NAO Nordic Amern Offshore Ltd Ordinary Shares (Bermuda)

Link to the complete 4th Quarter 2016 report:
http://hugin.info/159489/R/2085731/786792.pdf 

Hamilton, Bermuda, March 7, 2017.

We are very pleased that Nordic American Offshore successfully closed a follow-on offering March 1, 2017, strengthening the capital base with net proceeds of about $47.7 million and positioning NAO for further expansion. The proceeds could end up in excess of $50 million, provided the over-allotment option is wholly or partly exercised (maximum about $7 million). The offering clearly reflects the investor confidence in NAO. Access to financing, both equity and debt, remains a competitive advantage for us.

The Executive Chairman of NAO, plus senior executives of the Nordic American companies have bought shares in this offering. Our objective is that NAO shall become a success like the NYSE listed Nordic American Tankers (NAT), servicing customers and shareholders well. The corporate features of NAO are similar to the successful structure of NAT. Our belief in NAO is evidenced by the fact that the Executive Chairman and his immediate family invested $2 million in the offering. Furthermore, NAT, our largest shareholder, invested $10 million. Existing shareholders wishing to avoid dilution, have the opportunity to buy stock.

Going forward, this successful offering has as an objective to stimulate the growth process of NAO of modern PSVs, servicing the oil industry, above all in the UK and Norwegian sector of the North Sea. As NAO increases its fleet, we may expand into other geographical areas internationally - the potential for earnings and dividends is substantial.

NAO has ten high-quality Platform Supply Vessels (PSVs) built in Norway in the period 2012-2016. At the end of the quarter, seven of our ten vessels are in operation. The NAO customers and shareholders are our most important partners. We have seen an improvement in PSV rates the last weeks. At the time of this report, rates for 1Q2017 are above the level of 4Q2016.

The Board has declared a dividend of $0.02 per share for 4Q2016 to shareholders on record as of March 21, 2017. The payment of the dividend is expected to take place on or about April 5, 2017. Since its original establishment in late 2013, NAO has paid dividends for 12 consecutive quarters, totalling $2.59 per share, including the dividend to be paid on or about April 5, 2017.

Key points to consider:

• NAO successfully completed a follow-on offering March 1, 2017, greatly strengthening the capital base. At the time of this report, the outstanding number of shares is 60,686,847.
   
• The accounting net results show the following: -$9.8m for 4Q2016, -$8.6m for 3Q2016 and -$4.4m for 4Q2015. Earnings per share (EPS): -$0.48 for 4Q2016, -$0.42 for 3Q2016 and -$0.19 for 4Q2015. EPS does not take into account financial risk, i.e., the debt level of a company. 
   
• Adjusted Net Operating Earnings^[1]: -$4.3m for 4Q2016, -$3.4m for 3Q2016 and -$0.1m for 4Q2015.
   
• NAO has a cash breakeven level of about $11,500 per day per trading vessel, including financing and G&A costs.

Financial Information

The Board has declared a cash dividend of $0.02 per share for 4Q2016 to shareholders of record as of
March 21, 2017. The payment date is on or about April 5, 2017.

Net results (accounting wise) were -$9.8m in 4Q2016. In 3Q2016 and 4Q2015 the comparable amounts were -$8.6m and -$4.4m, respectively.

The Company's Adjusted Net Operating Earnings were -$4.3m in 4Q2016 (cash development). In 3Q2016 and 4Q2015 Adjusted Net Operating Earnings were -$3.4m and -$0.1m, respectively.

Following the equity offering in early March, our net debt is $8.5m per vessel.

Several service companies in our sector are in a difficult financial position. Going forward, NAO sees opportunities for expansion.

We concentrate on keeping our vessel operating costs low, while always maintaining our strong commitment to safe operations. As we expand our fleet, we do not anticipate that our administrative costs will rise proportionally.

For further details on our financial position for 4Q2016, 3Q2016 and 4Q2015, please see later in this release. Our 2015 Annual Report (Form 20-F) contains a large amount of information about NAO. This report was filed with the SEC March 23, 2016 and can be found on our web site www.nao.bm.

The Fleet

Our fleet is comprised of ten high-quality PSVs. All our trading vessels operate in the UK and in the Norwegian sectors of the North Sea. The vessels may operate in either sector or elsewhere. The significant fuel efficiency, and corresponding low emissions of our ships are attractive features for our clients.

The Company's objective is to ensure spot or term employment for the fleet. The specifications of the Company's vessels are essentially the same.

Strategy Going Forward

The main elements of NAO's strategy is based on quarterly dividends, low debt, low G&A costs, high liquidity in the stock and full transparency. Growth of the fleet is a central part of our strategy

Our dividend policy has the objective to achieve a competitive cash yield and a satisfactory Total Return^[2] over time.

NAO is firmly committed to protecting its underlying earnings, dividend potential and strong balance sheet.

We shall endeavor to safeguard and further strengthen the position in a deliberate, predictable and transparent way.

We encourage prospective investors interested in the offshore supply vessel sector to consider buying shares in NAO.

* * * * *

Link to the graph: http://hugin.info/159489/R/2085731/786792.pdf 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Matters discussed in this press release may constitute forward-looking statements.  The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties.  Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.  We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the PSV market, as a result of changes in the general market conditions of the oil and natural gas industry which influence charter hire rates and vessel values, demand in platform supply vessels, our operating expenses, including bunker prices, dry docking and insurance costs, governmental rules and regulations or actions taken by regulatory authorities as well as potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, the availability of financing and refinancing, vessel breakdowns and instances of off-hire and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission.

Contacts:

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