TNP Tsakos Energy Navigation Limited

Takis Arapoglou Chairman of the Board
Nikolas Tsakos President and Chief Executive Officer
Paul Durham Chief Financial Officer
George Saroglou Chief Operating Officer
Nicolas Bornozis President of Capital Link Investor Relations Advisor of Tsakos Energy Navigation
Ben Nolan Stifel
Magnus Fyhr H.C. Wainwright
Chris Robertson Jefferies
Call transcript

Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the Second Quarter 2021 Financial Results.

We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr. George Saroglou, Chief Operating Officer of the Company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today. And now, I'll pass the floor to Mr. Nicolas Bornozis, President of Capital Link Investor Relations Advisor of Tsakos Energy Navigation. Please go ahead, sir.

Nicolas Bornozis

Thank you, very much, and good morning to all of our participants. I'm Nicolas Bornozis of Capital Link, Investor Relations Adviser to Tsakos Energy Navigation. This morning, the Company released publicly its financial results for the second quarter and six-month period ended June 30, 2021. In case you do not have a copy of today's earnings release, please call us at (212) 661-7566 or e-mail us at, and we will have a copy sent to you by e-mail right away. Please note that parallel to today's conference call, there is also a live audio and slide webcast, which can be accessed on the Company's website on the front page at The conference call will follow the presentation slides, so please we urge you to access the presentation slides on the Company's website. Please note that the slides of the webcast presentation will be available and archived on the website of the Company after the conference call. Also, please note that the slides of the webcast presentation are user-controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect TEN's business prospects and results of operations. And before turning the floor over to Mr. Arapoglou, I would like to say that we are particularly happy to be hosting this conference call today from New York. Dr. Tsakos is in New York. And actually, I would like to congratulate him that a couple of days ago, he was inducted into the International Maritime Hall of Fame in a big ceremony in New York organized by the Maritime Association of the Port of New York and New Jersey.

So Dr. Tsakos, congratulations, and delighted to have you with us in New York. And without any further delay, I would like to pass the floor to Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir.

Takis Arapoglou

Thank you, Nicolas. Good morning and good afternoon to everyone. Thank you for joining our call today. We clearly are in the worst period in the market in recent memory. And despite this, the results that we show today indicate that we've managed to stay relatively unscathed, proving once more that we have a robust operating model.

We continued our well-proven strategy of countercyclical new investments in accretive charters and with blue-chip customers as always.

We continue selling all the vessels to maintain a young fleet.

We continue keeping a substantial portion of our vessels on time charter, albeit at a lower percentage to ensure a predictable revenue flow and cover costs, while steadily increasing the spot content to position TEN for, as expected, a strong rebound in the market. All this, while maintaining a very comfortable cash position, constantly repaying debt, servicing our obligations, maintaining dividends and containing costs.

So nothing really new, just tweaking the same model according to what's happened in the market. This has served us all along well. And for this, again, we need to congratulate Nikolas Tsakos and his team for the focus and the excellent performance. I'll now pass the floor to Nikolas Tsakos. Thank you very much from my side.

Nikolas Tsakos

Good morning to all, and thank you, Nic Bornozis for your wishes, and thank you, Chairman. We would like to be congratulated also when we would start making the big profits. We hope that will be coming soon, but thank you for your good words.

We have been using TEN's model in a difficult environment; and the difficult environment, it has not only been the market conditions, but the operational conditions that our 70 vessels have been facing, navigating through the pandemic around the world. And we would like to thank the whole operation team and the men and women on board the ships for actually being the unsung heroes and recognized heroes for spending more and more time on board their ships away from their families than actually ever before due to a very hostile repatriation rules from various regions and countries. And from our side, we have tried to do the utmost to succeed in vaccinating the majority of them and also making sure that at any cost, and you will see this also sometimes in our bottom line, navigating our vessels at significant costs to frankly repatriations areas like, I would say, the Philippines and Greece, the France, in order to make sure that people will go back to their families, and we will get them safely on board.

So it has been, I would say, a very strange period of time. We try to keep a clear head through this storm.

And so far, as our good Chairman said, so good. The horizon seems to be brightening up.

I think we have all looked at this at the fourth quarter of 2021 as a time that things would start normalizing.

We are looking at the other markets that we are participating like the dry cargo market and the container market taking advantage of today's environment of the bottleneck that is happening. And being here, we can see the majority of our clients are actually looking to put their hands on as many vessels as they can, which is something that is emanation of the first and second quarter of 2020, the beginning of the pandemic. This makes us positive for going forward. And we have seen also the rates have been bouncing significantly from the bottom. All you have to do is to see that the market reports on the Baltic Index of the VLCCs with an average of less than $100 on a year-to-date basis are of today in close to $20,000.

So I think that's a significant jump, which has to do with seasonality, but also from the thirst for energy around the world.

So I hope that the fourth quarter started much better than the rest is going to lead us to calmer waters. In the meantime, we are maintaining our model of taking advantage of the crisis to renew a fleet. 10 state-of-the-art vessels, four delivered, six on order, six of them also Dual-Fuel.

For us, it's a significant turn, a big dramatic design term for the future.

So we're very proud about this, very proud for our new building team for designing the vessels and going forward with our charters hand-to-hand to a new era of shipping. And hopefully, we would be able to announce in the next couple of quarters, much better results. And with this, I would hand the floor to Mr. Saroglou, COO, who will give you the past, but I think, George, also talked to us about the future because I think that's -- that might be a bit more pleasurable. Thank you.

George Saroglou

Thank you, Nikos, and good morning to all of you joining our earnings call.

So let me start by saying that we're currently seeing a bouncing freight markets in the larger-sized vessels compared to the summer months and the year-to-date average rates. Spot rates for VLCCs and Suezmax', on average, are currently 4 to 5x higher than the year-to-date average. And we expect this improvement to continue across all vessel types as we enter the seasonally strong fourth quarter. The anticipation of this improvement, we consider it to be sustainable, considering that oil demand continues to recover from the demand losses of last year. Global oil inventories that built last year continue to grow and are below the five-year average in all major economies and geographies. Mobility statistics in the U.S.A., China and Europe are improving, and the strong demand recovery of 2021 will continue next year when we expect to be at the pre-COVID demand levels by the end of 2022. OPEC+ has now restored almost 50% of the initial 10 million-plus production cuts and is adding from August, 400,000 barrels per day every month until the 5 million barrels per day of current supply cuts are phased out, which is expected to happen at the end of the third quarter of 2022 based on the current OPEC+ plans. And of course, supply of new tankers continues to be at low historical levels while the global fleet is getting older, and new upcoming environmental regulations are expected to phase out the big part of the agent fleet.

Let's move now to the slides of our presentation. In Slide 3, we see that in TEN since inception in 1993, we have faced four major crises. But this time, the Company, thanks to its operating model, which is built to be crisis-resistant, has come out stronger. We started with four modern tankers in 1993, and we currently have a pro forma fleet of 71 vessels for an average annual growth of 15% in terms of deadweight tons in the four decades we operate. In the next slide, we see the pro forma fleet and its current employment profile.

We have a combination of vessels in fixed time charters and flexible employment contracts, time charter with profit sharing, CoAs and spot ratings that capture the market's upside. All dark blue color vessels, 20 in the slides, are on fixed rate time charters, while the light blue and red colored vessels or 69% of the fleet currently in the water have exposure in the market's upside.

So that means that TEN is very well positioned to capture the positive tanker market fundamentals and the recovery in freight rates. And of course, we took advantage of the low freight environment to bring forward a number of scheduled special surveys to have these vessels available once the target tanker freight market rebounds. And since fleet modernity is a key element of our operating model, during the first half of 2021, we concluded the sale of three of our older tankers, a 2003-built Panamax tanker and 2005-built Suezmax tankers, which will be replaced with six new buildings. Plus two options that will enhance the Company's environmental footprint as the four plus two newbuilding Aframax tankers are LNG-powered Dual-Fuel vessels, the first such investments in the Company's history.

In addition, we are building one more DP2 Shuttle Tanker and one LNG carriers. All firm six new buildings are coming with long-term employment attached. In Slide 5, the left side presents the all-in breakeven cost for the various vessel types we operate in TEN.

As you can see, the cost base continues to be low. And during the first half of '21, the revenue generated from the time charter contracts was again sufficient to cover the Company's cash expenses, paying for all vessel OpEx, overheads, chartering costs and loan interest.

In addition to the low shipbuilding costs, we must highlight the purchasing power of TCM, the continuous cost control efforts by management to maintain a low OpEx average for the fleet and the low general and administrative expenses, while keeping a very high fleet utilization rates. Quarter after quarter, despite bringing forward scheduled dry dockings, we achieved overall, 92% plus utilization for the fleet. And of course, thanks to the profit-sharing element, a cornerstone of TEN's chartering strategy for every $1,000 increase in spot rates. This has a positive impact of $0.62 in the annual EPS based on the number of 10 vessels that currently have exposure in the spot market. Debt reduction is also very important, and it's part of the capital allocation strategy of the Company. Since our debt peaked in December of 2016, we have repaid $340 million of debt and repurchased $100 million in two series of step-up preferred sales we had outstanding.

In addition to bringing down debt, growing the Company through timely sale and purchase and new building acquisitions, we continued to reward shareholders with dividend payments. We paid $0.10 per share dividend to the common shareholders on July 20, 2021. TEN has rewarded the Company's shareholders with almost $0.5 billion in dividend payments or on average, $26 million per annum since the New York Stock Exchange listing in 2002.

Looking at the markets, global oil demand continues to recover from the unprecedented collapse because of the COVID pandemic and the measures to contain it. 2020 was the first year of negative growth since the period of great recession in 2008 and 2009. Year-end demand was approximately 8.6 million barrels per day below the levels of the 2019 year-end demand figures of approximately 100 million barrels per day. Most of the losses were in jet and aviation fuel.

We expect demand growth of 5.2 million barrels per day for 2021 and 3.2 million barrels per day growth in 2022. Bearing non-foreseen developments with COVID variants, we will most probably reach the pre-COVID oil demand levels at the end of next year.

On the global supply front -- on the global supply front, OPEC+ producers continue to manage supply with discipline. Almost half of the 10 million barrels per day production cuts have returned to the market. The plan is for monthly increases of 400,000 barrels per day, which OPEC+ reduce and adjust in their monthly scheduled meetings.

As we enter winter in the Northern Hemisphere and peak seasonal demand, the release of additional barrels to the market should be a positive -- a further positive catalyst for tanker demand and tanker rates. Slide 9. With oil demand recovering, let us look at the forecast of the supply cost. The order book as of September stands at around 340 tankers over the next three years or 6.8%, which is the lowest order book in more than 20 years. At the same time, a big part of the fleet, 1,500 vessels or almost 30% of the fleet is over 15 years and 382 tankers or 7.5% of the [cap car] and tanker fleet are currently over 20 years. Upcoming environmental regulations could push more tankers approaching or above 20 years to go for scrapping. In the next slide, we see that 2018 was the highest drop in years of records, with 21.9 million deadweight ton removed from the market. Last year and the year before, as expected, scrapping was lower. We had a strong August this year and with scrap prices at very high levels, $600 per light weight.

We have so far seen 135 vessels exiting the market or 10.4 million deadweight ton. With modern environmental regulations and 7.5% of the global fleet above 20 years, we expect the scrapping numbers for 2021 to increase, helping further the supply side of the business. To summarize, oil demand, we see strong recovery to continue.

On the supply of oil, monthly production increases of at least 400,000 barrels per day by OPEC+, are bringing more cargoes to the market at the time when global oil stocks are below the five-year average levels, and demand is increasing towards the pre-COVID levels.

On the order book and supply of tankers, the order book to current fleet ratio is at historical low levels. A big part of the fleet is reaching phase-out edge, which all points to a tighter supply of tankers for the next 18 to 24 months.

Our company's balance sheet, we have built a crisis resistant operating model.

We have a modern fleet well positioned to capture the market developments as we enter the seasonally strong fourth quarter.

We continue to reduce debt, we have a strong balance sheet and strong banking relationships that will allow the Company to take advantage of the opportunities that will be presented. And lastly, looking at how other shipping sectors are doing, freight rates and asset prices for both containers and bulk carriers continue to be very strong. And if past history can be guidance for the future, there is always a time lag for the positive spillover effect to the lagging shipping sectors and short tankers should be the next shipping sector to enjoy a better freight rate environment. Supporting the above is increased activity from major end users for long-term business, which, in our view, is a vote of confidence that the recovery of the market is nearby.

With the expectation of much better days ahead, I will ask Paul to walk you through the financial highlights of the second quarter and first half 2021. Paul?

Paul Durham

Thank you, George.

So despite the continuing stagnant market in quarter two, TEN was able to generate gross revenue of nearly $137 million and over $275 million in the half year. Much of this was due to our ability to secure almost full utilization with 2/3 of the fleet on time charter and despite eight vessels undergoing dry docking, and that includes four vessels brought forward for dry-docking. Of some significance in these times of squeezed liquidity for tankers, time charter hire was still enough to cover our charter-in costs, our operating expenses, our overheads and our cash finance costs, and during the six-month period, managing to reduce debt by nearly $87 million. That still left 32 of our 65 vessels in quarter two to operate in the spot market, where they successfully earned revenue over $65 million, covering all voyage expenses, which had been impacted by a large increase in fuel costs due to rising oil prices. Also, fuel consumption increased as certain vessels completed their time charter and moved into the spot market to find more lucrative earnings where possible. In June, Suezmax', Arctic and [I] Antarctic was sold for a total of $45 million, incurring a modest loss of $5.8 million, but free in cash of almost $17 million after repaying related loans of $27 billion.

Excluding the loss on the sale of the Suezmax', net operating losses were just $7.1 million, and the overall net loss was held to a relatively decent $13.8 million, in the circumstances.

Our daily TCE per vessel in quarter two averaged $17,240, a strong performance compared to market average TCE given the difficult conditions and the dry dockings. TEN's overall expenses have been held down by our technical managers since the prior quarter two, rising in total by only 4%. Operating expenses increased by $3.5 million on the addition of a further vessel and also due to dry dockings, which this quarter included an LNG carrier, which especially pushed up expenses temporarily, but left the vessel in perfect condition to continue its time charter to a major LNG trade. A weaker dollar also contributed to higher costs, although we expect this to reverse as the U.S. economy continues to revise.

So average OpEx per vessel moderately increased, but in the six months, it fell to just over $7,800, while G&A costs stayed at exactly the same level as in the prior quarter two, bearing in mind that fees -- management fees have not been increased for over 10 years. Finance costs fell 46%, mainly due to reduced debt and lower interest rates and margins.

While the cost of our debt has remained at only 2% and also positive bunker hedge valuation movements amounted to over $3 million. And at this point, I'll now hand the call back to Nikolas.

Nikolas Tsakos

Thank you, Paul, and that's how we'll be all reporting with even more enthusiasm and big profits sometime soon. Well, I think as it is clear, it has been a very trying period and it has been a trying period for all of us, and sometimes the trying period on the business segment, it has been secondary to what people have suffered around the world.

So it is very good to be able to stay safe and maintain our course with a clear head under these circumstances. And finally, we start seeing things becoming better on the period and the spot rates we are expecting the Chinese Golden Week to start thinning out and people getting back to work next week, and we hope to see through that even more stronger rates going forward. And with this, I would be very happy to answer any questions so that you might have. Thank you very much.


[Operator Instructions] Your first question today comes from the line of Ben Nolan from Stifel. Please go ahead.

Your line is open.

Ben Nolan

So I've got a couple. I wanted to start with the vessels that you ordered. These are Dual-Fuel, I believe, the press release said Dual-Fuel LNG and conventional. Strategically, I guess the question or where I'm headed on this is and obviously, most of what you do is on long-term contract. But is it fair to say that given sort of the uncertainty with respect to fuel and emissions that at the moment, if you're going to be building anything, it probably is going to be Dual-Fuel? Or was this a specific request of your customer and maybe you're less strict on sort of how you're -- what you would be looking to build?

Nikolas Tsakos

Thank you. Thank you very much, Ben. And we took the, I would say, strategic decision, not we invest in many conventional new buildings anymore.

So it is with our strategic partners going hand-to-hand, taking a dive into future technology, which it's always better when you dive in to hold somebody's hand than dive into it by yourself.

We are as uncertain as anybody that where the future will take us. The way we speak today and is -- that the way we see today is that the Dual-Fuel seems to be the medium-term solution from now until 2050.

As you know, we are building ships.

We are building ships that would last 20 to 25 years, and that's why we took this decision.

So it is a decision based on the future and not the decision made on a piece of business that came, we have been offered quite a number of attractive business on conventional vessels, and we decided to pass because we have the model 10 was created the new -- most of you're too young to remember, back in 1993.

On the aftermath of the OPA 90, when we had to convert the whole world's tanker fleet between 1990 and 2000 into the double-double design, and that's why TEN was -- started this very, very soon the way before time, we had the full double-double-double fleet. And I think that's what we're looking in the future with this new technology.

Ben Nolan

Okay. That's helpful. And then sort of following on to that, one of the, again, fuel challenges is the potential of carbon taxes in the not-too-distant future. And as I understand it though, it would be borne by the ship owner. That could, in theory, present a problem if you have a legacy time charter contract that doesn't -- isn't built to compensate for that. How do you think you -- or how do you manage through that if there is, in fact, whatever it is, a $60 ton carbon tax or whatnot, how do you think that will be borne or mitigated or handled on your part?

Nikolas Tsakos

In most of our time charter contracts, we have foreseen. And I would say I think this is something that I -- wearing my ex-INTERTANKO hat, I will get most of my other colleagues to foresee on the long-term time charters to make sure that this will be shared between the charters and the owners.

I think that is fair.

I think it is unfair for owners to carry the whole burden of something like this. The owners are paying for the new technology we are building the new ships.

We are making the investment as we did with a double-double design 30 years ago. But when I think it has to be shared together with the end users and our charterers.

So, I think -- so in our long-term contracts and we have quite a few of them, we have discerning arrangement.

Ben Nolan

Okay. That's helpful. And then the last, just out of curiosity, I mean, it's October 7, I mean the last tanker company to report was two months ago. Any color as to what -- how we're so behind schedule?

Nikolas Tsakos

Yes. Well, it had to do a lot that we were planning finally after 20 long months to be here in the United States and do a road show. We wanted you to do this on our results. The migration legislation, the COVID would not allow us to come. We were trying to come end of August, and end of September, and the only reason we were able to -- I was able to get a permit to come was because of my award for the Hall of Fame, two days ago.

So, we said, it would be good to be here in New York, and do the result show. Immediately, we could do a road show not to be in a block period.

So that's why it was postponed. Like my award, I was supposed to be getting this award at the CMA in March 2020.

So I'm glad I got it alive.

Ben Nolan

Well, congratulations, and welcome to the U.S. And I was -- I traveled internationally last week, and it felt nice to use my passport again.

So anyway, I appreciate it. Thanks so much, Nik.

Nikolas Tsakos

Thank you.


Thank you.

Your next question comes from the line of Magnus Fyhr from H.C. Wainwright. Please go ahead.

Your line is open.

Magnus Fyhr

Good afternoon team, Tsakos, and Congratulations, Nikolas, to the award and the new contracts for the Aframax'.

Nikolas Tsakos

Thank you. Thank you, Magnus.

Magnus Fyhr

All right. Couple of questions.

Just a follow-up on those contracts. I know you stated a few that should be $350 million. Can you give a little more flavor on what kind of targeted returns and the additional cost over a regular Aframax newbuild that this LNG capability would cost? And it looks like there's somewhere in the ballpark of six years contracts. I don't know if you can comment further on that. Thank you.

Nikolas Tsakos


I think that's quite accurate to what you have said.

I think the -- we were able to achieve the contracts because of our long relationships and being, I would say, one of the companies that we have been always faithful to our shipbuilders and not really jumping from country to country.

So that's another -- we have put our continued trust to Korean shipbuilding and are actually, our new building team has been there since the '90s without moving because we keep on building vessels there, which gives us at least the comfort that technologically in this new environment, we are not taking too many chances.

Of course, the cost, we were able to achieve the pre-explosion of the steel prices environment. And I think today, those ships have an additional 15% to 20% value, at least 15 for sure, percent value as we go because steel prices, as you know, have gone through the roof as most commodities have been going through the roof.

So we are glad we were able to build really the previous four vessels for the U.S. major oil company and those six at the pre-up prices for new buildings. But however, still, there is a significant -- another 10 -- at least 10% to 15% higher price due to the very complicated and excitingly new technology.

Magnus Fyhr

Okay. Good. And as far as timing and financing of these vessels, can you comment on what kind of delivery time frame you would see?

Nikolas Tsakos

Well, we are hopeful, we are very certain we will start taking delivery of those ships every quarter in 2023. And -- but in the meantime, we still have quite a few deliveries that are right now a lot into the money in a very big way.

We have our LNG coming for delivery in January that energy and which is as you've seen what has happened to the LNG markets and to the LNG value.

So I think that vessel today is at least $30 million more we could flip here, if we hope for $30 million at least more than what we have paid for here, which is a good situation to be in to. And then later in the year, in April, we have our next Brazilian endeavor with our shuttle tanker.

So we will have things to do from now until the Dual-Fuel will be coming for delivery.

Magnus Fyhr

All right.

So should we assume that you already spent the 10% down and then just regular down payment, performance payments in 2022?

Nikolas Tsakos

That's true.

Magnus Fyhr

All right. The last question and I'll let over to somebody else to ask questions. But the cash balance have declined here, you still have a significant cash balance. But my question is, can you still sleep at night with $140 million on the balance sheet?

Nikolas Tsakos

Well, I've been criticized in the past for having too much cash in the balance sheet. And there is -- and now you can see why it was the correct thing to do. And yes, I think we are -- as I said, we are hopeful that with the market turning and most of our obligations have -- are out of the way. Don't forget, we had to -- we do not have any more obligations for the delivery of either our shuttle tankers or our LNGs. These are money that we have paid the Company takes very seriously its cash management.

We have reduced debt from the peak in 2016 of close to $1.8 billion, right now, to $1.35 billion. And that's all from the Company's cash. And on top of that, we have repaid $100 million of our step-up preferreds.

So, we are reducing significantly our obligations, and we are enjoying very low -- we're enjoying a very low debt environment, which today is under 2%.

So I think our WAC cost of capital it is very, very low, and that's why we feel comfortable. And do not forget that we hope that we have close to 2 billion -- sorry, 2 million or 1.7 million lightweight tons of steel.

So our whole fleet, our debt in our fleet is about $1.35 billion, which is supported by an excess of $1 billion of scrap values. And still a very, very, very young fleet.

So with all this, I think Paul, referred to a comfortable situation in today's market environment, of course.

Magnus Fyhr

Yes. No, that's an interesting way to look at it. Nikos, congratulations to your award.

Nikolas Tsakos

Thank you. Thank you very much.


Your next question comes from the line of Jefferies. Please go ahead.

Your line is open.

Chris Robertson

This is Chris Robertson on for Randy. How are you.

Nikolas Tsakos

I very well. Thank you.

Finally, on this side of the Atlantic.

Chris Robertson

Yes. Congratulations on the award as well. I guess, just following up on the new build questions that were asked. Is it fair to say that you put down payments on four out of the six? And then can you discuss kind of the timing for the option period on the additional two?

Nikolas Tsakos

Yes, yes. That's the situation. And I think it will be for January 2022.

Chris Robertson

Okay. And then can you talk about any of the other systems aside from the propulsion, obviously, that will be -- maybe a new design or upgrade that we'll be able to comply with the new Phase III requirements for the EEDI?

Nikolas Tsakos

Well, I think I have -- I hope we have our new building department on the line. But I think from -- this is going to be an engineer's dream. And I have one of my daughters is threatening to study engineering.

So I think she'll be in a very good time to follow up the construction of those ships, for all our teams. I don't know how she wants to become an engineer, but it's good to have someone in the family in this. But it is going to be really breaking new ground. It will be based on what we already experienced on our LNG vessels.

So I think we have the knowledge of operating those ships due to the similarity of the LNG vessels that are Dual- or sometimes Tri-Fuel ships. The challenges are going to be the containment system for the gas, which in the design profile will be in tanks instead of being allocated spaces on deck, which happens in retrofit vessels.

So I think we're going for the whole -- having a very, very demanding and high-class charter, we are going for the whole ship. And as we said, I think we are excited that we're starting this phase of the new design of ships.

So again, against a very long charter, as we did back in 1998 when we build against a 50-year contract, a number of our first -- sorry, 1996, our first double-double ships.

Chris Robertson

Sure. I guess moving on to the ATM program, can you talk about kind of the breakdown between the preferred shares versus common shares? And how are you guys thinking about that in terms of the balanced strategy between the two?

Nikolas Tsakos

Yes. Well, I think we have made a breakdown in the press release about the ATM program. And I think we have about $20 million have come from the common and $15 million from the preferred so far. And we find the ATM program as a very efficient and inexpensive way to create liquidity in the market. And I think, it will continue in a measured way.

Chris Robertson

And can you briefly comment on the remaining authorization in that program?

Nikolas Tsakos

I think it's, George Saroglou, if you're listening. He's the one who's keeping all the -- what is it, George is it $15 million or?

George Saroglou

Yes, close to this level.

Nikolas Tsakos

$15 million, approximately another $15 million, 1-5.

Chris Robertson

I think that's it for us.

Nikolas Tsakos

Thank you very much.


Thank you. I will now hand the call back for any closing remarks.

Nikolas Tsakos

Well, again, it has been a real pleasure to be able to be back in the in the United States and hopefully have spent a little time seeing now that we have our results out with our shareholders later this week and next week.

We have entered the new phase of development for the Company.

We expect this phase of development to take us to a much greener environment. And we always follow the environmental calls in a big way, and we're very excited about this. And the signs of our markets are looking finally better in numbers and not just in feeling, and we hope that this will continue. And in our next call, we will have much better news. Thank you for all your support following the Company. And please let Nic Bornozis is now on the team, if you would like to have any one-on-ones now that I am finally free to come and visit. Thank you very much.


Thank you. That does conclude our conference for today. Thank you for participating.

You may all disconnect.