Tsakos Energy Navigation Reports Second Quarter and First Half 2006 Results

ATHENS, Greece, Aug. 4 /PRNewswire-FirstCall/ -- Tsakos Energy Navigation Limited (TEN) reported results (unaudited) for the second quarter and first half of 2006.

Revenues, net of voyage expenses and commissions, were $ 80.26 million in the second quarter of 2006 up from $ 53.77 million in the 2005 period. TEN deployed 33.9 vessels versus 26.5 vessels in the year earlier quarter. Fleet utilization was high at 96.8% as compared with 94.6% in the second quarter of 2005. The per day, per ship TCE rose to $ 28,557 from $ 25,116. Vessel operating costs were $ 6,659 per ship, per day, up from $ 6,205 reflecting higher maintenance expenses, crew costs, insurance premiums, lubricant prices and the impact of renewed Dollar weakness.

Depreciation and dry-docking amortization costs rose to $ 16.14 million from $ 9.89 million with the fleet at 37 vessels at June 30, 2006 as compared with 26 vessels a year earlier. Management fees reflected the increased number of ships while overheads rose as a result of professional fees.

Interest and finance costs net of interest income rose sharply as a result of higher interest rates and the additional borrowings related to the expansion of the fleet. However, the impact was muted by the benefits of interest rate swaps and capitalized interest. There were no vessel sales in the second quarter of 2006; whereas, the like period of 2005 benefited from capital gains of $ 19.64 million.

Net income in the 2006 period was $33.03 million versus $ 41.90 million in the second quarter of 2005. Basic earnings per share were $1.73 versus $ 2.09 in the 2005 quarter, which was enhanced by capital gains of $ 0.98 per share.

FIRST HALF HIGHLIGHTS

Revenues, net of voyage expenses and commissions, were $ 155.88 million in the first six months of 2006 up from $ 120.52 million in the 2005 period. TEN operated 30.5 ships as compared with 26.6 a year earlier. TCE per ship, per day rose to $ 30,603 from $ 27,883 while operating expense on that basis were $ 6,777 versus $ 6,430. Management fees tracked fleet expansion while overhead costs rose modestly.

Interest and finance costs, net of interest income, rose from the impact of rising interest rates and borrowings to fund fleet expansion. However, the benefits of higher interest income, interest capitalization, and interest rate swaps reduced the impact. Likewise depreciation increased to $ 25.47 million from $ 17.43 million as a result of fleet expansion.

Net income in the first half of 2005 was enhanced by capital gains of $ 24.84 million to reach $ 81.75 million; whereas, net income in the 2006 period was $ 74.80 million without the benefit of capital gains from vessel sales. On a per share basis, the first half of 2006 produced basic earnings of $ 3.92, while the first six months of 2005 had basic earnings of $ 4.06 including $ 1.23 in capital gains.

SUBSEQUENT HIGHLIGHTS

Eleven of the thirteen vessels (including new building contracts) acquired in two fleet purchases earlier this year are now employed with attractive long-term charters.

TEN has formed a four vessel joint venture with Flota Petrolera Ecuaorian (FLOPEC), initially comprising of two vessels. A third vessel has been sold to FLOPEC. In addition, FLOPEC has chartered a fourth vessel from TEN for long period employment. As a result, capital gains of $ 49 million will be recognized in the third quarter of 2006.

"The first seven months of 2006 have been the most active and dynamic in the company's history. The strong foundations of a solid balance sheet, a proven business model, rich and deep client relationships, and supportive banks has provided the basis and wherewithal to simultaneously proceed with a major new buildings initiative and acquire two established fleets" observed D. John Stavropoulos, Chairman of the Board. "This has been achieved without distracting from the day to day challenges of operating a safe, reliable, and cost efficient transport service."

Mr. Stavropoulos, further noted, "the financial results of the first half were most commendable. More importantly, the various initiatives in recent months have positioned TEN to generate increasingly visible cash flows and earnings thereby adding to shareholder value."

FLEET STRATEGY

The objective of building a young and growing fleet has been significantly accelerated with the purchase of two fleets earlier this year. The resulting fleet includes 36 vessels in operation of which two are jointly owned with FLOPEC and 14 new building contracts for delivery in 2006, 2007 and 2008. The make-up of the fleet is very evenly balanced between crude oil transporters (24) and product carriers (25) complemented by one LNG tanker.

Mr. Nicholas P. Tsakos President and CEO of TEN stated. ¨Our new building program combined with the purchase of two fleets fulfilled important aspects of our basic growth strategy. The broad diversification of our vessel types gives us the ability to service the breadth of our customers sea transportation needs. The strong position in ice-class capability gives an edge in serving this rapidly growing market with particular emphasis on the dynamic petroleum products segment. Expansion in scale is also helping to combat the pressures of rising costs of operation and overhead expenses. In the meantime, the strong sale and purchase market will allow us to profitably dispose of our older tonnage."

He added, ¨our focus is to deploy our fleet with a balanced employment strategy assuring steady cash flow and the capability to enjoy the benefits of strong markets when they develop. During the past few months our clients have shown a keen interest in longer-term employment opportunities. This fits well with our objectives. As a result, all eleven of the thirteen vessels delivered this year as part of the acquisition of two fleets plus two other new deliveries are now under contract for periods ranging from two to five years. Some are at fixed rates while the majority are at fixed minimum rates that more than cover our breakeven costs plus profit sharing in the upside. The overall breakdown of our 50 vessels fleet includes: 8 ships at fixed rates, 16 vessels at minimum with profit sharing, 3 at floating rates, 5 committed to pools, 7 in the spot market, and 11 new buildings unfixed. This key element of our business plan and corporate strategy has served us well since our inception in late 1993 and has provided the fundamental basis for our unbroken record of profitability in our highly seasonal and cyclical industry.¨

The following table presents the 14 new building vessels on order: HULL Expected Ice VESSEL No. DWT Delivery Class/Design 1. M/T Promitheas 1651 116,000 August 2006 1A Ice Class 2. M/T Propontis 1652 116,000 October 2006 1A Ice Class 3. M/T Arion S-0346 36,660 October 2006 1A Ice Class 4. M/T Andromeda S-0347 36,660 March 2007 1A Ice Class 5. M/T Aegeas S-0348 36,660 May 2007 1A Ice Class 6. M/T Artic S-1708 162,400 February 2007 1A Ice Class 7. M/T Antarctic S-1709 162,400 April 2007 1A Ice Class 8. M/T Byzantion S-0406 37,340 May 2007 1B Ice Class 9. M/T Bosporos S-0407 37,340 September 2007 1B Ice Class 10. M/T TBN S-1328 105,000 March 2007 DNA design 11. M/T TBN S-1334 105,000 June 2007 DNA design 12. M/T TBN S-1342 105,000 November 2008 DNA design 13. M/T TBN S-1344 105,000 November 2008 DNA design 14. LNG - M/T TBN S-1754 150,000 cm3 January 2007 Membrane

Assuming no interim retirements of vessels the following outlines the composition of TEN´s fleet after delivery of the orders cited above and the sale of Aztec:

TYPE DOUBLE DOUBLE-SINGLE SINGLE TOTAL HULL HULL HULL VLCC 3 3 Suezmax 10 10 Aframax 13 1 14 Panamax 6 6 Handymax 6 6 Handysize 8 2 10 LNG 1 1 Total: 47 2 1 50 TANKER INDUSTRY

High prices for oil have at the margin moderated demand. Nevertheless, need and consumption continues to grow. Worldwide oil demand grew 4.0% in 2004 and 1.3% in 2005, with forecasted increases of 1.5% to 1.6% this year, reflecting acceleration in demand in the fourth quarter of 2006. Preliminary indications point toward growth of 1.8% in 2007. The prospective drivers of demand are China, India, Pacific Rim countries and North America. The critical aspect of this forecast is that the high demand countries are all importers and distant from the sources of production. An added feature is the limited capacity for refining oil and the increasing phenomena of re-exports of refined products in order to reach the end-use consumer. These have been and will continue to be powerful forces in driving the growth of needs for sea transportation capacity.

Meantime, the tanker industry continues to add significant capacity. One aspect has been the very low rate of scrappage, which has been postponed, by the relatively high, prevailing charter rates. Nevertheless, mandated retirements on or before 2010 will moderate expansion as will the somewhat limited shipyard availability. We believe the balance of 2006 should witness acceptable fleet utilization and charter rates. We continue to expect that the tanker industry will record a fourth consecutive year of general prosperity, but somewhat muted compared with 2004/2005.

OUTLOOK FOR TEN

TEN's momentum since 2003 was sustained in the first half of 2006. Charter rates began their usual seasonal decent late in the first quarter and continued in the forepart of the second quarter. However, the recovery since then has come much earlier and stronger than in prior years. There are many and varied explanations for this development, but suffice to say it is most welcome. The observations of our CEO, Mr. Tsakos, outline the recent developments, which have significantly enhanced cash flow and earnings visibility.

Prospective basic earnings from operations combined with capital gains to be realized in the second half give us confidence that 2006 will be an outstanding year for TEN.

ABOUT TSAKOS ENERGY NAVIGATION

TEN's proforma operational fleet consists of 50 vessels of 5.2 million dwt, 36 of which are operational today. Additionally, its newbuilding program has 14 vessels including two LR Aframax product carriers, four Aframax crude transporters, two Suezmaxes, five Handysize product carriers, and one LNG representing 1.2 million dwt.

The strategy of a balanced diverse fleet is reflected in 24 crude transporters ranging from VLCCs to Aframaxes and 25 product carriers ranging from Handysize to Aframaxes; complemented by one LNG.

FORWARD-LOOKING STATEMENTS

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. TEN undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

CONTACTS: George V. Saroglou, COO Tsakos Energy Navigation Ltd. Tel: 3010 94 07 710 3 ten@tenn.gr Thomas J. Rozycki, Jr., Vice President Cubitt Jacobs & Prosek Communications 212-279-3115 x208 tom@cjpcom.com TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES Selected Consolidated Financial and Other Data (Unaudited) (In Thousands of U.S. Dollars, except share, per day and fleet data) Three months ended Six months ended June 30 June 30 STATEMENT OF INCOME DATA 2006 2005 2006 2005 Voyage revenues $ 105,025 $ 65,455 $ 200,896 $ 142,329 Commissions 4,044 2,533 7,600 5,684 Voyage expenses 20,720 9,151 37,421 16,130 Charter hire expense 6,104 6,080 12,162 12,115 Vessel operating expenses 18,167 12,714 32,623 26,440 Depreciation 14,798 8,866 25,474 17,426 Amortization of deferred drydocking costs 1,340 1,027 2,765 2,756 Management fees 1,772 1,383 3,181 2,778 General & Administrative expenses 980 890 1,455 1,389 Foreign currency losses/(gains) 80 (101) 74 (72) Amortization of deferred gain on sale of vessels (792) (792) (1,584) (1,584) Gain on sale of vessels, net 0 (8,820) 0 (14,023) Total expenses 67,213 32,931 121,171 69,039 Operating income 37,812 32,524 79,725 73,290 Gain on sale of non- operating vessels, net 0 10,818 0 10,818 Interest and finance costs, net (5,705) (2,862) (9,317) (4,448) Interest income 94 1,196 2,869 1,883 Other income/(expense) 824 221 1,522 205 Net income $ 33,025 $ 41,896 $ 74,799 $ 81,748 Earnings per share, basic $ 1.73 $ 2.09 $ 3.92 $ 4.06 Earnings per share, diluted $ 1.73 $ 2.09 $ 3.92 $ 4.06 Weighted average number of shares outstanding Basic 19,063,315 20,046,517 19,082,672 20,110,217 Diluted 19,071,712 20,063,877 19,091,243 20,128,025 BALANCE SHEET DATA June 30 December 31 June 30 2006 2005 2005 Cash and cash equivalents 81,438 145,769 133,262 Current assets, including cash 142,599 191,734 167,013 Investments 21,586 21,881 25,053 Advances for vessels 279,112 150,428 131,911 Vessels at cost 1,551,089 882,210 874,267 Accumulated Depreciation (196,322) (170,848) (164,457) Vessels' Net Book Value 1,354,767 711,362 709,810 Deferred charges 13,411 13,769 14,297 Total assets $ 1,811,475 $ 1,089,174 $ 1,048,084 Current portion of long-term debt 18,186 51,496 42,782 Current liabilities, including current portion of long-term debt 83,050 91,518 88,996 Long-term debt, net of current portion 1,066,181 382,023 379,404 Deferred income, net of current portion 6,864 8,447 10,450 Total stockholders' equity 655,380 607,186 569,234 Total liabilities and stockholders' equity $ 1,811,475 $ 1,089,174 $ 1,048,084 Three months ended Six months ended OTHER FINANCIAL DATA June 30 June 30 2006 2005 2006 2005 Net cash from operating activities $ 56,446 $ 33,667 $ 101,813 $ 80,568 Net cash used in investing activities $ (519,866) $ (54,497) $ (786,452) $ (87,938) Net cash from financing activities $ 468,287 $ 9,584 $ 620,308 $ 23,710 TCE per ship per day $ 28,557 $ 25,116 $ 30,603 $ 27,883 Operating expenses per ship per day $ 6,659 $ 6,205 $ 6,777 $ 6,430 Vessel overhead costs per ship per day $ 893 $ 944 $ 840 $ 865 7,552 7,149 7,617 7,295 FLEET DATA Average number of vessels during period 33.9 26.5 30.5 26.6 Number of vessels at end of period 37.0 26.0 37.0 26.0 Average age of fleet at end of period Years 6.0 6.6 6.0 6.6 Dwt at end of period (in thousands) 4,057.9 2,884.6 4,057.9 2,884.6 Time charter employment - fixed rate Days 581 932 1,275 1,989 Time charter employment - variable rate Days 750 455 1,166 899 Period employment (pool and coa) at market rates Days 863 539 1,574 1,044 Spot voyage employment at market rates Days 790 352 1,386 659 Total operating days 2,984 2,278 5,401 4,591 Total available days 3,082 2,407 5,519 4,817 Utilization 96.8% 94.6% 97.9% 95.3%

TCE represents voyage revenue less voyage expenses. Commission is not deducted. Operating expenses per ship per day exclude the three chartered-in vessels and the vessel bare-boat chartered out.

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