Overseas Shipholding Group, Inc., a market leader in providing energy transportation services, announced it has entered into a settlement agreement with American Shipping Company ASA (“AMSC”),

Aker Philadelphia Shipyard ASA, and Aker Philadelphia Shipyard, Inc.
(“APSI”), (collectively “Aker”) that settles all outstanding commercial
disputes between OSG and Aker and provides for the dismissal with
prejudice of all the claims in the arbitration among the parties. The
settlement also provides for certain modifications to other existing
agreements among AMSC and OSG, including eliminating restrictions on
OSG’s ability to purchase Jones Act product tankers, changes to the
profit sharing agreement as well as providing vessel purchase rights
under specific conditions. The settlement agreement has received all
necessary third party approvals as well as approval from the U.S. Coast
Guard.

In connection with the agreement, OSG will purchase two Handysize
product carriers, the Overseas Cascade and Hull 015 (TBN Overseas
Chinook) for approximately $115 million per vessel. The Overseas
Cascade delivered to OSG simultaneous with today’s settlement
announcement. The Overseas Cascade and TBN Overseas Chinook will be
converted to shuttle tankers and have been chartered out to Petrobras
America, Inc. (Petrobras). Following conversion work, the vessels are
expected to deliver to Petrobras in the second quarters of 2010 and
2011, respectively. The shuttle tankers will transport oil from
Petrobras’ FPSO (Floating Production Storage and Offloading) facilities
located in the Cascade and Chinook ultra-deepwater fields in the U.S.
Gulf of Mexico.

Of APSI’s 12 ship newbuild program with OSG, eight vessels have been delivered and four additional vessels deliver through 2011.

In connection with the settlement, Evercore Partners acted as financial
advisor to OSG. Proskauer Rose LLP acted as legal counsel to OSG.

Source: Overseas Shipholding Group, Inc.

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