Good day and welcome to the Frontline Q2 2010 results presentation conference call. For your information, today’s conference is being recorded. And at this time, I would like to turn the conference over to Jens Martin Jensen, CEO, and Inger Klemp, CFO. Please go ahead.

Good morning and good afternoon, and welcome to our Q2 presentation. I think we had a good second quarter, and again we outperformed our benchmark competitors. We will follow our usual program for this presentation with our CFO, Inger Klemp, going through the Q2 highlights and transactions to offer a financial view of the quarter. After that, I will go through some market slides, fleet development, and outlook on how we see things. Finally, after that, there should be time for some questions. Inger, please?

Thanks, Jens. And good morning and good afternoon, ladies and gentlemen. I will guide you through the highlights and the financial review in the second quarter 2010 together with a run-through of newbuilding program, as Jens just said. Moving to slide four and five, in March 2010, Frontline announced the successful completion of its $225 million convertible bond offering. And in April, Frontline completed the issuance of the bond loan and the loan will disperse. The third and the fourth Suezmax newbuildings from Rongsheng, Front Odin and Front Njord were delivered in May and August 2010 respectively. The third and the fourth VLCC newbuildings from Waigaoqiao, Front Cecilie, and Front Signe were delivered in June and August 2010 respectively. Then in April 2010, Frontline announced the acquisition of the two 2009-built double hull VLCC tankers. And the first vessel, Front Eminence, was delivered in May the 18th, 2010; and the second vessel, Front Endurance, was delivered on June 28, 2010. Further in May, we secured long-term bank financing for these vessels, representing 70% of the purchase price. Then in June 2010, the single hull VLCC Front Duke was redelivered from her time charter agreement and subsequently entered into a bareboat charter agreement expiring at the end of 2012. The vessel will be operating as a floating storage unit and has ceased to trade as a regular tanker. Further in June 2010, Frontline received notices from the owners of two chartered-in 2001-built Suezmax tankers and two chartered-in 2000-built VLCCs that the owners exercised their option to extend the charter period for two years to the end of 2013 from the expiry of the mandatory lease period at the end of 2011. In June, we also ordered two new Suezmax newbuilding contracts with expected delivery in February and May 2013, and we…

Thank you, Inger. There was a lot of information you came with there. We are now at slide 18, which is about earnings and market factors. The second quarter was a healthy quarter with VLCC earnings around $50,000 per day and Suezmaxes around $32,000 per day. But contributed positive to this was the ability of limited fleet growth in the quarter. Net newbuilding was delivered and a number of VLCCs and Suezmaxes were removed from trading. Also up to 50 VLCCs were tied up with our storage business. Also what contributed positively in the market was that the whole Iranian owned VLCC fleet was tied up in old storage plus of course the strong demand for China’s oil imports. If we move to slide number 19 regarding the VLCC fleet, as mentioned, we had a limited fleet growth in the second quarter of 2010, with VLCC delivery slipping back around 20%. I’ll go back to that in another slide a little bit later. The order book on paper for 2011 looks challenging. But as we have said before, next year the expense of VLCC order books starts with average ship costing more than $135 million per ship. So there could be some changes through the order book going forward. Now to slide 20, on the Suezmax fleet, we have seen about a 30% slippage in newbuilding that delivered in the Suezmax segment during the first six months of 2010, and we expect the same for the balance of the year as well. So there will also be changes to the Suezmax fleet. As Inger mentioned, our own newbuildings in Rongsheng has been delivered. And some of these ships were up to 18 months delayed. Extensive ordering in the Suezmax segment during the first half of 2010 could though put a…

Thank you. (Operator instructions) Our first question today comes from Scott Burk from Oppenheimer. Please go ahead. Scott Burk – Oppenheimer: Good morning, guys. I just had a couple questions. First of all, you talked about the increase in charter coverage for 2011. Is that 2011 to 2013? Would you be going to the same kind of contract coverage level you have for 2010 of around 30%, 35% or something more than that?

No, it would be around that. Around 30% to 35% is fixed, and then the rest up to 50% with the floating rates. That’s what we prefer to do. Scott Burk – Oppenheimer: Okay. And would that be focused on your Suezmax fleet or VLCC fleet or just balanced across the two?

It will be one or two ships from each segment. Scott Burk – Oppenheimer: Okay. Okay. And then I had a question about your OBO fleet. That starts to roll off the nice charters that you had there in 2011. Do you plan to, at that point, continue to operate those OBOs or do you think you might sell them at that point? What's kind the plan for the OBO fleet?

Well, we have these ships on a lease arrangement from Ship Finance, and they are running up to 2015. So we will continue to trade the ships as bulk carriers until that date. Some of the ships potentially will already expire during the middle of Q4. And we are already in discussion with the various channels of extending these periods. But of course, it will be at different levels than they are now. But they are still – will still be positive to our bottom line. Scott Burk – Oppenheimer: Okay. And actually, you kind of answered one of my other questions about it. So all the OBOs are still trading as dry bulk vessels? None of them are trading as Suezmaxes?

All of them are trading in dry. They will not come back in the tanker mode. Scott Burk – Oppenheimer: Yes, okay. Okay. And then I had a question about the Front Duke. You said that's gone to bareboat charter doing storage. Can you give me some more details about that, where it's being used for storage? And then, does this forestall it being eventually scrapped as a single-hull vessel or, I mean, can it be used as storage long term or does it eventually run up against the single-hull restrictions and can't even be used as a storage vessel?

Well, the ship got of time charter in March, in the spring, and that we have fixed it for 2.5 years bareboat at the FSO and see it operating off Singapore – or in actually Malaysia water to Singapore, and she will not come back to regular tanker trading. And a ship like that, under the present rules and regulation, can sit as a floating storage for some time. So hopefully we can keep employed with that. Scott Burk – Oppenheimer: Okay. What level is the charter at?

We don’t normally say that. But I would say it’s at a profitable rate, but I don’t think it’s something to write home about. But it’s still positive for us. Scott Burk – Oppenheimer: Okay. So I assume the operating expenses also go way down once you're just kind of floating there.

It’s bareboat. So – Scott Burk – Oppenheimer: Oh, sorry.

Yes. Scott Burk – Oppenheimer: Yes, okay. Okay. And then you kind of talked a little bit about kind of going fishing with your VLCC fleet, just waiting for better days. Can you talk about the number of vessels that you have that are kind of – that are idle at this point versus active?

I got the same question this morning, and I think I replied, a handful. So I think I will give you the same reply if that’s okay. Scott Burk – Oppenheimer: Okay. So a handful of vessels and –

I have a quite big hand. Scott Burk – Oppenheimer: Yes, it would depend on whose hand it is. That's right. And then, you also kind of gave the timeframe, which was the other question that I had, so 20, 25 days. What if we don't see a rebound in rates by – in the next few weeks or next month or so? At what point do you just say, we've got to earn cash flow and you just start putting them back to work?

Well, I think we have a very competitive breakeven level. So probably some of our competitors will have bigger problems than us and that should maybe improve the market. I think the bottom of the market has been found and certain number of fixes being done every month. And I think it’s not so imbalanced as it looks in paper. So we are positive for Q4. Scott Burk – Oppenheimer: Okay. And when you say you are positive, can we get back to the same kind of rate levels we have seen in the beginning of the year or what’s kind of your view where we can go in the fourth quarter?

Well, it happened last year. In the beginning of Q4, the market took off and we – that market continued into Q1 of this year. So hopefully we will see the same scenario again. Scott Burk – Oppenheimer: Yes, okay. Thank you very much.

Thank you.

Thank you.

Our next question today comes from Justin Yagerman from Deutsche Bank. Please go ahead. Justin Yagerman – Deutsche Bank: Hey, guys. I was curious – I mean, you called out a current market rate of 25,000 on the VLs, 15 on the Suezes in your release. And at current levels, given the coverage that you are at, I mean, would the expectation be, if we don’t see a pickup in September, that you would be at a loss in Q3 or is that too severe do you think you’d still be earning at least with your coverage some positive EPS?

Those rates mentioned the 25 and the 15 is actually from Clarksons’ tanker (inaudible) I think they called us what they predict to be the average rate for Q3. It does not necessarily say what we will aim at. But that’s what they believe, the rates will end up. And of course, we hope our rates will be better than that. Justin Yagerman – Deutsche Bank: Okay. If you are around a cash break even type of levels slightly in a loss or slightly above in the quarter, how do you think about the dividend in relation to that for Q3? Would you keep it the same given that your Q4 outlook sounds like it’s quite a bit better or is that something that you think you would have to take down in the current market?

With respect to dividend policy, it’s mostly a fixed policy with a fixed amount per share per quarter. I mean, our dividend policy is that we are paying out the excess cash flow that the company has. And obviously, of course, if we don’t earn up much money in the quarter, usually we pay less dividend. That’s just how it is. Justin Yagerman – Deutsche Bank: Okay. And from a storage standpoint, with the oil price having gone down the way it has in the last few weeks, are you guys seeing more enquiry for storage demand on your ships?

Yes, we have seen it mainly relating to Brent – Brent oil. So ships that delivering UK, October, November onwards doesn’t enquire there. I believe actually a time charter was done earlier in the week for 30 to 90 days at 38,000. There seems to be a flow building up, which could help the market. Justin Yagerman – Deutsche Bank: Okay. So that could be helpful from an employment standpoint. Would you guys necessarily talk about that if that was coming out in the quarter or would we find out about that probably just later on?

The good thing about the tanker industry, there is not many secrets. So I’m sure you will be able to see some things being done. Justin Yagerman – Deutsche Bank: Fair enough. And lastly, you indicated 70% advance rates on future newbuilding financing. Just curious what the banks are that are offering those kinds of rates where you’ve gotten indications? Are they Asian banks, European banks, little combination of both? That’s a little bit better than what we’ve been hearing from your peers. So I was curious if that’s real time in terms of what’s out there in the marketplace right now.

It is actually a combination of Asian, European and all sorts of banks in a way. So it doesn’t – not a specific type of bank. Justin Yagerman – Deutsche Bank: Okay. But I’m assuming you’ve done 80% on a couple of those ships that’s not available right now. So 70% is kind of where indications are at the moment?

I would say, that 80% is not available now. That would be overdoing it. Justin Yagerman – Deutsche Bank: Okay. Fair enough. Thank you so much.

Thank you.

Thank you.

Our next question today comes from Rob Mackenzie from FBR Capital Markets. Please go ahead. Doug Garber – FBR Capital Markets: Hi, guys. This is actually Doug Garber filling in for Rob.

Okay. Good morning.

Good morning. Doug Garber – FBR Capital Markets: Most of our questions have already been asked. But I do have one more. I was curious if you guys are interested in sale-leasebacks at all. I know most of the capacity you’ve added has been owned capacity. And I was curious what kind of rates you’re looking at if you are to do something like a 10-year charter rent on a sale-leaseback.

We look at sale-leasebacks, but of course, normally that’s a quite expensive way of financing – securing your financing needs. But we have been offered deals like that and we look at them, but so far we have not found them what’s right compared to what the banks can offer and the use of our own cash. So – but we look at those, but right now it’s not attractive. Doug Garber – FBR Capital Markets: So would it be fair saying, going forward, as we add capacity, it’s going to be own capacity as opposed to charter-in capacity?

We will take some ships on a charter-in and not on a long-term basis. I think then we’ll prefer to own. It will be a mix of short to medium-term charter-in and tonnage, putting on our own book. Doug Garber – FBR Capital Markets: And if you work to charter-in something on a long-term basis, let’s say, maybe seven to ten years, what would be an attractive rate for that in your opinion?

That’s a difficult question. I think we will only do – I will not give you any rate examples because then my phone will ring here afterwards. But I would say we will only do long-term deals like that if we can get purchase options or other kickers in the deal. We will not do it straight deal. Of course, it is a very low rate, but otherwise not, no. Doug Garber – FBR Capital Markets: Okay. And can you remind me right now you guys currently have the purchase options? Are they in the money? Are there any plans on any of your purchase options currently?

We have purchase options on some of the KD [ph] ships, both Suezmax and VLCCs. And of course, we look at that. But we also have charter options. And right now it’s cheaper for us just to continue the charter than to declaring the purchase option and financing it ourselves. But we were looking at that, and I think it’s safe to say that the purchase options are in the money if we want to do something with that. Doug Garber – FBR Capital Markets: Okay, great. Thanks, guys. I’ll turn it back.

Thank you.

Thank you.

Our next question today comes from Anders Hagen of ABG. Please go ahead. Anders Hagen – ABG: Hey, guys. Just one quick question about the third quarter. Do you expect to be profitable?

I think that’s a question for you, Inger.

We don’t normally comment on these things. So I don’t think we will have any more comment on that. Anders Hagen – ABG: Okay. Thanks.

Thank you.

(Operator instructions) We will now take a follow-up question from Mr. Scott Burk from Oppenheimer. Please go ahead. Scott Burk – Oppenheimer: Hi. I have one more question about your order book. You talked about these two VLCCs where you could essentially walk away and then have – when we lose the deposit essentially. Now that the VLCC price has come back up, you guys ordered few more vessels. What’s the likelihood that you actually would walk away from those two VLs where we have that option?

We are actually in a splendid discussion with Iraq now and trying to see if we can find a solution, which will suit both of us. So we are working on that right now, and I’m sure within the next weeks we will come out with some different position than we are in now. So with that, I think that’s all I can say of it right now. Scott Burk – Oppenheimer: Okay. And what’s the timeframe for delivery for those two VLCCs or – what would be the delivery timeframe?

That would be first half of 2012. Scott Burk – Oppenheimer: Okay. Okay, thank you.

Thank you.

Our next question today comes from David Neuhauser from Livermore Partners. Please go ahead. David Neuhauser – Livermore Partners: Hey, good morning, Jens and Inger.

Good morning.

Good morning. David Neuhauser – Livermore Partners: I want to ask you what do you think – what's your view currently of your competitors at this point? I mean, you’ve described that you have a competitive advantage as far as operating expenses. And if the current rates stay this way for the next several quarters, how do you – are you positioning yourself in that way?

I think we have been fortunate that the way our company has been structured in our strategy that we have always been what we say, lean and mean. We don’t have to spend a lot of management time in the cost-cutting exercises and the other things like that, which I know other people have been using a lot of time on. I think we try to operate the same in the high and the low market and that we’d make sure to keep costs and the breakeven that is competitive, I think, that has shown – if you look at our results now and some of the other tanker owners for the second quarter, and we were quite happy with that. David Neuhauser – Livermore Partners: And what’s your view here currently on your capital structure? Are you pretty satisfied with that at this point?

Yes, we are satisfied with that. David Neuhauser – Livermore Partners: Okay. And just lastly, again, on the M&A front, do you have any views you’d find that we will see further consolidation, again, if the spot rates stay pretty low?

I think everybody is looking around at opportunities right now, and we are not the only company doing that. There have been some newcomers in the field. And I think that some bigger transactions could probably happen in the fourth quarter of this year if the market remains as it is and the stock values and so on. And so I wouldn’t be surprised if that could happen. David Neuhauser – Livermore Partners: And are you guys running for things like that? I mean, are you looking for sort of larger transformational-type events that could take advantage of the current environment if it stays weak?

We are looking at a few things, yes. David Neuhauser – Livermore Partners: Okay. All right. That sounds good. Thank you, guys.

Thank you.

Our next question today comes from Fotis Giannakoulis from Morgan Stanley. Please go ahead. Fotis Giannakoulis – Morgan Stanley: Yes, good morning. I would like if you can give us some guidance on the dividend. And you declared very high dividend this quarter very similar to the previous one. And if you can give us some guidance for the next quarter and how shall we start thinking about the next quarter dividend.

Like I just said, I mean, we don’t give any guidance with respect to the dividends. But our policy is that we pay the excess cash flow that the company has. As I just stated when I went through the presentation, there is no need for the cash from operation to support the financing of the newbuilding program. So in that sense, you are pretty – get to a pretty good idea about what is actually available for dividend going forward based on your estimates. Fotis Giannakoulis – Morgan Stanley: Okay. Thank you.

Thank you. Fotis Giannakoulis – Morgan Stanley: Fine. Thank you.

(Operator instructions) We’ll now take a question from Zou Dazou [ph] from Sterne Agee. Please go ahead. Zou Dazou – Sterne Agee: Yes. Good afternoon, gentlemen. I have a question. For the second quarter, how many ships – how many VLCCs and Suez total ships were used in floating storage?

You mean – first quarter, it was up to as high as around 50 years, it is. Right now, I would guess – it's only guesswork, I haven’t – I would say probably between five and ten VLCCs. We had one VLCC in use for some short-term storage right now. So my guess is five to ten VLCCs; very few Suezmaxes right now. Zou Dazou – Sterne Agee: No, I’m sorry, I apologize. I meant how many Frontline’s vessels in the second quarter were being used for floating storage?

Apart from the single hull, which we have in the long-term, floating storage was as five ships. We have one double hull doing some kind of short-term storage right now. Zou Dazou – Sterne Agee: Okay. And then for the second quarter, can you give a sense – I'm not sure if that’s a statistic that you provide, but can you give a sense for what the utilization rate was? So put another way, what percentage of your available ship days were employed in the second quarter?

We don’t normally give that guidance. We have given some guidance on all five, but of course we also have what we call commercial waiting time where we decide a few days. But we don’t normally give that out. Zou Dazou – Sterne Agee: Okay. But just in order of magnitude, was it higher than in the second quarter – than in the first quarter?

It’s around the same in the second quarter and the first quarter. Zou Dazou – Sterne Agee: Around the same. Okay. And then just a clarification on the guidance you provided earlier, did you say that for 2011 that you want your contract coverage to get to about 33%, something like that?

Yes, it doesn’t have to be exactly 33%. But as you can see, we have around 34% and fixed coverage right now. And we would like to be around there, let’s say, around 35%. So we need to put in few more ships on charter next year and 2012. Zou Dazou – Sterne Agee: And that would be up from the current – on slide 17, it’s 22%. Right?

Yes, that’s right. That’s right. A few more ships. Zou Dazou – Sterne Agee: So – and that charter-in activity you would expect to happen in – well, at this point we are at the end of August, probably in the fourth quarter, I assume?

We are in some discussions now already. So it will happen within the next one or two or three months, yes. Zou Dazou – Sterne Agee: Does that represent the change from your prior views? So let’s say, like last quarter’s conference call, which was late May, was your intention at that point to be at about 35% for 2011?

No. I think we always sort of had a big chunk on our fleet in the spot market. And if we increase a little bit to 30%, 35%, we will still have 65%, 70% of the spot market, and that’s a level we are comfortable with. Zou Dazou – Sterne Agee: Right. So roughly two-third spot, one-third fixed is a level that long-term you want to be at?

Yes, that was right. Zou Dazou – Sterne Agee: Okay. And then just – you expressed some caution earlier about US oil demand. I guess if US oil demand – because I think the International Energy Agency, their forecast for US oil demand is for slight growth. Correct?

Yes, that’s right. Zou Dazou – Sterne Agee: So if – this actually turns out to be little lower than that, like maybe 0.2% or 0.3% decline. Does that materially change your view of the tanker market for the fourth quarter?

I think of course for the US market, you also have to look at the domestic oil production. So I think some people are predicting also maybe the domestic production can go down a little bit and then you will of course have to compensate with imports. But that varies – there are many reports on this. They are all almost coming out daily and quite contradicting. So let’s just say we hope that the import volumes of America will be increased. Zou Dazou – Sterne Agee: Okay. Thank you very much. I appreciate it.

Thank you.

Thank you.

We will now take a follow-up question from David Neuhauser from Livermore Partners. Please go ahead. David Neuhauser – Livermore Partners: Yes. I just want to follow up quickly on my capital structure question earlier. Meaning, if you’re going out there and looking obviously at some M&A activity, what are some of the options that you are looking at to finance something and what sort of the metrics that you are looking at? Meaning, are you comfortable with your current leverage ratio or if you would acquire a company, let’s say, any ideas as far as how financing would be – options would be open for you?

I would say that all sorts of financing options would be considered and open. I think it is hard in a way to be precise on that. Sorry about that. David Neuhauser – Livermore Partners: That’s okay. That’s okay. I know that’s kind of a tough question to answer. And then also, Jens, I want to ask you specifically if – what is sort of your global macro outlook at this point? There is lot of talk on China, lot of talk on – we are seeing waning demand. Is your view is it short-term or for a quarter or two, or do you think this could go well into 2011?

I think I’m very pro-China and the China oil demand, which of course we had seen been compiling and just going up. Now, there are various storage – strategic storages have been – the second phase has been completed. So I wouldn’t be surprised if there is suddenly a little dip in the oil price. You can see these strategic storage facilities being filled up, and that will of course be positive for tanker market. I think that the Chinese oil demand with the diversified sources of oil, I think it’s very important for the tanker market, and we’d be fairly positive going forward. David Neuhauser – Livermore Partners: All right. That sounds good. Thank you, guys. Appreciate it.

Thank you.

Thank you.

(Operator instructions) It appears there is no further questions in the queue. And at this time, I’d like to turn the call back over to your host today for any additional or closing remarks.

I’d just like to say thank you for dialing in and I’d like to thank everybody in the company for the good work during the first half of this year. And I hope we can of course carry that on for the rest of the year. Thank you.

Thank you. Ladies and gentlemen, that concludes today’s conference call. You may now disconnect your lines.