calculating the TCE daily rates is as follows:




1.           Aframaxes




Puerta la
Cruz to Corpus Christi with 70,000 tons of crude (50% weight)


Sullom
Voe to Wilhelmshaven with 80,000 tons of crude (25% weight)


Banias to
Lavera with 80,000 tons of crude (25% weight)




2.           VLCCs




Ras
Tanura to Chiba with 250,000 tons of crude (50% weight)


Ras
Tanura to LOOP with 280,000 tons of crude (46% weight)


Offshore
Bonny to LOOP with 260,000 tons of crude (4% weight)




The
notional routes are intended to represent routes on which Aframaxes and VLCCs
are typically traded by the charterers. If during the term of the charter, in
OIN’s reasonable opinion, any notional route ceases to be used by Aframaxes or
VLCCs, as the case may be, or the selection of bunkering ports for purposes of
determining bunker prices ceases to be representative of bunkering practice
along a notional route, OIN may, with our consent, which we may not unreasonably
withhold, instruct the Broker Panel to substitute alternative notional routes
and bunkering ports that most closely match the routes and bunkering ports then
being used by Aframaxes or VLCCs and to apply appropriate weights to such
alternative routes for such period.




If in
OIN’s reasonable opinion it becomes impractical or dangerous, due to war,
hostilities, warlike operations, civil war, civil commotion, revolution or
terrorism for Aframaxes and VLCCs to operate on the notional routes, OIN may
request our agreement, which we may not unreasonably refuse, for the average
daily rate to be determined during the period of such danger or restriction of
trading using average spot rates determined by the Broker Panel for alternative
notional routes proposed by the charterer that reasonably reflect realistic
alternative round voyage trade for Aframaxes and VLCCs during the period of such
danger or restriction of trading. In such event, the TCE revenue for such period
will be calculated using the daily spot rates for such alternative routes and
applying such weights as determined by the charterer, with our agreement, which
we may not unreasonably refuse.




Additional
details on the calculation of TCE revenue for spot periods are set forth
below:




·
            Calculation of voyage
      duration. The voyage duration for each notional route will be
      calculated for the laden and ballast legs of a round trip on such notional
      route using the distance, speed and time in port specified below for each
      vessel.




·
            Data used in
      calculations. The following data will be used in the above
      calculations and is subject to annual review to ensure consistency with
      industry standards:




Bunkers
in port




For
Aframaxes (Overseas Cathy and Overseas Sophie):  loading 20 tons;
discharging 20 tons.




For
Aframaxes (Overseas Rebecca and Overseas Ania):  loading 20 tons;
discharging 20 tons.




For
VLCCs:  loading 50 tons;
discharging 200 tons.







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 Table of Contents





Bunker
costs




Bunkers
used in the calculation of freight income will be determined based on speed,
distance and consumption of bunkers at sea and in port. Bunker costs will be
equal to the bunkers used multiplied by the bunker price. Bunker prices will be
as published by Platts Bunkerwire, or a similar publication or quotation service
mutually acceptable to us and the charterer, and will be increased for barge
delivery charges to reflect the average barge delivery charges in the applicable
port over the prior applicable period.




Bunker
prices for Aframaxes: the weighted average of the
daily mean prices during the spot period for Marine Fuel Oil grade IFO 380 CST
prevailing at each of Houston (50% weighting), Rotterdam (25% weighting) and
Gibraltar (25% weighting).




Bunker
prices for VLCCs: the average of the daily
mean prices during the spot period for Marine Fuel Oil grade IFO 380 CST
prevailing at each of Fujairah and Houston, averaged on an equal
weighting.




Port
charges




The port
charges for each notional route will be equal to the sum of port tariffs, tugs
and other port call expenses at the loading and discharging ports, in U.S.
dollars, converted if necessary at the exchange rate in effect on the last
calendar day of the period for which the TCE day rate is being
calculated.




Time
in port




For
Aframaxes:  5 days,
which will be split 2 days loading, 2 days discharging and 1 day
idling.




For
VLCCs:  7.5 days,
which will be split 3 days loading, 3 days discharging and 1.5 days
idling.




Distance




The
distance for each notional route will be determined according to the “World-Wide
Marine Distance Tables” published by British Petroleum.




Speed
and consumption at sea




For
Aframaxes (Overseas Cathy and Overseas Sophie): 15 knots at 60 tons per day
in laden condition and 15 knots at 60 tons per day in ballast condition, less a
steaming allowance of 7.5% applied to the speeds to allow for weather and
navigation.




For
Aframaxes (Overseas Rebecca and Overseas Ania): 13.3 knots at 37 tons per
day in laden condition and 13.3 knots at 37 tons per day in ballast condition,
less a steaming allowance of 7.5% applied to the speeds to allow for weather and
navigation.




For
VLCCs: 14.75 knots at 105 tons per day in laden condition and 15.75 knots
at 100 tons per day in ballast condition, less a steaming allowance of 7.5%
applied to the speeds to allow for weather and navigation.




Additional
hire for vessels operating under bareboat charter.




With
respect to one of our Suezmaxes, the Overseas Newcastle, we will,
in addition to the basic bareboat rate, earn 33% of the vessel’s earnings above
the TCE rate of $35,000 per day for the first three years of the bareboat
charter term and above $34,000 per day for the last four years of the charter
term, calculated on a four quarter rolling average. There is no profit sharing
element under the bareboat charter agreement for our other Suezmax, the Overseas London.







27
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SHIP
MANAGEMENT AGREEMENTS
  The
following summary of the material terms of our ship management agreements does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the shipmanagement agreements.
Because the following is only a summary, it does not contain all information
that you may find useful. For more complete information, you should read the
exhibit to this report which outlines the terms and conditions of the new ship
management agreements entered into by the subsidiaries owning our Initial
Vessels.




At the
time of our IPO in October 2005 each of the subsidiaries owning our Initial
Vessels entered into fixed rate ship management agreements with Tanker
Management with respect to such vessels. Effective as of January 16, 2009,
Tanker Management exercised its right to cancel the ship management agreements
and effective as of the same date each of the subsidiaries owning our Initial
Vessels entered into new ship management agreements with Tanker
Management.  Under the new ship management agreements, each of the
subsidiaries will pay the actual cost associated with the technical management
of the vessels in addition to an annual management fee.




Old
Ship Management Agreements




Under the
Initial Vessels’ old ship management agreements, Tanker Management was
responsible for all technical management and most of the associated costs,
including crewing, maintenance, repair, drydockings (subject to the provisions
described below), maintaining required vetting approvals, and other vessel
operating expenses, but excluding insurance premiums and vessel
taxes.  Additionally, Tanker Management was responsible for all
scheduled drydocking costs related to our Initial Vessels.




Tanker
Management was also obligated under the old ship management agreements to
arrange for insurance for the Initial Vessels, including marine hull and
machinery insurance, protection and indemnity insurance (including pollution
risks and crew insurances), war risk insurance and loss of hire insurance and we
were responsible for the payment of all premiums.




We
obtained loss of hire insurance that generally provided coverage against
business interruption for periods of more than 21 days (in the case of our
VLCCs) or 14 (in the case of our Aframaxes) per incident (up to a maximum of 120
days) following any loss under our hull and machinery policy (mechanical
breakdown, grounding, collision or other incidence of damage that does not
result in a total loss or constructive total loss of the vessel). Tanker
Management was permitted to assign its duties under the ship management
agreements to an affiliate at any time.




Under the
old ship management agreements, we paid Tanker Management a technical management
fee in exchange for the management services and payment of costs described
above, expressed in dollars per day that was payable monthly in advance and
calculated on the actual number of days in the month. For the management
agreements, the technical management fee was fixed through October 2007 and
increases by 2.5% per year thereafter until the agreements were terminated in
January 16, 2009.




Under the
old ship management agreements, Tanker Management agreed to maintain our vessels
so that they complied with the requirements of our charters and were in class
with valid certification, and to keep them in the same good order and condition
as when delivered, except for ordinary wear and tear. In addition, Tanker
Management was responsible for our fleet’s compliance with all government,
environmental and other regulations.




From
October 18, 2008, both us and Tanker Management had the right to terminate for
any reason at any time upon 90 days’ advance notice.  Effective
January 16, 2009, Tanker Management exercised its right to cancel the ship
management agreements and effective as of the same date each of the subsidiaries
owning our Initial Vessels entered into new ship management agreements with
Tanker Management.




New
Ship Management Agreements




Under the
new ship management agreements for the Initial Vessels, Tanker Management
continues to be responsible for all technical management, including crewing,
maintenance, repair, drydockings (subject to the provisions described below),
and maintaining required vetting approvals and insurance coverage. We have
agreed to guarantee the obligations of each of our subsidiaries under the new
ship management agreements.







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Tanker
Management is also obligated under the new ship management agreements to arrange
for insurance for the Initial Vessels, including marine hull and machinery
insurance, protection and indemnity insurance (including pollution risks and
crew insurances), war risk insurance and loss of hire insurance and we are
responsible for the payment of all premiums.




We have
obtained loss of hire insurance that will generally provide coverage against
business interruption for periods of more than 21 days (in the case of our
VLCCs) or 14 (in the case of our Aframaxes) per incident (up to a maximum of 120
days) following any loss under our hull and machinery policy (mechanical
breakdown, grounding, collision or other incidence of damage that does not
result in a total loss or constructive total loss of the vessel). Tanker
Management is permitted to assign its duties under the ship management
agreements to an affiliate at any time.




Each new
ship management agreement is coterminous with the time charter of the associated
vessel. An extension of a time charter will trigger an extension of the
associated ship management agreement unless it is cancelled as described
below.  Under each new ship management agreement, we will pay the
actual cost of operating the vessel as well as an annual management fee to
Tanker Management in exchange for the management services.




Under the
new ship management agreements, Tanker Management has agreed to maintain our
vessels so that they continue to comply with the requirements of our charters
and are in class with valid certification, and to keep them in the same good
order and condition as when delivered, except for ordinary wear and tear. In
addition, Tanker Management is responsible for our fleet’s compliance with all
government, environmental and other regulations.




The new
ship management agreements  are cancelable by us or Tanker Management
for any reason at any time upon 90 days’ prior written notice to the other. If a
ship management agreement is terminated, we will be required to pay a
termination fee of $45,000 per vessel to cover costs of the manager associated
with termination. We will also be required to obtain the consent of the
applicable charterer and our lenders before we appoint a new manager; however,
such consent may not to be unreasonably withheld.




Suezmaxes




Each of
our Suezmaxes are on bareboat charters to subsidiaries of OSG, pursuant to which
the charterer is responsible for all technical management of the vessel,
including vessel insurance. Accordingly, these vessels are not subject to ship
management agreements.






OUR
FLEET




The
following chart summarizes certain information about the nine vessels in our
current fleet.







Vessel
                                
                                Year
      Built
                                
                                Dwt
                                
                                Current
      Flag
                                
                                Classification
                                  SocietyVLCCOverseas
      Ann(1)
                                
                                2001
                                
                                309,327
                                
                                Marshall
      Islands
                                
                                LloydsOverseas
      Chris(1)
                                
                                2001
                                
                                309,285
                                
                                Marshall
      Islands
                                
                                LloydsOverseas
      Regal(1)
                                
                                1997
                                
                                309,966
                                
                                Marshall
      Islands
                                
                                ABSSuezmaxOverseas
      Newcastle(2)
                                
                                2001
                                
                                164,626
                                
                                Marshall
      Islands
                                
                                ABSOverseas
      London(3)
                                
                                2000
                                
                                152,923
                                
                                Marshall
      Islands
                                
                                DNVAframaxOverseas
      Cathy(1)
                                
                                2004
                                
                                112,028
                                
                                Marshall
      Islands
                                
                                ABSOverseas
      Sophie(1)
                                
                                2003
                                
                                112,045
                                
                                Marshall
      Islands
                                
                                ABSOverseas
      Rebecca(1)
                                
                                1994
                                
                                94,873
                                
                                Marshall
      Islands
                                
                                ABSOverseas
      Ania(1)
                                
                                1994
                                
                                94,848
                                
                                Marshall
      Islands
                                
                                ABS





(1)  Acquired
on October 18, 2005 and time chartered to a subsidiary of OSG as of that
date.







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(2)  Acquired
on December 4, 2007 and bareboat chartered to a subsidiary of OSG as of that
date.




(3)  Acquired
on January 28, 2008 and bareboat chartered to a subsidiary of OSG as of that
date.




The Overseas Regal was built in
Japan by Universal Shipbuilding Corporation (formerly Hitachi Zosen Corporation)
and our other six Initial Vessels were built by Hyundai Heavy Industries Co. in
South Korea, in each case under full-time on-site supervision of OSG’s in-house
naval architects. The Overseas
Newcastle and Overseas
London were also built by Hyundai Heavy Industries Co. in South Korea.
Our vessels have been built to specifications, which, in many areas, exceed
industry and shipyard standards at the time of construction. Our vessels
incorporate coating specifications for both the hull and the cargo tanks to
minimize corrosion, reduce maintenance and help protect the environment. As a
result, we believe our vessels are among the most efficient and safe
tankers.




RISK
OF LOSS AND INSURANCE




Our
operations may be affected by a number of risks, including mechanical failure of
the vessels, collisions, property loss to the vessels, cargo loss or damage and
business interruption due to political circumstances in foreign countries,
hostilities and labor strikes. In addition, the operation of any ocean-going
vessel is subject to the inherent possibility of catastrophic marine disaster,
including oil spills and other environmental mishaps, and the liabilities
arising from owning and operating vessels in international trade.




With
respect to our Initial Vessels, Tanker Management is responsible for arranging
for the insurance of such vessels on terms specified in the ship management
agreements, which we believe are in line with standard industry practice. We are
responsible for the payment of premiums. Tanker Management is responsible for
the payment of deductibles, up to the amounts specified in the ship management
agreements, but will not be required to reimburse us for off hire periods that
are not covered by loss of hire insurance. In accordance with the ship
management agreements, Tanker Management has arranged for marine hull and
machinery and war risks insurance, which includes the risk of actual or
constructive total loss, and protection and indemnity insurance with mutual
assurance associations. Tanker Management has also agreed in the ship management
agreements to arrange for loss of hire insurance in respect of each of our
vessels, subject to the availability of such coverage at commercially reasonable
terms. Loss of hire insurance generally provides coverage against business
interruption following any loss under our hull and machinery policy. We have
obtained loss of hire insurance that generally provides coverage against
business interruption for periods of more than 21 days (in the case of our
VLCCs) or 14 (in the case of our Aframaxes) per incident (up to a maximum of
120 days) following any loss under our hull and machinery policy
(mechanical breakdown, grounding, collision or other incidence of damage that
does not result in a total loss of the vessel). Currently, the amount of
coverage for liability for pollution, spillage and leakage available to us on
commercially reasonable terms through protection and indemnity associations and
providers of excess coverage is $1 billion per vessel per occurrence.
Protection and indemnity associations are mutual marine indemnity associations
formed by ship-owners to provide protection from large financial loss to one
member by contribution towards that loss by all members.




Our two
Suezmaxes, which are currently bareboat chartered to subsidiaries of OSG, are
subject to the same insurance coverage as our seven Initial Vessels. However,
under a bareboat charter arrangement, the charterer is responsible for all
insurance for the vessel, including with respect to payment of premiums and
deductibles.




We
believe that our anticipated insurance coverage will be adequate to protect us
against the accident-related risks involved in the conduct of our business and
that we will maintain appropriate levels of environmental damage and pollution
insurance coverage, consistent with standard industry practice. However, there
is no assurance that all risks are adequately insured against, that any
particular claims will be paid or that we will be able to obtain adequate
insurance coverage at commercially reasonable rates in the future following
termination of the ship management agreements and bareboat
charters.







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INSPECTION
BY A CLASSIFICATION SOCIETY




Every
commercial vessel’s hull and machinery is evaluated by a classification society
authorized by its country of registry. The classification society certifies that
the vessel has been built and maintained in accordance with the rules of the
classification society and complies with applicable rules and regulations of the
vessel’s country of registry and the international conventions of which that
country is a member. Each vessel is inspected by a surveyor of the
classification society in three surveys of varying frequency and thoroughness:
every year for the annual survey, every two to three years for intermediate
surveys and every four to five years for special surveys. Should any defects be
found, the classification surveyor will issue a “recommendation” for appropriate
repairs which have to be made by the ship-owner within the time limit
prescribed. Vessels may be required, as part of the annual and intermediate
survey process, to be drydocked for inspection of the underwater portions of the
vessel and for necessary repair stemming from the inspection. Special surveys
always require drydocking.




Each of
our vessels has been certified as being “in class” by a member society of the
International Association of Classification Societies, indicated in the table
on page 29 of this report.




ENVIRONMENTAL
REGULATION




Government
regulation significantly affects the ownership and operation of our tankers.
They are subject to international conventions, national, state and local laws
and regulations in force in the countries in which our tankers may operate or
are registered. Under both the old and new ship management agreements for our
Initial Vessels and under the bareboat charters for our Suezmaxes, Tanker
Management and the bareboat charterers, respectively, have assumed technical
management responsibility for our fleet, including compliance with all
government and other regulations. If our ship management agreements with Tanker
Management terminate, we would attempt to hire another party to assume this
responsibility, including compliance with the regulations described herein and
any costs associated with such compliance. However, in such event we may be
unable to hire another party to perform these and other services, and we may
incur substantial costs to comply with environmental requirements.




A variety
of governmental and private entities subject our tankers to both scheduled and
unscheduled inspections. These entities include the local port authorities (U.S.
Coast Guard, harbor master or equivalent), classification societies, flag state
administration (country of registry) and charterers, particularly terminal
operators and oil companies. Certain of these entities require us to obtain
permits, licenses and certificates for the operation of our tankers. Failure to
maintain necessary permits or approvals could require us to incur substantial
costs or temporarily suspend operation of one or more of our
tankers.




We
believe that the heightened level of environmental and quality concerns among
insurance underwriters, regulators and charterers is leading to greater
inspection and safety requirements on all tankers and may accelerate the
scrapping of older tankers throughout the industry. Increasing environmental
concerns have created a demand for tankers that conform to the stricter
environmental standards. With respect to our Initial Vessels and our Suezmaxes,
Tanker Management and the bareboat charterers, respectively, are required to
maintain operating standards for all of our tankers emphasizing operational
safety, quality maintenance, continuous training of our officers and crews and
compliance with U.S. and international regulations. We believe that the
operation of our vessels is in substantial compliance with applicable
environmental laws and regulations; however, because such laws and regulations
are frequently changed and may impose increasingly stringent requirements, we
cannot predict the ultimate cost of complying with these requirements, or the
impact of these requirements on the resale value or useful lives of our
tankers.




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INTERNATIONAL
MARITIME ORGANIZATION
  In April
2001, the International Maritime Organization or “IMO,” adopted regulations
under the International Convention for the Prevention of Pollution from Ships,
or “MARPOL,” requiring new tankers of 5,000 dwt and over, contracted for
construction since July 6, 1993, to have double hull, mid-deck or equivalent
design. At that time, the regulations also required the phase-out of non-double
hull tankers by 2015, with tankers having double sides or double bottoms
permitted to operate until the earlier of 2017 or when the vessel reaches 25
years of age. Existing single hull tankers were required to be phased out unless
retrofitted with double hull, mid-deck or equivalent design no later than 30
years after delivery. These regulations were adopted by over 150 nations,
including many of the jurisdictions in which our tankers operate. Subsequent
amendments to the MARPOL regulations accelerated the phase out of single hull
tankers to 2005 for Category I vessels and 2010 for Category II and III vessels.
Category I vessels are crude oil tankers of 20,000 dwt and above and product
tankers of 30,000 dwt and above that are pre-MARPOL Segregated Ballast Tanks
(SBT) tankers. Category II tankers are crude oil tankers of 20,000 dwt and above
and product tankers of 30,000 dwt and above that are post-MARPOL SBT tankers.
Category III tankers are tankers above 5,000 dwt, but below the deadweight
specified for Category I and II tankers above. The IMO may adopt additional
regulations in the future that could further restrict the operation of single
hull vessels. All of our tankers are double-hulled and are thus not subject to
phase-out under existing IMO regulations.
 
 The IMO
has also negotiated international conventions that impose liability for oil
pollution in international waters and a signatory’s territorial waters. In
September 1997, the IMO adopted Annex VI to the International Convention for the
Prevention of Pollution from Ships to address air pollution from ships. Annex
VI, which became effective in May 2005, sets limits on sulfur oxide and nitrogen
oxide emissions from ship exhausts and prohibits deliberate emissions of ozone
depleting substances, such as chlorofluorocarbons. Annex VI also includes a
global cap on the sulfur content of fuel oil and allows for special areas to be
established with more stringent controls on sulfur emissions. All of our vessels
are currently compliant with these regulations. Additional or new conventions,
laws and regulations may be adopted that could adversely affect the cost of
operating our vessels.
 
 Under the
International Safety Management Code, or “ISM Code,” promulgated by the IMO, the
party with operational control of a vessel is required to develop an extensive
safety management system that includes, among other things, the adoption of a
safety and environmental protection policy setting forth instructions and
procedures for operating its vessels safely and describing procedures for
responding to emergencies. Tanker Management and the charterers of the Overseas Newcastleand Overseas Londonwill rely upon their
respective safety management systems.
 
 The ISM
Code requires that vessel operators obtain a safety management certificate for
each vessel they operate. This certificate evidences compliance by a vessel’s
management with code requirements for a safety management system. No vessel can
obtain a certificate unless its operator has been awarded a document of
compliance, issued by each flag state, under the ISM Code. All requisite
documents of compliance have been obtained with respect to the operators of all
our vessels and safety management certificates have been issued for all our
vessels for which the certificates are required by the IMO. These documents of
compliance and safety management certificates are required to be renewed
annually.
 
 Noncompliance
with the ISM Code and other IMO regulations may subject the ship-owner or
charterer to increased liability, lead to decreases in available insurance
coverage for affected vessels and result in the denial of access to, or
detention in, some ports. For example, the U.S. Coast Guard and European Union
authorities have indicated that vessels not in compliance with the ISM Code will
be prohibited from trading in U.S. and European Union ports.
 
 Although
the United States is not a party to these conventions, many countries have
ratified and follow the liability plan adopted by the IMO and set out in the
International Convention on Civil Liability for Oil Pollution Damage of 1969.
Under this convention, and depending on whether the country in which the damage
results is a party to the 1992 Protocol to the International Convention on Civil
Liability for Oil Pollution Damage, a vessel’s registered owner is strictly
liable for pollution damage caused in the territorial waters of a contracting
state by discharge of persistent oil, subject to certain complete defenses.
Under an amendment to the Protocol that became effective on November 1, 2003,
for vessels of 5,000 to 140,000 gross tons (a unit of measurement for the total
enclosed spaces within a vessel), liability will be limited to approximately
$6.7 million plus $940 for each additional gross ton over 5,000. For vessels of
over 140,000 gross tons, liability will be limited to approximately $140
million. As the convention calculates liability in terms of a basket of
currencies, these figures are based on currency exchange rates on January 27,
2009. Under the 1969 Convention, the right to limit liability is forfeited where
the spill is caused by the owner’s actual fault. Under the 1992 Protocol, a
ship-owner cannot limit liability where the spill is caused by the owner’s
intentional or reckless conduct. Vessels trading to states that are parties to
these conventions must provide evidence of insurance covering the liability of
the owner. In jurisdictions where the International Convention on Civil
Liability for Oil Pollution Damage has not been adopted, various legislative
schemes or common law govern, and liability is imposed either on the basis of
fault or in a manner similar to that convention. We believe that our P&I
insurance will cover the liability under the plan adopted by the
IMO.







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IMO
regulations also require owners and operators of vessels to adopt Shipboard Oil
Pollution Emergency Plans, or “SOPEPs.”  Periodic training and drills
for response personnel and for vessels and their crews are required. In addition
to SOPEPs, Tanker Management and the charterers of the Overseas Newcastleand Overseas Londonhave adopted
Shipboard Marine Pollution Emergency Plans for our vessels, which cover
potential releases not only of oil but of any noxious liquid
substances.




U.S.
REQUIREMENTS




The
United States regulates the tanker industry with an extensive regulatory and
liability regime for environmental protection and cleanup of oil spills,
consisting primarily of the U.S. Oil Pollution Act of 1990, or “OPA,” and the
Comprehensive Environmental Response, Compensation, and Liability Act, or
“CERCLA.” OPA affects all owners and operators whose vessels trade with the
United States or its territories or possessions, or whose vessels operate in the
waters of the United States, which include the U.S. territorial sea and the 200
nautical mile exclusive economic zone around the United States. CERCLA applies
to the discharge of hazardous substances (other than oil) whether on land or at
sea. Both OPA and CERCLA impact our business operations.




Under
OPA, vessel owners, operators and bareboat or demise charterers are “responsible
parties” who are liable, without regard to fault, for all containment and
clean-up costs and other damages, including property and natural resource
damages and economic loss without physical damage to property, arising from oil
spills and pollution from their vessels.




In
general, OPA limits the liability of responsible parties to the greater of
$1,900 per gross ton or $16 million per tanker that is over 3,000 gross
tons. OPA specifically permits individual states to impose their own liability
regimes with regard to oil pollution incidents occurring within their
boundaries, and some states have enacted legislation providing for unlimited
liability for discharge of pollutants within their waters. In some cases, states
that have enacted this type of legislation have not yet issued implementing
regulations defining tanker owners’ responsibilities under these laws. CERCLA,
which applies to owners and operators of vessels, contains a similar liability
regime and provides for cleanup, removal and natural resource damages associated
with discharges of hazardous substances (other than oil). Liability under CERCLA
is limited to the greater of $300 per gross ton or $5 million.




These
limits of liability do not apply, however, where the incident is caused by
violation of applicable U.S. federal safety, construction or operating
regulations, or by the responsible party’s gross negligence or willful
misconduct. Similarly, these limits do not apply if the responsible party fails
or refuses to report the incident or to cooperate and assist in connection with
the substance removal activities. OPA and CERCLA each preserve the right to
recover damages under existing law, including maritime tort law.




OPA also
requires owners and operators of vessels to establish and maintain with the U.S.
Coast Guard evidence of financial responsibility sufficient to meet the limit of
their potential strict liability under the Act. The U.S. Coast Guard has enacted
regulations requiring evidence of financial responsibility consistent with the
limits of liability described above for OPA and CERCLA (combined), or $2,200 per
gross ton. Under the regulations, evidence of financial responsibility may be
demonstrated by insurance, surety bond, self-insurance, guaranty or an
alternative method subject to approval by the Director of the U.S. Coast Guard
National Pollution Funds Center. Under OPA regulations, an owner or operator of
more than one tanker is required to demonstrate evidence of financial
responsibility for the entire fleet in an amount equal only to the financial
responsibility requirement of the tanker having the greatest maximum strict
liability under OPA and CERCLA. Tanker Management and the charterers of the
Overseas Newcastleand
Overseas Londonhave
provided the requisite guarantees and received certificates of financial
responsibility from the U.S. Coast Guard for each of our tankers required to
have one.







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With
respect to our Initial Vessels and our Suezmaxes, Tanker Management and the
bareboat charterers, respectively, have arranged insurance for each of our
tankers with pollution liability insurance in the amount of $1 billion.
However, a catastrophic spill could exceed the insurance coverage available, in
which event there could be a material adverse effect on our business, on the
charterer’s business, which could impair the charterer’s ability to make
payments to us under our charters, and on Tanker Management’s business, which
could impair Tanker Management’s ability to manage our Initial
Vessels.




Under
OPA, oil tankers as to which a contract for construction or major conversion was
put in place after June 30, 1990 are required to have double hulls. In
addition, oil tankers without double hulls will not be permitted to come to U.S.
ports or trade in U.S. waters starting in 2015. All of our vessels have double
hulls.




OPA also
amended the federal Water Pollution Control Act, or “Clean Water Act,” to
require owners and operators of vessels to adopt vessel response plans for
reporting and responding to oil spill scenarios up to a “worst case” scenario
and to identify and ensure, through contracts or other approved means, the
availability of necessary private response resources to respond to a “worst case
discharge.” In addition, periodic training programs and drills for shore and
response personnel and for vessels and their crews are required.




Vessel
response plans for our tankers operating in the waters of the United States have
been approved by the U.S. Coast Guard. In addition, the U.S. Coast Guard has
announced it intends to propose similar regulations requiring certain vessels to
prepare response plans for the release of hazardous substances. With respect to
our Initial Vessels and our Suezmaxes, Tanker Management and the bareboat
charterers, respectively, are responsible for ensuring our vessels comply with
any additional regulations.




In
addition, the Clean Water Act prohibits the discharge of oil or hazardous
substances in U.S. navigable waters and imposes strict liability in the form of
penalties for unauthorized discharges. The Clean Water Act also imposes
substantial liability for the costs of removal, remediation and damages and
complements the remedies available under the more recent OPA and CERCLA,
discussed above. The U.S. Environmental Protection Agency or “EPA,” has exempted
the discharge of ballast water and other substances incidental to the normal
operation of vessels in U.S. ports from Clean Water Act permitting requirements.
However, on March 30, 2005, a U.S. District Court ruled that the EPA
exceeded its authority in creating an exemption for ballast water. On
September 18, 2006, the court issued an order invalidating the exemption in
EPA’s regulations for all discharges incidental to the normal operation of a
vessel as of September 30, 2008, and directing the EPA to develop a system
for regulating all discharges from vessels by that date.  In June
2008, the EPA proposed rules governing the regulation of ballast water
discharges and other discharges incidental to the normal operation of
vessels.  Under the proposed rules, commercial vessels are require to
obtain a Clean Water Act permit regulating such discharges.  The
permit, which was finalized by EPA in December 2008, incorporates current U.S.
Coast Guard requirements for ballast water management as well as supplemental
ballast water requirements, and provides technology-based and water-quality
based limits for other discharges, such as deck runoff, bilge water and gray
water.  Administrative provisions, such as monitoring, recordkeeping
and reporting requirements, are also included.  Various states have
also enacted legislation restricting ballast water discharges and the
introduction of non-indigenous species considered to be invasive. These and any
similar restrictions enacted in the future could require the installation of
equipment on our vessels to treat ballast water before it is discharged or the
implementation of other port facility disposal arrangements or procedures at
potentially substantial cost, and/or otherwise restrict our vessels from
entering U.S. waters.




The U.S.
Clean Air Act, or “CAA,” requires the EPA to promulgate standards applicable to
emissions of volatile organic compounds and other air contaminants. In December
2007, the EPA issued an Advance Notice of Proposed Rulemaking indicating its
plan to propose more stringent federal emission standards for new Category 3
marine diesel engines. The standards under consideration are consistent with the
2008 amendments to Annex VI of MARPOL, as discussed above. The CAA also requires
states to draft State Implementation Plans, or “SIPs,” designed to attain
national health-based air quality standards in primarily major metropolitan
and/or industrial areas. Several SIPs regulate emissions resulting from vessel
loading and unloading operations by requiring the installation of vapor control
equipment. Individual states, including California, have attempted to regulate
vessel emissions within state waters.  New or more stringent federal
or state air emission regulations could require significant capital expenditures
to retrofit vessels and could otherwise increase our operating
costs.







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EUROPEAN
UNION TANKER RESTRICTIONS




In
July 2003, in response to the Prestige oil spill in
November 2002, the European Union adopted legislation that prohibits all
single hull tankers used for the transport of oil from entering into its ports
or offshore terminals starting in 2010. The European Union, following the lead
of certain European Union nations such as Italy and Spain, has also banned all
single hull tankers carrying heavy grades of oil from entering or leaving its
ports or offshore terminals or anchoring in areas under its jurisdiction.
Commencing in April 2005, certain single hull tankers above 15 years
of age are also restricted from entering or leaving European Union ports or
offshore terminals and anchoring in areas under European Union jurisdiction. All
of our tankers are double hulled. The European Union has also adopted
legislation that (1) bans manifestly sub-standard vessels (defined as those
over 15 years old that have been detained by port authorities at least
twice in a six month period) from European waters, creates an obligation of port
states to inspect at least 25% of vessels using these ports annually and
provides for increased surveillance of vessels posing a high risk to maritime
safety or the marine environment and (2) provides the European Union with
greater authority and control over vessel classification societies, including
the ability to seek to suspend or revoke the authority of negligent societies.
In addition, the European Union is considering the adoption of criminal
sanctions for certain pollution events, such as the unauthorized discharge of
tank washings. Certain member states of the European Union, by virtue of their
national legislation, already impose criminal sanctions for pollution events
under certain circumstances. It is impossible to predict what additional
legislation or regulations, if any, may be promulgated by the European Union or
any other country or authority.




GREENHOUSE
GAS REGULATION




In
February 2005, the Kyoto Protocol to the United Nations Framework Convention on
Climate Change entered into force. Currently, the emissions of greenhouse gases
from international shipping are not subject to the Kyoto Protocol. However, the
European Union has indicated that it intends to propose an expansion of the
existing European Union emissions trading scheme to include emissions of
greenhouse gases from vessels. In the United States, the California Attorney
General and a coalition of environmental groups in October 2007 petitioned the
EPA to regulate greenhouse gas emissions from ocean-going vessels under the
Clean Air Act. Any passage of climate control legislation or other regulatory
initiatives by the IMO, European Union, or individual nations or states where we
operate that restrict emissions of greenhouse gases could entail financial
impacts on our operations that we cannot predict with certainty at this
time.




VESSEL
SECURITY REGULATIONS




As of
July 1, 2004, all ships involved in international commerce and the port
facilities that interface with those ships must comply with the new
International Code for the Security of Ships and of Port Facilities, or “ISPS
Code.” The ISPS Code, which was adopted by the IMO in December 2002,
provides a set of measures and procedures to prevent acts of terrorism, which
threaten the security of passengers and crew and the safety of ships and port
facilities. All of our vessels have obtained an International Ship Security
Certificate, or “ISSC,” from a recognized security organization approved by the
vessel’s flag state and each vessel has developed and implemented an approved
Ship Security Plan.




LEGAL
PROCEEDINGS




The
nature of our business, which involves the acquisition, chartering and ownership
of our vessels, exposes us to the risk of lawsuits for damages or penalties
relating to, among other things, personal injury, property casualty and
environmental contamination. Under rules related to maritime proceedings,
certain claimants may be entitled to attach charter hire payable to us in
certain circumstances. There are no actions or claims pending against us as of
the date of this report.







35
 Table of Contents




C.
                                ORGANIZATIONAL
      STRUCTURE


The
following table sets forth our significant subsidiaries and the vessels owned by
each of those subsidiaries as of December 31, 2008.




Subsidiary
                                      
                                      Vessel
                                      
                                      State
      of Jurisdiction or
                                        Incorporation
                                      
                                      Percent
      of
                                        OwnershipAnia
      Aframax Corporation
                                      
                                      Overseas
      Ania
                                      
                                      Marshall
      Islands
                                      
                                      100%Ann
      Tanker Corporation
                                      
                                      Overseas
      Ann
                                      
                                      Marshall
      Islands
                                      
                                      100%Cathy
      Tanker Corporation
                                      
                                      Overseas
      Cathy
                                      
                                      Marshall
      Islands
                                      
                                      100%Chris
      Tanker Corporation
                                      
                                      Overseas
      Chris
                                      
                                      Marshall
      Islands
                                      
                                      100%London
      Tanker Corporation
                                      
                                      Overseas
      London
                                      
                                      Marshall
      Islands
                                      
                                      100%Newcastle
      Tanker Corporation
                                      
                                      Overseas
      Newcastle
                                      
                                      Marshall
      Islands
                                      
                                      100%Rebecca
      Tanker Corporation
                                      
                                      Overseas
      Rebecca
                                      
                                      Marshall
      Islands
                                      
                                      100%Regal
      Unity Tanker Corporation
                                      
                                      Overseas
      Regal
                                      
                                      Marshall
      Islands
                                      
                                      100%Sophie
      Tanker Corporation
                                      
                                      Overseas
      Sophie
                                      
                                      Marshall
      Islands
                                      
                                      100%




D.
                                  PROPERTY,
      PLANT AND
EQUIPMENT


We own a
modern fleet of double hull crude oil tankers. The following table sets forth
the vessels comprising our fleet as of December 31, 2008.




Vessel
                                  
                                  Type
                                  
                                  Approximate
                                    Dwt
                                  
                                  Construction
                                  
                                  FlagOverseas
      Ann
                                  
                                  VLCC
                                  
                                  309,327
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      Chris
                                  
                                  VLCC
                                  
                                  309,285
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      Regal
                                  
                                  VLCC
                                  
                                  309,966
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      London
                                  
                                  Suezmax
                                  
                                  152,923
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      Newcastle
                                  
                                  Suezmax
                                  
                                  164,626
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      Cathy
                                  
                                  Aframax
                                  
                                  112,028
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      Sophie
                                  
                                  Aframax
                                  
                                  112,045
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      Rebecca
                                  
                                  Aframax
                                  
                                  94,873
                                  
                                  Double-Hull
                                  
                                  Marshall
      IslandsOverseas
      Ania
                                  
                                  Aframax
                                  
                                  94,848
                                  
                                  Double-Hull
                                  
                                  Marshall
      Islands





ITEM
      4A.
                                    UNRESOLVED
      STAFF COMMENTSNone.


ITEM
      5.
                                  OPERATING
      AND FINANCIAL REVIEW AND
PROSPECTS


MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




You
should read the following discussion and analysis in conjunction with our
consolidated financial statements, and the related notes included elsewhere in
this report.  This Management’s Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements based on
assumptions about our future business.  Please see “Cautionary Note
Regarding Forward-Looking Statements” for a discussion of the risks,
uncertainties and assumptions relating to these statements.  Our
actual results may differ from those contained in the forward-looking statements
and such differences may be material.









36
 Table of Contents




BUSINESS
  On
October 18, 2005, we acquired the seven vessels comprising our initial
fleet (“Initial Vessels”). We have chartered these Initial Vessels to
subsidiaries of OSG under fixed rate charters for minimum terms of five to
six and one-half years. The charters commenced on the delivery of the vessels to
us. The charters also contain various options for the charterers to extend the
minimum terms of the charters in increments of one, two or three years up to a
maximum of five, six or eight years, depending on the vessel, from the initial
expiration date. On November 26, 2008, we entered into an agreement with
OSG whereby OSG exercised part of the extension options for the Initial Vessels
upon expiry of the vessels’ initial charter periods. For two of the vessels, the
charters were extended for 18 months after the initial charter periods expiring
in October 2010 and for five of the vessels, the charters were extended for 12
months following the expiry of the initial charter periods between April 2011
and April 2012. On December 4, 2007 and January 28, 2008,
respectively, we acquired two Suezmaxes and upon delivery bareboat chartered
these vessels to subsidiaries of OSG for fixed terms of seven years and ten
years, respectively. See the section of this report entitled “Item 4.
Information on the Company—Business Overview—Charter Arrangements” for a more
detailed description of our charter arrangements. We previously entered into
ship management agreements with a subsidiary of OSG for the technical management
of our Initial Vessels that substantially fixed our operating expenses
(excluding insurance premiums and vessel taxes).  However, effective
January 16, 2009, we entered into new technical management agreements with
the same subsidiary of OSG, under which we will pay the actual cost related to
the technical management of the Initial Vessels. See the section of this report
entitled “Item 4. Information on the Company—Business Overview—Ship Management
Agreements” for a more detailed description of our ship management agreements.
We expect that for so long as our chartering arrangements are in place with OSG,
our revenues will be generated primarily from time charter and bareboat payments
made to us by subsidiaries of OSG. Under the bareboat charters for our two
Suezmaxes, the charterer is responsible for paying all operating costs
associated with the vessels. Accordingly, we do not incur any operating expenses
associated with these vessels. In addition, under our bareboat charters, we will
continue to receive the basic bareboat charter rate even during such periods
that the vessel is not able to operate. As long as our Initial Vessels subject
to time charters are not off hire, we will receive revenue amounts at least
equal to the sum of the basic hire payments due under our time charters and
bareboat charters.




FACTORS
AFFECTING OUR RESULTS




The
principal factors that affect our results of operations and financial condition
include:




●
            the
      fixed basic charter rate that we are paid under our
    charters;




●
            the
      amount of additional hire that we receive under our charter
      arrangements;




●
            with
      respect to our Initial Vessels, the number of off hire days during which
      we will not be entitled, under our charter arrangements, to receive either
      the fixed basic charter rate or additional
hire;




●
            the
      amount of daily technical management fees payable under our ship
      management agreements;




●
            our
      general and administrative and other
expenses;




●
            our
      insurance premiums and vessel
taxes;




●
            any
      future vessel acquisitions; and




●
            our
      interest expense.




Our
revenues are principally derived from fixed rate time charters and bareboat
charters with subsidiaries of OSG to which all our vessels have been chartered.
In addition, the amount of additional hire that we receive under our charter
arrangements is dependent on the revenues generated by our vessels. These
revenues are sensitive to patterns of supply and demand. Rates for the
transportation of crude oil are determined by market forces, such as the supply
and demand for oil, the distance that cargoes must be transported and the number
of vessels expected to be available at the time such cargoes need to be
transported. The demand for oil shipments is significantly affected by the state
of the global economy. The number of vessels is affected by newbuilding
deliveries and by the removal of existing vessels from service. The tanker
industry has historically been highly cyclical, experiencing volatility in
profitability, vessel values and freight rates.







37
 Table of Contents





Our
expenses are expected to consist primarily of daily technical management fees
payable under our ship management agreements, interest expense, insurance
premiums, vessel taxes, financing expenses and general and administrative
expenses. With respect to our Initial Vessels, our vessel-owning subsidiaries
previously entered into ship management agreements with Tanker Management Ltd.
(Tanker Management or TML), a subsidiary of OSG, under which it is responsible
for technical management of the vessels, including crewing, maintenance and
ordinary repairs, scheduled drydockings, stores and supplies and lubricating
oils. Under these agreements, we paid a fixed daily fee (subject to a 2.5%
annually increase after October 2007) for the cost of vessels’ operations,
including scheduled drydockings, for each vessel. The terms of the old
agreements provided both us and Tanker Management the right to cancel these
agreements for any reason at any time upon 90 days’ advance notice from October
2008 onwards. Effective as of January 16, 2009, Tanker Management exercised
its right to cancel the technical management agreements with respect to the
Initial Vessels. Effective as of the same date, we entered into new technical
management agreements with Tanker Management according to which we will pay the
actual cost related to the technical management of the Initial
Vessels.




The
charterers of each vessel pay us a fixed basic charter rate monthly in advance
with additional hire, if any, paid quarterly in arrears. We pay daily technical
management fees under our ship management agreements monthly in advance. We are
required to pay interest under our credit facility quarterly, insurance premiums
either annually or more frequently (depending on the policy) and our vessel
taxes annually.




The
following table sets forth the average daily time charter equivalent (TCE) rates
earned by our VLCCs and Aframaxes and daily bareboat rate earned by our
Suezmaxes during the last three years.




Year
      Ended
                                                                          December
      31, 2008
                                                                        
                                                                        
                                                                        Year
      Ended
                                                                          December
      31, 2007
                                                                        
                                                                        
                                                                        Year
      Ended December 31, 2006VLCCs
      (TCE)
                                                                        
                                                                        $
                                                                        52,300
                                                                        
                                                                        
                                                                        $
                                                                        41,500
                                                                        
                                                                        
                                                                        $
                                                                        46,900Suezmaxes
      (Bareboat)(1)
                                                                        
                                                                        $
                                                                        28,900
                                                                        
                                                                        
                                                                        $
                                                                        27,400
                                                                        
                                                                        
                                                                        
                                                                        -Aframaxes
      (TCE)
                                                                        
                                                                        $
                                                                        26,700
                                                                        
                                                                        
                                                                        $
                                                                        25,700
                                                                        
                                                                        
                                                                        $
                                                                        26,200


(1)  Overseas Newcastle only for
the 27 day period from December 4, 2007 to December 31, 2007 and the full year
2008 and the Overseas London for the period January 18, 2008 to December 31,
2008..




CRITICAL
ACCOUNTING POLICIES




The
financial statements for DHT are prepared in accordance with accounting
principles generally accepted in the United States, or “GAAP,” which require us
to make estimates in the application of our accounting policies based on the
best assumptions, judgments, and opinions of management. Following is a
discussion of the accounting policies that involve a higher degree of judgment
and the methods of their application. For a complete description of all of our
material accounting policies, see Note A to our consolidated financial
statements, included as Item 18 to this report.




Revenue
Recognition




Both
prior to and following our IPO, our Initial Vessels have generated revenue by
operating in pools, whereby shipping revenue and voyage expenses are pooled and
allocated to each pool’s participants on a TCE basis in accordance with an
agreed-upon formula. For vessels operating in pools shipping revenues are
substantially the same as TCE revenues.







38
 Table of Contents





Our three
VLCCs participate in the Tankers International Pool and our four Aframaxes
participate in the Aframax International Pool (the Overseas Ania left the
Aframax International Pool as of July 1, 2008). Each of these pools generate a
majority of its revenue from voyage charters. Within the shipping industry,
there are two methods used to account for voyage revenues: (1) ratably over the
estimated length of each voyage and (2) completed voyage. The recognition of
voyage revenues ratably over the estimated length of each voyage is the most
prevalent method of accounting for voyage revenues and the method used by the
pools in which we participate. Under each method, voyages may be calculated on
either a load-to-load or discharge-to-discharge basis. In applying its revenue
recognition method, management of each of the pools believes that the
discharge-to-discharge basis of calculating voyages more accurately estimates
voyage results than the load-to-load basis. Since, at the time of discharge,
management generally knows the next load port and expected discharge port, the
discharge-to-discharge calculation of voyage revenues can be estimated with a
greater degree of accuracy. Revenues from time charters performed by vessels in
the pools are accounted for as operating leases and are recognized ratably over
the periods of such charters, as service is performed. Each of the pools does
not begin recognizing voyage revenue until a charter has been agreed to by both
the pool and the customer, even if the vessel has discharged its cargo and is
sailing to the anticipated load port on its next voyage.
 
 We
acquired our two Suezmaxes on December 4, 2007 and January 28, 2008,
respectively. These vessels are on bareboat charters to subsidiaries of OSG and
do not participate in pools. Revenues from bareboat charters are accounted for
as operating leases and are recognized ratably over the periods of such
charters, as service is performed.
 
 Vessel
Lives and Impairment
 
 With
respect to our Initial Vessels, the carrying value of each vessel represents its
original cost at the time it was delivered less depreciation calculated using an
estimated useful life of 25 years from the date such vessel was originally
delivered from the shipyard. In the shipping industry, use of a 25-year life has
become the standard. The actual life of a vessel may be different. We have
evaluated the impact of the revisions to MARPOL Regulation 13G that became
effective April 5, 2005 and the EU regulations that went into force on October
21, 2003 on the economic lives assigned to the fleet. Because the fleet consists
of modern, double hull vessels, the revised regulations do not affect any of our
vessels. If the economic lives assigned to the tankers prove to be too long
because of new regulations or other future events, higher depreciation expense
and impairment losses could result in future periods related to a reduction in
the useful lives of any affected vessels.
 
 With
respect to our two Suezmaxes, the carrying value of each vessel represents the
cost to us when the vessel was acquired less depreciation calculated using an
estimated useful life of 25 years from the date such vessel was originally
delivered from the shipyard.
 
 The
carrying values of our vessels may not represent their fair market value at any
point in time since the market prices of second-hand vessels tend to fluctuate
with changes in charter rates and the cost of newbuildings. Historically, both
charter rates and vessel values have been cyclical. We record impairment losses
only when events occur that cause us to believe that future cash flows for any
individual vessel will be less than its carrying value. The carrying amounts of
vessels held and used by us are reviewed for potential impairment whenever
events or changes in circumstances indicate that the carrying amount of a
particular vessel may not be fully recoverable. In such instances, an impairment
charge would be recognized if the estimate of the undiscounted future cash flows
expected to result from the use of the vessel and its eventual disposition is
less than the vessel’s carrying amount. This assessment is made at the
individual vessel level since separately identifiable cash flow information for
each vessel is available.
 
 In
developing estimates of future cash flows, we must make assumptions about future
charter rates, ship operating expenses and the estimated remaining useful lives
of the vessels. These assumptions are based on historical trends as well as
future expectations. Although management believes that the assumptions used to
evaluate potential impairment are reasonable and appropriate, such assumptions
are highly subjective.


39
 Table of Contents




RESULTS
OF OPERATIONS
  Income
from Vessel Operations
  Shipping
revenues increased by $33,176,000, or 40.7%, to $114,603,000 in 2008 from
$81,427,000 in 2007. This increase was attributable to the acquisition of our
two Suezmaxes on December 4, 2007 and January
28, 2008, respectively and higher freight rates in 2008. Shipping revenues were
$86,793,000 in 2006.




Vessel
expenses increased by $1,986,000 in 2008, to $21,409,000 from $19,423,000 in
2007, principally as a result of $821,608 of bunker consumption claims by the
charterers for two of the Company’s VLCCs, bunker costs related to vessels on
scheduled off-hire.  In addition, we incurred a $500,000 one time cost
related to change of technical management as well as the 2.5% price increase as
of October 18, 2007, and October 18, 2008, pursuant to the ship
management agreements entered into on October 18, 2005 with Tanker
Management, a subsidiary of OSG, for the technical management of our Initial
Vessels. Vessel expenses were $18,690,000 in 2006.




Depreciation
and amortization increased by $8,677,000 in 2008, to $25,948,000 from
$17,271,000 in 2007 principally as a result of the delivery of the Overseas Newcastle on
December 4, 2007 and the OverseasLondonon January 28,
2008. Depreciation and amortization expenses were $16,915,000 in
2006.




General
and Administrative Expenses




General
and administrative expenses increased by $991,000 to $4,766,000 in 2008 from
$3,775,000 in 2007. This increase was mainly a result of higher personnel cost
and $338,404 of costs related to a transaction which did not materialize.
General and administrative expenses were $2,389,000 in 2006.




General
and administrative expenses for 2008, 2007 and 2006 include directors’ fees and
expenses, the salary and benefits of our executive officers, legal fees, fees of
independent auditors and advisors, directors and officers insurance, rent and
miscellaneous fees and expenses.




Interest
Expense and Amortization of Deferred Debt Issuance Cost




Interest
expense increased by $7,447,000 to $21,904,000 in 2008 from $14,457,000 in 2007
principally as a result of the increase in debt in connection with the
acquisition of the Overseas
Newcastle on December 4, 2007 and the Overseas London on January
28, 2008. Interest expense was $13,957,000 in 2006.




LIQUIDITY
AND SOURCES OF CAPITAL




We
operate in a capital intensive industry. We financed the acquisition of our
Initial Vessels with the net proceeds of our IPO, borrowings under our credit
facility and through the issuance of shares of our common stock to a subsidiary
of OSG. We financed the acquisition of the Overseas Newcastle on
December 4, 2007, and the Overseas London on January
28, 2008, with borrowings under our secured credit facility. Our working capital
requirements relate to our operating expenses, including payments under our ship
management agreements, payments of interest, payments of insurance premiums,
payments of vessel taxes and the payment of principal under our secured credit
facility. We fund our working capital requirements with cash from operations. We
collect our basic hire monthly in advance and pay our ship management fees
monthly in advance. We receive additional hire payable quarterly in arrears.
During the period from our IPO through the fourth quarter of 2007, we paid
dividends on a quarterly basis in amounts determined by our board of directors
substantially equal to the available cash from our operations during the
previous quarter, less cash expenses and any reserves established by our board
of directors. In January 2008, our board of directors approved a new dividend
policy intended to provide the shareholders with a fixed quarterly dividend.
Commencing with the first dividend payment attributable to the 2008 fiscal year,
the dividend payment was $0.25 per common share. Since our IPO, we have paid the
following dividends:




Operating
      period
                                
                                Total
      payment
                                
                                Per
      share
                                
                                Record
      date
                                
                                Payment
      dateOct.18-Dec.
      31 2005
                                
                                $12.9
      million
                                
                                $0.43
                                
                                March
      10, 2006
                                
                                March
      24, 2006Jan.
      1-March 31 2006
                                
                                $15.9
      million
                                
                                $0.53
                                
                                June
      1, 2006
                                
                                June
      16, 2006April
      1-June 30 2006
                                
                                $10.8
      million
                                
                                $0.36
                                
                                August
      18, 2006
                                
                                Sept.
      4, 2006July
      1-Sept. 30 2006
                                
                                $12.6
      million
                                
                                $0.42
                                
                                Nov.
      27, 2006
                                
                                Dec.
      6, 2006Oct.
      1-Dec. 31 2006
                                
                                $13.2
      million
                                
                                $0.44
                                
                                Feb.
      22, 2007
                                
                                March
      6, 2007Jan.
      1-March 31 2007
                                
                                $11.4
      million
                                
                                $0.38
                                
                                May
      29, 2007
                                
                                June
      12, 2007April
      1-June 30 2007
                                
                                $11.7
      million
                                
                                $0.39
                                
                                Sept.
      12, 2007
                                
                                Sept.
      21, 2007July
      1-Sept. 30 2007
                                
                                $11.1
      million
                                
                                $0.37
                                
                                Dec.
      3, 2007
                                
                                Dec.
      12, 2007Oct.
      1-Dec. 31 2007
                                
                                $10.5
      million
                                
                                $0.35
                                
                                Feb.
      26, 2008
                                
                                March
      11, 2008Jan.
      1-March 31 2008
                                
                                $9.8
      million
                                
                                $0.25
                                
                                May
      30, 2008
                                
                                June
      11, 2008April
      1-June 30 2008
                                
                                $9.8
      million
                                
                                $0.25
                                
                                Sept.
      15, 2008
                                
                                Sept.
      24, 2008July
      1-Sept. 30 2008
                                
                                $11.8
      million
                                
                                $0.30
                                
                                Dec.
      2, 2008
                                
                                Dec.
      11, 2008Oct.
      1-Dec. 31 2008
                                
                                $11.8
      million
                                
                                $0.30
                                
                                Feb.
      26, 2009
                                
                                March
      5,
2009







40
 Table of Contents




We
believe that cash flow from our charters will be sufficient to fund our interest
payments under our secured credit facility. We funded the acquisition of the
Overseas Newcastle for
$92.7 million on December 4, 2007, and the acquisition of the Overseas London for $90.3
million on January 28, 2008, with borrowings under our secured credit facility
with the Royal Bank of Scotland or “RBS,” which was increased from $401 million
to $420 million in 2007. Following this increase, we were required to make a
principal repayment of $75 million no later than December 31, 2008. We repaid
the $75 million in October 2008 with cash on hand including proceeds from the
issuance of 9.2 million new shares in April and May 2008 for net proceeds of
$91.4 million.




As of
December 31, 2008, we were in compliance with the covenants contained in our
secured loan agreement.




Working
capital at December 31, 2008 was $28,288,000 compared with ($83,046,000) at
December 31, 2007. The significant improvement in working capital in 2008 was
primarily due to the equity offering in April, with net proceeds of $91.4
million. The negative working capital at December 31, 2007 was primarily due to
the $75,000,000 in current installment of long-term debt. Working capital at
December 31, 2006 was $15,431,000. At December 31, 2008, additional hire related
to the period from October 1, 2008 through December 31, 2008, which amounted to
$8,791,000, had not been received from the charterers. At December 31, 2007,
additional hire related to the period from October 1, 2007 through December 31,
2007, which amounted to $1,547,000, had not been received from the charterers.
At December 31, 2006, additional hire related to the period from October 1, 2006
through December 31, 2006, which amounted to $4,009,000, had not been received
from the charterers.




Net cash
provided by operating activities was $65,016,000 in 2008 compared to $49,363,000
in 2007. This increase was primarily attributable to higher earnings in 2008 for
our Initial Vessels operating in pools as well as earnings from the two Suezmax
tankers acquired on December 4, 2007 and January 28, 2009,
respectively. Net cash provided by operating activities was $53,998,000 in
2006. The decrease between net cash provided by operating activities in 2007 and
net cash provided by operating activities in 2006 was primarily attributable to
lower earnings in 2007 for our Initial Vessels operating in pools.  We
had total debt outstanding of $344,000,000 at December 31, 2008, all of which is
due to RBS, compared to $253,700,000 in long term debt and $75,000,000 in
current installment of long-term debt at December 31, 2007.  We had
total debt outstanding of $236,000,000 at December 31, 2006.




AGGREGATE
CONTRACTUAL OBLIGATIONS




As of
December 31, 2008, our long-term contractual obligations are as
follows:




Summary
      Long-Term Future Contractual Obligations(1)2009
                                  
                                  
                                  2010
                                  
                                  
                                  2011
                                  
                                  
                                  2012
                                  
                                  
                                  2013
                                  
                                  
                                  Thereafter
                                  
                                  
                                  Total($
      in thousands)Long-term
      debt(2)
                                  
                                  
                                  19,630
                                  
                                  
                                  
                                  19,630
                                  
                                  
                                  
                                  55,146
                                  
                                  
                                  
                                  53,105
                                  
                                  
                                  
                                  50,970
                                  
                                  
                                  
                                  271,524
                                  
                                  
                                  
                                  470,006  (1)
                                      Under
      the new ship management agreements for our Initial Vessels effective
      January 16, 2009, we are required to pay the actual cost of operating the
      vessels as well as an annual management fee to Tanker Management for their
      services. Each ship management agreement for our Initial Vessels is
      coterminous with the charter for each vessel but may be terminated by
      either us or Tanker Management upon 90 days’ written notice to the
      other(2)
                                      Amounts
      shown include contractual interest obligations on $344 million of debt
      outstanding under our secured credit facility. The interest obligations
      have been determined using an interest rate of 5.60% per annum based on
      the five year interest rate swap arrangement that was effective as of
      October 18, 2005 for $236 million and an interest rate of 5.95% per annum
      based on the five year interest rate swap arrangement that was effective
      as of December 4, 2007 for $100 million. The interest on the balance
      outstanding is payable quarterly and the principal is payable with
      quarterly installments of $9,075,000 commencing on January 18, 2011, with
      a final payment of $109,050,000 on July 18,
  2017.
  41
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We
collect our fixed basic charter rate monthly in advance and pay the estimated
technical management fees monthly in advance. To the extent there are additional
hire revenues, we receive such additional hire quarterly in arrears. Although we
can provide no assurances, we expect that our cash flow from our chartering
arrangements will be sufficient to cover our technical management fees, interest
payments and other financing costs under our credit facility, insurance
premiums, vessel taxes, general and administrative expenses and other costs and
any other working capital requirements for the short and medium term. Our longer
term liquidity requirements include repayment of the principal balance of our
secured credit facility. We may require new borrowings and/or issuances of
equity or other securities to meet this repayment obligation. Alternatively, we
can sell our assets and use the proceeds to pay down debt.




Marshall
Islands law generally prohibits the payment of dividends other than from surplus
or while a company is insolvent or would be rendered insolvent by the payment of
such a dividend. In addition, under the terms of our credit facility, we may not
declare or pay any dividends if we are in default under the credit facility or
if the market value of our vessels is less than 135% of our outstanding
borrowings under the credit facility plus the actual or notional cost of
terminating any interest rate swaps that we enter.




RISK
MANAGEMENT




We are
exposed, to market risk from changes in interest rates, which could affect our
results of operation and financial position. We manage this risk by entering
into interest rate swap agreements in which we exchange fixed and variable
interest rates based on agreed upon notional amounts. We use such derivative
financial instruments as risk management tools and not for speculative or
trading purposes. In addition, the counterparty to the derivative financial
instrument is a major financial institution in order to manage exposure to
nonperformance by counterparties.




As of
December 31, 2008, the Company is party to two floating-to-fixed interest
rate swaps that are being accounted for as cash flow hedges with notional
amounts of $236,000,000 and $100,000,000, respectively, pursuant to which the
Company pays a fixed rate of 5.6% and 5.95% including the applicable margin,
respectively and receives a floating rate based on LIBOR. The swaps expire on
October 18, 2010 and January 18, 2013, respectively. As of
December 31, 2008, the Company has recorded a liability of $26,418,060
relating to the fair value of the swaps. This unrealized loss has been recorded
to accumulated other comprehensive income/(loss). The fair value of interest
rate swaps is the estimated amount that the Company would receive or pay to
terminate the agreement at the reporting date.




The
shipping industry’s functional currency is the U.S. dollar. All of our revenues
and most of our operating costs are in U.S. dollars.




EFFECTS
OF COST INCREASES




For the
past three years, under the vessels’ old ship management agreements, the Company
paid a fixed cost for the technical management of the
vessels.  However, under the vessels’ new ship management agreements,
effective January 16, 2009, the Company must pay the actual costs associated
with the technical management of the vessels.  As a result, the cost
of the technical management of the vessels for 2009 and in the future will
reflect the effects of cost increases.  Recently, ship management
costs have increased rapidly, although the current global recession may mitigate
some of this cost increase.




OFF
BALANCE SHEET ARRANGEMENTS
  With the
exception of the above mentioned interest rate swaps, we do not currently have
any liabilities, contingent or otherwise, that we would consider to be off
balance sheet arrangements.





42
 Table of Contents







OUR
SECURED CREDIT FACILITY




The
following summary of the material terms of our secured credit facility does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Secured Loan Facility Agreement. Because
the following is only a summary, it does not contain all information that you
may find useful. For more complete information, you should read the entire
Secured Loan Facility Agreement (as amended) filed as an exhibit to this
report.




General




On
October 18, 2005, we entered into a $401 million secured credit facility
with The Royal Bank of Scotland, or “RBS,” for a term of ten years, with no
principal amortization for the first five years. The credit facility consisted
of a $236 million term loan, a $150 million vessel acquisition
facility and a $15 million working capital facility. We are the borrower
under the credit facility and each of our vessel-owning subsidiaries have
guaranteed our performance thereunder.




We
borrowed the entire amount available under the term loan upon the completion of
our IPO to fund a portion of the purchase price for the Initial Vessels that we
acquired from OSG. On November 29, 2007, we amended our secured credit facility
to increase the total commitment thereunder by $19 million to $420 million.
Under the terms of our amended secured credit facility, our previous $15 million
working capital facility and $150 million vessel acquisition facility were
canceled and replaced with a new $184 million vessel acquisition facility, which
we used to fund the entire purchase price of our two Suezmaxes, the Overseas Newcastle and the
OverseasLondon.Following delivery of
the Overseas London on
January 28, 2008, only $1 million of our vessel acquisition facility remains
undrawn.




Borrowings
under the initial $236 million term loan bear interest at an annual rate of
LIBOR plus a margin of 0.70%. Borrowings under the vessel acquisition portion of
the credit facility bear interest at an annual rate of LIBOR plus a margin of
0.85%. To reduce our exposure to fluctuations in interest rates, we entered into
an interest rate swap on October 18, 2005 pursuant to which we fixed the
interest rate for five years on the full amount of our term loan at 5.60%. On
October 16, 2007, we fixed the interest rate for five years on $100 million of
our outstanding debt at a rate of 5.95% through a swap agreement with respect to
$92.7 million effective as of December 4, 2007 and a further $7.3 million
effective as of January 18, 2008. We were required to pay a $1.5 million
fee in connection with the arrangement of our credit facility (which we funded
with a portion of the net proceeds from our IPO) and a commitment fee of 0.3%
per annum, which will be payable quarterly in arrears, on the undrawn portion of
the facility. We were required to pay an arrangement fee of $95,000 in October
2007 in connection with the increase in our secured credit facility from $401
million to $420 million.




Following
the above-mentioned increase, our secured credit
facility was repayable with one initial installment of $75 million in
2008, and commencing on January 18, 2011 the balance of our secured credit
facility will be repayable with 27 quarterly installments of
$9,075,000. A final payment of $99,975,000 will be payable with the last
quarterly installment. The initial installment of $75 million was repaid in
October 2008.






Security




Our
secured credit facility provides that borrowings thereunder are secured by the
following:




●
            a
      first priority mortgage on each of the vessels we have agreed to purchase
      and any additional vessels that we
acquire;




●
              an
      assignment of charter hire guarantees and earnings from, and insurances
      on, each of the vessels we have agreed to purchase and any additional
      vessels that we acquire;
  ●
              a
      pledge of the balances in our bank accounts which we have agreed to keep
      with RBS; and
  ●
              an
      unconditional and irrevocable guarantee by each of our vessel-owning
      subsidiaries.





43
 Table of Contents




The
facility agreement provides that in the event of either the sale or total loss
of a vessel, we must prepay an amount under the credit facility proportionate to
the market value of the sold or lost vessel compared with the total market value
of all of our vessels before such sale or loss together with accrued interest on
the amount prepaid and, if such prepayment occurs on a date other than an
interest payment date, any interest breakage costs.




Covenants




The
facility agreement contains restrictive covenants that prohibit us and each of
our subsidiaries from, among other things:




●
            incurring
      additional indebtedness without the prior consent of the
      lenders;




●
            permitting
      liens on assets;




●
            merging
      or consolidating with other entities or transferring all or substantially
      all of our assets to another
person;




●
            paying
      dividends if the charter-free market value of our vessels that secure our
      obligations under the credit facility is less than 135% of our borrowings
      under the credit facility plus the actual or notional cost of terminating
      any interest rates swaps that we enter, if there is a continuing default
      under the credit facility or if the payment of the dividend would result
      in a default or breach of a loan
covenant;




●
            changing
      the technical manager of our vessels without the prior consent of the
      lenders;




●
            making
      certain loans, advances or investments; entering into certain material
      transactions with affiliated
parties;




●
            entering
      into certain types of charters, including bareboat charters and time
      charters or consecutive voyage charters of greater than 13 months
      (excluding our charters with OSG’s
  subsidiaries);




●
            de-activating
      any of our vessels or allowing work to be done on any vessel in an
      aggregate amount greater than $2.0 million without first obtaining a
      lien waiver;




●
            making
      non-ordinary course acquisitions or entering into a new line of business
      or establishing a place of business in the United States or any of its
      territories;




●
            selling
      or otherwise disposing of a vessel or other assets or assigning or
      transferring any rights or obligations under our charters and our ship
      management agreements.




The
facility agreement also contains a financial covenant requiring that at all
times the charter-free market value of our vessels that secure our obligations
under the credit facility be no less than 120% of our borrowings under the
credit facility plus the actual or notional cost of terminating any of our
interest rates swaps. In the event that the aggregate charter-free market value
of the vessels that secure our obligations under the credit facility is less
120% of our borrowings under the credit facility plus the actual or notional
cost of terminating any of our interest rates swaps, the difference shall be
recovered by pledge of additional security acceptable to the lenders or by a
prepayment of the amount outstanding at the option of the
borrowers.







44
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Events
of Default




Each of
the following events with respect to us or any of our subsidiaries, in some
cases after the passage of time or notice or both, is an event of default under
the facility agreement:




●
            non-payment
      of amounts due under the credit
facility;




●
            breach
      of our covenants;




●
            misrepresentation;




●
            cross-defaults
      to other indebtedness in excess of
  $2.0 million;




●
            materially
      adverse judgments or orders;




●
            event
      of insolvency or bankruptcy;




●
            acceleration
      of any material amounts that us or any of our subsidiaries is obligated to
      pay;




●
            breach
      of a time charter or a charter hire guaranty in connection with any of our
      vessels;




●
            default
      under any collateral documentation or any swap
  transaction;




●
            cessation
      of operations;




●
            unlawfulness
      or repudiation;




●
            if,
      in the reasonable determination of the lender, it becomes impossible or
      unlawful for us or any of our subsidiaries to comply with our obligations
      under the loan documents; and




●
            if
      any event occurs that, in the reasonable opinion of the lender, has a
      material adverse effect on our and our subsidiaries’ operations, assets or
      business, taken as a whole.




The
facility agreement provides that upon the occurrence of an event of default, the
lenders may require that all amounts outstanding under the credit facility be
repaid immediately and terminate our ability to borrow under the credit facility
and foreclose on the mortgages over the vessels and the related
collateral.


ITEM 6.
                          DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEESA.
                          DIRECTORS
      AND SENIOR MANAGEMENT


The
following table sets forth information regarding our executive officers and
directors.





Name
                                                                        
                                                                        Age
                                                                        
                                                                        PositionErik
      A. Lind
                                                                        
                                                                        53
                                                                        
                                                                        Class I
      Director and ChairmanRandee
      Day
                                                                        
                                                                        60
                                                                        
                                                                        Class II
      DirectorRolf
      A. Wikborg
                                                                        
                                                                        50
                                                                        
                                                                        Class III
      DirectorOle
      Jacob Diesen
                                                                        
                                                                        61
                                                                        
                                                                        Chief
      Executive OfficerEirik
      Ubøe
                                                                        
                                                                        48
                                                                        
                                                                        Chief
      Financial OfficerTom
      R. Kjeldsberg
                                                                        
                                                                        37
                                                                        
                                                                        Senior
      Vice President, Business
Development





Set forth
below is a brief description of the business experience of our directors and
executive officers.





45
 Table of Contents






Erik
A. Lind—Chairman of the Board. Mr. Lind has been chief executive of
Tufton Oceanic and Managing Director of Tufton Oceanic Ltd. since 2004. Tufton
Oceanic is a Fund Management and Investment banking firm for the Marine and
Energy related sectors. Mr. Lind has more than 25 years experience in corporate
banking, global shipping and specialized and structured asset financing. From
1995 to 2001, Mr. Lind served as Executive Vice President and a member of the
Executive Management Committee at IM Skaugen ASA, a Norwegian public bulk
shipping and logistics company engaged in the transportation of petrochemical
gases, LPG and organic chemicals as well as crude oil lightering, in various
financial management, operational and corporate and business development roles.
Mr. Lind has also held senior and executive positions with Manufacturers Hanover
Trust Company, Oslobanken and GATX Capital. He has been actively involved in
corporate recapitalization, financial restructurings, acquisitions, structured
finance and joint venture investments. In addition to his positions within
Tufton Oceanic. Mr. Lind currently serves on the boards of Maritime Capital
Shipping Limited, a Bermuda-based ship-owning company, A.M. Nomikos, a Greek
ship-owning company, Alislami Oceanic Shipping Company I and II, investment
companies based in the Jebel Ali Free Zone and Cayman Islands, respectively, KFH
Oceanic Portfolio Company, a ship investment company based in the Cayman
Islands, Frilin AS, a Norwegian private investment company, and Christiania
Capital Partners, a private financial advisory and consulting firm based in
Norway. Mr. Lind is a resident of the United Kingdom and a citizen of
Norway.


Randee
Day—Director. Ms. Day has been a Managing Director at Seabury
Transportation Holdings LLC, a leading advisory and consulting firm specializing
in the transportation industry, since 2004 and is responsible for all of
Seabury’s activities related to the maritime industry. Ms. Day has more than 25
years of specialized international financial experience in the marine and energy
sectors. From 1985 to 2004, Ms. Day was president and chief executive officer of
Day & Partners, Inc., a financial advisory and consulting firm focused on
the maritime, energy and cruise industries with a diversified client base
consisting of shipping companies, commercial banks and government agencies. Ms.
Day has an extensive background in international trust and maritime law and has
worked with clients on bankruptcies, foreign judgments and strategies for
disposing of real estate and shipping assets in various international
jurisdictions. Ms. Day has served as an independent director and audit committee
chair of TBS International Ltd., a Bermuda based operator of one of the world’s
largest controlled fleets of multipurpose tweendeck bulk carriers, since 2001.
From 1979 to 1985, Ms. Day served as the head of J.P. Morgan’s Marine
Transportation and Finance department in New York, where she was responsible for
managing a $1 billion loan portfolio and overseeing relationships with the
bank’s shipping clients in the Western Hemisphere and the Far East. She also
served in the London offices of J.P. Morgan, Continental Illinois National Bank
& Trust and Bank of America. Ms. Day is a resident and citizen of the United
States.
 
 Rolf A. Wikborg—Director. Mr. Wikborg is
Managing Director of AMA Norway A/S and a director of AMA Capital Partners in
New York, a maritime merchant banking group involved in mergers and
acquisitions, restructurings and financial engineering in the shipping, offshore
and cruise sector. Mr. Wikborg has extensive experience arranging operating and
financial leases for operators in the maritime field and recently has been
active arranging mergers and acquisitions. Prior to founding the AMA group in
New York in 1987, Mr. Wikborg was a Managing Director at Fearnleys, Mexico, for
two years after having worked in the Project Department of Fearnleys, an Oslo
based ship-broker. Mr. Wikborg holds a Bachelor of Science in Management
Sciences from the University of Manchester, England. Mr. Wikborg is an officer
in the Royal Norwegian Navy and is a citizen and resident of
Norway.
 
 Ole Jacob Diesen—Chief Executive Officer. Mr.
Diesen has been an independent corporate and financial management consultant
since 1997, serving a diverse group of clients primarily in the tanker industry.
Mr. Diesen has advised on a broad range of shipping transactions, including
mergers and acquisitions, corporate reorganizations, joint ventures, asset
sales, equity, debt and lease financings and vessel charters, pooling and
technical management agreements. Mr. Diesen’s career in shipping and shipping
finance spans over 30 years. From 1991 to 1997, Mr. Diesen served as Managing
Director of Skaugen PetroTrans ASA, a Norwegian public company that was listed
on the Oslo Stock Exchange. Skaugen PetroTrans is an established crude oil
lightering company in the U.S. Gulf and operator of a fleet of medium sized
tankers. From 1984 to 1991, Mr. Diesen headed Fearnley Group (UK) Ltd., a
privately held corporate finance advisory firm specializing in the maritime and
oil industries. Prior to this, Mr. Diesen served for ten years with
Manufacturers Hanover Trust, a predecessor to JPMorgan Chase, in positions
including Vice President and Deputy Regional Manager, where he was responsible
for the bank’s portfolios of shipping and Scandinavian corporate credits after
having spent two years as a tanker chartering broker. Mr. Diesen currently
serves on a number of boards including PetroTrans Holdings Ltd., Bermuda, the
largest independently owned U.S. Gulf lightering business; I.M. Skaugen Marine
Services Pte Ltd., Singapore, an owner of LPG/ethylene carriers; and FSN Capital
Holding Ltd., Jersey, a private equity firm. Mr. Diesen is a citizen of
Norway.


46
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Eirik Ubøe—Chief Financial Officer.Mr. Ubøe has been involved in international accounting and finance for
approximately 20 years, which includes time spent in ship finance and as the
chief financial officer for companies listed on the Oslo Stock Exchange. From
March 2002 through December 2004, Mr. Ubøe served as the chief executive and
chief financial officer of Nutri Pharma ASA, an international health care
company listed on the Oslo Stock Exchange. From 1997 through 2002, Mr. Ubøe
worked in various positions at the Schibsted Group, the largest Norwegian media
group with newspaper, television and online interests in Scandinavia, the
Baltics, Switzerland, France and Spain, including as the finance director of the
Schibsted Group and as chief financial officer of Schibsted’s newspaper
initiative in Switzerland, France and Spain. Mr. Ubøe has also served as a vice
president in the corporate finance and ship finance departments of various
predecessors to JPMorgan Chase both in New York and Oslo for a total of eight
years. Mr. Ubøe holds an MBA from the University of Michigan’s Ross School of
Business and a Bachelor in Business Administration from the University of
Oregon. Mr. Ubøe is a citizen of Norway.




Tom R. Kjeldsberg – Senior Vice
President, Business Development. Mr. Kjeldsberg has 10 years investment
banking experience, mainly within the maritime/transportation industries. From
2002 through 2007, he was a Director in the Corporate Finance division of
DnB NOR Markets, Oslo, one of the world’s leading shipping and offshore banks.
Mr. Kjeldsberg has also served as an Associate in the Corporate Finance group of
Merrill Lynch in London and Analyst in the Project Finance group of Cambridge
Partners in New York. He holds an MBA from the IESE Business School in
Barcelona, Spain. Mr. Kjeldsberg is a citizen of Norway.


B.
                              COMPENSATION




DIRECTORS’
COMPENSATION




Each
member of our board of directors is currently paid an annual fee of $47,500,
plus reimbursement for expenses incurred in the performance of duties as members
of our board of directors. We pay our chairman an additional $15,000 per year to
compensate him for the extra duties incident to that office. We pay the head of
our audit committee an additional $11,750 per year and an additional $4,750 per
year to each of the other members of the audit committee. We pay the heads of
our compensation committee and nominating and corporate governance committee an
additional $8,000 each per year and an additional $1,000 per year to each of the
other members of the compensation committee and nominating and corporate
governance committee. We pay each director $1,250 for each board meeting
attended. On May 10, 2006, we awarded each of our directors 1,000 shares of
restricted stock. These shares of restricted stock vested and were issued on
October 18, 2006. On November 8, 2006, each member of our board of
directors was awarded 3,614 shares of restricted stock, of which 1,204 shares
vested in May 2007 and 334 shares vested in May 2008.  Of the
remaining 2,076 shares, 1,743 shares vest in May 2009, subject to each
member of our board of directors remaining a member of our board of directors
and certain market conditions. The remaining 333 shares of restricted stock each
vest in May 2009, subject to each member of our board of directors
remaining a member of our board of directors. On May 9, 2007, each member of our
board of directors was awarded 3,287 shares of restricted stock, of which 333
shares vested in May 2008. Of the remaining 2,954 shares, 1,525 shares vest in
May 2009 and 762 shares vest in May 2010, subject to each member of our board of
directors remaining a member of our board of directors and certain market
conditions. The remaining 667 shares of restricted stock each vest in two
amounts in May 2009 (334 shares) and May 2010 (333 shares), subject to each
member of our board of directors remaining a member of our board of
directors. On May 9, 2008, each member of our board of directors was
awarded 4,398 shares of restricted stock, of which 2,932 shares vest in three
equal amounts in May 2009, May 2010 and May 2011, subject to each
member of our board of directors remaining a member of our board of directors
and certain market conditions. The remaining 1,466 shares of restricted stock
each vest in three equal amounts in May 2009, May 2010 and May 2011,
subject to each member of our board of directors remaining a member of our board
of directors. During the vesting period of the shares of restricted stock
awarded to our directors on November 8, 2006, May 9, 2007 and May 9, 2008,
each director will be credited with an additional number of shares of restricted
stock in an amount equal to the value of the dividends that would have been paid
on the awarded shares had the shares vested on the date of the award. These
additional shares will be transferred to each director as the shares
vest.





47
 Table of Contents




We have
no service contracts between us and any of our directors providing for benefits
upon termination of their employment or service.




EXECUTIVE
COMPENSATION, EMPLOYMENT AGREEMENTS




Our chief
executive officer, Mr. Ole Jacob Diesen, receives an annual salary of $600,000,
which includes benefits. Our chief financial officer, Mr. Eirik Ubøe receives an
annual salary of NOK 1,900,000, which includes benefits. In addition, each is
reimbursed for expenses incurred in the performance of their duties as our
executive officers and receives the equity based compensation described below.
Our senior vice president, Mr. Tom R. Kjeldsberg, receives an annual salary of
NOK 1,750,000.




Executive
Officer Employment Agreements




We have
entered into employment agreements with Mr. Diesen and Mr. Ubøe that set forth
their rights and obligations as our chief executive officer and chief financial
officer, respectively. The employment agreements are substantially similar.
Either the executive or we may terminate the employment agreements for any
reason and at any time.




Pursuant
to the current employment agreements, Mr. Diesen receives a base salary in the
amount of $600,000 per year and Mr. Ubøe receives a base salary in the amount of
NOK 1,900,000 per year. In addition, in connection with our IPO, both Mr. Diesen
and Mr. Ubøe received a combination of stock options and restricted stock that
had a grant date value of $75,000 split equally between stock options and
restricted stock. The 3,125 shares of restricted stock awarded to each of Mr.
Diesen and Mr. Ubøe in connection with our IPO vest in four equal amounts in
October 2006, 2007, 2008 and 2009, respectively, subject to the relevant
officer’s continued employment with us. The 34,723 stock options granted to each
of Mr. Diesen and Mr. Ubøe have an exercise price of $12 per share and expire on
October 18, 2015. On February 19, 2007, each officer exercised 11,575
options in a “cash-less” exercise and 2,352 shares were issued to each of them.
On October 23, 2007, each officer exercised a further 11,574 options in a
“cash-less” exercise and 2,190 shares were issued to each of them. The remaining
11,574 stock options granted to each of Mr. Diesen and Mr. Ubøe have not yet
been exercised. Each executive officer is also eligible for additional grants
under our 2005 Incentive Compensation Plan, as determined by the compensation
committee of our board of directors. On November 8, 2006, Mr. Diesen and
Mr. Ubøe were awarded 14,457 and 9,940 shares of restricted stock, respectively,
of which 4,820 and 3,314, respectively, vested in May 2007 and 1,042 and 1,042,
respectively, vested in May 2008. Of the remaining 8,595 and 5,584 shares,
respectively, (i) 7,554 and 4,543 shares, respectively, vest in May 2009,
subject to the relevant officer’s continued employment with us and certain
market conditions and (ii) 1,041 each vest in May 2009, subject to the
relevant officer’s continued employment with us. On May 9, 2007, Mr. Diesen
and Mr. Ubøe were awarded 13,149 and 9,040 shares of restricted stock,
respectively, of which 1,042 shares each vested in May 2008.  Of the
remaining 12,107 awarded to Mr. Diesen, 6,683 shares and 3,341 shares,
respectively, vest in May 2009 and May 2010, subject to continued employment
with us and certain market conditions and the final 2,082 shares vest in two
equal amounts in May 2009 and May 2010 subject to continued employment with us.
Of the remaining 7,998 awarded to Mr. Ubøe, 3,944 shares and 1,972 shares,
respectively, vest in May 2009 and May 2010, subject to continued employment
with us and certain market conditions and the final 2,082 shares vest in two
equal amounts in May 2009 and May 2010 subject to continued employment with
us.  On May 9, 2008, Mr. Diesen and Mr. Ubøe were awarded 26,385
and 14,094 shares of restricted stock, respectively, of which 17,590 and 9,396
shares, respectively, vest in three equal amounts in May 2009, May 2010 and May
2011, subject to continued employment with us and certain market conditions. The
remaining 8,795 and 4,698 shares of restricted stock each vest in three equal
amounts in May 2009, May 2010 and May 2011, subject to continued employment with
us.  During the vesting period of the shares of restricted stock awarded to
Mr. Diesen and Mr. Ubøe on November 8, 2006, May 9, 2007 and May 9,
2008, Mr. Diesen and Mr. Ubøe will each be credited with an additional number of
shares of restricted stock in an amount equal to the value of the dividends that
would have been paid on the awarded shares had the shares vested on the date of
the award. These additional shares will be transferred to Mr. Diesen and Mr.
Ubøe as the shares vest.







48
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In the
event that (i) we terminate either executive’s employment without cause (as
such term is defined in the employment agreement), or (ii) either executive
terminates his employment for good reason (as such term is defined in the
employment agreement) within six months following a change of control, then we
will pay such executive an amount equal to one year’s salary (also, if the
executive loses his position for good reason within six months following a
change of control, the executive may, at the Board’s discretion, be entitled to
a payment equal to twice the executive’s annual base salary and any unvested
equity wards will become fully vested). In addition, in the event an executive
is terminated without cause pursuant to clause (i) above, all of his equity
based compensation, including initial grants, will immediately vest and become
exercisable. If an executive’s employment is terminated due to death or
disability, we will continue to pay his salary through the first anniversary of
such date of termination. In the event that an executive’s employment is
terminated for cause, we are only obligated to pay his salary and unreimbursed
expenses through the termination date.




Pursuant
to their employment agreements, each of Mr. Diesen and Mr. Ubøe has agreed to
protect our confidential information. They have also agreed during the term of
the agreements and for a period of one year following his termination, not to
(i) engage in any business in any location that is involved in the voyage
chartering or time chartering of crude oil tankers, (ii) solicit any
business from a person that is a customer or client of ours or any of our
affiliates, (iii) interfere with or damage any relationship between us or
any of our affiliates and any employee, customer, client, vendor or supplier or
(iv) form, or acquire a two percent or greater equity ownership, voting or
profit participation in, any of our competitors.




We have
also entered into an indemnification agreement with each of Mr. Diesen and Mr.
Ubøe pursuant to which we have agreed to indemnify them substantially in
accordance with the indemnification provisions related to our officers and
directors in our bylaws.




We have
entered into an employment agreement with Mr. Kjeldsberg that sets forth his
rights and obligations as our Senior Vice President. Either we or Mr. Kjeldsberg
may terminate his employment agreement for any reason at any time. Pursuant to
his employment agreement, Mr. Kjeldsberg receives a base salary in the amount of
NOK 1,750,000 per year. In addition, Mr. Kjeldsberg is eligible to receive
equity awards pursuant to the 2005 Incentive Compensation Plan. On May 9,
2007, Mr. Kjeldsberg was awarded 8,218 shares of restricted stock, of which of
which 913 shares vested in May 2008. Of the remaining 7,305 shares, 3,653 shares
vest in May 2009 and 1,826 shares vest in May 2010, subject to continued
employment with us and certain market conditions. The remaining 1,826 shares of
restricted stock each vest in two equal amounts in May 2009 and May 2010,
subject to continued employment with us. On May 9, 2008, Mr. Kjeldsberg was
awarded 13,011 shares of restricted stock, of which 8,674 shares vest in three
equal amounts in May 2009, May 2010 and May 2011, subject to continued
employment with us and certain market conditions. The remaining 4,337 shares of
restricted stock each vest in three equal amounts in May 2009, May 2010 and
May 2011, subject to continued employment with us. During the vesting
period of the shares of restricted stock awarded to Mr. Kjeldsberg on
May 9, 2007 and May 9, 2008, Mr. Kjeldsberg will be credited with an
additional number of shares of restricted stock in an amount equal to the value
of the dividends that would have been paid on the awarded shares had the shares
vested on the date of the award. These additional shares will be transferred to
Mr. Kjeldsberg as the shares vest.




In the
event of a change of control, Mr. Kjeldsberg is entitled to an amount equal to
twice his annual base salary, subject to certain conditions. In the event we
terminate Mr. Kjeldsberg’s employment, he is entitled to one year of severance,
subject to certain conditions. Pursuant to his employment agreement, Mr.
Kjeldsberg has agreed to protect our confidential information. He has also
agreed during the term of the agreement and for a period of one year following
his termination not to (i) engage in any business that is involved in the
voyage chartering or time chartering of crude oil tankers, (ii) solicit any
business from a person that is a customer or client of ours or (iii) form,
or acquire a two percent or greater equity ownership, voting or profit
participation in, any of our competitors.







49
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Stock
Plan




2005
Incentive Compensation Plan




We
established the 2005 Incentive Compensation Plan, which we call the “Plan,”
prior to the consummation of our IPO for the initial benefit of our directors
and officers (including prospective directors and officers). The following
description of the Plan is qualified by reference to the full text thereof, a
copy of which is filed as an exhibit to this report.




Awards




The Plan
provides for the grant of options intended to qualify as incentive stock
options, or “ISOs,” under Section 422 of the Internal Revenue Code of 1986,
as amended and non-statutory stock options, or “NSOs,” restricted stock awards,
restricted stock units, or “RSUs,” cash incentive awards and other equity-based
or equity-related awards.




Plan
administration




The Plan
will be administered by the compensation committee of our board of directors or
such other committee as our board may designate to administer the Plan.
Initially, our entire board will perform the functions of the compensation
committee and will administer the Plan. Subject to the terms of the Plan and
applicable law, the compensation committee has sole and plenary authority to
administer the Plan, including, but not limited to, the authority to
(i) designate Plan participants, (ii) determine the type or types of
awards to be granted to a participant, (iii) determine the number of shares
of our common stock to be covered by awards, (iv) determine the terms and
conditions of any awards, including vesting schedules and performance criteria,
(v) amend or replace an outstanding award and (vi) make any other
determination and take any other action that the compensation committee deems
necessary or desirable for the administration of the Plan.




Shares
available for awards




Subject
to adjustment as provided below, the aggregate number of shares of our common
stock that may be delivered pursuant to awards granted under the Plan is
300,000, of which the maximum number of shares that may be delivered pursuant to
ISOs granted under the Plan is 150,000. The maximum number of shares of our
common stock with respect to which awards may be granted to any participant in
the Plan in any fiscal year is 75,000. If an award granted under the Plan is
forfeited, or otherwise expires, terminates or is canceled without the delivery
of shares, then the shares covered by such award will again be available to be
delivered pursuant to awards under the Plan.




In the
event of any corporate event affecting the shares of our common stock, the
compensation committee in its discretion may make such adjustments and other
substitutions to the Plan and awards under the Plan as it deems equitable or
desirable in its sole discretion.




Stock
options




The
compensation committee may grant both ISOs and NSOs under the Plan. Except as
otherwise determined by the compensation committee in an award agreement, the
exercise price for options cannot be less than the fair market value (as defined
in the Plan) of our common stock on the date of grant. In the case of ISOs
granted to an employee who, at the time of the grant of an option, owns stock
representing more than 10% of the voting power of all classes or our stock or
the stock of any of our affiliates, the exercise price cannot be less than 110%
of the fair market value of a share of our common stock on the date of grant.
All options granted under the Plan will be NSOs unless the applicable award
agreement expressly states that the option is intended to be an
ISO.




Subject
to any applicable award agreement, options shall vest and become exercisable on
each of the first three anniversaries of the date of grant. The term of each
option will be determined by the compensation committee; provided that no option
will be exercisable after the tenth anniversary of the date the option is
granted. The exercise price may be paid with cash (or its equivalent) or by
other methods as permitted by the compensation committee.







50
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Restricted
shares and restricted stock units




Restricted
shares and RSUs may not be sold, assigned, transferred, pledged or otherwise
encumbered except as provided in the Plan or the applicable award agreement;
provided, however, that the compensation committee may determine that restricted
shares and RSUs may be transferred by the participant. Upon the grant of a
restricted share, certificates will be issued and registered in the name of the
participant and deposited by the participant, together with a stock power
endorsed in blank, with us or a custodian designated by the compensation
committee or us. Upon lapse of the restrictions applicable to such restricted
shares, we or the custodian, as applicable, will deliver such certificates to
the participant or his or her legal representative.




An RSU
will have a value equal to the fair market value of a share of our common stock.
RSUs may be paid in cash, shares of our common stock, other securities, other
awards or other property, as determined by the committee, upon the lapse of
restrictions applicable to such RSU or in accordance with the applicable award
agreement. The committee may provide a participant who holds restricted shares
or RSUs with dividends or dividend equivalents payable in cash, shares of our
common stock or other property.




The
compensation committee may provide a participant who holds restricted shares
with dividends or dividend equivalents, payable in cash, shares of our common
stock or other property.




Cash
incentive awards




Subject
to the provisions of the Plan, the compensation committee may grant cash
incentive awards payable upon the attainment of one or more individual, business
or other performance goals or similar criteria.




Other
stock-based awards




Subject
to the provisions of the Plan, the compensation committee may grant to
participants other equity-based or equity-related awards. The compensation
committee may determine the amounts and terms and conditions of any such awards
provided that they comply with applicable laws.




Amendment
and termination of the Plan




Subject
to any government regulation and to the rules of the New York Stock Exchange or
any successor exchange or quotation system on which shares of our common stock
may be listed or quoted, the Plan may be amended, modified or terminated by our
board of directors without the approval of our stockholders, except that
stockholder approval shall be required for any amendment that would
(i) increase the maximum number of shares of our common stock available for
awards under the Plan or increase the maximum number of shares of our common
stock that may be delivered pursuant to ISOs granted under the Plan or
(ii) modify the requirements for participation under the Plan. No
modification, amendment or termination of the Plan that is adverse to a
participant will be effective without the consent of the affected participant,
unless otherwise provided by the compensation committee in the applicable award
agreement.




The
compensation committee may waive any conditions or rights under, amend any terms
of, or alter, suspend, discontinue, cancel or terminate any award previously
granted, prospectively or retroactively; provided, however, that, unless
otherwise provided by the compensation committee in the applicable award
agreement, any such waiver, amendment, alteration, suspension, discontinuance,
cancellation or termination that would materially and adversely impair the
rights of any participant to any award previously granted will not to that
extent be effective without the consent of the affected
participant.







51
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Change
of control




The Plan
provides that, unless otherwise provided in an award agreement, in the event we
experience a change of control, unless provision is made in connection with the
change of control for assumption for, or substitution of, awards previously
granted:




●
            any
      options outstanding as of the date the change of control is determined to
      have occurred will become fully exercisable and vested, as of immediately
      prior to the change of control;




●
            all
      cash incentive awards will be paid out as if the date of the change of
      control were the last day of the applicable performance period and
      “target” performance levels had been attained;
  and




●
            all
      other outstanding awards will automatically be deemed exercisable or
      vested and all restrictions and forfeiture provisions related thereto will
      lapse as of immediately prior to such change of control.




Unless
otherwise provided pursuant to an award agreement, a “change of control” is
defined to mean any of the following events, generally:




●
            the
      consummation of a merger, reorganization or consolidation or sale or other
      disposition of all or substantially all of our
  assets;




●
            the
      approval by our stockholders of a plan of our complete liquidation or
      dissolution; or




●
            an
      acquisition by any individual, entity or group of beneficial ownership of
      50% or more of either the then outstanding shares of our common stock or
      the combined voting power of our then outstanding voting securities
      entitled to vote generally in the election of
  directors.




Term
of the Plan




No award
may be granted under the Plan after June 7, 2015, the tenth anniversary of the
date the Plan was approved by our stockholders.


C.
                                BOARD
      PRACTICES
  BOARD
OF DIRECTORS




Our
business and affairs are managed under the direction of our board of directors.
Our board is currently composed of three directors, all of whom are independent
under the applicable rules of the New York Stock Exchange.




Our board
of directors is elected annually on a staggered basis and each director elected
holds office for a three-year term. Each of our directors was initially elected
in July 2005. The term of our Class I director, Mr. Erik Lind, expires
in 2011; the term of our Class III director, Mr. Rolf Wikborg, expires in
2009; and the term of our Class II director, Ms. Randee Day, expires in
2010. Mr. Wikborg was re-elected as our Class III director at our
annual stockholders meeting on June 22, 2006, Ms. Day was re-elected as our
Class II director at our annual stockholders meeting on June 20, 2007
and Mr. Lind was re-elected as our Class I director at our annual
stockholders meeting on June 18, 2008.




BOARD
COMMITTEES




Our board
of directors, which is entirely composed of independent directors under the
applicable rules of the New York Stock Exchange, performs the functions of our
audit committee, compensation committee and nominating and corporate governance
committee.




The
purpose of our audit committee is to oversee (i) management’s conduct of
our financial reporting process (including the development and maintenance of
systems of internal accounting and financial controls), (ii) the integrity
of our financial statements, (iii) our compliance with legal and regulatory
requirements and ethical standards, (iv) significant financial transactions
and financial policy and strategy, (v) the qualifications and independence
of our outside auditors, (vi) the performance of our internal audit
function and (vii) the outside auditors’ annual audit of our financial
statements. Ms. Randee Day is our “audit committee financial expert” as that
term is defined in Item 401(h) of Regulation S-K.





52
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The
purpose of our compensation committee is to (i) discharge the board’s
responsibilities relating to the evaluation and compensation of our executives,
(ii) oversee the administration of our compensation plans,
(iii) review and determine director compensation and (iv) prepare any
report on executive compensation required by the rules and regulations of the
SEC.




The
purpose of our nominating and corporate governance committee to
(i) identify individuals qualified to become board members and recommend
such individuals to the board for nomination for election to the board,
(ii) make recommendations to the board concerning committee appointments,
(iii) review and make recommendations for executive management
appointments, (iv) develop, recommend and annually review our corporate
governance guidelines and oversee corporate governance matters and
(v) coordinate an annual evaluation of the board and its
chairman.




DIRECTORS




Our
directors are elected by a plurality of the votes cast by stockholders entitled
to vote. There is no provision for cumulative voting.




Our
bylaws provide that our board of directors must consist of at least three
members. Stockholders may change the number of directors only by the affirmative
vote of holders of a majority of the outstanding common stock. The board of
directors may change the number of directors only by a majority vote of the
entire board.


D.
                                EMPLOYEES




As of
December 31, 2008, we had 3 employees. Our employees are not represented by any
collective bargaining agreements and we have never experienced a work
stoppage.


E.
                                SHARE
      OWNERSHIP




See “Item
7.A Major Shareholders”.


ITEM
7.
                                  MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONSA.
                                  MAJOR
      SHAREHOLDERS




The
following table sets forth certain information regarding (i) the owners of
more than 5% of our common stock that we are aware of based
on 13G filings and (ii) the total amount of common stock owned by
all of our officers and directors, individually and as a group. Following the
completion of our IPO we have one class of common stock outstanding and each
outstanding share will be entitled to one vote.




Prior to
our IPO, OSG International, Inc., or “OIN,” owned 100 shares, or 100%, of our
common stock. As part of the purchase price for our Initial Vessels, we issued
13,999,900 shares, or 46.7%, of our common stock to OIN. OIN granted the
underwriters the right to purchase up to 2,400,000 of these shares to cover
over-allotments. The underwriters’ exercised their option to purchase 648,500 of
these shares, and accordingly, OIN owned 13,351,400 shares, or 44.5%, of our
common stock upon completion of our IPO. We did not receive any of the proceeds
from the exercise of the over-allotment option. During the first half of 2007,
OIN sold all of its remaining shares of our common stock.  As of
December 31, 2007, OIN owned no shares of our common stock.






53
 Table of Contents




Number
      of
                                    Shares
                                  
                                  
                                  Percentage
      of Outstanding SharesPersons
      owning more than 5% of a class of our equity securitiesAmerican
      Century Companies, Inc. (1)
                                  
                                  
                                  2,185,812
                                  
                                  
                                  
                                  5.6DirectorsErik
      A. Lind(2)(3)
                                  
                                  
                                  20,464
                                  
                                  
                                  
                                  *Randee
      Day(2)
                                  
                                  
                                  14,464
                                  
                                  
                                  
                                  *Rolf
      A. Wikborg(2)
                                  
                                  
                                  12,464
                                  
                                  
                                  
                                  *Executive
      OfficersOle
      Jacob Diesen(4)
                                  
                                  
                                  62,237
                                  
                                  
                                  
                                  *Eirik
      Ubøe(5)
                                  
                                  
                                  41,226
                                  
                                  
                                  
                                  *Tom
      R. Kjeldsberg(6)
                                  
                                  
                                  21,318
                                  
                                  
                                  
                                  *Directors
      and executive officers as a group (6 persons)(7)
                                  
                                  
                                  162,173
                                  
                                  
                                  
                                  *




*   Less
      than 1%


(1)Based
      on a Schedule 13G filed by American Century Companies, Inc with the
      Commission on February 13, 2009.


(2)Includes
      9,428 shares of restricted stock subject to vesting
      conditions.


(3)Includes
      8,000 shares owned by a company associated with Erik Lind’s
      family.


(4)Does
      not include 11,574 options with an exercise price of $12 per share and
      expiring on October 18, 2015. Includes 47,868 shares of restricted stock
      subject to vesting conditions.


(5)Does
      not include 11,574 options with an exercise price of $12 per share and
      expiring on October 18, 2015. Includes 28,457 shares of restricted stock
      subject to vesting conditions.


(6)Includes
      20,316 shares of restricted stock subject to vesting
      conditions.


(7)Includes
      124,925 shares of restricted stock subject to vesting
      conditions.




Our major
shareholders have the same voting rights as our other shareholders. To our
knowledge, no corporation or foreign government or other natural or legal
person(s) owns more than 50% of our outstanding stock. We are not aware of any
arrangements, the operation of which may at a subsequent date result in a change
of control.


B.
                                  RELATED
      PARTY TRANSACTIONSNone.




C.
                                  INTEREST
      OF EXPERTS AND COUNSELNot
  applicable.




ITEM
      8.
                                          FINANCIAL
      INFORMATIONA.
                                          CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
      INFORMATION1.
                                          AUDITED
      CONSOLIDATED FINANCIAL STATEMENTS
                                            See Item 18.2.
                                          THREE
      YEARS COMPARATIVE FINANCIAL STATEMENTS
                                            See Item 18.3.
                                          AUDIT
      REPORTS
                                            See Reports of Independent Registered Public Accounting Firm at
      page F-2 through
F-4.





54
 Table of Contents




4.
                                              LATEST
      AUDITED FINANCIAL STATEMENTS MAY BE NO OLDER THAN 15
      MONTHS
                                                We
      have complied with this requirement.5.
                                              INTERIM
      FINANCIAL STATEMENTS IF DOCUMENT IS MORE THAN NINE MONTHS SINCE LAST
      AUDITED FINANCIAL YEAR
                                                Not
      applicable.6.
                                              EXPORT
      SALES IF SIGNIFICANT
                                                See
      Item 18.7.
                                              LEGAL
      PROCEEDINGS


The
nature of our business, i.e., the acquisition, chartering and ownership of our
vessels, exposes us to risk of lawsuits for damages or penalties relating to,
among other things, personal injury, property casualty and environmental
contamination. Under rules related to maritime proceedings, certain claimants
may be entitled to attach charter hire payable to us in certain circumstances.
There are no actions or claims pending against us as of the date of this
report.




8.
            DIVIDEND
      POLICY




Historically,
we paid quarterly dividends to the holders of our common stock in March, June,
September and December of each year, in amounts substantially equal to the
available cash from our operations during the previous quarter less cash
expenses and any reserves established by our board. In January 2008, our board
of directors approved a new dividend policy to provide shareholders of record
with an intended fixed quarterly dividend.  Commencing with the first
dividend payment attributable to the 2008 fiscal year, the dividend was $0.25
per share.  The dividends paid related to the four quarters of 2008
and amounted to $0.25, $0.25, $0.30 and $0.30 per share,
respectively.




Our board
of directors may review and amend our dividend policy from time to time in
accordance with any future growth of our fleet or for other reasons. The timing
and amount of dividend payments will be determined by our board of directors and
will depend on, among other things, our cash earnings, financial condition, cash
requirements and other factors.




The
amount of future dividends, if any, could be affected by various factors,
including our cash earnings, financial condition and cash requirements, the loss
of a vessel, the acquisition of one or more vessels, required capital
expenditures, reserves established by our board of directors, increased or
unanticipated expenses, our ability to comply with the terms of our credit
facility, a change in our dividend policy, additional borrowings or future
issuances of securities, many of which will be beyond our control.




Marshall Islands
law generally prohibits the payment of dividends other than from surplus or
while a company is insolvent or would be rendered insolvent by the payment of
such a dividend. We do not expect to pay any income taxes in the Marshall
Islands. We also do not expect to pay any income taxes in the United States.
Please see the sections of this report entitled “Item 10. Additional
Information—Taxation.”




B.
            SIGNIFICANT
      CHANGESNone.




ITEM 9.
                            THE
      OFFER AND LISTINGA.
                            OFFER AND LISTING DETAILS1.
                            EXPECTED
      PRICE
                              Not
      applicable.2.
                            METHOD
      TO DETERMINE EXPECTED PRICE
                              Not
      applicable.





55
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3.
                              PRE-EMPTIVE
      EXERCISE RIGHTS
                                Not applicable.4.
                              STOCK PRICE
  HISTORY


Our
common stock is listed for trading on the New York Stock Exchange and is traded
under the symbol “DHT.” The following table lists the high and low closing
market prices for our common stock for the periods indicated as
reported:


High
                
                
                LowYear
      ended:December
      31, 2006
                
                $
                16.44
                
                
                $
                12.10December
      31, 2007
                
                
                18.73
                
                
                
                11.64December
      31, 2008
                
                
                12.61
                
                
                
                3.25Quarter
      ended:March
      31, 2006
                
                
                14.25
                
                
                
                12.57June
      30, 2006
                
                
                13.50
                
                
                
                12.10September
      30, 2006
                
                
                15.49
                
                
                
                12.25December
      31, 2006
                
                
                16.44
                
                
                
                13.01March
      31, 2007
                
                
                16.42
                
                
                
                13.91June
      30, 2007
                
                
                16.75
                
                
                
                14.60September
      30, 2007
                
                
                18.73
                
                
                
                13.62December
      31, 2007
                
                
                15.70
                
                
                
                11.64March 31, 2008
                
                
                12.61
                
                
                
                9.32June
      30, 2008
                
                
                12.20
                
                
                
                9.85September
      30, 2008
                
                
                10.14
                
                
                
                6.14December
      31, 2008
                
                
                6.75
                
                
                
                3.25Month
      ended:September
      30, 2008
                
                
                9.40
                
                
                
                6.14October
      31, 2008
                
                
                6.75
                
                
                
                3.25November
      30, 2008
                
                
                5.68
                
                
                
                3.88December
      31, 2008
                
                
                6.13
                
                
                
                4.68January
      31, 2009
                
                
                6.88
                
                
                
                5.42February
      28, 2009
                
                
                6.78
                
                
                
                4.95


5.
              TYPE
      AND CLASS OF SECURITIES
                    Not
      applicable.
  6.
              LIMITATIONS
      OF SECURITIES
                    Not
      applicable.
  7.
                RIGHTS
      CONVEYED BY SECURITIES ISSUED
                      Not
      applicable.
 B.
                      PLAN
      OF DISTRIBUTION
 Not
      applicable.
 
 C.
                        MARKETS
      FOR STOCK
 Our
      common stock is listed for trading on the New York Stock Exchange and is
      traded under the symbol
“DHT.”





56
 Table of Contents




D.
                  SELLING
      SHAREHOLDERS
 Not
      applicable.
 
 E.
                    DILUTION
      FROM OFFERING
 Not
      applicable.
 
 F.
                      EXPENSES
      OF OFFERING
 Not
      applicable.
 
  ITEM
      10.
                        ADDITIONAL
      INFORMATION
 A.
                          SHARE
      CAPITAL
 Not
      applicable.
 B.
                            MEMORANDUM
      AND ARTICLES OF ASSOCIATION
 Not
      applicable.


The
following is a description of the material terms of our amended and restated
articles of incorporation and bylaws. Because the following is only a summary,
it does not contain all information that you may find useful. For more complete
information you should read our amended and restated articles of incorporation
and bylaws listed as an exhibit to this report.




PURPOSE




Our
purpose, as stated in our amended and restated articles of incorporation, is to
engage in any lawful act or activity for which corporations may now or hereafter
be organized under the Business Corporations Act of the Marshall Islands, or the
“BCA.” Our amended and restated articles of incorporation and bylaws do not
impose any limitations on the ownership rights of our stockholders.




AUTHORIZED
CAPITALIZATION




Under our
amended and restated articles of incorporation, our authorized capital stock
consists of 100,000,000 shares of common stock, par value $.01 per share, and
1,000,000 shares of preferred stock, par value $.01 per share. As of December
31, 2008, we had outstanding 39,238,807 shares of common stock and no
shares of preferred stock. All of our shares of stock are in registered
form.




Common
Stock




Each
outstanding share of common stock entitles the holder to one vote on all matters
submitted to a vote of stockholders. Subject to preferences that may be
applicable to any outstanding shares of preferred stock, holders of shares of
common stock are entitled to receive ratably all dividends, if any, declared by
our board of directors out of funds legally available for dividends. Upon our
dissolution or liquidation or the sale of all or substantially all or our
assets, after payment in full of all amounts required to be paid to creditors
and to the holders of preferred stock having liquidation preferences, if any,
the holders or our common stock will be entitled to receive pro rata our
remaining assets available for distribution. Holders of common stock do not have
conversion, redemption or preemptive rights to subscribe to any of our
securities. The rights, preferences and privileges of holders of common stock
are subject to the rights of the holders of any shares of preferred stock which
we may issue in the future.







57
 Table of Contents





Preferred
Stock




Our
amended and restated articles of incorporation authorize our board of directors
to establish one or more series of preferred stock and to determine, with
respect to any series of preferred stock, the terms and rights of that series,
including:




●
            the
      designation of the series;




●
            the
      number of shares of the series;




●
            the
      preferences and relative, participating, option or other special rights,
      if any, and any qualifications, limitations or restrictions of such
      series; and




●
            the
      voting rights, if any, of the holders of the
  series.




DIRECTORS




Our
directors are elected by a plurality of the votes cast by stockholders entitled
to vote. There is no provision for cumulative voting.




Our
bylaws provide that our board of directors must consist of at least three
members. Stockholders may change the number of directors only by the affirmative
vote of holders of a majority of the outstanding common stock. The board of
directors may change the number of directors only by a majority vote of the
entire board.




STOCKHOLDER
MEETINGS




Under our
bylaws, annual stockholder meetings will be held at a time and place selected by
our board of directors. The meetings may be held in or outside of the Marshall
Islands. Special meetings may be called by stockholders holding not less than
one-fifth of all the outstanding shares entitled to vote at such meeting. Our
board of directors may set a record date between 15 and 60 days before the
date of any meeting to determine the stockholders that will be eligible to
receive notice and vote at the meeting.




DISSENTERS’
RIGHTS OF APPRAISAL AND PAYMENT




Under the
BCA, our stockholders have the right to dissent from various corporate actions,
including any merger or consolidation or sale of all or substantially all of our
assets not made in the usual course of our business, and receive payment of the
fair value of their shares. In the event of any further amendment of our amended
and restated articles of incorporation, a stockholder also has the right to
dissent and receive payment for his or her shares if the amendment alters
certain rights in respect of those shares. The dissenting stockholder must
follow the procedures set forth in the BCA to receive payment. In the event that
we and any dissenting stockholder fail to agree on a price for the shares, the
BCA procedures involve, among other things, the institution of proceedings in
the high court of the Republic of the Marshall Islands or in any appropriate
court in any jurisdiction in which the company’s shares are primarily traded on
a local or national securities exchange.




STOCKHOLDERS’
DERIVATIVE ACTIONS




Under the
BCA, any of our stockholders may bring an action in our name to procure a
judgment in our favor, also known as a derivative action, provided that the
stockholder bringing the action is a holder of common stock both at the time the
derivative action is commenced and at the time of the transaction to which the
action relates.




LIMITATIONS
ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS




The BCA
authorizes corporations to limit or eliminate the personal liability of
directors and officers to corporations and their stockholders for monetary
damages for breaches of directors’ fiduciary duties. Our bylaws includes a
provision that eliminates the personal liability of directors for monetary
damages for actions taken as a director to the fullest extent permitted by
law.





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Our
bylaws provide that we must indemnify our directors and officers to the fullest
extent authorized by law. We are also expressly authorized to advance certain
expenses (including attorneys fees and disbursements and court costs) to our
directors and offices and carry directors’ and officers’ insurance providing
indemnification for our directors, officers and certain employees for some
liabilities. We believe that these indemnification provisions and insurance are
useful to attract and retain qualified directors and executive
officers.




The
limitation of liability and indemnification provisions in our amended and
restated articles of incorporation and bylaws may discourage stockholders from
bringing a lawsuit against directors for breach of their fiduciary duty. These
provisions may also have the effect of reducing the likelihood of derivative
litigation against directors and officers, even though such an action, if
successful, might otherwise benefit us and our stockholders. In addition, your
investment may be adversely affected to the extent we pay the costs of
settlement and damage awards against directors and officers pursuant to these
indemnification provisions.




There is
currently no pending material litigation or proceeding involving any of our
directors, officers or employees for which indemnification is
sought.




ANTI-TAKEOVER
EFFECT OF CERTAIN PROVISIONS OF OUR AMENDED AND RESTATED ARTICLES OF
INCORPORATION AND BYLAWS




Several
provisions of our amended and restated articles of incorporation and bylaws,
which are summarized below, may have anti-takeover effects. These provisions are
intended to avoid costly takeover battles, lessen our vulnerability to a hostile
change of control and enhance the ability of our board of directors to maximize
stockholder value in connection with any unsolicited offer to acquire us.
However, these anti-takeover provisions, which are summarized below, could also
discourage, delay or prevent the merger or acquisition of our company by means
of a tender offer, a proxy contest or otherwise that a stockholder may consider
in its best interest, as well as the removal of incumbent officers and
directors.




Blank
Check Preferred Stock




Under the
terms of our amended and restated articles of incorporation, our board of
directors has authority, without any further vote or action by our stockholders,
to issue up to 1,000,000 shares of blank check preferred stock. Our board of
directors may issue shares of preferred stock on terms calculated to discourage,
delay or prevent a change of control of our company or the removal of our
management.




Classified
Board of Directors




Our
amended and restated articles of incorporation provide for the division of our
board of directors into three classes of directors, with each class as nearly
equal in number as possible, serving staggered, three year terms. Approximately
one-third of our board of directors will be elected each year. This classified
board provision could discourage a third party from making a tender offer for
our shares or attempting to obtain control of us. It could also delay
stockholders who do not agree with the policies of our board of directors from
removing a majority of our board of directors for two years.




Election
and Removal of Directors




Our
amended and restated articles of incorporation prohibit cumulative voting in the
election of directors. Our bylaws require parties other than the board of
directors to give advance written notice of nominations for the election of
directors. Our articles of incorporation also provide that our directors may be
removed only for cause and only upon the affirmative vote of a majority of the
outstanding shares of our capital stock entitled to vote for those directors.
These provisions may discourage, delay or prevent the removal of incumbent
officers and directors.







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Our
bylaws provide that stockholders are required to give us advance notice of any
person they wish to propose for election as a director if that person is not
proposed by our board of directors. These advance notice provisions provide that
the stockholder must have given written notice of such proposal not less than
90 days nor more than 120 days prior to the anniversary date of the
immediately preceding annual general meeting. In the event the annual general
meeting is called for a date that is not within 30 days before or after
such anniversary date, notice by the stockholder must be given not later than
10 days following the earlier of the date on which notice of the annual
general meeting was mailed to stockholders or the date on which public
disclosure of the date of the annual general meeting was made.




In the
case of a special general meeting called for the purpose of electing directors,
notice by the stockholder must be given not later than 10 days following
the earlier of the date on which notice of the special general meeting was
mailed to stockholders or the date on which public disclosure of the date of the
special general meeting was made. Any nomination not properly made will be
disregarded.




A
director may be removed only for cause by the stockholders, provided notice is
given to the director of the stockholders meeting convened to remove the
director and provided such removal is approved by the affirmative vote of a
majority of the outstanding shares of our capital stock entitled to vote for
those directors. The notice must contain a statement of the intention to remove
the director and must be served on the director not less than fourteen days
before the meeting. The director is entitled to attend the meeting and be heard
on the motion for his removal.




Limited
Actions by Stockholders




Our
amended and restated articles of incorporation and our bylaws provide that any
action required or permitted to be taken by our stockholders must be effected at
an annual or special meeting of stockholders or by the unanimous written consent
of our stockholders. Our amended and restated articles of incorporation and our
bylaws provide that, subject to certain exceptions, our chairman or chief
executive officer, at the direction of the board of directors or holders of not
less than one-fifth of all outstanding shares may call special meetings of our
stockholders and the business transacted at the special meeting is limited to
the purposes stated in the notice. Accordingly, a stockholder may be prevented
from calling a special meeting for stockholder consideration of a proposal over
the opposition of our board of directors and stockholder consideration of a
proposal may be delayed until the next annual meeting.




TRANSFER
AGENT




The
registrar and transfer agent for our common stock is BNY Mellon Shareowner
Services LLC.




LISTING




Our
common stock is listed on the New York Stock Exchange under the symbol
“DHT.”


C.
                    MATERIAL
      CONTRACTS


Other
than the Executive Officer Employment Agreements (described below), the
Charters, the Ship Management Agreements (as amended), our Guarantees and our
Secured Loan Facility Agreement (as amended), we have not entered into any
material contracts other than contracts entered into in the ordinary course of
business.






Executive
Officer Employment Agreements




We have
entered into employment agreements with Mr. Ole Jacob Diesen and
Mr. Eirik Ubøe that set forth their rights and obligations as our chief
executive officer and chief financial officer, respectively. The employment
agreements are substantially similar. Either the executive or we may terminate
the employment agreements for any reason and at any time. We have also entered
into an employment agreement with Mr. Tom R. Kjeldsberg that sets
forth his rights and obligations as our Senior Vice President. Either
Mr. Kjeldsberg or we may terminate the employment agreement at any time.
For additional information on these agreements see “Item 6. Directors, Senior
Management and Employees─Executive Compensation, Employment
Agreements.”







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D.
                        EXCHANGE
      CONTROLSNone.
 E.
                                  TAXATION


The
following is a discussion of the material Marshall Islands and United States
federal income tax considerations relevant to an investment decision by a
“United States Holder,” as defined below, with respect to the acquisition,
ownership and disposition of our common stock. This discussion does not purport
to deal with the tax consequences of owning common stock to all categories of
investors, some of which (such as financial institutions, regulated investment
companies, real estate investment trusts, tax-exempt organizations, insurance
companies, persons holding our common stock as part of a hedging, integrated,
conversion or constructive sale transaction or a straddle, traders in securities
that have elected the mark-to-market method of accounting for their securities,
persons liable for alternative minimum tax, persons who are investors in
pass-through entities, dealers in securities or currencies and investors whose
functional currency is not the United States dollar) may be subject to special
rules.




WE
RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISORS CONCERNING THE OVERALL TAX
CONSEQUENCES ARISING IN YOUR OWN PARTICULAR SITUATION UNDER UNITED STATES
FEDERAL, STATE, LOCAL OR FOREIGN LAW OF THE OWNERSHIP OF COMMON
STOCK.




MARSHALL
ISLANDS TAX CONSIDERATIONS




The
following are the material Marshall Islands tax consequences of our activities
to us and stockholders of our common stock. We are incorporated in the Marshall
Islands. Under current Marshall Islands law, we are not subject to tax on income
or capital gains, and no Marshall Islands withholding tax will be imposed upon
payments of dividends by us to our stockholders.




UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS




This
discussion is based on the Internal Revenue Code of 1986, as amended (the
“Code”), Treasury regulations issued thereunder, published administrative
interpretations of the Internal Revenue Service, or “IRS,” and judicial
decisions as of the date hereof, all of which are subject to change at any time,
possibly on a retroactive basis.




Taxation
of Operating Income: In General




Our
subsidiaries have elected to be treated as disregarded entities for U.S. federal
income tax purposes. As a result, for purposes of the discussion below, our
subsidiaries are treated as branches of it rather than as separate
corporations.




Unless exempt from United States
federal income taxation under the rules contained in Section 883 of the
Code (discussed below), a foreign corporation is subject to United States
federal income taxation on its shipping income that is treated as derived from
sources within the United States, referred to as “United States source shipping
income.” For these purposes “shipping income” means any income that is derived
from the use of vessels, from the hiring or leasing of vessels for use on a
time, voyage or bareboat charter basis, from the participation in a pool,
partnership, strategic alliance, joint operating agreement, code sharing
arrangement or other joint venture it directly or indirectly owns or
participates in that generates such income, or from the performance of services
directly related to those uses. For tax purposes, United States source shipping
income includes (i) 50% of shipping income that is attributable to
transportation that begins or ends, but that does not both begin and end, in
the United States and
(ii) 100% of shipping income that is attributable to transportation that
both begins and ends in the United States.







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Shipping
income attributable to transportation exclusively between non-United States
ports will be considered to be 100% derived from sources outside the United
States. Shipping income derived from sources outside the United States will not
be subject to any United States federal income tax.




In the
absence of exemption from tax under Section 883, our gross United States
source shipping income would be subject to a 4% tax imposed without allowance
for deductions as described below. We have not, nor do we believe we will,
engage in transportation that produces income which is considered to be 100%
from sources within the United States.




Exemption
of operating income from United States federal income taxation




Under
Section 883 of the Code and the regulations thereunder, we will be exempt
from United States federal income taxation on its United States source shipping
income if:




1.
            we
      are organized in a foreign country (the “country of organization”) that
      grants an “equivalent exemption” to corporations organized in the United
      States; and




2.
            either




(A)more than 50% of the value
of our stock is owned, directly or indirectly, by individuals who are
“residents” of our country of organization or of another foreign country that
grants an “equivalent exemption” to corporations organized in the United States,
referred to as the “50% Ownership Test,” or




(B) our stock is “primarily and regularly
traded on an established securities market” in our country of organization, in
another country that grants an “equivalent exemption” to United States
corporations, or in the United States, referred to as the “Publicly-Traded
Test.”




The
Marshall Islands, the jurisdiction where we and our ship-owning subsidiaries are
incorporated, grants an “equivalent exemption” to United States corporations.
Therefore, we will be exempt from United States federal income taxation with
respect to our United States source shipping income if either the 50% Ownership
Test or the Publicly-Traded Test is met. As a result of the IPO, it is difficult
to satisfy the 50% Ownership Test due to the widely-held ownership of our
stock.




As to the
Publicly-Traded Test, the regulations under Code Section 883 provide, in
pertinent part, that stock of a foreign corporation will be considered to be
“primarily traded” on an established securities market in a country if the
number of shares of each class of stock that is traded during any taxable year
on all established securities markets in that country exceeds the number of
shares in each such class that is traded during that year on established
securities markets in any other single country. We believe that our common
stock, which is, and will continue to be, the sole class of our issued and
outstanding stock, is , and will continue to be, “primarily traded” on the New
York Stock Exchange, which is an established securities market for these
purposes.




The
Publicly-Traded Test also requires our common stock be “regularly traded” on an
established securities market.  Under the regulations, our common
stock is considered to be “regularly traded” on an established securities market
if one or more classes of our stock representing more than 50% of our
outstanding shares, by both total combined voting power of all classes of stock
entitled to vote and total value, are listed on the market, referred to as the
“listing threshold.” The regulations further require that with respect to each
class of stock relied upon to meet the listing threshold,(i) such class of
stock is traded on the market, other than in minimal quantities, on at least
60 days during the taxable year or 1/6
of the days in a short taxable year; and (ii) the aggregate number of
shares of such class of stock traded on such market during the taxable year is
at least 10% of the average number of shares of such class of stock outstanding
during such year (as appropriately adjusted in the case of a short taxable
year). We believe we satisfy, and will continue to satisfy, the trading
frequency and trading volume tests. However, even if we do not satisfy both
tests, the regulations provide that the trading frequency and trading volume
tests will be deemed satisfied if our common stock is traded on an established
market in the United States and such stock is regularly quoted by dealers making
a market in such stock. We believe this is and will continue to be the
case.







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Notwithstanding
the foregoing, a class of our stock will not be considered to be “regularly
traded” on an established securities market for any taxable year in which 50% or
more of the vote and value of the outstanding shares of such class are owned,
actually or constructively under certain stock attribution rules, on more than
half the days during the taxable year by persons who each own 5% or more of the
value of such class of our outstanding stock, referred to as the “5 Percent
Override Rule.”




In order
to determine the persons who actually or constructively own 5% or more of our
stock, or “5% Stockholders,” we are permitted to rely on those persons that are
identified on Schedule 13G and Schedule 13D filings with the United
States Securities and Exchange Commission, or the “SEC,” as having a 5% or more
beneficial interest in our common stock. In addition, an investment company
identified on a Schedule 13G or Schedule 13D filing which is
registered under the Investment Company Act of 1940, as amended, will not be
treated as a 5% Stockholder for such purposes.




In the
event the 5 Percent Override Rule is triggered, the 5 Percent Override Rule will
nevertheless not apply if we can establish that among the closely-held group of
5% Stockholders, there are sufficient 5% Stockholders that are considered to be
“qualified stockholders” for purposes of Section 883 to preclude
non-qualified 5% Stockholders in the closely-held group from owning 50% or more
of each class of our stock for more than half the number of days during the
taxable year.




We
believe that we have satisfied and will continue to satisfy the Publicly-Traded
Test and that the 5% Override Rule has not been and will not be applicable to
us. However, no assurance can be given that this will be the case in the
future.




In any
year that the 5 Percent Override Rule is triggered with respect to us, we are
eligible for the exemption from tax under Section 883 only if we can
nevertheless satisfy the Publicly-Traded Test (which requires, among other
things, showing that the exception to the 5 Percent Override Rule applies) or if
we can satisfy the 50% Ownership Test. In either case, we would have to satisfy
certain substantiation requirements regarding the identity of our stockholders
in order to qualify for the Section 883 exemption. These requirements are
onerous and there is no assurance that we would be able to satisfy
them.




To the
extent the benefits of Section 883 are unavailable, our United States
source shipping income, to the extent not considered to be “effectively
connected” with the conduct of a United States trade or business, as described
below, would be subject to a 4% tax imposed by Section 887 of the Code on a
gross basis, without the benefit of deductions. Since under the sourcing rules
described above, no more than 50% of our shipping income would be treated as
being United States source shipping income, the maximum effective rate of United
States federal income tax on its shipping income would never exceed 2% under the
4% gross basis tax regime.




To the
extent the benefits of the Section 883 exemption are unavailable and our
United States source shipping income is considered to be “effectively connected”
with the conduct of a United States trade or business, as described below, any
such “effectively connected” United States source shipping income, net of
applicable deductions, would be subject to the United States federal corporate
income tax currently imposed at rates of up to 35%. In addition, we may be
subject to the 30% “branch profits” taxes on earnings effectively connected with
the conduct of such trade or business, as determined after allowance for certain
adjustments, and on certain interest paid or deemed paid attributable to the
conduct of our United States trade or business.




Our
United States source shipping income would be considered “effectively connected”
with the conduct of a United States trade or business only if:




●
            we
      had, or were considered to have, a fixed place of business in the United
      States involved in the earning of United States source shipping income;
      and







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●
            substantially
      all of our United States source shipping income was attributable to
      regularly scheduled transportation, such as the operation of a vessel that
      followed a published schedule with repeated sailings at regular intervals
      between the same points for voyages that begin or end in the United
      States.




We do not
have, nor will we permit circumstances that would result in having, any vessel
sailing to or from the United States on a regularly scheduled basis. Based on
the foregoing and on the expected mode of our shipping operations and other
activities, we believe that none of our United States source shipping income is
or will be “effectively connected” with the conduct of a United States trade or
business.




United
States taxation of gain on sale of vessels




Regardless
of whether we qualify for exemption under Section 883, we will not be
subject to United States federal income taxation with respect to gain realized
on a sale of a vessel, provided the sale is considered to occur outside of the
United States under United States federal income tax principles. In general, a
sale of a vessel will be considered to occur outside of the United States for
this purpose if title to the vessel, and risk of loss with respect to the
vessel, pass to the buyer outside of the United States. It is expected that any
sale of a vessel will be considered to occur outside of the United
States.




United
States Federal Income Taxation of “United States Holders”




As used
herein, the term “United States Holder” means a beneficial owner of common stock
that




●
            is
      an individual United States citizen or resident, a United States
      corporation or other United States entity taxable as a corporation, an
      estate the income of which is subject to United States federal income
      taxation regardless of its source, or a trust if a court within the United
      States is able to exercise primary jurisdiction over the administration of
      the trust and one or more United States persons have the authority to
      control all substantial decisions of the
trust,




●
            owns
      our common stock as a capital asset,
and




●
            owns
      less than 10% of our common stock for United States federal income tax
      purposes.




If a
partnership holds our common stock, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. If you are a partner in a partnership holding our common stock, we
suggest that you consult your tax advisor.




Distributions




Subject
to the discussion of passive foreign investment companies, or “PFICs,” below,
any distributions made by us with respect to our common stock to a United States
Holder will generally constitute dividends to the extent of its current or
accumulated earnings and profits, as determined under United States federal
income tax principles. Distributions in excess of such earnings and profits will
be treated first as a nontaxable return of capital to the extent of the United
States Holder’s tax basis in his common stock on a dollar-for-dollar basis and
thereafter as capital gain. Because we are not a United States corporation,
United States Holders that are corporations will not be entitled to claim a
dividends received deduction with respect to any distributions they receive from
us. Dividends paid with respect to our common stock will generally be treated as
“passive income” for purposes of computing allowable foreign tax credits for
United States foreign tax credit purposes.




Dividends
paid on our common stock to a United States Holder who is an individual, trust
or estate (a “United States Non-Corporate Holder”) will generally be treated as
“qualified dividend income” that is taxable to such United States Non-Corporate
Holder at a preferential tax rate of 15% (through 2010) provided that
(1) the common stock is readily tradable on an established securities
market in the United States (such as the New York Stock Exchange); (2) we
are not a PFIC for the taxable year during which the dividend is paid or the
immediately preceding taxable year (see discussion below); (3) the United
States Non-Corporate Holder has owned the common stock for more than
60 days in the 121-day period beginning 60 days before the date on
which the common stock becomes ex-dividend; and (4) the United States
Non-Corporate Holder is not under an obligation to make related payments with
respect to positions in substantially similar or related property. Special rules
may apply to any “extraordinary dividend”—generally, a dividend in an amount
which is equal to or in excess of 10% of a stockholder’s adjusted basis in a
share of common stock—paid by us. If we pay an “extraordinary dividend” on our
common stock that is treated as “qualified dividend income,” then any loss
derived by a United States Non-Corporate Holder from the sale or exchange of
such common stock will be treated as long-term capital loss to the extent of
such dividend. There is no assurance that any dividends paid on our common stock
will be eligible for these preferential rates in the hands of a United States
Non-Corporate Holder, although we believe that they will be so eligible provided
that we are not a PFIC, as discussed below. Any dividends out of earnings and
profits we pay which are not eligible for these preferential rates will be taxed
at ordinary income rates in the hands of a United States Non-Corporate
Holder.





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In
addition, even if we are not a PFIC, under proposed legislation, dividends of a
corporation incorporated in a country without a “comprehensive income tax
system” paid to United States Non-Corporate Holders would not be eligible for
the 15% tax rate. Although the term “comprehensive income tax system” is not
defined in the proposed legislation, we believe this rule would apply to us
because we are incorporated in the Marshall Islands.




Sale,
exchange or other disposition of common stock




Provided
that we are not a PFIC for any taxable year, a United States Holder generally
will recognize taxable gain or loss upon a sale, exchange or other disposition
of our common stock in an amount equal to the difference between the amount
realized by the United States Holder from such sale, exchange or other
disposition and the United States Holder’s tax basis in such stock. Such gain or
loss will be treated as long-term capital gain or loss if the United States
Holder’s holding period is greater than one year at the time of the sale,
exchange or other disposition. Such capital gain or loss will generally be
treated as United States source income or loss, as applicable, for United States
foreign tax credit purposes. Long-term capital gains of United States
Non-Corporate Holders are eligible for reduced rates of taxation. A United
States Holder’s ability to deduct capital losses against ordinary income is
subject to certain limitations.




PFIC
status and significant tax consequences




Special
United States federal income tax rules apply to a United States Holder that
holds stock in a foreign corporation classified as a PFIC for United States
federal income tax purposes. In particular, United States Non-Corporate Holders
will not be eligible for the 15% tax rate on qualified dividends. In general, we
will be treated as a PFIC with respect to a United States Holder if, for any
taxable year in which such holder held its common stock, either




●
            at
      least 75% of our gross income for such taxable year consists of passive
      income (e.g., dividends, interest, capital gains and rents derived other
      than in the active conduct of a rental business),
  or




●
            at
      least 50% of the average value of our assets during such taxable year
      produce, or are held for the production of, passive
  income.




Income
earned, or deemed earned, by us in connection with the performance of services
would not constitute passive income. By contrast, rental income would generally
constitute “passive income” unless we were treated under specific rules as
deriving our rental income in the active conduct of a trade or
business.





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Cravath,
Swaine & Moore, LLP (“Tax Counsel”) provided us with an opinion dated August
8, 2008 stating that it was more likely than not that we are not a PFIC. This
opinion was based on our operations and certain representations made by us (and
prior representations made by OSG) and ourselves, including representations that
the terms of each ship management agreement and time charter, taken as a whole,
as well as certain specific terms in each agreement, were in accordance with
normal commercial practice for agreements made at arm’s length between unrelated
parties. Based on the foregoing, Tax Counsel concluded that, although there was
no legal authority directly on point, the gross income we derived from the time
chartering activities of our subsidiaries more likely than not constituted
services income, rather than rental income. Consequently, such income more
likely than not did not constitute passive income, and the assets that we or our
wholly owned subsidiaries owned and operated in connection with the production
of such income, in particular, the vessels, more likely than not did not
constitute passive assets for purposes of determining whether we were a PFIC.
Tax Counsel stated that there was legal authority supporting its position,
consisting of case law and IRS pronouncements, concerning the characterization
of income derived from time charters as services income for other tax purposes.
However, there was no legal authority specifically relating to the statutory
provisions governing PFICs or relating to circumstances substantially similar to
that of us. In addition, the opinion of Tax Counsel was based on representations
made by us (and prior representations made by OSG) that were not reviewed by the
IRS. As a result, the IRS or a court could disagree with our position. No
assurance can be given that this result will not occur. We have not materially
changed our operations since the time the opinion was given, and believe that
the representations given to Tax Counsel at the time of the opinion remain true
and accurate. We therefore believe that we have not been, and are not currently,
a PFIC, even after taking into account the new bareboat charters with respect to
the Overseas
Newcastleand Overseas
London. In addition, although we intend to conduct our affairs in a
manner to avoid, to the extent possible, being classified as a PFIC with respect
to any taxable year, we cannot assure you that the nature of our operations will
not change in the future, or that we can avoid PFIC status in the
future.
 
 As
discussed more fully below, if we were treated as a PFIC for any taxable year, a
United States Holder would be subject to different taxation rules depending on
whether the United States Holder made an election to treat us as a “Qualified
Electing Fund,” which election is referred to as a “QEF election.” As an
alternative to making a QEF election, a United States Holder should be able to
make a “mark-to-market” election with respect to our common stock, as discussed
below.
 
 Taxation
of United States Holders making a timely QEF election
 
 If we
were a PFIC and a United States Holder made a timely QEF election, which United
States Holder is referred to as an “Electing Holder,” the Electing Holder would
report each year for United States federal income tax purposes its pro rata
share of our ordinary earnings and our net capital gain (which gain shall not
exceed our earnings and profits for the taxable year), if any, for our taxable
year that ends with or within the taxable year of the Electing Holder,
regardless of whether or not distributions were received from us by the Electing
Holder. Any such ordinary income would not be eligible for the preferential tax
rates applicable to qualified dividend income as discussed above. The Electing
Holder’s adjusted tax basis in the common stock would be increased to reflect
taxed but undistributed earnings and profits. Distributions of earnings and
profits that had been previously taxed would, pursuant to this election, result
in a corresponding reduction in the adjusted tax basis in the common stock and
would not be taxed again once distributed. An Electing Holder would not,
however, be entitled to a deduction for its pro rata share of any losses that we
incurred with respect to any year. An Electing Holder would generally recognize
capital gain or loss on the sale, exchange or other disposition of our common
stock. A United States Holder would make a QEF election with respect to any year
that we are a PFIC by filing one copy of IRS Form 8621 with his United States
federal income tax return. If we were treated as a PFIC for any taxable year, we
would provide each United States Holder with all necessary information in order
to make the QEF election described above. Even if a United States Holder makes a
QEF election for one of our taxable years, if we were a PFIC for a prior taxable
year during which the holder was a stockholder and for which the holder did not
make a timely QEF election, different and more adverse tax consequences would
apply.
 
 Taxation
of United States Holders making a “mark-to-market” election
 
 Alternatively,
if we were treated as a PFIC for any taxable year and, as we believe, our stock
is treated as “marketable stock,” a United States Holder would be allowed to
make a “mark-to-market” election with respect to our common stock, provided the
United States Holder completes and files IRS Form 8621 in accordance with the
relevant instructions and related Treasury regulations. If that election is
made, the United States Holder generally would include as ordinary income in
each taxable year the excess, if any, of the fair market value of the common
stock at the end of the taxable year over such holder’s adjusted tax basis in
the common stock. The United States Holder would also be permitted an ordinary
loss in respect of the excess, if any, of the United States Holder’s adjusted
tax basis in the common stock over its fair market value at the end of the
taxable year, but only to the extent of the net amount previously included in
income as a result of the mark-to-market election. A United States Holder’s tax
basis in his common stock would be adjusted to reflect any such income or loss
amount. Gain realized on the sale, exchange or other disposition of our common
stock would be treated as ordinary income, and any loss realized on the sale,
exchange or other disposition of the common stock would be treated as ordinary
loss to the extent that such loss does not exceed the net mark-to-market gains
previously included by the United States Holder in income.


66
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Taxation
of United States Holders not making a timely QEF or “mark-to-market”
election




Finally,
if we were treated as a PFIC for any taxable year, a United States Holder who
does not make either a QEF election or a “mark-to-market” election for that
year, referred to as a “Non-Electing Holder,” would be subject to special rules
with respect to (1) any excess distribution (i.e., the portion of any
distributions received by the Non-Electing Holder on our common stock in a
taxable year in excess of 125% of the average annual distributions received by
the Non-Electing Holder in the three preceding taxable years, or, if shorter,
the Non-Electing Holder’s holding period for the common stock), and (2) any
gain realized on the sale, exchange or other disposition of our common stock.
Under these special rules:




●
            the
      excess distribution or gain would be allocated ratably over the
      Non-Electing Holder’s aggregate holding period for the common
      stock;




●
            the
      amount allocated to the current taxable year and any taxable year prior to
      the first taxable year in which we were a PFIC during the Non-Electing
      Holder’s holding period, would be taxed as ordinary income;
      and




●
            the
      amount allocated to each of the other taxable years would be subject to
      tax at the highest rate of tax in effect for the applicable class of
      taxpayer for that year, and an interest charge for the deemed deferral
      benefit would be imposed with respect to the resulting tax attributable to
      each such other taxable year.




These
penalties would not apply to a qualified pension, profit sharing or other
retirement trust or other tax-exempt organization that did not borrow money or
otherwise utilize leverage in connection with its acquisition of our common
stock. If we were a PFIC and a Non-Electing Holder who was an individual died
while owning our common stock, such holder’s successor generally would not
receive a step-up in tax basis with respect to such stock. Certain of these
rules would apply to a United States Holder who made a QEF election for one of
our taxable years if it were a PFIC in a prior taxable year during which the
holder was a stockholder and for which the holder did not make a QEF
election.




United
States Federal Income Taxation of “Non-United States Holders”




A
beneficial owner of common stock (other than a partnership) that is not a United
States Holder is referred to herein as a “Non-United States
Holder.”




Dividends
on common stock




Non-United
States Holders generally will not be subject to United States federal income tax
or withholding tax on dividends received from us with respect to our common
stock, unless that dividend income is effectively connected with the Non-United
States Holder’s conduct of a trade or business in the United States. If the
Non-United States Holder is entitled to the benefits of a United States income
tax treaty with respect to those dividends, that income is taxable only if it is
attributable to a permanent establishment maintained by the Non-United States
Holder in the United States.







67
 Table of Contents





Sale,
exchange or other disposition of common stock




Non-United
States Holders generally will not be subject to United States federal income tax
or withholding tax on any gain realized upon the sale, exchange or other
disposition of our common stock, unless:




●
            the
      gain is effectively connected with the Non-United States Holder’s conduct
      of a trade or business in the United States (and, if the Non-United States
      Holder is entitled to the benefits of an income tax treaty with respect to
      that gain, that gain is attributable to a permanent establishment
      maintained by the Non-United States Holder in the United States);
      or




●
            the
      Non-United States Holder is an individual who is present in the United
      States for 183 days or more during the taxable year of disposition
      and other conditions are met.




If the
Non-United States Holder is engaged in a United States trade or business for
United States federal income tax purposes, the income from the common stock,
including dividends and the gain from the sale, exchange or other disposition of
the stock, that is effectively connected with the conduct of that trade or
business will generally be subject to regular United States federal income tax
in the same manner as discussed in the previous section relating to the taxation
of United States Holders. In addition, if you are a corporate Non-United States
Holder, your earnings and profits that are attributable to the effectively
connected income, which are subject to certain adjustments, may be subject to an
additional branch profits tax at a rate of 30%, or at a lower rate as may be
specified by an applicable income tax treaty.




Backup
Withholding and Information Reporting




In
general, dividend payments, or other taxable distributions, made within the
United States to you will be subject to information reporting requirements if
you are a non-corporate United States Holder. Such payments or distributions may
also be subject to backup withholding tax if you are a non-corporate United
States Holder and you:




●
            fail
      to provide an accurate taxpayer identification
  number;




●
            are
      notified by the Internal Revenue Service that you have failed to report
      all interest or dividends required to be shown on your federal income tax
      returns; or




●
            in
      certain circumstances, fail to comply with applicable certification
      requirements.




Non-United
States Holders may be required to establish their exemption from information
reporting and backup withholding by certifying their status on IRS
Form W-8BEN, W-8ECI or W-8IMY, as applicable.




If you
are a Non-United States Holder and you sell our common stock to or through a
United States office of a broker, the payment of the proceeds is subject to both
United States backup withholding and information reporting unless you certify
that you are a non-United States person, under penalties of perjury, or you
otherwise establish an exemption. If you sell our common stock through a
non-United States office of a non-United States broker and the sales proceeds
are paid to you outside the United States, then information reporting and backup
withholding generally will not apply to that payment. However, United States
information reporting requirements, but not backup withholding, will apply to a
payment of sales proceeds, even if that payment is made to you outside the
United States, if you sell our common stock through a non-United States office
of a broker that is a United States person or has some other contacts with the
United States. Such information reporting requirements will not apply, however,
if the broker has documentary evidence in its records that you are a non-United
States person and certain other conditions are met, or you otherwise establish
an exemption.




Backup
withholding tax is not an additional tax. Rather, you generally may obtain a
refund of any amounts withheld under backup withholding rules that exceed your
income tax liability by filing a refund claim with the IRS.







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 Table of Contents




F.
                        DIVIDENDS
      AND PAYING AGENTSNot
applicable.
 G.
                                STATEMENT
      OF EXPERTSNot
applicable.
 H.
                                    DOCUMENTS
      ON DISPLAY


The
descriptions of each contract, agreement or other document filed as an exhibit
to this report are summaries only and do not purport to be complete. Each such
description is qualified in its entirety by reference to such exhibit for a more
complete description of the matter involved.




We are
subject to the informational requirements of the Exchange Act and in accordance
therewith will file reports and other information with the Securities and
Exchange Commission. Such reports and other information can be inspected and
copied at the public reference facilities maintained by the Securities and
Exchange Commission at its principal offices at 100 F Street, N.E.,
Washington, D.C. 20549. Copies of such information may be obtained from the
Public Reference Section of the Securities and Exchange Commission at 100 F
Street, N.E., Washington, D.C. 20549 at prescribed rates. The Securities and
Exchange Commission also maintains a website (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Securities and Exchange
Commission.




As a
foreign private issuer, we are not subject to the proxy rules under Section 14
of the Exchange Act and our officers, directors and principal shareholders are
not subject to the insider short-swing profit disclosure and recovery provisions
under Section 16 of the Exchange Act.




As a
foreign private issuer, we are not required to publish financial statements as
frequently or as promptly as United States companies; however, we intend to
furnish holders of our common stock with reports annually containing
consolidated financial statements audited by independent accountants. We also
intend to file quarterly unaudited financial statements under cover of Form
6-K.




I.
                        SUBSIDIARY
      INFORMATIONNot applicable.
 ITEM 11.
                    QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 See “Item 5.
      Operating and Financial Review and Prospects.”
 ITEM
      12.
                      DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES
 Not
      applicable.




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 Table of Contents




PART II
  ITEM 13.
                          DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIESNone.ITEM 14.
                          MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS


Material
Modifications to the Rights of Security Holders




Not applicable.




Use
of Proceeds




Not applicable.


ITEM 15.
                        CONTROLS
      AND PROCEDURESA.
                        DISCLOSURE
      CONTROLS AND PROCEDURES


As of the
end of the period covered by this annual report (the “Evaluation Date”), we
conducted an evaluation (under the supervision and with the participation of
management, including the chief executive officer and its chief financial
officer), pursuant to Rule 13a-15 of the Exchange Act, of the effectiveness of
the design and operation of our disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14(c) and 15d-14(c)). Based on this evaluation, our
chief executive officer and chief financial officer concluded that as of the
Evaluation Date, our disclosure controls and procedures were effective to
provide reasonable assurance that material information required to be disclosed
by us in reports we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission.


B.
                              MANAGEMENT’S
      ANNUAL REPORT ON INTERNAL CONTROL OVER
REPORTING


In
accordance with Rule 13a-15(f) of the Securities Exchange Act of 1934, the
management of DHT Maritime, Inc. and its subsidiaries (the “Company”) is
responsible for the establishment and maintenance of adequate internal controls
over financial reporting for the Company. Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. The Company’s system of internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the
Company’s assets that could have a material effect on the financial statements.
Management has performed an assessment of the effectiveness of the Company’s
internal controls over financial reporting as of December 31, 2008 based on
the provisions of Internal Control—Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our
assessment, management has determined that the Company’s internal controls over
financial reporting were effective as of December 31, 2008 based on the
criteria in Internal Control—Integrated Framework issued by COSO.







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C.
                              ATTESTATION
      REPORT OF THE REGISTERED PUBLIC ACCOUNTING
FIRM


The
effectiveness of our internal control over financial reporting as of December
31, 2008 has been audited by Ernst & Young LLP, an independent registered
public accounting firm, as stated in their report which appears
herein.


D.
                            CHANGES
      IN INTERNAL CONTROL OVER
REPORTING


There
were no significant changes in the Company’s internal control over financial
reporting identified in connection with the evaluation performed above that
occurred during the period covered by this annual report that could
significantly affect the Company’s disclosure controls and procedures subsequent
to the Evaluation Date, nor any significant deficiencies or material weaknesses
in such disclosure controls and procedures requiring corrective
actions.  As a result, no corrective actions were taken.


ITEM 16A.
                            AUDIT
      COMMITTEE FINANCIAL
EXPERT


The
Company’s board of directors has determined that Ms. Randee Day is an
“audit committee financial expert,” as defined in paragraph (b) of
Item 16A of Form 20-F. Ms. Day is “independent,” as determined in
accordance with the rules of the New York Stock Exchange.


ITEM 16B.
                            CODE
      OF
ETHICS




The
Company has adopted a Code of Business Conduct and Ethics that applies to all
employees including its Chief Executive Officer (its principal executive
officer) and Chief Financial Officer (its principal accounting officer). The
Company has posted this Code of Ethics to its website at www.dhtmaritime.com, where it
is publicly available. In addition, the Company will provide a printed copy of
its Code of Business Conduct and Ethics to its shareholders upon
request.


ITEM 16C.
                            PRINCIPAL
      ACCOUNTANT FEES AND
SERVICES


The
following table shows the fees for professional services provided by Ernst &
Young LLP, our Independent Registered Public Accounting Firm, for the fiscal
years ended December 31, 2007 and 2008.


Fees
                                    2007
                                    
                                    2008Audit
      Fees(1)
                                    $
                                    220,000
                                    
                                    $
                                    225,000Audit-Related
      Fees(2)
                                    
                                    138,700
                                    
                                    
                                    51,500Total
                                    $
                                    358,700
                                    
                                    $
                                    276,500


(1)
              Audit
      fees for 2007 and 2008 represent fees for professional services provided
      in connection with the audit of our consolidated financial statements as
      of and for the periods ended December 31, 2007 and 2008,
      respectively.(2)
              Audit-related
      fees for 2008 consisted of $39,500 in respect of assistance with
      preparation of a registration statement on Form F-3 for the relating to
      the issue of 9.2 million shares and $12,000 relating to assistance with a
      transaction which did not materialize. Audit-related fees for 2007
      consisted of $34,000 in respect of assistance with preparation of a
      registration statement on Form F-3 relating to the sale of 8,751,500
      shares by OSG. We were reimbursed by OSG for these expenses. Audit-related
      fees for 2007 also includes a further $55,700 related to assistance with a
      transaction which did not materialize and $49,000 related to assistance
      with preparation of a registration statement on Form F-3 for the offer of
      securities up to a total dollar amount of $200
  million.





The Audit
Committee has the authority to pre-approve permissible audit-related and
non-audit services to be performed by our Independent Registered Public
Accounting Firm and associated fees. Engagements for proposed services either
may be separately pre-approved by the Audit Committee or entered into pursuant
to detailed pre-approval policies and procedures established by the Audit
Committee, as long as the Audit Committee is informed on a timely basis of any
engagement entered into on that basis. The Audit Committee separately
pre-approved all engagements and fees paid to our Independent Registered Public
Accounting Firm in the fiscal year ended December 31, 2008.





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ITEM 16D.
                            EXEMPTIONS
      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot
      applicable.
 ITEM 16E.
                                PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
      PURCHASERSNone.
 ITEM 16F.
                                    CHANGE
      IN REGISTRANT’S CERTIFYING ACCOUNTANTNot
      applicable.
 ITEM 16G.
                                          CORPORATE
      GOVERNANCE


We are
fully compliant with the listing standards of the New York Stock Exchange
applicable to foreign private issuers.  Our corporate governance
practices do not significantly differ from those followed by U.S. companies
listed on the New York Stock Exchange.






72
 Table of Contents




PART III
  ITEM 17.
                          FINANCIAL
      STATEMENTSNot
      applicable.ITEM 18.
                          FINANCIAL
      STATEMENTS


The
following financial statements, together with the related report of Ernst &
Young LLP, an independent registered public accounting firm, are filed as part
of this Annual Report:




DHT
      Maritime, Inc. Consolidated Financial Statements
                        PageReports
      of Independent Registered Public Accounting Firm
                        F-2Consolidated
      Balance Sheets as of December 31, 2008 and 2007
                        F-4Consolidated
      Statements of Operations for the years ended December 31, 2008, 2007 and
      2006
                        F-5Consolidated
      Statements of Changes in Stockholders' Equity for the years ended December
      31, 2008, 2007 and 2006
                        F-6Consolidated
      Statements of Cash Flows for the years ended December 31, 2008, 2007 and
      2006
                        F-7Notes
      to Consolidated Financial Statements
                        F-8




ITEM 19.
                          EXHIBITS





1.1
                                                                                                                                                                                                      
                                                                                                                                                                                                      Restated
      Articles of Incorporation of DHT Maritime, Inc.1.2
                                                                                                                                                                                                      
                                                                                                                                                                                                      Bylaws
      of DHT Maritime, Inc.2.1*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Form
      of Common Share Certificate.2.2*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Registration
      Rights Agreement.4.1.1*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Form
      of Credit Agreement.4.1.2******
                                                                                                                                                                                                      
                                                                                                                                                                                                      Amendment
      No. 1 to Credit Agreement.4.2.1*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Time
      Charter ─ Overseas
      Ann.4.2.2*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Time
      Charter ─ Overseas
      Chris.4.2.3*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Time
      Charter ─ Overseas
      Regal.4.2.4*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Time
      Charter ─ Overseas
      Cathy.4.2.5*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Time
      Charter ─ Overseas
      Sophie.4.2.6*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Time
      Charter ─ Overseas
      Rebecca.4.2.7*
                                                                                                                                                                                                      
                                                                                                                                                                                                      Time
      Charter ─ Overseas
      Ania.4.2.8*******
                                                                                                                                                                                                      
                                                                                                                                                                                                      Amendment
      to Time Charter ─ Overseas
      Ania.
  73
  4.2.9*******
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Time Charter ─ Overseas
      Ann.4.2.10*******
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Time Charter ─ Overseas
      Cathy.4.2.11*******
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Time Charter ─ Overseas
      Chris.4.2.12*******
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Time Charter ─ Overseas
      Rebecca.4.2.13*******
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Time Charter ─ Overseas
      Regal.4.2.14*******
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Time Charter ─ Overseas
      Sophie.4.3.1**
                                                                                                                                                                                                
                                                                                                                                                                                                Memorandum
      of Agreement ─ Overseas
      Newcastle.4.3.2**
                                                                                                                                                                                                
                                                                                                                                                                                                Memorandum
      of Agreement ─ Overseas
      London.4.4.1*
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement ─ Overseas
      Ann.4.4.2*
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement ─ Overseas
      Chris.4.4.3*
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement ─ Overseas
      Regal.4.4.4*
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement ─ Overseas
      Cathy.4.4.5*
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement ─ Overseas
      Sophie.4.4.6*
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement ─ Overseas
      Rebecca.4.4.7*
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement ─ Overseas
      Ania.4.5.1***
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Ship Management Agreement ─ Overseas
      Ann.4.5.2***
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Ship Management Agreement ─ Overseas
      Chris.4.5.3***
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Ship Management Agreement ─ Overseas
      Regal.4.5.4***
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Ship Management Agreement ─ Overseas
      Cathy.4.5.5***
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Ship Management Agreement ─ Overseas
      Sophie.4.5.6***
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Ship Management Agreement ─ Overseas
      Rebecca.4.5.7***
                                                                                                                                                                                                
                                                                                                                                                                                                Amendment
      to Ship Management Agreement ─ Overseas
      Ania.4.5.8*******
                                                                                                                                                                                                
                                                                                                                                                                                                Ship
      Management Agreement.4.6*
                                                                                                                                                                                                
                                                                                                                                                                                                Charter
      Framework Agreement.4.7*
                                                                                                                                                                                                
                                                                                                                                                                                                OSG
      Guaranty of Charterers’ Payments under Charters and Charter Framework
      Agreement.4.8*
                                                                                                                                                                                                
                                                                                                                                                                                                Double
      Hull Tankers, Inc. Guaranty of Vessel Owners’ Obligations under
      Management Agreement.4.9*
                                                                                                                                                                                                
                                                                                                                                                                                                Double
      Hull Tankers, Inc. Guaranty of Vessel Owners’ Obligations under
      Charters.4.10*
                                                                                                                                                                                                
                                                                                                                                                                                                Form
      of Indemnity Agreement among OSG, OIN and certain subsidiaries of the
      Company related to existing
recommendations.


74
 Table of Contents






4.11*******
                          
                          Employment
      Agreement of Ole Jacob Diesen.4.11.1*
                          
                          Indemnification
      Agreement of Ole Jacob Diesen.4.12****
                          
                          Employment Agreement of Eirik
      Ubøe.4.12.1****
                          
                          Indemnification Agreement
      of Eirik Ubøe.4.13*****
                          
                          Employment Agreement of Tom R.
      Kjeldsberg.4.14*
                          
                          2005
      Incentive Compensation Plan.8.1**
                          
                          List
      of Significant Subsidiaries.12.1
                          
                          Certification
      of Chief Executive Officer required by Rule 13a-14(a) (17 CFR
      240.13a-14(a)) or Rule 15d-14(a) (17 CFR
    240.15d-14(b)).12.2
                          
                          Certification
      of Chief Financial Officer required by Rule 13a-14(a) (17 CFR
      240.13a-14(a)) or Rule 15d-14(a) (17 CFR
    240.15d-14(b)).13.1
                          
                          Certification
      furnished pursuant to Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule
      15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title
      18.14.1
                          
                          Consent
      of Independent Registered Public Accounting
  Firm.
  *
                                          
                                          Incorporated
      herein by reference from the Company’s Registration Statement on Form F-1
      (File No. 333 -128460).**
                                          
                                          Incorporated
      herein by reference from the Company’s Registration Statement on Form F-3
      (File No. 333-147001).***
                                          
                                          Incorporated
      herein by reference from the Company’s Form 6-K filed on May 17,
      2007.****
                                          
                                          Incorporated
      herein by reference from the Company’s Annual Report on Form 20-F for the
      fiscal year ended December 31, 2005 (File No.
  001-32640).*****
                                          
                                          Incorporated
      herein by reference from the Company’s Annual Report on Form 20-F for the
      fiscal year ended December 31, 2006 (File No.
  001-32640).******
                                          
                                          Incorporated
      herein by reference from the Company’s Annual Report on Form 20-F for the
      fiscal year ended December 31, 2007 (File No.
      001-32640).*******
                                          
                                          Incorporated
      herein by reference from the Company’s Form 6-K filed on February 12,
      2009.


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SIGNATURES




The
registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.




DHT
      Maritime, Inc.Date: 
      March 12, 2009
              By:
              /s/ 
      OLE JACOB DIESENName:
      Ole Jacob DiesenTitle:  
      Chief Executive Officer
                (Principal Executive Officer)







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FINANCIAL
STATEMENTS
 
 DHT
Maritime, Inc.
 Index
to Consolidated Financial Statements
 
 PageReports
      of Independent Registered Public Accounting Firm
                              F-2Consolidated
      Balance Sheets as of December 31, 2008 and 2007
                              F-4Consolidated
      Statements of Operations for the years ended December 31, 2008, 2007 and
      2006
                              F-5Consolidated
      Statements of Changes in Stockholders’ Equity for the years ended December
      31, 2008, 2007 and 2006
                              F-6Consolidated
      Statements of Cash Flows for the years ended December 31, 2008, 2007 and
      2006
                              F-7Notes
      to Consolidated Financial Statements
                              F-8
            
    F-1
 Table of Contents
     REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  The
Board of Directors and Stockholders
 DHT
Maritime, Inc.
 
 We have audited DHT Maritime, Inc.’s
(the “Company”) internal control over financial reporting as of December 31,
2008, based on criteria established in Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(the COSO criteria). The Company’s management is responsible for maintaining
effective internal control over financial reporting, and for its assessment of
the effectiveness of internal control over financial reporting included in the
accompanying Management’s Annual Report on Internal Control over Reporting. Our
responsibility is to express an opinion on the company’s internal control over
financial reporting based on our audit.
 
 We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects. Our audit included obtaining
an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.
 
 A company’s internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.
 
 Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
 
 In our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as
of December 31, 2008, based onthe COSO criteria.
 
 We also have audited, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of DHT Maritime, Inc. and
subsidiaries as of December 31, 2008 and 2007 and the related consolidated
statements of operations, cash flows, and changes in stockholder’s equity for
each of the three years in the period ended December 31, 2008 and our report
dated March11,
2009 expressed an unqualified opinion thereon.
 
 
 /s/
      ERNST & YOUNG LLP
 
 New York,
New York
 March
11, 2009
   F-2
 Table of Contents
   REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  The Board
of Directors and Stockholders
 DHT
Maritime, Inc.
  We have audited the accompanying
consolidated balance sheets of DHT Maritime, Inc. and subsidiaries (the
“Company”) as of December 31, 2008 and 2007 and the related consolidated
statements of operations, cash flows, and changes in stockholders’ equity for
each of the three years in the period ended December 31, 2008. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
  We conducted our audits in accordance
with standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
  In our opinion, the financial
statements referred to above present fairly, in all material respects, the
consolidated financial position of the Company  at December 31,
2008 and 2007, and the consolidated results of their operations and their cash
flows for each of the three years in the period ended December 31, 2008, in
conformity with U.S. generally accepted accounting principles.
  We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), the Company’s internal control over financial reporting as of December
31, 2008, based on criteria established in Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated March 11, 2009, expressed an unqualified opinion
thereon.
  
 /s/ ERNST
& YOUNG LLP
  New York,
New York
 March
11,
2009
      F-3
 Table of Contents
  DHT
Maritime, Inc.
 Consolidated
Balance Sheets
 as
of December 31
    2008
                          
                          
                          2007(Dollars
      in thousands, except
                            Share
      and per share amounts)ASSETSCurrent
      assetsCash
      and cash equivalents
                          
                          $
                          59,020
                          
                          
                          $
                          10,365Voyage
      receivables from OSG
                          
                          
                          8,791
                          
                          
                          
                          1,547Prepaid
      expenses
                          
                          
                          382
                          
                          
                          
                          318Prepaid
      technical management fee to OSG
                          
                          
                          768
                          
                          
                          
                          1,357Total
      current assets
                          
                          
                          68,961
                          
                          
                          
                          13,587Vessels,
      net of accumulated depreciation
                          
                          
                          462,387
                          
                          
                          
                          398,005Deferred
      debt issuance costs
                          
                          
                          1,148
                          
                          
                          
                          1,337Deposits
      for vessel acquisition
                          
                          
                          —
                          
                          
                          
                          9,145Deferred
      equity offering cost
                          
                          
                          —
                          
                          
                          
                          134Total
      assets
                          
                          $
                          532,496
                          
                          
                          $
                          422,208LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilitiesAccounts
      payable and accrued expenses
                          
                          $
                          6,400
                          
                          
                          $
                          4,409Unrealized
      loss on interest rate swap
                          
                          
                          26,418
                          
                          
                          
                          10,218Deferred
      shipping revenues
                          
                          
                          7,855
                          
                          
                          
                          7,006Current
      installment of long-term debt
                          
                          
                          —
                          
                          
                          
                          75,000Total
      current liabilities
                          
                          
                          40,673
                          
                          
                          
                          96,633Long-term
      liabilitiesLong-term
      debt
                          
                          
                          344,000
                          
                          
                          
                          253,700Stockholders’
      equityPreferred
      stock ($0.01 par value, 1,000,000 shares authorized, none
      issued)
                          
                          
                          —
                          
                          
                          
                          —Common
      stock ($0.01 par value, 100,000,000 authorized, 39,238,807 and 30,030,811
                            shares
      issued and outstanding, respectively).
                          
                          
                          392
                          
                          
                          
                          300Paid-in
      additional capital
                          
                          
                          200,570
                          
                          
                          
                          108,760Retained
      earnings/(deficit)
                          
                          
                          (26,721
                          )
                          
                          
                          (26,967
                          )Accumulated
      other comprehensive income/(loss)
                          
                          
                          (26,418
                          )
                          
                          
                          (10,218
                          )Total
      stockholders’ equity
                          
                          
                          147,823
                          
                          
                          
                          71,875Total
      liabilities and stockholders’ equity
                          
                          $
                          532,496
                          
                          
                          $
                          422,208
   See notes
to accompanying financial statements.
    
 F-4
 Table of Contents
    DHT
Maritime, Inc.
 Consolidated
Statements of Operations
 Years
Ended December 31
 
 
 Year
      ended December 31,
                      2008
                  
                  
                  Year
      ended December 31,
                      2007
                  
                  
                  Year
      ended December 31,
                      2006(Dollars
      in thousands except per share amounts)Shipping
      revenues
                  
                  $
                  114,603
                  
                  
                  $
                  81,427
                  
                  
                  $
                  86,793Ship
      Operating Expenses:Vessel
      expenses
                  
                  
                  21,409
                  
                  
                  
                  19,423
                  
                  
                  
                  18,690Depreciation
      and amortization
                  
                  
                  25,948
                  
                  
                  
                  17,271
                  
                  
                  
                  16,915General
      and administrative
                  
                  
                  4,766
                  
                  
                  
                  3,775
                  
                  
                  
                  2,389Total
      ship operating expenses
                  
                  
                  52,123
                  
                  
                  
                  40,469
                  
                  
                  
                  37,994Income
      from vessel operations
                  
                  
                  62,480
                  
                  
                  
                  40,958
                  
                  
                  
                  48,799Interest
      income
                  
                  
                  1,572
                  
                  
                  
                  962
                  
                  
                  
                  908Interest
      expense and amortization of deferred
                    debt
      issuance costs
                  
                  
                  (21,904
                  )
                  
                  
                  (14,457
                  )
                  
                  
                  (13,957
                  )Income
      before income taxes
                  
                  
                  42,148
                  
                  
                  
                  27,463
                  
                  
                  
                  35,750Provision
      for income taxes
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Net
      Income
                  
                  $
                  42,148
                  
                  
                  $
                  27,463
                  
                  
                  $
                  35,750Basic
      net income per share
                  
                  $
                  1.17
                  
                  
                  $
                  0.91
                  
                  
                  $
                  1.19Diluted
      net income per share
                  
                  $
                  1.17
                  
                  
                  $
                  0.91
                  
                  
                  $
                  1.19Cash
      dividends declared and paid per share
                  
                  $
                  1.15
                  
                  
                  $
                  1.58
                  
                  
                  $
                  1.74Shares
      used in computing basic net income pershare
                  
                  
                  36,055,422
                  
                  
                  
                  30,024,407
                  
                  
                  
                  30,007,000Shares
      used in computing diluted net incomeper
      share
                  
                  
                  36,055,422
                  
                  
                  
                  30,036,523
                  
                  
                  
                  30,016,352
 
 See notes
to accompanying financial statements.
    F-5
 Table of Contents
    DHT
Maritime, Inc.
 Consolidated
Statements of Changes in Stockholders’ Equity
   Common
    StockShares
                                                        
                                                        
                                                        Amount
                                                        
                                                        
                                                        Paid-in
                                                          Additional
                                                          Capital
                                                        
                                                        
                                                        Retained
                                                          Earnings
                                                        
                                                        
                                                        Accumulated
                                                          Other
                                                          Comprehensive
                                                          Income/(Loss)
                                                        
                                                        
                                                        Total(Dollars in
      thousands)Balance
      at December 31, 2005
                                                        
                                                        
                                                        30,006,250
                                                        
                                                        
                                                        $
                                                        300
                                                        
                                                        
                                                        $
                                                        108,272
                                                        
                                                        
                                                        $
                                                        9,469
                                                        
                                                        
                                                        $
                                                        (807
                                                        )
                                                        
                                                        $
                                                        117,234Net
      Income
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        35,750
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        35,750Other
      Comprehensive Income, effect of derivative instruments
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        2,519
                                                        
                                                        
                                                        
                                                        2,519Other
      Comprehensive Income
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —Cash
      dividends declared and paid
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (52,211
                                                        )
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (52,211
                                                        )Compensation
      related to options and restricted stock
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        123
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        123Issuance
      of restricted stock awards
                                                        
                                                        
                                                        3,000
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —Balance
      at December 31, 2006
                                                        
                                                        
                                                        30,009,250
                                                        
                                                        
                                                        $
                                                        300
                                                        
                                                        
                                                        $
                                                        108,395
                                                        
                                                        
                                                        $
                                                        (6,992
                                                        )
                                                        
                                                        $
                                                        1,712
                                                        
                                                        
                                                        $
                                                        103,415Net
      Income
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        27,463
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        27,463Other
      Comprehensive Income, effect of derivative instruments
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (11,930
                                                        )
                                                        
                                                        
                                                        (11,930
                                                        )Other
      Comprehensive Income
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        15,533Cash
      dividends declared and paid
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (47,438
                                                        )
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (47,438
                                                        )Compensation
      related to options and restricted stock
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        365
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        365Issuance
      of restricted stock awards
                                                        
                                                        
                                                        21,561
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —Balance
      at December 31, 2007
                                                        
                                                        
                                                        30,030,811
                                                        
                                                        
                                                        $
                                                        300
                                                        
                                                        
                                                        $
                                                        108,760
                                                        
                                                        
                                                        $
                                                        (26,967
                                                        )
                                                        
                                                        $
                                                        (10,218
                                                        )
                                                        
                                                        $
                                                        71,875Net
      Income
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        42,148
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        42,148Other
      Comprehensive Income, effect of derivative instruments
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (16,200
                                                        )
                                                        
                                                        
                                                        (16,200
                                                        )Other
      Comprehensive Income
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        25,948Cash
      dividends declared and paid
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (41,902
                                                        )
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        (41,902
                                                        )Issuance
      of Common Stock
                                                        
                                                        
                                                        9,200,000
                                                        
                                                        
                                                        
                                                        92
                                                        
                                                        
                                                        
                                                        91,334
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        91,426Compensation
      related to options and restricted stock
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        476
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        476Issuance
      of restricted stock awards
                                                        
                                                        
                                                        7,996
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —
                                                        
                                                        
                                                        
                                                        —Balance
      at December 31, 2008
                                                        
                                                        
                                                        39,238,807
                                                        
                                                        
                                                        $
                                                        392
                                                        
                                                        
                                                        $
                                                        200,570
                                                        
                                                        
                                                        $
                                                        (26,721
                                                        )
                                                        
                                                        $
                                                        (26,418
                                                        )
                                                        
                                                        $
                                                        147,823
  
 See notes
to accompanying financial statements.
    F-6
 Table of Contents
   DHT
Maritime, Inc. Consolidated Statements of Cash Flow
 Years
Ended December 31
 (dollars
in thousand)
 
 
 2008
                  
                  
                  2007
                  
                  
                  2006Cash
      Flows from Operating Activities:Net
      income
                  
                  $
                  42,148
                  
                  
                  $
                  27,463
                  
                  
                  $
                  35,750Items
      included in net income not affecting cash flows:Depreciation
      and amortization
                  
                  
                  25,948
                  
                  
                  
                  17,272
                  
                  
                  
                  16,914Amortization
      of debt issuance cost
                  
                  
                  189
                  
                  
                  
                  165
                  
                  
                  
                  160Deferred
      compensation related to options and restricted stock
    granted
                  
                  
                  476
                  
                  
                  
                  365
                  
                  
                  
                  123Changes
      in operating assets and liabilities:Receivables
                  
                  
                  (7,244
                  )
                  
                  
                  2,462
                  
                  
                  
                  1,497Prepaid
      expenses
                  
                  
                  525
                  
                  
                  
                  (20
                  )
                  
                  
                  (50
                  )Accounts
      payable, accrued expenses and deferred revenue
                  
                  
                  2,840
                  
                  
                  
                  1,790
                  
                  
                  
                  (396
                  )Net
      cash provided by operating activities
                  
                  
                  65,016
                  
                  
                  
                  49,363
                  
                  
                  
                  53,998Cash
      Flows from Investing Activities:Expenditures
      for vessels
                  
                  
                  (81,185
                  )
                  
                  
                  (92,700
                  )
                  
                  
                  —Decrease/(increase)
      in vessel acquisition deposit
                  
                  
                  —
                  
                  
                  
                  (9,145
                  )Net
      cash (used in) investing activities
                  
                  
                  (81,185
                  )
                  
                  
                  (101,845
                  )
                  
                  
                  —Cash
      Flows from Financing Activities:Issuance
      of common stock
                  
                  
                  91,426
                  
                  
                  
                  —
                  
                  
                  
                  —Issuance
      of long-term debt, net of issuance costs
                  
                  
                  90,300
                  
                  
                  
                  92,605
                  
                  
                  
                  —Cash
      dividends paid
                  
                  
                  (41,902
                  )
                  
                  
                  (47,438
                  )
                  
                  
                  (52,211
                  )Deferred
      Offering Costs
                  
                  
                  134
                  
                  
                  
                  (134
                  )
                  
                  
                  —Repayment
      of long-term debt
                  
                  
                  (75,000
                  )
                  
                  
                  —
                  
                  
                  
                  —Net
      cash provided by/(used in) financing activities
                  
                  
                  64,958
                  
                  
                  
                  45,033
                  
                  
                  
                  (52,211
                  )Net
      increase/(decrease) in cash and cash equivalents
                  
                  
                  48,655
                  
                  
                  
                  (7,315
                  )
                  
                  
                  1,787Cash
      and cash equivalents at beginning of period
                  
                  
                  10,365
                  
                  
                  
                  17,680
                  
                  
                  
                  15,893Cash
      and cash equivalents at end of period
                  
                  $
                  59,020
                  
                  
                  $
                  10,365
                  
                  
                  $
                  17,680Interest
      paid
                  
                  $
                  20,750
                  
                  
                  $
                  13,752
                  
                  
                  $
                  13,686
 
 See notes
to accompanying financial statements.
    F-7
 Table of Contents
  NOTES TO DHT MARITIME, INC.
 CONSOLIDATED
FINANCIAL STATEMENTS
  General
  DHT
Maritime, Inc. (the “Company”) was incorporated under the name of Double
Hull Tankers, Inc. on April 14, 2005 under the laws of the Marshall Islands
as a wholly owned indirect subsidiary of Overseas Shipholding Group, Inc.
(“OSG”). In October 2005, the Company completed its initial public offering
(“IPO”) by issuing and selling to the public 16,000,000 common shares, par value
$0.01 per share, at a price to the public of $12.00 per share, raising gross
proceeds of $192.0 million before deduction of underwriting discounts,
commissions and expenses of approximately $13.8 million. On the date of the
IPO, the Company also raised $236 million of secured debt (before expenses
of approximately $1.6 million). Simultaneously with the IPO, the Company
acquired seven double hull tankers, comprising our initial fleet, consisting of
three very large crude carriers, or VLCCs, and four Aframax vessels
(collectively, the “Initial Vessels”) from subsidiaries of OSG in exchange for
cash and shares of the Company’s common stock. The Company chartered the Initial
Vessels back to subsidiaries of OSG. The aggregate purchase price for the
Initial Vessels was $580.6 million, of which $412.6 million was in the
form of cash and $168 million in the form of common stock. The Company
treated the excess of the purchase price over OSG’s $343.0 million
aggregate book value of the Initial Vessels, or $237.6 million, as a deemed
dividend to OSG.
  During
the first half of 2007, wholly owned subsidiaries of OSG sold all of their
shares of the Company’s common stock. The Company did not receive any proceeds
from the sale of the shares.
  On
December 4, 2007, the Company acquired a Suezmax tanker, the Overseas Newcastle, for $92.7
million and on January 28, 2008, the Company acquired a Suezmax tanker, the
Overseas London, for
$90.3 million.  Both vessels are chartered to OSG. These vessels and
the Initial Vessels are collectively referred to as the “Vessels.”
  The
Vessels are owned by nine Marshall Islands subsidiaries of the Company (the
“Vessel Subsidiaries”). The primary activity of each of the Vessel Subsidiaries
is the ownership and operation of a Vessel. The following table sets out the
details of the Vessel Subsidiaries included in these consolidated financial
statements:
  
 Company
                          
                          Vessel
      name
                          
                          Dwt
                          
                          Flag
      State
                          
                          Year
      BuiltChris
      Tanker Corporation
                          
                          Overseas
      Chris
                          
                          309,285
                          
                          Marshall
      Islands
                          
                          2001Ann
      Tanker Corporation
                          
                          Overseas
      Ann
                          
                          309,327
                          
                          Marshall
      Islands
                          
                          2001Regal
      Unity Tanker Corporation
                          
                          Overseas
      Regal
                          
                          309,966
                          
                          Marshall
      Islands
                          
                          1997Newcastle
      Tanker Corporation
                          
                          Overseas
      Newcastle
                          
                          164,626
                          
                          Marshall
      Islands
                          
                          2001London
      Tanker Corporation
                          
                          Overseas
      London
                          
                          152,923
                          
                          Marshall
      Islands
                          
                          2000Cathy
      Tanker Corporation
                          
                          Overseas
      Cathy
                          
                          112,028
                          
                          Marshall
      Islands
                          
                          2004Sophie
      Tanker Corporation
                          
                          Overseas
      Sophie
                          
                          112,045
                          
                          Marshall
      Islands
                          
                          2003Ania
      Aframax Corporation
                          
                          Overseas
      Ania
                          
                          94,848
                          
                          Marshall
      Islands
                          
                          1994Rebecca
      Tanker Corporation
                          
                          Overseas
      Rebecca
                          
                          94,873
                          
                          Marshall
      Islands
                          
                          1994
 
 Effective
October 18, 2005, the Company chartered the Initial Vessels to subsidiaries
of OSG for initial terms of five to six and one-half years at basic hire amounts
which are essentially fixed. In addition, the time charter arrangements include
a profit sharing component that gives the Company the opportunity to earn
additional hire when the Initial Vessel earnings exceed the basic hire amounts
set forth in the charters. From October 18, 2005 to December 31, 2008,
the seven Initial Vessels operated in the Tankers International Pool and the
Aframax International Pool (except the Overseas Ania which left the Aframax
International Pool in July 2008).  The Company expects the potential
to earn additional hire will benefit from the utilization rates realized by
these pools. In a pooling arrangement, the net revenues generated by all of the
vessels in a pool are aggregated and distributed to pool members pursuant to a
pre-arranged weighting system that recognizes each vessel’s earnings capacity
based on its cargo capacity, speed and fuel consumption, and actual on-hire
performance.  Effective July 1, 2008, the Overseas Ania left the
Aframax International Pool and is chartered by OSG to its wholly-owned
subsidiary, OSG Lightering, at $29,000
per day until October 2010. The rate of $29,000 per day serves as the basis
for the vessel’s profit sharing under its charter.
    F-8
 Table of Contents
    Each time
charter for the Initial Vessels may be renewed by OSG on one or more successive
occasions for periods of one, two or three years, up to an aggregate of five,
six or eight years, depending on the Initial Vessel. If a time charter isrenewed, the charter terms providing for profit sharing
will remain in effect and the charterer, at the time of exercise, will have the
option to select a basic charter rate that is equal to (i) 5% above the
published one-, two- or three-year time charter rate (corresponding to the
length of the additional period chosen) for the Initial Vessel’s class, as
decided by a shipbrokers panel, or (ii) the basic hire rate set forth in
the applicable charter. The shipbrokers panel will be The Association of
Shipbrokers and Agents Tanker Broker Panel or another panel of brokers mutually
acceptable to us and OSG.
  On
November 26, 2008, we entered into an agreement with OSG whereby OSG
exercised part of the extension options for the Initial Vessels upon expiry of
the vessels’ initial charter periods. For the Overseas Ania and Overseas Rebecca, OSG extended for a period of
18 months after the initial charter periods expire in October 2010 at the
basic charter rate set forth in the applicable charter. For the Overseas Cathy, Overseas Sophie, Overseas Ann, Overseas Chris and Overseas Regal, OSG extended for a period of
12 months following the expiry of the initial charter periods between April 2011
and April 2012. The basic charter hire rate for the extension periods for
these five vessels will be either the basic charter rate stipulated in the
applicable charter or, if the one-year time charter rate is lower, a base rate
which is no more than $5,000 per day below the basic charter rate stipulated in
the charters.  The profit sharing arrangement, whereby DHT earns an
additional amount equal to 40% of the excess of vessels’ actual net daily
earnings calculated on a four quarter rolling basis, will remain in place for
all vessels.
  Effective
October 18, 2005, the Company also entered into ship management agreements
with Tanker Management, a wholly-owned subsidiary of OSG. The ship management
agreements provided for the technical management of the Initial Vessels in
exchange for a fee that was fixed for the first two years of each agreement,
with OSG only permitted to terminate each agreement upon 90 days’ prior written
notice to the Company following October 18, 2007.  On May 11, 2007,
the Company and OSG reached an agreement whereby OSG deferred its right to
terminate each agreement upon 90 days’ prior written notice until after
October 18, 2008. The basic hire rate for each of the Initial Vessels and
the technical management fee was payable monthly in advance. Recently, the
Company entered into new ship management agreements with Tanker Management for
the Vessels under time charter with effect from January 16,
2009.  The new ship management agreements are described in
Note J.
  Effective
December 4, 2007, the Company bareboat chartered the Overseas Newcastle to OSG for
a term of seven years. The basic bareboat charter rate is $26,343 per day for
the first three years of the charter term, and is reduced to $25,343 per day for
the last four years of the charter term. In addition to the bareboat charter
rate, the Company will, through the profit sharing element of the charter
agreement, earn 33% of the vessel’s earnings above the time charter equivalent
rate of $35,000 per day for the first three years of the charter term and above
$34,000 per day for the last four years of the charter term, calculated on a
four quarter rolling average. At the end of the seven year bareboat charter
term, OSG has the right to acquire the vessel for $77 million. Effective January
28, 2008, the Company bareboat chartered the OverseasLondon to OSG for a term of
ten years. The basic bareboat charter rate is $26,630 per day throughout the
period. OSG has the right to acquire the vessel at the end of the eighth, ninth
and tenth years of the charter term at a price of $71 million, $67 million and
$60 million, respectively. If OSG elects to exercise its purchase option, the
Company will, in addition to the purchase option price, receive an amount equal
to 40% of the difference between the market price of the vessel at the time the
purchase option is exercised and the purchase option price.
  On April
29, 2008, the Company issued 8 million shares of common stock, in a public
offering and on May 9, 2008, the underwriters exercised their overallotment
option for an additional 1.2 million shares.  The total net
proceeds to the Company as a result of the issue of the 9.2 million shares
were approximately $91.4 million.
  Following
the approval of the shareholders at the Company’s Annual General Meeting on June
18, 2008, the Company changed its name from Double Hull Tankers, Inc. to DHT
Maritime, Inc.
   F-9
 Table of Contents
   Note A—Summary
of significant accounting policies:
  Basis
of presentation and accounting
  The DHT
Maritime, Inc. consolidated financial statements are prepared in accordance
with generally accepted accounting principles in the United States. The
consolidated financial statements include the assets and liabilities of the
Company and its wholly owned subsidiaries. All intercompany balances and
transactions have been eliminated upon consolidation or
combination.
  Cash
and cash equivalents
  Interest-bearing
deposits that are highly liquid investments and have a maturity of three months
or less when purchased are included in cash and cash equivalents. Cash and cash
equivalents of $59.0 million as of December 31, 2008 are pledged as
described in Note D and are held at a single financial institution. The
carrying value of cash and cash equivalents approximates its fair
value.
  Vessels
  At
October 18, 2005, the Company recorded the Initial Vessels at their
historical cost to OSG. The Initial Vessels are being depreciated over periods
ranging from 14 to 23 years, which represent the Initial Vessels’ remaining
life at the date of acquisition from OSG. TheOverseas Newcastleand theOverseas Londonare being depreciated over a period
of 18 years. Each vessel’s salvage value is equal to the product of its
lightweight tonnage and an estimated scrap rate per ton. Accumulated
depreciation was $173.8 million and $147.9 million at December 31, 2008 and
2007, respectively. Vessel deposit at December 31, 2007 were applied to payment
for the Overseas London in
2008.
  At
October 18, 2005, the Company recorded the Initial Vessels at their
historical cost to OSG. The Initial Vessels are being depreciated over periods
ranging from 14 to 23 years, which represent the Initial Vessels’ remaining
life at the date of acquisition from OSG. The Overseas Newcastle and the
Overseas London are
being depreciated over a period of 18 years. Each vessel’s salvage value is
equal to the product of its lightweight tonnage and an estimated scrap rate per
ton. Accumulated depreciation was $173,829,825 and $147,881,505 at
December 31, 2008 and 2007, respectively.
  Deferred
drydock expenditures
  On
October 18, 2005, the Company entered into ship management agreements with
Tanker Management, a subsidiary of OSG, for the technical management of its
Initial Vessels in exchange for a fixed fee for each vessel. As part of the ship
management agreement, OSG was responsible for drydocking costs. These agreements
were terminated effective January 16, 2009.
  Impairment
of long-lived assets
  The
carrying amounts of long-lived assets held and used are reviewed for potential
impairment whenever events or changes in circumstances indicate that the
carrying amount of a particular asset may not be fully recoverable. In such
instances, an impairment charge would be recognized if the estimate of the
undiscounted future cash flows expected to result from the use of the asset and
its eventual disposition is less than the asset’s carrying amount. This
assessment is made at the individual vessel level since separately identifiable
cash flow information for each vessel is available. The amount of an impairment
charge, if any, would be determined using discounted cash flows.
  Deferred
finance charges
  Finance
charges incurred in the arrangement of debt are deferred and amortized to
interest expense over the life of the related debt. Amortization of deferred
finance charges amounted to $189,227 in 2008, $164,868 in 2007 and $159,996 in
2006.
    F-10
 Table of Contents
   Revenue
and expense recognition
  Revenues
from time charters and bareboat charters are accounted for as operating leases
and are thus recognized ratably over the rental periods of such
charters.
  For time
and bareboat charters, time charter equivalent revenues represent shipping
revenues less brokerage commissions, if applicable, which are included in voyage
expenses.
  The
Initial Vessels operated in either the Tankers International Pool (VLCCs) or the
Aframax International Pool (Aframaxes) during the three years ended
December 31, 2008, except the Overseas
Ania which left the Aframax International pool as of July 1, 2008 and is
chartered by OSG to its wholly-owned subsidiary, OSG Lightering. For vessels
operating in such pools, revenues and voyage expenses are pooled and allocated
to each pool’s participants on a time charter equivalent basis in accordance
with an agreed-upon formula.
  Vessel
expenses include crew costs, vessel stores and supplies, lubricating oils,
maintenance and repairs, insurance and communication costs.
  As part
of all of the time charters and one of the bareboat charters that the Company
has entered into with subsidiaries of OSG with respect to its Vessels, the
Company has the opportunity to earn additional hire when vessel earnings exceed
the basic hire amounts set forth in the charters. Additional hire, if any, is
calculated and paid quarterly in arrears and recognized as revenue in the
quarter in which it was earned.
  On
October 18, 2005, and as subsequently amended, the Company entered into
ship management agreements with Tanker Management, a subsidiary of OSG, for the
technical management of its seven Initial Vessels in exchange for a fixed
fee. As part of the ship management agreements, OSG was responsible for
drydocking costs.
  The
Company entered into new ship management agreements with Tanker Management for
the Initial Vessels with effect from January 16, 2009.  The new
ship management agreements are described in Note J.
  Derivatives
  Statement
of Financial Accounting Standards No. 133, “Accounting for Derivative
Investments and Hedging Activities” (“FAS 133”) requires the Company to
recognize all derivatives on the balance sheet at fair value. If the derivative
is an effective hedge, a change in the fair value is either offset against the
change in fair value of the hedged item or recognized in other comprehensive
income until the hedged item is recognized in income. The ineffective portion of
effective hedges is immediately recognized in income. Derivatives that are not
effective hedges are fully adjusted through income.
  The
Company uses interest rate swaps to convert interest-bearing debt from floating
to fixed rate. The swaps are designated and qualify as cash flow hedges. The
Company assumes no ineffectiveness since the interest rate swaps meet the
conditions required under FAS 133 to apply the critical terms method for
prepayable debt.
  Fair
Value Measurement
  SFAS 157
defines three levels of inputs that may be used to measure fair value and
requires that the assets or liabilities carried at fair value be disclosed by
the input level under which they were valued. The input levels defined under
SFAS 157 are as follows:
 
 Level 1:
Quoted market prices in active markets for identical assets and
liabilities.
 
 Level 2:
Observable inputs other than defined in Level 1, such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities.
    F-11
 Table of Contents
  
 Level 3:
Unobservable inputs that are not corroborated by observable market
data.
 
 The following table summarizes assets
and liabilities that are measured at fair value on a recurring basis at
December 31, 2008 (in millions):
 
 
 December
      31, 2008
                        Fair
      Value Asset (Liability)(Dollars
      in thousands
                      
                      Level
      2
                      
                      TotalDerivativesLiabilities
                      
                      $
                      (26,400)
                      
                      
                      (26,400)
 
 Derivative
liabilities relate to interest rate swaps.
  
 Comprehensive
Income
  Accumulated
other comprehensive income consists entirely of unrealized gains and losses on
derivative instruments.
  Foreign
currency
  The
functional currency of the Company and each of the Vessel Subsidiaries is the
U.S. dollar. Monetary assets and liabilities denominated in other currencies are
translated at the year end exchange rates. Foreign currency revenues and
expenses are translated at transaction date exchange rates. Exchange gains and
losses are included in the determination of net income.
  Concentration
of risk
  All of
the Company’s vessels are chartered to OSG.  All of the Company’s debt
and counterparty for its interest rate swaps are the same financial
institution.
  Adoption
of new accounting standards
  In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. Effective
January 1, 2008, the Company adopted the provisions of SFAS 157 related to
financial assets and liabilities, as well as other assets and liabilities
carried at fair value on a recurring basis. These provisions, which have been
applied prospectively, did not have a material impact on the Company’s
consolidated financial statements. Certain other provisions of SFAS 157 related
to other nonfinancial assets and liabilities will be effective for the Company
on January 1, 2009, and will be applied prospectively. The Company is
currently evaluating the impact the provisions of SFAS 157 related to other
nonfinancial assets and liabilities will have on the consolidated financial
position, results of operations or cash flows of the Company.
 
 In March
2008, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 161, "Disclosures about Derivative Instruments and
Hedging Activities, an amendment of Statement of Financial Accounting Standards
No. 133" ("FAS 161"). FAS 161 requires qualitative disclosures
about an entity's objectives and strategies for using derivatives and
quantitative disclosures about how derivative instruments and related hedged
items affect an entity's financial position, financial performance and cash
flows. FAS 161 is effective for fiscal years, and interim periods within
those fiscal years, beginning after November 15, 2008, with early
application allowed. FAS 161 allows, but does not require comparative
disclosures for earlier periods at initial adoption.
    F-12
 Table of Contents
  
 Use
of estimates
  The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
  Note
B—Earnings per common share:
 
 The
computation of basic earnings per share is based on the weighted average number
of common shares outstanding during the period. The computation of diluted
earnings per share assumes the exercise of all dilutive stock options and
restricted shares using the treasury stock method. The components of the
calculation of basic earnings per share and diluted earnings per share are as
follows:
   (Dollars in thousands) for the
      years ended December 31,
                          
                          2008
                          
                          
                          2007
                          
                          
                          2006Net
      income
                          
                          $
                          42,148
                          
                          
                          $
                          27,463
                          
                          
                          $
                          35,750Common
      shares outstanding, basic:Weighted
      average shares outstanding, basic
                          
                          
                          36,055,422
                          
                          
                          
                          30,024,407
                          
                          
                          
                          30,007,000Common
      shares outstanding, diluted:Weighted
      average shares outstanding, basic
                          
                          
                          36,055,422
                          
                          
                          
                          30,024,407
                          
                          
                          
                          30,007,000Dilutive
      equity awards—
                          
                          
                          
                          12,116
                          
                          
                          
                          9,352Weighted
      average shares outstanding, diluted
                          
                          
                          36,055,422
                          
                          
                          
                          30,036,523
                          
                          
                          
                          30,016,352
   The
anti-dilutive effects of equity awards that were excluded from the calculation
of diluted earnings per share were not material for each of the three years in
the period ended December 31, 2008.
 
 Note C—Accounts
payable and accrued expenses:
  Accounts
payable and accrued expenses consist of the following:
  December
    31,2008
                          
                          
                          2007Interest
                          
                          $
                          3,883,000
                          
                          
                          $
                          3,137,000Insurance
                          
                          
                          171,000
                          
                          
                          
                          268,000Accounts
      payable
                          
                          
                          126,000
                          
                          
                          
                          55,000Other
                          
                          
                          2,220,000
                          
                          
                          
                          949,000$
                          6,400,000
                          
                          
                          $
                          4,409,000
 Note D—Debt:
  On
October 18, 2005, the Company entered into a $401 million secured
credit facility with The Royal Bank of Scotland (“RBS”) for a term of ten years,
with no principal amortization for the first five years. The Company is the
borrower under the credit facility and each of the Vessel Subsidiaries has
guaranteed its performance thereunder. The facility is secured by, among other
things, first priority mortgages on the Vessels, assignments of earnings and
insurances and the Company’s rights under the charters for the Vessels
and the ship management agreements, and a pledge of the balances in the
Company’s bank accounts. The credit facility provides that the Company may not
pay dividends if the charter-free market value of the Company’s vessels that
secure the credit facility is less than 135% of the Company’s borrowings under
the facility plus the actual or notional cost of terminating any interest rate
swaps that the Company enters, if there is a continuing default under the credit
facility or if the payment of the dividend would result in a default or breach
of a loan covenant. Interest is payable quarterly in
arrears.
   F-13
 Table of Contents
    A term
loan of $236 million was borrowed on October 18, 2005 to fund a portion of
the purchase price for the Initial Vessels that we acquired from
OSG.  On November 29, 2007, the secured credit facility was
amended to increase the total commitment thereunder to $420 million, which
included a $184 million vessel acquisition facility, which was used to fund
the entire purchase price of two new Suezmaxes, the Overseas Newcastle and the
Overseas
London.  Following the amendment, the credit facility was
repayable with one installment of $75 million due in 2008 and, commencing
on January 18, 2011, with 27 quarterly installments of $9,075,000 until its
final maturity in 2017, when a final payment of approximately $109 million will
be due. The first installment of $75 million was paid in
October 2008.
  Borrowings
under the initial $236 million term loan bear interest at an annual rate of the
London interbank offered rate (“LIBOR”) plus a margin of 0.70%. Borrowings under
the vessel acquisition facility bear interest at an annual rate of LIBOR plus a
margin of 0.85%. To reduce our exposure to fluctuations in interest rates, we
entered into an interest rate swap on October 18, 2005, pursuant to which we
fixed the interest rate for five years on the full amount of our $236 million
term loan at 5.60%. On October 16, 2007, we entered into a floating-to-fixed
interest rate swap with a notional amount of $100,000,000 pursuant to which the
Company pays a fixed rate of 5.95% and receives a floating rate based on LIBOR.
The swap expires on January 18, 2013. This swap was entered into to fix the
interest on the borrowings to fund the acquisition of the Overseas Newcastle and the
Overseas London(see
Note F).
  We were
required to pay a $1.5 million fee in connection with the arrangement of our
credit facility in October 2005, and a commitment fee of 0.3% per annum, payable
quarterly in arrears, on the undrawn portion of the facility. We were required
to pay an arrangement fee of $95,000 in October 2007 in connection with the
increase in our credit facility from $401 million to $420 million.
  The
effective interest rate for debt outstanding at December 31, 2008 and 2007,
was 5.69% and 5.7%, respectively as a result of related interest rate swaps
(Note E).
  As of
December 31, 2008 and 2007, all of the net book amount of the Company’s
Vessels, is pledged as collateral under the debt agreement.
  The
carrying amounts of the loans approximate their fair value.
  Note E—Derivatives:
  As of
December 31, 2008, the Company is party to two floating-to-fixed interest
rate swaps that are being accounted for as cash flow hedges with notional
amounts of $236,000,000 and $100,000,000, respectively, pursuant to which the
Company pays a fixed rate of 5.6% and 5.95%, respectively and receives a
floating rate based on LIBOR. The swaps expire on October 18, 2010 and
January 18, 2013, respectively. As of December 31, 2008, the Company has
recorded a liability of $26,418,060 relating to the fair value of the swaps.
This unrealized loss has been recorded to accumulated other comprehensive
income/(loss). The fair value of interest rate swaps is the estimated amount
that the Company would receive or pay to terminate the agreement at the
reporting date.
  Note F—Accumulated
other comprehensive income/(loss):
  All of
other comprehensive income / (loss) for the years relates to changes in the fair
value of interest rate swaps.  At December 31, 2008 and 2007,
accumulated comprehensive income consisted of the unrealized gains and losses on
interest rate swaps.
    F-14
 Table of Contents
   Note G—Taxes:
  No income
taxes have been provided herein because the Company is a foreign corporation
that is not subject to United States federal income taxes. Further, the Company
is not subject to income taxes imposed by the Marshall Islands, the country in
which it is incorporated.
  Note H—Stock
Compensation:
  In
October 2005, the Company awarded a total of 6,250 shares of restricted common
stock to its officers. These shares are non-transferable until they vest, which
occurs ratably over a four-year period. The aggregate fair market value of the
shares on the grant date, $75,000, is being amortized to compensation expense
over the vesting period of four years, using the straight-line method. In
addition, also in October 2005, the Company awarded its officers stock options
to purchase a total of 69,446 shares of common stock at an exercise price of
$12.00 per share. These stock options vest ratably over a three-year period and
expire ten years from the date of grant. The Company follows Financial
Accounting Standards Board Statement No. 123 (R), “Share-Based Payment” and
related Interpretations in accounting for its stock-based compensation. The fair
value of the options granted were estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions: risk free interest rate of 4.69%, dividend yield of 10.42%,
expected stock price volatility of 0.31 and expected life of 6 years. The
aggregate fair market value of the stock options on the grant date, $75,000, was
amortized to compensation expense over the vesting period of three years, using
the straight-line method.
  On
February 19, 2007, the officers exercised 23,150 options in a “cash-less”
exercise and 4,704 shares were issued. On October 23, 2007, the officers
exercised 23,148 options in a “cash-less” exercise and 4,380 shares were issued.
There are 23,148 options remaining which have not been exercised.
  The
Company awarded a total of 3,000 shares of restricted common stock to its
directors on May 10, 2006. These restricted shares vested on
October 18, 2006. At the date of the award, the fair market value of the
Company’s common stock was $12.79 per share. The aggregate fair market value of
the shares on the grant date was amortized to expense over five months, using
the straight-line method.
  The
Company awarded a total of 24,397 shares of restricted common stock to its
officers on November 8, 2006, of which 6,250 shares vest in three equal amounts
in May 2007, May 2008 and May 2009, subject to continued employment and 18,147
shares vest in three equal amounts in May 2007, May 2008 and May 2009, subject
to continued employment and certain market conditions.  At the date of
the award, the fair market value of the Company’s common stock was $13.785 per
share. The aggregate fair market value of the shares on the grant date is being
amortized to expense from November 2006 to May 2009.
  The
Company awarded a total of 10,842 shares of restricted common stock to its
directors on November 8, 2006, of which 3,000 shares vest in three equal
amounts in May 2007, May 2008 and May 2009, subject to continued office and
7,842 shares vest in three equal amounts in May 2007, May 2008 and May 2009,
subject to continued office and certain market conditions. At the date of the
award, the fair market value of the Company’s common stock was $13.785 per
share. The aggregate fair market value of the shares on the grant date is being
amortized to expense from November 2006 to May 2009.
  The
Company awarded a total of 30,407 shares of restricted common stock to its
officers on May 9, 2007, of which 8,989 shares vest in three equal amounts in
May 2008, May 2009 and May 2010, subject to continued employment and 21,418
shares vest in three equal amounts in May 2008, May 2009 and May 2010, subject
to continued employment and certain market conditions.  At the date of
the award, the fair market value of the Company’s common stock was $16.10 per
share. The aggregate fair market value of the shares on the grant date is being
amortized to expense from May 2007 to May 2010.
  The
Company awarded a total of 9,861 shares of restricted common stock to its
directors on May 9, 2007, of which 3,000 shares vest in three equal amounts in
May 2008, May 2009 and May 2010, subject to continued office and 6,861 shares
vest in three equal amounts in May 2008, May 2009 and May 2010, subject to
continued office and certain market conditions. At the date of the award, the
fair market value of the
Company’s common stock was $16.10 per share. The aggregate fair market value of
the shares on the grant date is being amortized to expense from May 2007 to
May 2010.
    F-15
 Table of Contents
   The
Company awarded a total of 53,490 shares of restricted common stock to its
officers on May 9, 2008, of which 17,830 shares vest in three equal amounts in
May 2009, May 2010 and May 2011, subject to continued employment and 35,660
shares vest in three equal amounts in May 2009, May 2010 and May 2011, subject
to continued employment and certain market conditions.  At the date of
the award, the fair market value of the Company’s common stock was $10.60 per
share. The aggregate fair market value of the shares on the grant date is being
amortized to expense from May 2008 to May 2011.
  The
Company awarded a total of 13,194 shares of restricted common stock to its
directors on May 9, 2008, of which 4,398 shares vest in three equal amounts in
May 2009, May 2010 and May 2011, subject to continued office and 8,796 shares
vest in three equal amounts in May 2009, May 2010 and May 2011, subject to
continued office and certain market conditions.  At the date of the
award, the fair market value of the Company’s common stock was $10.60 per share.
The aggregate fair market value of the shares on the grant date is being
amortized to expense from May 2008 to May 2011.
  Activity
with respect to restricted common stock is summarized as follows:
  Nonvested
      Shares Outstanding at December 31, 2005
                                        6,250Granted
                                        38,239Vested
                                        (4,564)Forfeited
                                        —Nonvested
      Shares Outstanding at December 31, 2006
                                        39,925Granted
                                        40,268Vested
                                        (13,308)Forfeited
                                        —Nonvested
      Shares Outstanding at December 31, 2007
                                        66,885Granted
                                        66,684Vested
                                        (8,644)Forfeited
                                        —Nonvested
      Shares Outstanding at December 31, 2008(1)
                                        124,925
  (1)96,641
shares relate to the officers of the Company and 28,284 shares relate to the
board of directors.
 
 Activity
with respect to stock options is summarized as follows:
 
 Options
      Outstanding at December 31, 2005
                    69,446Granted
                    —Exercised
                    —Forfeited
                    —Options
      Outstanding at December 31, 2006
                    69,446Granted
                    —Exercised
                    (46,298)Forfeited
                    —Options
      Outstanding at December 31, 2007
                    23,148Granted
                    —Exercised
                    —Forfeited
                    —Vested
      and Exercisable Options Outstanding at December 31, 2008
                    23,148
  Total
stock-based compensation expense was $475,541 in 2008, $365,536 in 2007 and
$122,561 in 2006.
   F-16
 Table of Contents
  
 Note I—Charters-out:
  The
future minimum revenues expected to be received from the time charters and
bareboat charters for the Company’s nine Vessels and the related revenue days
(which represent calendar days, less estimated days that the time chartered
vessels are not available for employment due to repairs or drydock) are as
follows:
  
 Amount
                                      
                                      
                                      Revenue
      Days2009
                                      
                                      
                                      89,417,180
                                      
                                      
                                      
                                      3,1672010
                                      
                                      
                                      92,184,580
                                      
                                      
                                      
                                      3,2572011
                                      
                                      
                                      91,293,680
                                      
                                      
                                      
                                      3,1972012
                                      
                                      
                                      64,318,752
                                      
                                      
                                      
                                      2,1972013
                                      
                                      
                                      23,459,780
                                      
                                      
                                      
                                      851Thereafter
                                      
                                      
                                      48,217,666
                                      
                                      
                                      
                                      1,827Net
      minimum charter payments
                                      
                                      $
                                      408,891,638
                                      
                                      
                                      
                                      14,496
 
 Future
minimum revenues do not include any additional hire from the profit sharing
component of the charter agreements. Revenues from a time charter are not
received when a vessel is off-hire, including time required for normal periodic
maintenance of the vessel. In arriving at the minimum future charter revenues,
an estimated time off-hire to perform periodic maintenance on each vessel has
been deducted, although there is no assurance that such estimate will be
reflective of the actual off-hire in the future.
  Note J—Subsequent
events:
  Tanker
Management, a wholly owned subsidiary of OSG, exercised its right to cancel the
technical management agreements for the Initial Vessels, which had been in place
since October 18, 2005. The Company entered into new technical management
agreements with Tanker Management effective January 16, 2009.  Under
the Initial Vessels’ old technical agreements with Tanker Management, the
Company paid a fixed cost for the technical management of the
vessels.  However, under the Initial Vessels’ new technical management
agreements, the Company will pay the actual cost associated with the technical
management of the vessels plus a management fee.
  On
February 10, 2009, the Company declared a dividend of $11,780,224, or $0.30
per share payable on March 5, 2009 to stockholders of record as of February
26, 2009.
         F-17