AUGUST 14, 2012 — American Shipping Company ASA (Oslo: AMSC) had a net profit for Q2 of 2013 of $13.1 million versus $11.8 million in Q2 of 2012.

The company was set up (originally as Aker American Shipping) to own ships built by Aker Philadelphia and charter them out.

The company owns ten Jones Act product tankers that are chartered to OSG. It says that although OSG remains in Chapter 11 bankruptcy it continues to make all monthly charter payments to AMSC on time and that during the quarter OSG and AMSC agreed on the conversion of one of AMSC's vessels to a shuttle tanker for a long term time charter to Shell.

AMSC says that trade fundamentals that impact the U.S. Jones Act product tanker fleet continue to improve and that industry expectations are that the positive trends will continue due to shale oil shipments and the aging of the fleet that will require vessel renewal with only two U.S. shipyards currently building tankers.

To date, no profits have been generated under AMSC's profit share agreement with OSG. However, with increasing time charter rates, prospects for profit share are improving.

The risks facing AMSC principally relate to the operational and financial performance of OSG as well as overall market risk.

During Q1 2013, the U.S. Bankruptcy Court approved OSG's motion to continue to perform all of its obligations under the bareboat charters and attendant agreements with AMSC.

Under U.S. bankruptcy laws, OSG may take one of the following actions: (i) assume the vessel charters, meaning it would agree to continue to perform under the terms of the charters, (ii) reject the vessel charters and return the vessels to the company, or (iii) assume and assign the vessel charters to a third party, in which case the third party would replace OSG and assume all of the rights and obligations under the assigned charters and related transaction documents. AMSC believes that the least likely outcome is the rejection of the charters by OSG since the terms of the charters are favorable to OSG in the current market.

In the event that OSG chooses to reject the bareboat charters, AMSC anticipates that, considering that all vessels are working under time charters and markets are improving, it would be able to re-charter the vessels to another Jones Act operator on equal or better terms on relatively short notice.