6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR

15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November, 2006

Commission File Number 001-31236

TSAKOS ENERGY NAVIGATION LIMITED

(Translation of registrant’s name into English)

367 Syngrou Avenue, 175 64 P. Faliro, Athens, Greece

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):         

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):         

Indicate by check mark whether the registrant by furnishing the information contained in the Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨    No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            .

The exhibit index is located on page 2.

EXHIBIT INDEX

99.1	Consolidated Financial Statements (Unaudited), September 30, 2006
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report on Form 6-K is hereby incorporated by reference into the following Registration Statements of the Company:

• Registration Statement on Form F-3 (No. 333-134265) filed with the SEC on May 18, 2006;

• Registration Statement on Form F-3 (No. 333-111615) filed with the SEC on December 30, 2003;

• Registration Statement on Form S-8 (No. 333-134306) filed with the SEC on May 19, 2006.

• Registration Statement on Form S-8 (No. 333-104062) filed with the SEC on March 27, 2003; and

• Registration Statement on Form S-8 (No. 333-102860) filed with the SEC on January 31, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 27, 2006

TSAKOS ENERGY NAVIGATION LIMITED
By:	/s/ Nikolas P. Tsakos
	Nikolas P. Tsakos
	President

EX-99.1

Exhibit 99.1

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(Expressed in thousands of U.S. Dollars - except per share data)

	Three months ended September 30,
	2006			2005
VOYAGE REVENUES:	$	115,168		$	63,867
EXPENSES:
Commissions		4,019			2,479
Voyage expenses		17,609			11,558
Charter hire expense		6,149			6,077
Vessel operating expenses		19,815			12,483
Depreciation		16,604			9,201
Amortization of deferred dry-docking costs		1,056			1,026
Management fees		1,971			1,370
General and administrative expenses		647			845
Foreign currency losses/(gains)		37			(78	)
Amortization of deferred gain on sale of vessels		(792	)		(792	)
Gain on sale of vessels, net		(13,321	)		(21	)
Total expenses		53,794			44,148
Operating income		61,374			19,719
OTHER INCOME (EXPENSES):
Gain on sale of non-operating vessels, net		—			(57	)
Interest and finance costs, net		(18,409	)		(2,080	)
Interest income		1,648			1,811
Other, net		(119	)		(220	)
Total other income (expenses), net		(16,880	)		(546	)
Net Income	$	44,494		$	19,173
Earnings per share, basic	$	2.34		$	0.98
Earnings per share, diluted	$	2.33		$	0.98
Weighted average number of shares, basic		19,050,741			19,647,341
Weighted average number of shares, diluted		19,057,245			19,659,543

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(Expressed in thousands of U.S. Dollars - except per share data)

	Nine months ended September 30,
	2006			2005
VOYAGE REVENUES:	$	316,063		$	206,196
EXPENSES:
Commissions		11,619			8,163
Voyage expenses		55,030			27,687
Charter hire expense		18,312			18,192
Vessel operating expenses		52,438			38,924
Depreciation		42,078			26,628
Amortization of deferred dry-docking costs		3,821			3,782
Management fees		5,153			4,148
General and administrative expenses		2,102			2,234
Foreign currency losses/(gains)		111			(151	)
Amortization of deferred gain on sale of vessels		(2,376	)		(2,376	)
Gain on sale of vessels, net		(13,321	)		(14,044	)
Total expenses		174,967			113,187
Operating income		141,096			93,009
OTHER INCOME (EXPENSES):
Gain on sale of non-operating vessels, net		—			10,761
Interest and finance costs, net		(27,727	)		(6,528	)
Interest income		4,518			3,694
Other, net		1,403			(15	)
Total other income (expenses), net		(21,806	)		7,912
Net Income	$	119,290		$	100,921
Earnings per share, basic	$	6.25		$	5.06
Earnings per share, diluted	$	6.25		$	5.05
Weighted average number of shares, basic		19,071,911			19,954,229
Weighted average number of shares, diluted		19,079,843			20,001,357

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2006 and DECEMBER 31, 2005

(Expressed in thousands of U.S. Dollars - except per share data)

	September 30, 2006			December 31, 2005
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	140,395		$	145,769
Restricted cash		1,131			271
Receivables-
Trade accounts receivable, net		20,634			17,620
Insurance claims		733			652
Due from related companies		972			1,736
Advances and other		4,344			2,750
Assets held for sale		32,527
		59,210			22,758
Short-term investments		—			10,240
Inventories		9,337			5,406
Prepaid insurance and other		5,544			2,363
Financial instruments-Fair value		7,612			4,927
Total current assets		223,229			191,734
INVESTMENTS		22,033			21,881
FIXED ASSETS:
Advances for vessels under construction		269,812			150,428
Vessels		1,549,978			882,210
Accumulated depreciation		(184,721	)		(170,848	)
Vessels’ Net Book Value		1,365,257			711,362
Total fixed assets		1,635,069			861,790
DEFERRED CHARGES, net		13,059			13,769
Total assets	$	1,893,390		$	1,089,174
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	18,186		$	51,496
Accounts payable-
Trade		22,844			13,489
Due to related companies		6,829			1,385
Dividend declared		23,800			—
Other		1,088			542
		54,561			15,416
Accrued liabilities		11,367			10,139
Accrued bank interest		20,712			5,478
Unearned revenue		6,668			5,332
Deferred income, current portion		3,168			3,168
Financial instruments - Fair value		4,342			489
Total current liabilities		119,004			91,518
LONG-TERM DEBT, net of current portion		1,093,775			382,023
DEFERRED INCOME, net of current portion		6,072			8,447
STOCKHOLDERS’ EQUITY:
Common stock, $ 1.00 par value; 100,000,000 shares authorized at September 30, 2006 and December 31, 2005; 19,050,871 and 19,177,195 issued and outstanding at September 30, 2006 and December 31, 2005, respectively.		19,051			19,177
Additional paid-in capital		267,576			269,237
Other comprehensive income		582			3,067
Retained earnings		387,330			315,705
Total stockholders’ equity		674,539			607,186
Total liabilities and stockholders’ equity	$	1,893,390		$	1,089,174

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE YEAR ENDED DECEMBER 31, 2005 AND FOR THE PERIOD ENDED SEPTEMBER 30, 2006

(Expressed in thousands of U.S. Dollars - except per share data)

	Comprehensive Income (Loss)			Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Stock- Holders’ Equity
BALANCE, January 1, 2005				$	20,176		$	282,451		$	1,136		$	215,758		$	519,521
Net income		161,755												161,755			161,755
- Exercise of stock options					18			203									221
- Repurchase and cancellation of common stock (1,016,790 shares)					(1,017	)		(13,417	)					(23,322	)		(37,756	)
- Cash dividends declared and paid ($1.95 per share)														(38,486	)		(38,486	)
- Fair value of financial instruments		4,265									4,265						4,265
- Reclassification of gains on undesignated cash flow hedges		(2,334	)								(2,334	)					(2,334	)
Comprehensive income	$	163,686
BALANCE, December 31, 2005				$	19,177		$	269,237		$	3,067		$	315,705		$	607,186
Net income		119,290												119,290			119,290
- Exercise of stock options					5			54									59
- Repurchase and cancellation of common stock (131,200 shares)					(131	)		(1,715	)					(2,887	)		(4,733	)
- Cash dividends declared and paid ($1.10 per share)														(20,978	)		(20,978	)
- Cash dividends declared ($1.25 per share)														(23,800	)		(23,800	)
- Fair value of financial instruments		2,824									2,824						2,824
- Reclassification of gains on undesignated cash flow hedges		(5,309	)								(5,309	)					(5,309	)
Comprehensive income	$	116,805
BALANCE, September 30, 2006				$	19,051		$	267,576		$	582		$	387,330		$	674,539

TSAKOS ENERGY NAVIGATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS AND THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(Expressed in thousands of U.S. Dollars)

	Nine months ended September 30,						Three months ended September 30,
	2006			2005			2006			2005
Cash Flows from Operating Activities:
Net income	$	119,290		$	100,921		$	44,491		$	19,173
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		42,078			26,628			16,604			9,201
Amortization of deferred dry-docking costs		3,821			3,782			1,056			1,026
Amortization of loan fees		855			451			(409	)		327
Amortization of deferred income		(2,375	)		(4,050	)		(792	)		(2,048	)
Change in fair value of interest rate swaps		(1,317	)		(1,214	)		4,916			(411	)
Change in fair value of investments		(528	)		—			(447	)		—
Payments for dry-docking		(3,529	)		(10,857	)		(2,065	)		(5,445	)
Gain on sale of vessels, net		(13,321	)		(24,805	)		(13,321	)		36
Gain on sale of investments		(495	)		—			—			—
(Increase) Decrease in:
Receivables		(3,925	)		12,449			3,396			1,223
Inventories		(3,931	)		(2,021	)		1,610			(110	)
Prepaid insurance and other		(3,181	)		(1,809	)		1,468			1,375
Increase (Decrease) in:
Accounts payable		15,345			3,687			(1,592	)		(1,219	)
Accrued liabilities		16,459			353			10,347			(1,639	)
Unearned revenue		1,336			(1,081	)		(492	)		376
Net Cash from Operating Activities		166,582			102,434			64,770			21,865
Cash Flows from Investing Activities:
Advances for vessels under construction and acquisitions		(157,803	)		(44,621	)		9,300			(2,722	)
Vessel acquisitions and/or improvements		(706,406	)		(173,707	)		(75,946	)		(40,761	)
Investments		(4,991	)		(15,673	)		—			(620	)
Proceeds from sale of investments		16,102			—			—			—
Proceeds from sale of vessels, net		31,491			101,923			31,491			(36	)
Net Cash used in Investing Activities		(821,607	)		(132,078	)		(35,155	)		(44,139	)
Cash Flows from Financing Activities:
Proceeds from long-term debt		874,282			255,235			30,000			166,372
Financing costs		(2,280	)		(1,546	)		(73	)		(1,078	)
Payments of long-term debt		(195,839	)		(163,943	)		(2,405	)		(132,102	)
Proceeds from exercise of stock options		59			173			12			48
(Increase)/decrease in restricted cash		(860	)		1,431			1,808			1,355
Repurchase and cancellation of common stock		(4,733	)		(28,258	)		—			(14,373	)
Cash dividend		(20,978	)		(19,160	)		—			—
Net Cash from Financing Activities		649,651			43,932			29,342			20,222
Net (decrease)/increase in cash and cash equivalents		(5,374	)		14,288			58,957			(2,052	)
Cash and cash equivalents at beginning of period		145,769			116,922			81,438			133,262
Cash and cash equivalents at end of period	$	140,395		$	131,210		$	140,395		$	131,210

EX-99.2

Exhibit 99.2

TSAKOS ENERGY NAVIGATION LIMITED

THREE MONTHS ENDED SEPTEMBER 30, 2006

Results of operations – management discussion

(Percentage changes are based on the full numbers in the accompanying financial statements)

Quarter ended September 30, 2006 versus quarter ended September 30, 2005

Voyage Revenue

Voyage revenue was $115.2 million during the quarter ended September 30, 2006 compared to $63.9 million during the quarter ended September 30, 2005. The 80.3% increase was mainly due to the increase in the number of vessels in the fleet from an average of 25.9 vessels in the third quarter 2005 to an average of 37.1 vessels in the third quarter 2006 and the achievement of better hire and freight rates by our fleet.

Compared to the previous third quarter, the market enjoyed excellent trading conditions during this quarter both in the crude and product tanker sectors, due to the continuous increase in oil demand, which in the third quarter of 2006 was higher by over 1 million b/d compared to the same quarter last year. In addition, the shortage in refinery capacity close to the key consuming areas together with the build up of stocks in the U.S. kept product tanker rates at seasonally high levels.

TEN took advantage of this environment by placing most of its new deliveries on time charters with guaranteed employment at a minimum rate and the upside linked to market rates. In the third quarter of 2006, 80.5% of the fleet’s operating days were employed in market related charters compared to 58.9% in the third quarter of 2005.

Total productivity achieved by the fleet in the third quarter 2006 was 96.8% compared to 95.6% for the third quarter of 2005. The lost time related to the dry-dockings of Vergina II, which is being converted to double hull and Libra, which was sold in September 2006. Otherwise, almost all other vessels were 100% employed during the period.

The average time charter equivalent rate (TCE) per vessel for the quarter increased by 27.7% from $23,326 per day in the previous year’s third quarter to $29,779 for this third quarter. All tanker categories achieved significantly higher rates than the equivalent prior year quarter in a continuing strong market. VLCCs and aframaxes enjoyed the higher increases compared to the prior year third quarter, as follows (third quarter 2005 average TCE rates in parentheses) VLCCs earned an average $48,328 ($31,188), aframaxes $31,374 ($20,534). Suezmaxes and panamaxes also achieved very good rates, suezmaxes an average of $34,808 ($28,463), panamaxes $25,107 ($22,429).The newly acquired MR Handymax product carriers earned an average $23,792 and handysize product carriers earned $20,883 ($19,436). (TCE is calculated by taking voyage revenue less voyage costs divided by the number of operating days. We do not deduct commission, as commission is payable on all types of charter. In the case of the bare-boat charter, we add a notional operating expense per day in order to render the bare-boat charter comparable to a time-charter).

1

Since the third quarter of 2005 VLCC’s were joined by La Prudencia, which together with La Madrina were chartered for 5 years in a time charter with a minimum guaranteed rate of $28,500 and profit sharing above $40,000. La Prudencia contributed in the third quarter a daily TCE of $54,758 or $5.1 million of voyage revenue.

The suezmaxes were joined by two newbuilding ice-class vessels Archangel and Alaska delivered in the first quarter of 2006. Both Archangel and Alaska were trading in the spot market earning an average TCE of $40,871 and contributing $11.7 million of voyage revenue.

Aframaxes earned a TCE 52.8% higher than the third quarter of 2005. This is mainly due to the addition of two 1A ice class LR aframaxes, Proteas, acquired in the second quarter of 2006, and Promitheas, acquired in mid August 2006. Both Proteas and Promitheas have been chartered for two years at a minimum rate of $29,900 and a 50% profit sharing on the upside earning on average a TCE of $30,933 or $4.8 million of voyage revenue for this quarter. Also, Olympia, which in the prior year third quarter was under time charter, entered the spot market earning a TCE of $39,050 compared to $19,500 in the prior year third quarter. Vergina II, the only remaining single hull of the fleet was in dry-docking for conversion to double hull and, therefore, did not generate any revenue for the quarter. Nevertheless, the performance of the existing vessels (without Tamyra which was sold in the fourth quarter of 2005) secured the overall strong performance of the category.

In the panamax category, Hesnes and Victory III, which were under dry-docking in the third quarter of 2005, achieved good rates in this quarter and Aztec which in the third quarter of 2005 was under time charter, was under period employment this third quarter contributing a TCE of $28,304 compared to $18,653 in the third quarter of 2005. Aztec was sold in October 2006.

The newly acquired MR handymax 1A ice class product carriers achieved an average TCE of $23,792 contributing with $15.1 million of voyage revenue. All operated throughout the quarter. All were on time charter with profit share, except for the Ariadne and Apollon that operated for part of the period in the spot market before entering the time charters.

The handysize product carriers were joined by the acquisition in the second quarter of 2006 of Delphi and the 1A ice class Antares. Delphi was on time charter at $20,200 per day up to the end of the third quarter which was subsequently extended for another two years at $25,250 per day. Antares has been fixed up to 2009 on a time charter with a guaranteed minimum of $15,000, up to $20,000 on account of TEN and a 50% profit sharing in the upside. For the third quarter, the two vessels contributed an average TCE of $18,825 or $3.5 million in total of revenue. Libra and Crux, the only double side-single bottom vessels in the fleet, were sold in the third quarter realizing a capital gain of 13.3 million.

Commissions

Commissions were $4.0 million, or 3.5% of revenue from vessels during the quarter ended September 30, 2006, compared to $2.5 million, which was 3.9% of revenue

2

from vessels for the quarter ended September 30, 2005. Commissions as a percentage of revenue are lower this quarter as certain new time charters have lower commission rates than the charters expired.

Voyage expenses

Voyage expenses include costs that are directly related to a voyage, such as port charges, canal dues and bunker (fuel) costs. They are borne by the Company in the case of spot market single voyages or for voyages under contract of affreightment. Otherwise, in the case of time and bare-boat charters they are borne by the charterer. For vessels trading under a pool arrangement, allocation of revenue to pool members is determined after accounting for total voyage expenses by the pool managers.

Voyage expenses were $17.6 million during the quarter ended September 30, 2006, compared to $11.6 million during the prior year’s Quarter 3, a 52.4% increase. Total operating days on spot charter and contract of affreightment actually increased from 885 days in the third quarter of 2005 to 1,517 days in the third quarter of 2006, a 71% increase. Bunker costs also increased by 11.5% between the two respective third quarters.

Charter hire expense

The Company charters-in the aframax Olympia, and the suezmaxes, Cape Baker and Cape Balboa. Charter hire expense was $6.1 million in the third quarter 2006 and $6.1 million in the third quarter 2005. The Company exercised its option to repurchase Olympia at the end of the year for $31 million (current market value of the vessel is over $60 million). The actual handing back of the vessel will take place in January 2007. The $2.6 million deferred gain that is presented on the face of the Company’s balance sheet will be accounted for as a reduction of the repurchase price.

Vessel operating expenses

Vessel operating expenses include crew costs, maintenance repairs and spares, stores, lubricants, insurance and sundry expenses such as tonnage tax, registration fees, and communications costs. They are borne by the Company for all vessels of the fleet excluding for the one vessel on bare-boat charter and excluding the three vessels which are chartered-in. Total operating costs were $19.8 million during the quarter ended September 30, 2006 and compared to $12.5 million during the quarter ended September 30, 2005, a 58.7% increase. Available days of vessels bearing operating expenses increased by 1,029 days from 2,018 to 3,047 days, a 51% increase.

Average vessel operating expenses per ship per day for the fleet were $6,470 for the quarter ended September 30, 2006, a 4.9% increase from the $6,165 for the quarter ended September 30, 2005. Part of the increase is due to increased repairs and maintenance expenses, higher lubricant cost and the weakening of the dollar against the Euro over the previous year’s quarter. Approximately 25% of the Company’s operating expenses are in Euro, mainly in respect to Greek officers on the vessels. However, costs have been held to reasonable levels due to the sale of older vessels and the introduction of more cost efficient new vessels since the third quarter of 2005, the daily operating expenses per vessel in the third quarter 2006 being the lowest quarterly average of the four quarters since September 30, 2005.

3

Depreciation

Depreciation was $16.6 million during the quarter ended September 30, 2006 and $9.2 million during the quarter ended September 30, 2005. The increase represents the replacement of older vessels with modern new buildings with a higher book value.

Amortization of deferred charges

We amortize the cost of dry-docking and special surveys over the period to the next dry-docking and this amortization is included as part of the normal costs we incur in connection with the operation of our vessels. During the quarter ended September 30, 2006, amortization of deferred drydocking charges was $1.1 million and $1.0 million during the quarter ended September 30, 2005. A further $1.8 million of deferred charges has been expensed as part of carrying cost of the vessel Libra, which was sold during the third quarter.

Management fees

Management fees are the fixed fees per vessels the Company pays to Tsakos Energy Management Ltd. under a management agreement between the companies. This fee is $18,000 per month for owned vessels and $12,500 per month for the three chartered in vessels. Management fees on operating vessels totaled $2.0 million for the third quarter of 2006 and $1.4 million for the third quarter of 2005. The increase is a result of the increase in the number of vessels. A further $0.5 million in management fees relating to vessels under construction has been capitalized as pre-delivery costs of those vessels.

General and administrative expenses

G&A expenses consist primarily of independent directors’ fees, professional fees, office supplies, investor relations, advertising costs, directors’ liability insurance, and travel-related expenses. General and administrative expenses were $0.65 million during the quarter ended September 30, 2006 compared to $0.85 million during the previous year third quarter, a decrease of 23.4%.

The sum of these expenses, together with the management fees payable to Tsakos Energy Management Ltd., represents the overheads of the Company. On a per vessel basis, daily overhead costs were $767 for Quarter 3, 2006 compared to $928 for the third quarter of 2005, a 17.3% decrease. The decrease is mainly due to lower professional fees, and lower other general expenses due to economies of scale derived from the larger fleet.

Amortization of the deferred gain on sale of vessels

In the last quarter of 2003, the Company sold two suezmaxes in a sale and leaseback transaction. The total gain of $15.8 million has been deferred and is being amortized over five year minimum charter period. The amortization of this gain amounted to $0.8 million for both third quarter of 2006 and 2005.

4

Gain on the sale of vessel

In the third quarter of 2006 the company sold the 19-year old handysize double side-single bottom vessels Libra and Crux for total proceeds of $32.3 million realizing a capital gain of $13.3 million. Also, the company agreed to sell the panamax vessel Aztec and 49% of the holding company of the vessels Maya and Inca as part of a strategic alliance. The sale of Aztec was completed in October 2006 with a capital gain of approximately $25 million. The sale of shares in the holding companies of Maya and Inca will be completed in November 2006 and the company will realize a capital gain of approximately another $25 million. Aztec was transferred to assets held for sale since August 2006.

There were no sales of vessels in the third quarter of 2005.

Operating income

As a result of the reasons stated above, income from vessel operations was $61.4 million during the quarter ended September 30, 2006 versus $19.7 million during the quarter ended September 30, 2005, representing a 211.2% increase.

Interest and finance costs

Interest and finance costs increased from $2.1 million for the quarter ended September 30, 2005 to $18.4 million for the quarter ended September 30, 2006. This is the most significant cost variance for this quarter and is mainly due to the increase of the average loan balances from $427 million in the third quarter of 2005 to $1.1 billion in the third quarter of 2006. The above interest and finance cost net amounts are analyzed as follows:

Loan interest expense increased from $4.9 million to $16.5 million, mainly due to increases in the amount of average loans and the increase in interest rates payable on loans from an average of 4.6% to 5.9%.

In addition the valuation of non hedging interest rate swaps resulted in a loss of $4.9 million compared to a gain of $0.4 million in the prior year’ third quarter. (In the second quarter of 2006, there was a gain in valuation of $5 million).

In the third quarter of 2006, there were charges of $0.8 million of actual interest on the interest rate swaps compared to $0.2 million interest received in the equivalent prior year quarter.

Also, the third quarter of 2005 realized a gain of $1.3 million relating to the full amortization of a 1999 interest rate swap gain due to the repayment of its related loan. There was no similar gain in the third quarter of 2006.

The above charges were offset by capitalized interest, which was $3.7 million in the third quarter of 2006, compared to $1.4 million in the previous year’s equivalent quarter. The increase is due to accumulated yard advances for the Company’s extensive new-buildings program and a higher interest rate applied.

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Interest income

Interest income, which includes income from bank deposits and investments, was $1.6 million during the third quarter of 2006 and $1.8 million during the quarter ended September 30, 2005, due to slightly lower average bank deposits and investments, which was offset by the higher interest rates in Quarter 3, 2006 and lower unrealized investment income of $0.4 million compared to $0.6 million in the prior years equivalent quarter.

Net Income

As a result of the foregoing, net income for the quarter ended September 30, 2006 was $44.5 million, compared to $19.2 million for the third quarter, 2005, a 132.1% increase. Diluted earnings per share were $2.33 based on 19,057,245 weighted average number of diluted shares in the third quarter 2006, compared to $0.98 based on 19,659,543 weighted average number of diluted shares in the third quarter 2005.

Liquidity and capital resources

Liquidity requirements relate to servicing debt, funding the equity portion of investments in vessels, funding working capital and controlling fluctuations in cash flow. Net cash flow generated by continuing operations is the main source of liquidity. Additional sources, apart from raising equity, include proceeds from asset sales and borrowings, although all borrowing arrangements to date have specifically related to the acquisition of vessels.

We believe that, unless there is a major and sustained downturn in market conditions, our financial resources are sufficient to meet our liquidity needs through September 30, 2007, taking into account both our existing capital commitments and the minimum debt service requirements as defined by our bank loan covenants.

Net current assets amounted to approximately $104.2 million at September 30, 2006 compared to $82.4 million as at September 30, 2005. The increase is due to higher cash balances and the vessel Aztec being considered as held for sale, offset by higher dividend payable and accrued interest. Total cash balances (including restricted cash) as at September 30, 2006 amounted to $141.5 million.

Net cash provided by operating activities was $64.8 million in the quarter ended September 30, 2006 compared to $21.9 million in the previous year, a 196% increase. The increase is mainly due to increased income generated from operations and higher depreciation charges.

Expenditure on dry-dockings is deducted from cash generated by operating activities. Total expenditure during the quarter on dry-dockings amounted to $2.1 million compared to $5.5 million in the previous year’s quarter. The expenditure relates to dry-docking expenses paid for Opal Queen, Libra and Vergina II.

Net cash used in investing activities was $35.2 million for the quarter ended September 30, 2006, compared to $44.1 million for the quarter ended September 30, 2005. $28.5 million relates to the payments for the delivery of the ice-class LR aframax Promitheas. A further $47.4 million was paid as further yard installments for

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other vessels as part of the new building program. (As at September 30, 2006, the Company had under construction fifteen vessels, with a contract value of $990 million of which $270 million had been paid by September 30, 2006.)

In the third quarter of 2006, the Company had a 1.5 year structured note linked to the Nikkei 225 which was purchased for $5.0 million in the second quarter of 2006 and two other 3-year capital guaranteed notes the first linked to the USD 6 month LIBOR and the second linked to DJ EuroStoxx 50. Also, the company has invested $5.0 million in an 8% interest-bearing bond in a publicly quoted company listed on the Oslo Bors. All the above investments are valued each quarter and any changes are accounted for through earnings. The structured notes linked to the Nikkei and Eurostoxx 50 were sold in Quarter 4, 2006.

Net cash from financing activities was $29.3 million in quarter ended September 30, 2006, compared to $20.2 million in the quarter ended September 30, 2005. Proceeds from new bank loans in the quarter amounted to $30 million in relation to the newly delivered 1A ice class LR aframax Promitheas. Scheduled loan repayments amounted of $2.4 million. In the quarter ended September 30, 2005 proceeds from new loans amounted to $166 million in relation to the new delivered suezmax Euronike, ($41 million) and a new facility of $125 million. Scheduled loan repayments in Quarter 3, 2005 amounted to $10.2 million, and a prepayment of a loan amounted to $122 million.

During the nine month period ended September 30, 2006, the Company re-purchased over 131,000 shares in the open market in the buy-back programs at a cost of approximately $4.7 million. No shares were purchased in the third quarter of 2006. In the prior year the company had re-purchased 1,016,790 shares at a cost of $37.8 million. The shares were cancelled in accordance with Bermudan regulations.

A $1.25 dividend for the fiscal year 2006 was declared in September 2006 and was paid on October 26, 2006. The total amount paid was $23.8 million. The dividend policy of the Company is to pay, depending on cash availability and requirements, between 25% and 50% of the net income in any given year, payable in two installments, the first prior to the end of the year in October based on expected earnings and cash requirements, and the final portion in April of the following year based on final earnings and cash requirements.

Total net debt outstanding increased from $433.5 million at the beginning of the year to $1.1 billion by the end of the quarter. The average debt to capital ratio was approximately 62.2% by September 30, 2006 (compared to 45.1% at the end of the third quarter 2005) or 59.0% on a net of cash basis. The total notional amount of loans covered by interest rate swaps was $591 million or 53% of the total.

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