Thank you for standing by, ladies and gentlemen, and welcome to the Navigator Holdings Conference Call on the First Quarter 2015 Financial Results. We have with us Mr. David Butters, Chairman, President and Chief Executive Officer; Mr. Niall Nolan, Chief Financial Officer; and Mr. Oeyvind Lindeman, Chief Commercial Officer. 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 this conference is being recorded today. And I now pass the floor to your speaker, Mr. Butters. Please go ahead sir.

Thank you, and let me welcome everyone to Navigator's first quarter 2015 earnings conference call. We are pleased with the Navigator's performance over the past months, which exceeded our own expectations laid out in our internal budget created five months or so ago. Adjusting for the write-off of deferred financing costs, earnings per share of $0.43 represented 39% improvement same period in 2014. In a moment, our Chief Financial Officer, Niall Nolan will take us through the details of quarterly numbers and will be followed by our Chief Commercial Officer, Oeyvind Lindeman. Oeyvind who is joining us today from [indiscernible] will review the markets during the first quarter and what we might expect as we move forward during the remaining part of the year. It seems only yesterday when we reviewed our year-end 2014 results, so there will be very little new to add to that conversation. Remembering that Navigator is a long-term play on the structural, not cyclical changes taking place hydrocarbon space as the world gradually moves into greater use of cleaner fuels such as natural gas and natural gas liquids, one should not expect dramatic changes to our business basis. Change will come gradually as infrastructure is developed to facilitate the logistical shifts needed to accommodate the change. The emergence of America as an important global source of natural gas liquids is one important example of the structural change taking place. Another example would be the developments in the Middle East offsets they are pure hydrocarbons and export higher valued petrochemical gases at the expense of crude exports. But these changes take time to implement, but they are indeed being implemented witnessed by the infrastructure build-out in the Gulf of Mexico to accommodate the growing US LPG production. Enterprise Products Partners in Targa the early movers on…

Thanks David and good morning. The results for the three months ended March 31, 2015 were solid performance as David mentioned and in line with the expectations I outlined at the end of our recent Q4 earnings call. Operating revenue increased by 6.3% relative to the first quarter of last year despite some seasonal market softening in the area of parts this years as we mentioned previously and net income rose by over 30% compared to the same period last year despite rising of the $1.8 million of deferred financing costs, which I will comment on further in a moment. So operating revenue for the first quarter was $74.2 million up $4.4 million compared to the $69.8 million generated just first quarter of 2014. This revenue increase comprised of $6.1 million as a result of the increased fleet size which grew with an average of 26.9 vessels in the first quarter of this year compared to 24 vessels traded in the first quarter of last year. Secondly revenue increased by $1.2 million from an improvement in charter rates, which rose from a time charter equivalent of just under $888,000 per month or $29,180 per day in the three months ended March 31, 2015 from an average of $871,000 per month or $28,650 per day for the comparable three months period of 2014. Thirdly, we achieved a small uplift from the slight increase in our utilization rate which nudged up to 97% for this quarter compared to 96.9% for the first quarter of 2014. And against this revenue was impacted by a reduction of $3 million from an effective pass-through costs on voyages charter revenue from the significant reduction in global bunker fuel costs. One of our existing vessels entered drydock during the first quarter of 2015 for a 15-year docking.…

Thank you, Niall. And just to add to echo some of David's point, we are very excited about the continued build-out of U.S. NGL infrastructure, allowing the increasing production in U.S. LPG surplus to reach international market. They are re-coming, an example, up to middle of 2012, neither Navigator or anyone else had exported a single molecule of gas from Sunoco's Marcus Hook terminal near Philadelphia, but since the second half 2012 until - including the first quarter this year, we have listed or done, completed 40 load operations at this terminal, moving a total of 6 million barrels of propane. Now we see similar developments for butane. A surge of butane is coming to the market, which we will benefit from, and as David mentioned, we recently concluded our first shipment of butane 150,000 barrel cargo from Chesapeake, Virginia and we expect more to come. And this vessel is one of the first to load from this terminal. So I'm sure we'll take pictures and familiarize ourselves with that terminal. We see the - we expect, as David mentioned, more LPG coming to the East Coast with the commissioning of the Mariner East 1 pipeline connecting the Marcellus and Utica with the East Coast and export markets. In parallel, enterprise is well underway with their expansion program on the U.S. Gulf Coast. And as David said, Lone Star and Sunoco's Nederland terminals is operational and we expect to be able to load from there pretty soon and Occidental's Englefield Terminal in Texas is also expected to be commissioned and operational July of this year, we are in discussions with several customers to note from this side, but that is the U.S. and everyone mostly the guys on the call today are very familiar with U.S., but Navigator is involved…

Thank you, Oeyvind. Operator, I think we can open the call now to question-and-answer period.

Thank you very much. [Operator Instructions] Your first question comes from the line of Charles Rupinski from Global Hunter. Please go ahead.

Yes, good afternoon, everyone. Good morning I mean. Just curious, if I could ask you a question about what we've seen with bunker price moving up basically in the oil price as well. How this would affect sort of the charter environment for your vessels?

I don’t think it had much of affect either way Charles. Oeyvind could you comment or Niall do you have any specific numbers.

During the first quarter we had about 65% coverage meaning time charter. And of course then the bunker saving or lots on the time charter is for the customer.

Sure.

We don’t see that impact. Now on the spot voyages, obviously the bunker is on our account and with the narrowing of the arbitrage to reinvent the U.S. and Europe and LPG, they are decreasing bunker price obviously allowing product rules, giving better margins for us. But everybody is buying the bunkers, everybody is exposed to the bunker market. So I don’t - we are all in the same boat, when it comes to bunker price and freight rates are just accordingly.

Okay, thank you for that.

Thank you. [Operator Instructions] Your next question comes from Omar Nokta from Clarkson Capital. Please go ahead.

Thank you, good morning guys.

Good morning.

Hi, just as - the comments about the ethylene loaded kind of the U.S. in the past couple of weeks, a real divergence in the price of propylene and ethylene here in the U.S. finally get into significant discount prices in Asia and in Europe, clearly on where do you think - what you're seeing that the US is going to start really shipping or not necessarily shipping, but going from this purely propane next quarter and potentially enough butane that really start including propylene and ethylene in that in a bigger way.

Let me first answer part of it and then I’ll let Oeyvind answer a piece of it. I recently met with the folks at Sunoco Logistics and focusing on the fuller and more advanced element of their facility in Marcus Hook, which is a large facility capable of handling not only fuel exports and also large enough to create an infrastructure for our petrochemical business. They are discussing Mariner East 3 and believe that and they focus on Mariner East 3 as well as some of these surplus in the Mariner East 2 is really to upgrade fuel product at the site so that they can produce propylene and other petrochemical gases so that they can capture some of that added value in the U.S. and create manufacturing jobs. And that’s just great for us because in addition to being able and capable of carrying the fuel grade propane. Our vessels are the largest vessels for petrochemical gases i.e. propylene and butane. This however and I’m sure that will happen on the Gulf Coast creating the PDH and so butadiene or whatever have you. We’re certainly seeing the ethylene being exported now because of the shortages in Europe, but all of this I think is even further down the road because it takes quite a while to build these plants, but and the important thing is if that happen we’re sitting with the largest petrochemical vessels right now. So that would be a beautiful piece of an incremental business for us throughout, but tell us or even what you are seeing now as far as kind of arbitrage and what kind of trade within that petrochemical gas components might be.

Just to talk about ethylene it is important to remind ourselves that the only ethylene terminal in the U.S. its dock 1 at Targa remain upon and load rate there is 40 tons an hour which is about 4,400 barrels an hour, which is very limited. So loading one of our big ships, the largest ethylene ship from the water takes 12 days, but the economic still allows for customers to do that and take it all the way to China or far east. So let’s tell - now the infrastructure would develop in the U.S. from the big versatile ethylene cracker the new one come on stream 2017, 2018. We would think that there will be excess capacity on ethylene and we would think that new ethylene terminals would be available to export these products as well. Will the same thing happened with propylene probably, why shouldn’t you have still more PDH plants and export propylene products and we are coming there and load the propylene. So yes, I think the big opportunity for U.S. to take a larger chunk of market in petrochemical gas.

Yes, thank you. It definitely seems that this based of a pricing that is may start to instigate some investments. Just one question on that regarding Targa’s loan ethylene export facility. There is others similar sort of restrictions on the ability to move quickly as well, is it also a very small amount?

There are several terminals that have propylene capacity especially because they have propane storage with a few terminals that can be propylene stay but today we haven't seen any big propylene movements will come probably but the propylene generally moves through Mexico to Columbia in the region not into U.S., but we haven’t seen it in the past and it all depends on arbitrage and arbitrage in petrochemical gases changes every day, so we might have a situation whereby because of propylene is going one way and a week later we ship is after turnaround and this just where he came from.

Thank you and then just sort of summarizing that point when we think about the global trade of ethylene and propylene. Can you give us sort of a sense at least from your business or may be just the market perspective and what percentage of those two cargos originate in the Asia market versus the less?

I think the petrochemical market as a whole transform that piece is about 10 million ton half of that is ethane and ethylene the rest biggest part then remains is butane and propylene. In Asia there is a big business for propylene gas transportation business within there and one smaller ships. The smaller ships are not involved in taking the advantage of the arbitrage in confidence. But the exact proposition of coastal Far East propylene trade, west, I don’t have right now.

One thing is likely to happen now on speculation that should the sanctions in the UN and negotiations resolve issues with the RAN. RAN has a very major petrochemical complex historically been very active recently it’s been rather quiet for exports and so on. But they are major producers all sorts of petrochemical gases and should that open up. I think that will be a terrific beneficiary for the transport - international transport of petrochemical gases but of course that we’re dealing that with some speculation, but probably likely.

Okay thanks David and thanks Oeyvind for the commentary, very helpful. And it’s definitely seems that things are restaurant to play into the…

Thank you. Your next question comes from Michael Webber from Wells Fargo. Please go ahead.

Good morning this is the [indiscernible] stepping in for Mike. Are you guys seeing some incremental mix shift demand for LPG given the stronger recovery of oil and vis-à-vis naphtha pricing of the petrochemical feedstock? And also given some of that I think the pretty understand seriously understated geopolitical risks, we're seeing in Middle Eastern oil markets?

Well, business has been strong generally, we did not notice a material weakness as a result of collapse in the prices of crude months ago. We’re seeing that dramatic change going up, I think it’s been steady, it’s been growing and it’s very supportive, it’s been arbitrage and just about all of the fuel grade LPGs and petrochemical gases. It’s not much more we can deal with we running at 97% utilization we can improve on that a bit not a great deal Oeyvind can you put any more color than that on the question that our friend just asked?

General trend at least for Europe, European petrochemical producers move away from - lighter feedstock being overall [indiscernible] as the general trend, but granular impact of - say increase in oil price so far we haven’t - we don’t really see the impact much but the trend is there lighter feedstock.

Okay, thanks for that. And then, I have a second question that's on current spot market as we transition into the summer. As of couple weeks ago, there is virtually no prop tonnage available in the U.S. Gulf, I think it peaked at around three to four week waiting time for the VLGC in early April. Can you comment on current earnings and fundamentals in the Atlantic basin and what your expectations are as we transition into summer?

If you compare our first quarter and second quarter particularly on the U.S. East coast, and in the first quarter as we talked about because of the temperature of the core temperature - the coal temperature like last year, now bring on the doorstep we see definitely a strong pickup of demand for shipping in general including ourselves to move the NGL to markets [indiscernible] supply demand, despite some tonnage, but definitely stronger second quarter for us whereby our first open position today is sometime maybe early June and we are now early May, so that’s an indicator of the market.

All right. I appreciate the color guys, thanks a lot.

Thank you.

Thank you. Your next question comes from Jon Chappell from Evercore. Please go ahead.

Good morning, Jonathan I

Good morning, David. Couple of questions for you David on some strategic developments. I'm sure if there were any updates you have provided them in your comments or in the press release, but just try to get a better idea of maybe timing. So first on the former acting carriers new builds obviously one is already contracted, any update on the timing of the three remaining vessels?

It is frustrating not to be able to come back on these calls, and be able to give you some tangible information. It’s has been about 45 days since our last call, so really is in the full three months period. But I will say this, I remain confident about the attractiveness of these vessels to transport ethane, soon or later they will find their home on long-term basis. I think the issue has been the suddenness and dramatic movement of the price of crude throughout this last four, five months period has put a pause temporary pause on decision making on the part of the major companies involved in the importation and use of ethane. Throughout this whole period our opinion the economic advantage of using U.S. ethane in competition to any other raw material are still very positive and you would have said what this would trigger the transaction, but I think the issue has been the suddenness of it. And the lack of understanding of the cause of all of this volatility accrued has given everyone a bit of pause before they make decision. No one wants to be found silly about making a decision without having a better fix on the causes of it. Also we needed is my opinion with some stability in the price of crude oil for example in order to those decisions to get firmed up. I think we’ve had some stability, but now we are around the highest. So in my opinion this will all be firmed up in a period of time of anymore two month type of forecast, but conversations are continuing they are serious and no one has backed off and said they aren’t interested. So yes I think it’s going to continue, but I just cannot give a real clarity on when that it will happen, but I am confident by the timing these vessels do get delivered. In the summer and fall of 2016, they will be all fixed and have a nice happy home.

Okay, understand. The other thing in kind of that same regard then is VLEC on a one hand, you talked about the uncertainty and it doesn't seem to me that anyone really move forward with those types of vessels, almost nobody. On the other, I think when you first brought up the potential for those about a year ago, you would said in the years’ time, if we haven't moved down and we probably won't, obviously a much different environment from when you first made that statement. So, is it something where you feel you've missed the boat, and that's not something you can pursue anymore or does it go kind of hand in hand with what you just talked about the uncertainty in the market and decision making has maybe pushed back the open window opportunity and still something you are considering?

Yes, I think that what you’ve said is probably right. When I said that I was thinking that we would be - is it happening within the year, we wouldn’t be doing it. Unfortunately, at the time I thought there would be some stability in the price of oil and therefore decisions could be made in a logical and practical way with all the numbers. The complete breakdown in crude as differed any kind of decisions on the part of it. We have not lost business to anyone else and indeed I think if you would have evaluate the situation we are probably a the leading player that have the ability to do it. But just not happening, it’s not happening because are deferred and I have heard nobody we’ll not be doing this business because we just don’t think it’s going to economic tool. It has been economic right through the downturn and that’s another thing I - that even with the prices being where it was nobody backed off and said the spread wasn’t sufficient, it’ll always want just issue and major commitment on the part by contracting to buy a long-term supply of that thing. The commitment to charter vessels for long-term that those major capital decisions have to have some basis of understanding and when they didn’t understand the volatility in the price of crude and they - alternative feeds that could make the decision. That would come back and play a role in the next period of time. So it’s not that Jonathan not my opinion that is differed.

Okay. That makes complete sense David. One last one for Niall, on the - you gave the CapEx for the remainder of 2015 what’s the schedule for 2016 and 2017 and can you just remind us where you stand on financing for those periods?

The more recent loan - the recent loan that we put in will finance the remainder of the vessels coming out in 2015 and two of the vessels that will be delivered in 2016, we then have to finance which I mentioned that the banks have made some - quite a number of banks have made some over about financing the four ethylene carriers, the larger ethylene carriers and then we’ve got the two deliveries in 2017. Both the 2015 deliveries and the 2016 deliveries are pretty much old backend installments whereby there is 70% delivery installed, so the finance is won’t be required until the delivery, but they are well enhanced.

Okay, and indeed you said that the total figures for 2016 and 2017

At 2016 it’s just under $350 million, $345 million and 2017 it’s $20 million which is the last payment on the two…

Got it. All right. Thanks Niall, thanks David.

Thank you Jon.

Thank you very much. [Operator Instructions] The next question comes from Doug Mavrinac from Jefferies. Please go ahead.

Thank you, operator. Good morning, good afternoon guys. Oeyvind, during either one your answers for the questions are in your prepared comments you describe 2Q as being night and day different than what we saw in 1Q in terms of activity levels for your base, LPG carrier fleet and then even though 1Q which you guys are described dull, rates are still 29,000 a day, which were still very, very good. So my question is can you give us some sort of sense as far as what you're seeing in the market for handysize earnings and 2Q thus far, we were at 29 and change per day in 1Q when things you picked up. How are you seeing that manifest itself in terms of daily spot rates for, you know, across the industry and even if we have some specifics for your own fleet, kind of what are we seeing thus far in 2Q for your handysize carriers?

As I mentioned we’re booked up month of May we really one month ago for the second quarter. But definitely there is a change from first quarter to second quarter just the near fact of utilization it seems to be very high and the tightness of or the lack of tonnage is there. And it’s our job to see what we can do with the rates of course. So I mean we will come with the results when the time comes as opposed but so far it’s looking good.

Gotcha. But you are seeing utilization levels up from Q1 levels which equated to 29 grand today.

Well, 97.1% or 97% it’s very, very difficult to be, so even 97% come I think that’s pretty good.

Right, right, right gotcha. All right well that’s helpful and then my follow-up David in one of your answers to one of the previous questions you described the conversations still taking place for some of your ethane carriers. My question is now we’ve seen volatility in crude to the upside over the last four weeks. In those conversations would you say that or have you seen any changes on the part of the people you are negotiating with in terms of the urgency to get something done. Now that we are seeing new crude both WTI and Brent really rallying, causing people to have a little bit more urgency in terms of the negotiations or they just wanting stability whether it’s - volatility for the downside into the upside or they more interested in stability or this is kind of [indiscernible] under some people?

I would say the - it wouldn’t be an urgency raising to capture the price right away I think the urgency and the concern and the part of the people that we have been talking to about is the urgency to be sure that they get our vessels, remember we’re the only ones building that are not committed 35,000 cubic meter ethane carriers.

All right.

Those vessels can be delivered in late 2016. So if there is an urgency it is one of which - if I don’t get them I may miss them and I want to be in the business and I want to transport ethane I’ve added. So it’s not a matter of the price of oil because I think everybody wants to have a stable market so they can make such certain judgments and go to their Board of Directors with some degree of authority and confidence. When this volatility there is always someone who speculate what happens if and so what I do notice, yes the urgency is not on the price of the commodity but the availability of our equipment and that’s why I would say confidence is there from my part.

Gotcha, very helpful. Thank you.

Thank you. And your next question comes from Ben Nolan of Stifel. Please go ahead.

Thanks. I have a few - stepping away from the potential for contracts on the ethane capable vessels and maybe in conjunction with some of the discussion that you guys are having earlier with Omar about the potential for real growth and the transportation of petrochemicals. Have you seen much in the way of demand for maybe more long-term contracts, I know that you had those two new builds on your traditional handysize vessels that came with five year contracts but are your customers coming to you asking to lock in equipment for substantially longer periods of time or has that dynamics not really change at all.

I think it’s the latter, now for the handysize it’s still very much short-term for outsiders but 12 months’ time charters. We are always comfortable with that because of our experience and so forth and we can short the results of utilization. But yes, I haven’t really changed when unique special projects like the ones you just mentioned yes, but generally we feel better.

Okay, my next question is again sort of a broadly speaking, but obviously has an impact on you and it relates to the delivery of new builds. I know David that one of your concerns historically has been at the market would potentially become over build, is that still sort of top of mind for you the risk of overbuilding or you seeing any dynamic are you seeing slippage of new buildings added for your own equipment or maybe more broadly in the market maybe a little bit less of an appetite among potentially speculative orders or is that aspect of the supply side is keeping you up at night like it, maybe it was?

I hope it doesn’t keep me up, but I am always concerned about overbuilding, if you are in shipping and you are not concerned about all the building you won’t be in shipping for very long. It is something that is historically been real death knell for shippers and particularly when things go well people want to come in to the business and be part of it and build into it. Now we talked about the question about length of contracts and did we see anything that and in the longer runs, but we haven’t not materially I think they are extending out a little bit. But to the extent that they were that would make the attractiveness of handysize even more interesting and you would see even greater amount of new builds. One of the things it keeps people away is a fact that the handysize is one that is very difficult to get long-term contracts and hence it’s kind of a barrier to entry if you will. Now as far as the existing new build in some 38 vessels, 37 vessels being built, we now have 10 of those at least six of those in the handysize, 37 in the handysize, but there are some issues there has been some discussion and some press about one Chinese yard that does had some difficulties, acknowledge difficulties I guess about the ability to continue building amount the vessels that they have got on order and I believe they have got 13 of them in the handysize space that they may have to be delayed. I think and I don’t want to speculate I’ll take the word of the yard at face value and assume that they will get delivered, but I’ll also take what they’ve said about significant delays in delivering those vessels. And of course to the extent that they get delayed it’s a bonus to us, who have vessels in the water and our vessels still remain on time and on budget. So we are happy with us, but I think one should be everyone as an investors and ownership be concerned about new builds. Right now I’m comfortable with it, I’m not losing fleet and I think we can handle what is on our plate and what’s on the plate of everyone else. And they hasn’t been as far as I know any new builds in our handy space ordered in the last four to five months and I think subsequent to the oil the one beneficiary this is added to scare people about and then I think if you were to try to order new vessels today in the handy you are looking at the second half of 2017.

Okay, that’s helpful. And then my last question maybe this is for Niall, you are talking with Jon about you CapEx program and the financing that you have in place, could you maybe quantify for me what you feel like is you available capital if an opportunity were to arise without meeting any additional equity side I mean how much dry powder would you characterize you have at the moment?

Well, at the moment we’ve got sufficient equity to build or pay for the equity portion of the existing new build program. Obviously, we are generating cash on volume basis, we’ve got a number of facilities which come to maturity in 2017, as well as the Norwegian bond, which we have a call option from this December and expires in December 17. Well, assuming that those - all of those loans and the bonds where renewed so existing stake if you were going forward. We would have probably about a $100 million to $250 million per annum.

Okay.

But right now, we wouldn’t have anything significant of spare capacity because any available cash that we have was being used for the equity portion of the new business that we have covered between now and March 17.

Okay, that’s helpful. That 100 plus that you are talking about is that a on a levered basis or is that sort of your equity that you could probably contribute.

It’s kind of the internally generated equity that the equity generated from the operations.

Okay, perfect. All right, that does it from my questions. Thanks.

Thank you.

Thank you, very much. We have a follow-up question from Michael Webber from Wells Fargo. Please go ahead.

Hey, Donald stepping in for Mike. Just a follow-up question on one of the previous questions is talking about the just in the regional mix between trade flows in the Atlantic basin and the in Asia Pacific. As US Gulf, and East Coast exports continue to ramp. How are you viewing your regional fleet deployment it means as they are continuing sort of ramping our focus in the Atlantic basin or does increasing focus in the US Gulf create kind of dislocation and opportunities elsewhere?

The bulk of the fleet we migrating through the west. We have new building delivery on the 27th of April - meaningful feed towards the US or Atlantic basin because thought were the attractive rates. So the migration to the Atlantic and that’s what we’re seeing for probably, definitely the second quarter.

All right, thank you.

Thank you, very much. And there are no further questions in the phone lines. Please continue.

Great, thank you for helping us today with the call and thank you all for joining us. We will return once again in three months’ time and talk further about our developments. Thank you and good day.

Thank you very much. That does conclude the conference for today. Thank you for participating. And you are now free to disconnect.