DHT Holdings, Inc. (NYSE:DHT) Q4 2022 Earnings Call Transcript

Omar Nokta: And then you mentioned the Atlantic Basin just in your earlier comments, the SPR was a big driver of volumes late last year, but we haven’t seen any real — I don’t think there’s been any SPR releases this year. Is that affecting VLCC cargo demand out of the U.S. Gulf or is that not yet translating into any reduction in volume?

Svein Moxnes Harfjeld: It is of course have a positive impact in sort of team up to the beginning of the fourth quarter, but U.S. production is expected to increase. And you see that Europe, of course, are taking some of those incremental barrels in VLCCs. Those used to go on small ships. So we have a number of our ships trading to Europe, which are 2 to 3 to 4 port discharge. So I don’t think you should — it’s not only about SPR, it’s just about there’s demand for that order and production is going up, although not by big numbers. But Brazil is up, North Sea is up and Guyana is up. So there’s other areas, not just U.S.

Omar Nokta: And just maybe touching on the West Africa, that was also a bit of a — or that was a bit of a laggard last year. Although there’s been some positivity here recently, are you seeing any increase in volumes in that region?

Svein Moxnes Harfjeld: Mostly, it’s been sort of sideways. I think they certainly have the potential to ramp things up if they can, for a lack of better word, get back together on many fronts. So there’s still a lot of sort of disruptions and difficulties there, but they have the ability within OPEC quotas to increase production. And I think where the oil prices are, they have all the commercial incentives to make it happen as well. So we can only assume that they are working on trying to make it happen. So yes, let’s see.

Operator: We will take our next question, and the question comes from the line of Chris Tsung from Webber Research & Advisory.

Chris Tsung: I wanted to just touch on your program. It looks like you were able to complete 2 of the 8 and you have a few more now fighting to Q2. I was just curious, is this a function of where the spot market was in Q4, availability at the yards to retrofit these vessels, lining downtime with their dry docking schedule? Just trying to get a sense of what’s going on there.

Svein Moxnes Harfjeld: So you have this spot on. So of course, the rates were very strong in the fourth quarter. So we had opportunity to take ships to the yards in November, if we wanted to, but we decided to push it back. And these voyages are quite long, so you do quickly go a couple of months out or 3 for your sort of next position. So 2 completed sort of in the first half of January. We have 2 in the yards now that will come out shortly. And then another 2 going in, in sort of early March. And the last 2, we expect early on the second quarter. And as I said, the time is according to plan. We plan for 30 days per ship. We’re probably slightly improving on that, but that’s sort of early days. We don’t see really any challenges with the yard in terms of capacity to get these things done. So it’s not driven by that in terms of yard capacity.

Chris Tsung: And just — I noticed that — I think there’s a consensus view there that the tanker market — the tanker fleet is shrinking as you presented in your earlier remarks. Like what would it take for you to invest in fleet expansion? And also, would you be more interested in newbuilds or process a used vessel?