OSG to Purchase 2 Product Carriers in Settlement with Aker

OSG 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.