Good day and welcome to the Second Quarter 2015 Results Presentation Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Robert MaCleod. Please go ahead.

Many thanks. Good afternoon and good morning. Welcome to Frontline's presentation for the second quarter of 2015. This presentation will proceed as follows: Inger will start with the quarterly highlights, the main transactions and into the financial review of the quarter. I will then follow-up with earnings and market factors, newbuilding prices, fleet developments and time charter rates. Then we’ll move onto the present market, and finally we’ll look at the margin outlook. Inger, please go ahead.

Thanks, Robert, and good morning, and good afternoon, ladies and gentlemen. Then I would like you to move to slide four, Highlights and Transactions. In the second quarter, we issued 18.8 million new shares under the ATM program and the existing ATM program is not fully utilized. In April, the remaining outstanding balance on the convertible bond debt of $93.4 million was repaid in full upon maturity, and this was an important milestone for the company as its maturity was a concern in time leading upto April 2015. In June, the Company agreed with Ship Finance to amend the terms of the long term charter agreements relating to 17 vessels for the remainder of the charter period with effect from July 1, 2015. The six charter payments are expected to decrease by approximately $283 million as a consequence of the lower rate, but also as a consequence of increased OpEx payable by Ship Finance. We also agreed a new profit split of 50% each about the new charter rates and in connection with entering into the agreement with Ship Finance, Frontline issued 65 million shares to Ship Finance. Frontline was also released on the charter guarantee and in exchange a cash buffer of 2 million will be built up per vessel. In July 2015, the Company and Frontline 2012 entered into an agreement at the time of merger. The merger is in process and on August 24, Frontline filed a registration statement with the SEC covering the common shares to be issued by Frontline to Frontline 2012 shareholders in the merger. The shareholders meeting of each of Frontline and Frontline 2012 will be held after the registration statement is declared effective, and the effectiveness of the registration statement is subject among other things to SEC review. And we expect to…

Thank you very much Inger. Let's look at slide number 10, the earnings and market factors in Q2. The spot earnings for the quarter came in at $53,600 per day on the VLCCs and $38,000 on Suezmaxes. Whilst the overall results were 50,600 for the VLCC and $33,800 per day on the Suezmaxes including the time charter apps. Overall I would say that these numbers are satisfactory. They are also beating the Q1 results which were the company’s best quarter since the first quarter of 2009. The vessels we secured time charters for in Q1 this year brought the overall earnings down from our spot earnings but the time charter secures income forward and given the volatility of the tanker markets we feel that this cover is prudent to have. The markets were strong throughout the second quarter. It showed volatility but the rebounce was sharp giving a very good average income for tankers in the quarter. The continued decrease in bunker price improved the TCE further. So what’s made this quarter show the strength of debt? The most important factor is the high supply of oil. It actually increased slightly from the first quarter beating most estimates. The vessels were full as the store as they were instructed to wait at various ports and places around the world waiting for the cargo onboard to be sold. The ballast speed increased during the quarter as well and returned to normal levels which was a strong sign seeing this capacity to be absorbed. Overall, the tanker fleet was highly utilized and as the summer approached confidence grew that the summer downtime would be avoided this year. But the downturn did come this year as well later than normal, but I will get back to that in the reason for it later…

Thank you. [Operator Instructions] Our first question today comes from Jon Chappell from Evercore ISI.

Thank you, good afternoon. Just want to ask one question on Frontline 2012 before getting into post-merger strategy. Maybe the disclosure for Frontline 2012 is not as transparent as Frontline Limited. So, is there any way to provide any information on that charter in fleet? I see the ships on the website, but the duration of the charter-ins and the rates that are being paid for those?

This is obviously a call on Frontline Limited, but basically it’s MRs [ph] and we have five on at the moment. The average rate is 15/3 [ph] and periods are relatively short with exposure of max six months and there are lot of options. In total we are committed to about 450 vessel days and we have around 2,200 optional days.

Very helpful. All right. So, then post-merger, so maybe its goes through in the fourth quarter as you said couple of things. First of all on the consolidation front, its been pretty remarkable, the strength of the Time Charter market this year and the fact the asset values haven’t moved up and lot of people are kind of speculating as to why that maybe. But from your perspective is this somewhat of a sweet spot to add tonnage at this point in the market while the asset values continue to lag the earnings from the ships?

Yes. As we are looking at the newbuildings, they have come down and you’ve seen same on secondhand values as well. There’s less capital available in the markets and we are monitoring what’s going on closely, but for us the main focus is to get the merger done.

Then just one last thing and then I'll move on. From the fleet afterwards you mentioned a couple things I thought were interesting, Robert, talked about how it was prudent to do some Time Charter out business and that you may look to that going forward. That's not something that Frontline has historically done in a large manner. As we sit in the cycle today, do you think -- how do you think about the timing of Time Charters versus your optimism on the near term spot market?

The way the Time Charter market has developed over this year, I think with the fleet we have – I think it is prudent to take that cover. And as you say, that’s not been done in the past, but that is something that we certainly will be doing going forward to have a base. And that also gives opportunity to take in tonnage when the market drops and we still believe if it’s over correction now, so I think trading the steel in that way is something we will be much more active in.

And as we think about the combined fleet, would it make sense to maybe take more of that charter out on some of the existing vessels at Frontline Limited and use the newbuilds and the eco-ships from Frontline 2012 to keep your spot market exposure?

We will look at – since this is complete, we will look at it as one fleet and we’ll do what best for each individual ship, but what you’re saying there is obviously one strategy that could well make sense. But for us, we look at getting cover. We will be more likely to be interested in longer – in the longer charters as well as than the shorter and also we’ll be very open to do deals where we keep some of the upside, i.e., do profit share deals.

All right, make sense. Thanks for the time Robert.

Thank you.

We will now take a question from Fotis Giannakoulis from Morgan Stanley: Please go ahead.

Yes. Good morning and thank you. Robert, you mentioned earlier about the fact that the period market that has become more active. Can you give us some example, some numbers to see how liquid and how deep this market is? And given your answer to the previous questions with Jon, how many vessels do you expect that you are considering chartering under period contracts by the end of the year?

For the market in general what we’re seeing now is for the older VLCCs, the two-year deals are in a low 40s, probably 42, 43. The Suezmaxes are in a low 30s, 33 maybe for the similar period. And as per the release in Frontline 2012 you can see what we’ve been doing on the LR2s. As for what we will do here? I don’t want to give you a sort of a percentage on what will go out. It really does depend on how the market develops, but it is good to see the strength in the TCE rates now despite the fall in both VL and Suezmax market. It does show that in the market believe that this will – there will be a rebounce and expect once that happens the current levels have legs.

Thank you, Robert. We have seen that the last two, three weeks, while VLCC rates they have come down, Suezmaxes they seem to hold much better than these. And also what is quite surprising is that the LR vessels in the Middle East, they are even outperforming versus the previous period. Is it just the Yanbu refinery that is causing that? Why this discrepancy between the different asset classes?

Look, at the Suezmax first, there’s been correction now, but I think those day will come back. There’s not many ships as I said earlier. There’s not that many being delivered. As for the LR2s, I expect those two to take a bit of breather here coming into September. The recent being the refinery. So, as I saying earlier the refinery margin this year have been extraordinary as you know for this. So this has delayed the maintenance and the result of the maintenance will be that there will less expose now in September and I expect that to have an effect on the product market. So then things will become more sort of back to normal. But as you say, there’s some out-performance there and I must say, as a company we are very pleased with the decision we have when we were as a combined company with the LR2 fleet we have in Frontline 2012. I think it’s going to be a winner going forward.

Robert, you mentioned about the risks of the order book and I saw in your slide that you have broken nicely down the delivery schedules. And it seems that most of these deliveries are in the third and the fourth quarter of 2016. Are you getting a little bit more cautious about the second half of 2016, and overall how much more oil – how much growth in oil supply we are going to need in order to absorb these vessels and keep the rates above the current period market?

As most in this market, the order book has always cost concern and where we are now, the lowest point we saw was in 2013 we were down to about 11% of the fleet in order. The overall tanker has now about 16% in order. But at the same time, I think I can’t give you the sort of exact number that we need in terms of increase, but what I would say though, I think in terms of supply we’re moving from 93.5 to over 96 within this year and I expected to land somewhere between 97 and 98 possibly more for 2016. So I’m hopeful with the increased volume coming on stream. And I think this will be okay, but let’s see, time will show.

Okay. Robert. Thank you very much for your answers.

Thank you.

[Operator Instructions] We will now take question from Donald Bogden from Wells Fargo. Please go ahead.

Good morning. Can you talk a bit more to your stated goal of being more active in the TC market? I understand it will be somewhat opportunistic, but do you expect there to be a focus on a specific tanker segment? And should we expect Frontline to reach out following recent downward pressure at increase of TC exposure, or would you wait for the closing of the merger to ramp that up?

As I was saying earlier, we’ve had in 2012, there is some activity and for the combined company the main focus will be the four segments which are VLCC, Suezmax, LR2 and MR, that’s sort of core segment. And looking at those we’ll have an overweight toward crude. Crude will be the main focus. So first we will be optimistic. We will look at what give the best risk award, which gives us the best return and we will keep looking for opportunities.

Great, thanks for that. Just to follow-up on floating storage. Are you seeing any inquiry for structural floating storage come back into the market given downward pressure on tanker rates and an increase in contango? And also, could you quantify the non-structural, I think you called it forced, short-term floating storage earlier and just what quantity of vessels that is currently tying up? It's a tough figure to ballpark, but any color you could give on that would be appreciated?

First, just to take the contango-based storage, we’re not seeing contango-based storage questions as such, but I think indirect we are -- there a lot of people out there looking for storage options on the spot fixtures and where the current levels are on the VLCC and the Suezmaxes. I think it will be – it could be one of the factors, its not going to be the main factors. There could be one of the factors that helps bring this market back up. As for the forced storage, its difficult to put numbers on that, but just speaking of our own fleet, we have on many occasions this year been told to say, we’re loading the Middle East we’ve been told to sit in Fujairah or Dubai for 10 days, or 15 days or 20 and then the same situation in Singapore where simply the cargo is unsold and there’s no sort of choice on trade or oil company side than to let us wait until they know the direction we’re heading. And as long as the market is – the supply side as it is not right, I don’t think that’s going to change.

All right, well, thanks for the time and appreciate the color.

Thank you.

[Operator Instructions] Our next question comes from Gregory Lewis from Credit Suisse. Please go ahead.

Yes. Thank you and good afternoon. I guess there's really several questions. As we think about the fleet growing with the absorption of Frontline 2012, clearly Frontline has a lot of -- and with its relationships has a lot of legacy vessels in there, some late 1990s built, some early 2000 built vessels. Clearly, over the last year we’ve definitely seen the older tonnage in the market catch more of a bid up than the more modern tonnage. And just as we think about this going forward over the next, I don't know, six or 12 months, should we think about -- should we expect or is there a possibility that we could see Frontline continue to prune out its older vessels and actually book good profits? Just because it sounds like you see an opportunity for the market, but just given the whole time charter strategy it seems like you are more conservative than you have been in the past heading into what looks like a potential up cycle?

I will focus on the fleet age. As we were saying before we want to renew, we want to get the average age down. On the part of fleet that approaches 20 years, an example being the Front Glory, which we have on lease from – or we had on lease from Ship Finance which they’ve sold. I think we will – that is something that could well happen going forward here and try to sort renew ourselves a bit.

Okay. So it sounds like we should expect into the rising market continued asset sales of the older tonnage and that seems like the blueprint we should expect over the next two years?

Yes. The way we look at it is the premium we can get versus the stock price and compare that to the profit you can lock in on the time charters. And in most instances, things are now than the premium versus scrap price i.e., selling the vessel, is most often the winning strategy.

Okay. And just you mentioned the time charter market and looking at that, I mean what type of discount or -- when we think about time chartering vessels out, is there actually interest from charterers to be locking up some of this older tonnage or is it more -- is there discrimination where, if you are looking at a multiyear time charter, it's primarily just for the realm of more modern tonnage?

The demand the ships, say between 2015 and 2020 there’s good demand in that age segment.

Okay, perfect, guys. Thank you very much for the time.

Thank you.

We currently have no further questions. [Operator Instructions] There are currently no questions. As there are no further questions in the queue, I would now like to hand the call back over to Inger Klemp and Robert MaCleod for additional or closing remarks.

Thank you very much. Thank you all for dialing into this call and I would like to thank everyone in Frontline for their excellent efforts. Thank you.