VESSELS |
6 Months Ended |
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Jun. 30, 2022 | |
VESSELS, DEFERRED DRYDOCK AND OTHER PROPERTY [Abstract] | |
VESSELS, DEFERRED DRYDOCK AND OTHER PROPERTY | Note 6 — Vessels: Impairment of Vessels and Other Property During the six months ended June 30, 2022, the Company gave consideration on a quarterly basis as to whether events or changes in circumstances had occurred since December 31, 2021, that could indicate that the carrying amounts of the vessels in the Company’s fleet may not be recoverable. During the quarter ended June 30, 2022, the Company continued to monitor industry and market factors and intentions regarding its vessels to determine if indicators of impairment were present and determined that none of the vessels in the Company’s fleet met held-for-sale criteria as of June 30, 2022 and no held-for-use impairment indicators existed for the Company’s vessels as of June 30, 2022. During the quarter ended March 31, 2022, the Company concluded that the contracted sales of one 2004-built Panamax and two 2006-built Handysize product carriers resulted in the recognition of impairment charges aggregating $1.7 million. The Company also recognized an aggregate loss of approximately $0.7 million during the quarter ended March 31, 2022, related to the cost to terminate the purchase and installation contracts for ballast water treatment systems on three of the Company’s MRs that were sold during 2021. Vessel Acquisitions and Construction Commitments In January 2022, the Company entered into memoranda of agreements for the sale of a 2010-built MR for a sale price of $16.5 million and the purchase of a 2011-built LR1 for a purchase price of $19.5 million with the same counterparty. The LR1 was delivered into our niche commercial pool, Panamax International. The Company closed both transactions during the first quarter of 2022, recognizing a gain of $4.5 million on the sale of the 2010-built MR and a net cash outflow of $3.0 million representing the difference in value between the two vessels. The LR1 vessel replaced the MR as collateral under the $525 Million Credit Facility with no further mandatory principal repayment required. On March 11, 2021, the Company entered into agreements to construct three dual-fuel LNG-powered VLCCs at Daewoo Shipbuilding and Marine Engineering’s shipyard. The VLCCs will be able to burn LNG in their power plant, which will significantly reduce greenhouse gas emissions. Upon delivery to the Company in the first quarter of 2023, the vessels will be employed on seven-year time charter contracts with an oil major – Shell. The total construction cost for the vessels is approximately $290.0 million, which will be paid for through a combination of cash on hand and funds drawn from the BoComm Lease Financing (See Note 10, “Debt”). Accumulated expenditures of $71.0 million and $49.3 million (including capitalized interest costs of $2.1 million and $0.6 million) are included in vessels construction in progress in the accompanying condensed consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively. The remaining commitments on the contracts for the construction of these vessels as of June 30, 2022 was $220.8 million, for which the BoComm Lease Financing is expected to provide funding over the course of the construction and delivery of the three vessels. Disposal/Sales of Vessels In addition to the sale of the 2010-built MR described above, during the six months ended June 30, 2022, the Company also delivered a 2008-built MR, one 2002-built Panamax, one 2004-built Panamax and its remaining four 2006-built Handysize product carriers to buyers and recognized an aggregate gain of $7.7 million.
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