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Jan 3, 2019

Overseas Shipholding Group, Inc. Announces New Bareboat Charter and Completion of Refinancing

TAMPA, Fla. –
Overseas Shipholding Group, Inc. (NYSE:OSG) (“OSG”), a provider of
energy transportation services for crude oil and petroleum products in
the U.S. Flag markets, announced today that it has entered into a
Bareboat Charter Party Agreement with the owner of the vessel known as
the Oregon Voyager. OSG will rename the 1999-built U.S. flagged
product tanker the Overseas Key West and intends to use this
vessel in the U.S. coastwise trade under the Jones Act. The Bareboat
Charter extends for 10 years, into 2029. OSG will undertake the vessel’s
fourth special survey following the vessel’s expected delivery and
expects the vessel to commence commercial operations during the second
quarter of 2019.

Sam Norton, OSG’s President and CEO, remarked, “Following closely on our
decision to extend all of the leases for our AMSC-owned tankers, the
addition of the Overseas Key West to our fleet of Jones Act tank
vessels is an important and visible signal of OSG’s continuing
commitment to sustaining our leading position in the markets which we
serve. The extended duration of this new lease agreement is both an
affirmation of our positive outlook for the future as well as a
validation of OSG’s reputation as a preferred counterparty in operating
Jones Act tank vessels to the high standards demanded by its customers.”

Mr. Norton added, “At current market levels, we expect the Overseas
Key West to contribute more than $18 million per annum in time
charter equivalent revenue once she enters into service. At this revenue
level, we estimate that the Overseas Key West would add
approximately $5.5 million in net annual vessel operating contribution,
which would be a welcome addition toward building a solid future cash
flow profile.”

OSG’s announcement of its new bareboat charter is the latest in a series
of transactions previously announced, including:

  • The closing on December 21, 2018 of a five-year $325 million term loan
    credit facility with The Prudential Insurance Company of America and
    other syndicate lenders (the “Term Loan Refinancing”). OSG’s
    subsidiary, OSG Bulk Ships, Inc. (“OBS”) and certain of OBS’s
    subsidiaries obtained this new loan facility to refinance and replace
    its existing term loan facility, which was fully repaid as a result of
    the Term Loan Refinancing.
  • In connection with The Term Loan Refinancing, the amendment and
    extension of its secured asset-based revolving loan facility with
    Wells Fargo Bank, N.A. The amendment reduced the maximum credit line
    available from $75 million to $30 million and extended the term
    through August 2, 2019. The amendment also reduced the number of
    vessels serving as collateral.
  • The extension of OSG’s bareboat charter agreements with American
    Shipping Company ASA (“AMSC”) for nine vessels currently under charter
    from AMSC. Charter agreements for five of the vessels were extended
    for additional three-year terms, commencing in December 2019 and
    ending in December 2022. The charter agreements for the other four
    vessels were extended for one-year terms commencing in December 2019
    and ending in December 2020. OSG previously exercised its option to
    extend its charter for the tenth vessel that it leases from AMSC,
    extending that charter into 2025. As a result, all 10 bareboat charter
    agreements with AMSC have now been extended for additional periods.
  • The completion on November 19, 2018 of a financing from Wintrust
    Commercial Finance, a division of Wintrust Asset Finance Inc., in the
    amount of $27,500,000, which is secured by first preferred ship
    mortgages on the Overseas Mykonos and Overseas Santorini
    and a guaranty from OSG.

“We had a busy and highly productive fourth quarter,” commented Dick
Trueblood, Vice President and CFO of OSG. “Having extended the
maturities of all of our material liabilities and having resolved any
perceived uncertainty regarding the future deployment of our principal
revenue generating assets, we believe that we have enhanced the future
visibility of our cash flow streams. We are optimistic that this
improved visibility will highlight the value-generating prospects of our
business model and provide us with the capability to pursue additional
growth opportunities.”

About Overseas Shipholding Group, Inc.

Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded tanker
company providing energy transportation services for crude oil and
petroleum products in the U.S. Flag markets. OSG is a major operator of
tankers and ATBs in the Jones Act industry. OSG’s 21 vessel U.S. Flag
fleet consists of five ATBs, two lightering ATBs, three shuttle tankers,
nine MR tankers, and two non-Jones Act MR tankers that participate in
the U.S. MSP. In addition to the currently operating fleet, OSG has on
order two additional non-Jones Act MR tankers and one Jones Act
compliant barge which are scheduled for delivery in 2019 and 2020
respectively. OSG is committed to setting high standards of excellence
for its quality, safety and environmental programs. OSG is recognized as
one of the world’s most customer-focused marine transportation companies
and is headquartered in Tampa, FL. More information is available at www.osg.com.

Forward-Looking Statements; Non-GAAP Financial Measures

This release contains forward-looking statements. In addition, OSG may
make or approve certain statements in future filings with the Securities
and Exchange Commission (“SEC”), in press releases, or in oral or
written presentations by representatives of OSG. All statements other
than statements of historical facts should be considered forward-looking
statements. These matters or statements may relate to OSG’s prospects,
OSG’s future results of operations, OSG’s ability to maintain its market
position, OSG’s ability to operate without interruption, OSG’s ability
to pursue growth opportunities, and OSG’s ability to comply with the
terms of its credit facilities and other material contracts.
Forward-looking statements are based OSG’s current plans, estimates and
projections, and are subject to change based on a number of factors.
Investors should carefully consider the risk factors outlined in more
detail in OSG’s Annual Report on Form 10-K and in similar sections of
other filings made by OSG with the SEC from time to time. OSG assumes no
obligation to update or revise any forward-looking statements.
Forward-looking statements and written and oral forward-looking
statements attributable to OSG or its representatives after the date of
this release are qualified in their entirety by the cautionary
statements contained in this paragraph and in other reports previously
or hereafter filed OSG with the SEC. “TCE revenue” and “net annual
vessel operating contribution” are non-GAAP financial measures, which
are defined in OSG’s most recent Quarterly Report on Form 10-Q and the
related earnings release, a copy of which was filed as an Exhibit to
OSG’s Current Report on Form 8-K filed with the SEC on November 9, 2018.
These Non-GAAP measures are used because management makes economic
decisions, and evaluates OSG’s financial performance, based on these
measures.

Investor Relations & Media Contact:
Susan Allan,
Overseas Shipholding Group, Inc.
(813) 209-0620
sallan@osg.com