Results still affected by weak VLGC market

(Hamilton, Bermuda, 13 August 2008) The quarterly and half-year report for BW Gas ASA is presented by BW Gas Limited. All shares in BW Gas ASA have either been exchanged with shares (1:1) in BW Gas Limited or redeemed. BW Gas Limited was listed on Oslo Stock Exchange on 11 July 2008 whereas BW Gas ASA was de-listed on 30 July 2008.

Highlights

- Conditional offers for the LPG fleet rejected
- Decline in TC earnings for the VLGC segment
- Stable or improving TC earnings for the LGC and MGC segments
- One VLGC and two MGCs sold
- LGC pool terminated in May
- Refinancing the USD 1.5 billion credit facility
- Share-for-share exchange offer

Results

BW Gas recorded a second quarter operating profit before depreciation and disposals of USD 53.5 million, compared to USD 64.9 million in the second quarter of 2007. Operating profit was USD 38.9 million in the second quarter of 2008, compared to USD 52.0 million in the same period of 2007. Gain on sale of vessels amounted to USD 12.1 million, compared to USD 14.3 million in the second quarter of 2007.

The second quarter of 2008 showed decreasing freight rates for the VLGCs, stable freight rates for the LGCs and increasing freight rates for the MGCs, compared to the same period in 2007. The increase in bunker prices continued to have an adverse effect on TC earnings, particularly for the VLGCs. Unscheduled repairs had to be carried out on one VLGC vessel. The operating profit in the LPG segment amounted to USD 21.8 million in the second quarter of 2008, compared to USD 32.5 million in the second quarter of 2007. The average number of LPG vessels decreased from 40.6 to 37.1.

The operating profit in the LNG segment amounted to USD 21.0 million in the second quarter of 2008, compared to USD 24.4 million in the second quarter of 2007. One vessel was dry-docked for scheduled maintenance this quarter, resulting in eight days offhire not covered by the charterer and increased operating expenses. Depreciation decreased by USD 0.5 million following the sale of the two smaller LNG vessels: Havfru in May 2007 and Century in February 2008. The average number of LNG vessels decreased from 7.1 to 5.5.

Operating expenses increased by USD 7.1 million from USD 54.2 million in the second quarter of 2007 to USD 61.3 million in the second quarter of 2008 mainly due to the effects of the depreciation of USD against NOK related to the NOK denominated share of operating expenses, higher manning expenses, up-storing of spares related to storage contracts, deductibles and repairs being carried out on one VLGC and one LNG vessel.

The accounts show net financial income of USD 0.8 million in the second quarter of 2008 (USD 3.5 million in 2007), of which interest expenses amounted to USD 29.0 million (USD 20.9 million in 2007). Net foreign exchange gain amounted to USD 3.6 million, compared to USD 1.6 million in the second quarter of 2007. Other financial items amounted to USD 19.9 million in the second quarter of 2008 (USD 17.6 million in 2007), and consist mainly of changes in marked to market value of interest rate swaps.

Profit before tax amounted to USD 39.7 million in the second quarter of 2008 compared to USD 55.5 million in the second quarter of 2007. Net profit was USD 38.0 million (USD 0.3 per share) in the second quarter of 2008 compared to a net profit of USD 49.5 million in the second quarter of 2007 (USD 0.4 per share).

The income tax expense amounted to USD 1.7 million in the second quarter of 2008 compared to USD 6.0 million in the second quarter of 2007, and is mainly related to calculated changes in deferred tax in ordinary taxed companies as a result of unrealised foreign exchange gains on internal loans.

The second quarter financial results do not reflect any adjustments that may arise from the group reorganization that took place on 11 July 2008. As such, expenses incurred by BW Gas Limited in connection with the group reorganization have not been reflected in the interim financial statements.

The board of directors.

BW GAS - THE LEADING CLEAN ENERGY CARRIER
BW Gas is a leading global provider of gas marine transportation services. The company is the largest owner and operator of LPG (liquefied petroleum gas) carriers and one of the largest independent owners and operators of LNG (liquefied natural gas) carriers. BW Gas owns, part-owns and/or operates a fleet of 74 vessels including newbuildings, of which 61 are LPG vessels transporting mainly LPG and ammonia and 13 are LNG vessels. Currently the company employs approximately 1,910 seagoing personnel and 180 onshore employees.

BW Gas Limited