Oil Transport IPO: Crude Carriers Corp.

| About: Crude Carriers (CRU)

Crude Carriers Corp. (NYSE:CRU), a company formed by Capital Maritime & Trading Corp. that focuses on the crude tanker industry, is expected to price its IPO this week.

Business Overview (from prospectus)

We are a newly formed transportation company incorporated in the Marshall Islands in October 2009 to conduct a shipping business focused on the crude tanker industry. We plan to acquire and operate a fleet of crude tankers that will transport mainly crude oil and fuel oil along worldwide shipping routes. Capital Maritime, an international shipping company, will serve as our Manager. We intend to leverage the expertise and reputation of our Manager to pursue growth opportunities in the crude oil tanker shipping market. currently expect to focus on the spot market, including all types of spot market—related engagements such as single voyage or short-term time charters, but retain the ability to evaluate and enter into longer-term period charters, including time- and bareboat charters with terms that may provide for profit sharing arrangements or with returns that are linked to spot market indices.

Offering: 13.5 million shares at $19 - $21 per share. Net proceeds of approximately $291.4 million (inclusive of $40 million capital contribution from Crude Carriers Investments Corp.) will be used to purchase the two Universal VLCCs and the Initial Suezmax vessels.

Lead Underwriters: UBS Investment Bank (NYSE:UBS), BofA Merrill Lynch (NYSE:BAC), Wells Fargo Securities (NYSE:WFC)

Financial Highlights:

Revenues for the Initial Suezmax amounted to approximately $16.9 million for the year ended December 31, 2009 as compared to $39.2 million for the year ended December 31, 2008...Voyage expenses amounted to $6.3 million for the year ended December 31, 2009 as compared to $14.3 million for December 31, 2008...Vessel operating expenses amounted to approximately $3.0 million for the year ended December 31, 2009 compared to $2.9 million for December 31, 2008...Net income for the year ended December 31, 2009 amounted to $3.7 million as compared to $16.7 million for December 31, 2008...


We expect our business to fluctuate in line with the main patterns of trade of crude oil and vary according to changes in the supply and demand for crude oil. We plan to operate in markets that are highly fragmented, competitive and based primarily on supply and demand. Seaborne crude oil transportation services generally are provided by two main types of operators: major oil company captive fleets (both private and state owned); and independent ship-owner fleets. In addition, several owners and operators pool their vessels together on an ongoing basis, and such pools are available to customers to the same extent as independently owned and operated fleets.

We believe that Capital Maritime and Capital Ship Management are among a limited number of ship management companies that have undergone and successfully completed audits by six major international oil companies in the last few years, including audits with BP plc (NYSE:BP), Royal Dutch Shell plc (NYSE:RDS.A), StatoilHydro ASA (NYSE:STO), Chevron Corporation (NYSE:CVX), ExxonMobil Corporation (NYSE:XOM) and Total S.A. (NYSE:TOT). We believe that their ability to comply with the rigorous and comprehensive standards of major oil companies relative to less qualified or experienced operators will assist us in competing effectively for new charters.

Additional Resources: