Welcome to Teekay Tankers Limited’s Second Quarter 2017 Earnings Results Conference Call. During the call, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session [Operator Instructions]. As a reminder, this call is being recorded. Now for opening remarks and introductions, I would like to turn the call over to Mr. Kevin Mackay, Teekay Tankers Ltd’s, Chief Executive Officer. Please go ahead, sir.

Before Kevin begins, I would like to direct all participants to our Web site at teekaytankers.com, where you'll find a copy of the second quarter 2017 earnings presentation. Kevin will review this presentation during today’s conference call. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward- looking statements is contained in the second quarter 2017 earnings release and earnings presentation available on our Web site. I’ll now turn the call over to Kevin to begin.

Thank you, Ryan. Hello everyone, and thank you very much for joining us today. With me here in Vancouver are Vince Lok, Teekay Tankers' Chief Financial Officer and Christian Waldegrave, Head of Strategic Research at Teekay Corporation. During today’s call, I will be taking you through Teekay Tankers’ second quarter 2017 earnings results presentation, which can be found on our Web site. Beginning with our recent highlights on slide three of the presentation, Teekay Tankers reported an adjusted net loss of $7.1 million or $0.04 per share in the second quarter of 2017 compared to an adjusted net income of $7 million or $0.04 per share in the first quarter of this year. We generated free cash flow of $18.7 million during the quarter compared to $34.4 million in the previous quarter. Our results were negatively impacted by lower spot tanker rates in the second quarter, which I will elaborate on later in the presentation. In accordance with our dividend policy, Teekay Tankers declared dividend of $0.03 per share for the second quarter of 2017, representing the minimum quarterly dividend. As discussed in our news release in late May, Teekay Tankers agreed to acquire Tankers Investments Limited or TIL and its of fleet of 18 mid-sized conventional tankers in a share-for-share merger. I will touch on the benefits of this transaction later on in the presentation. In July, we completed the previously announced 12 year sale leaseback financing transaction on four modern Suezmax tankers, increasing our liquidity position by approximately $30 million. The transaction is structured as a 12 year bareboat charter at an average rate of approximately $11,000 per day with attractive purchase options for all four vessels throughout lease term commencing after year three. This transaction further strengthens our financial position by increasing liquidity, while allowing us to…

Thank you so much. We’ll start with the first question from the line of Gregory Lewis of Credit Suisse. Please go ahead.

Could you talk a little bit about the ship-to-ship transfer business? I mean clearly in the prepared remarks you talk leveraging that business. Yet, as I look at it sequentially, it looks like you led a couple of vessels roll off and looks like that fleet is shrinking a little?

Based on the volume growth that we developed at the backend of the last year and into the early half of this year, we have approximately five ships that we've dedicated to that business. And then we supplement with vessels that we bring in from our pulling business, as well as some spot market. On a ratable basis, there’s roughly five ships dedicated to that. In recent months, we have sold one of those five ships that we are looking to replace it by taking one of the Teekay ships from our pulling agreement and putting it back into that program. So going forward, while I think volumes will vary month-on-month, I think you'll probably see us through the rest of 2017 with an average of four to five ships in that trade in any given time.

And there is really no expense for moving a ship into the SPS, and is all the necessary equipment?

Yes.

And then just one big picture from me. Clearly, the OPEC cuts have been painful for the tanker market. But I guess on the flip side of that, we have been seeing increasing crude oil from the Atlantic basin. And I guess what I'm curious about is I'm curious on your thoughts about, as OPEC comes back online, whether that's in the middle of '18, late '18 or when OPEC eventually does come back online. How should we be thinking about that potentially impacting the Atlantic crude volumes that we've been seeing?

I think we have to recognize the Middle East OPEC cuts have had an impact, primarily on the VLCC market. And that's why I think you're seeing -- although production in West Africa has been increasing significantly over this year, we haven't seen the added impact on rates that we're hoping for. And that is a result of the cuts from the Middle East driving VLCC tonnage more towards West Africa. So I think as you see a reversal of that and OPEC starts to produce in higher volumes, we'll return more to a traditional sense where a larger volume of the Middle East crude will be carried by the V fleet, leaving a lot more opportunity and a lot more of in-balance of tonnage, both on the Vs and Suezmax in the Atlantic. So we should see a bolstering and a real driving home of the impact of the ton mile that the West Africa and Caribbean voyages into China and India drive. So I think, obviously, the return of Middle East crude is only positive for tankers.

We'll take the next question from the line of Noah Parquette of J. P. Morgan. Please go ahead.

I just wanted to ask about the sale leasebacks. It seemed like a pretty good day to get a little more liquidity. Are there other ships that you consider doing that with? I think just give me a sense of what other liquidity options you’re looking at outside of the merger happening? Thanks.

Yes, I think that’s one of the positives of the actual merger itself, and one of the compelling reasons why the Board was so positive on it is by adding the additional vessels to the fleet with a younger fleet profile, it does give us a lot more options if the tanker marker were to incur longer headwinds than we anticipate. So I think with our current fleet, there would be limited opportunities with our fleet to do some additional leasebacks. You would you probably see us look to sale assets of the older vintage trying to raise liquidity. But, the TIL merger, is really something that gives us that option to look at sale leaseback, selling older ships at various other avenues. So that's why we're positive about it, and we think it's a compelling merger for the organization and for bringing value to the shareholders.

If you could just remind me -- do you have any ships in your fleet that are unencumbered and any ships in TIL?

No, not currently. They’re all pledged and secured under existing facilities.

There are no further questions on the phone lines. I'll turn it back to you Mr. Mackay for closing remarks.

Thank you very much. And we'll speak to you next quarter.

Ladies and gentlemen, this concludes today's conference. We thank you for your participation. You may now disconnect your line and have a great day.