OceanFreight Inc. Reports Third Quarter 2008 Financial Results

November 11, 2008, Athens, Greece. OceanFreight Inc. (NASDAQ: OCNF), a global provider of marine transportation services, today announced its financial results for the quarter ended September 30, 2008.

Financial Highlights for Third Quarter 2008

• For the third quarter of 2008 the Company reported Net Income of $9.0 million or $0.61 per common share. Excluding a non-cash loss of $3.6 million associated with the valuation of the Company’s interest rate swaps and $1.3 million non-cash compensation cost associated with the vesting of executives shares, Net Income for the third quarter of 2008 amounted to $13.9 million or $0.95 per common share.

• OceanFreight’s Board of Directors declared a dividend of $0.77 per share in respect of the third quarter of 2008. The dividend was paid on November 6, 2008, to common shareholders of record as of October 31, 2008. This was the sixth consecutive quarterly dividend since the Company’s IPO in April 2007.

Other Developments

• The Company has received a commitment from a first class bank for a $30.5 million term loan facility, the proceeds of which will be used in order to partly finance the acquisition of the M/T Tamara and M/T Tigani. The facility is expected to be drawn down in the fourth quarter of 2008.

Anthony Kandylidis, the Company’s President and Chief Executive Officer, commented:
“I am pleased with yet another quarter of solid operational and financial performance. Our ability to obtain bank financing in this difficult credit environment is a testament to the strong reputation and confidence we have built within the banking community. Despite the current volatile market we have also managed to increase the size of our fleet to thirteen vessels and with the recent acquisition of the M/T Tamara and the M/T Tigani, we have enhanced our presence in the tanker sector, in line with our strategy of diversifying our fleet among multiple shipping sectors.

Including our dividend for the third quarter of 2008, since our IPO in April of 2007, we have paid six quarterly dividends totaling $3.98 per share. We expect that with the employment of the M/T Olinda in the Blue Fin Tankers pool we can capture some of the strength that currently exists in the spot tanker market, which will complement the cash flow generated from our remaining twelve vessels which are all on fixed rate charters with an average remaining duration of approximately two years.”

Third Quarter 2008 Results
For the quarter ended September 30, 2008, Gross Revenue amounted to $40.3 million and Operating Income amounted to $16.3 million.

Net Income for the third quarter of 2008 was $9.0 million or $0.61 per common share calculated on 14,659,201 weighted average common shares outstanding. This Net Income figure includes a non-cash loss of $3.6 million associated with the valuation of the Company’s interest rate swaps and $1.3 million non-cash compensation cost associated with the vesting of executives shares. Excluding the above non-cash items Net Income for the third quarter of 2008 amounted to $13.9 million or $0.95 per common share.

Net cash provided by operating activities and EBITDA for the third quarter of 2008 was $24.9 million and $23.1 million, respectively. Please see later in this release for a reconciliation of EBITDA to net cash provided by Operating activities. An average of 11 vessels were owned and operated during the third quarter of 2008, earning an average Time Charter Equivalent, or TCE, rate of $35,649 per day.

Capitalization
On September 30, 2008, debt (debt, net of deferred financing fees) to total capitalization (debt, net of deferred financing fees, and stockholders' equity) was 55.0% and net debt (debt less cash and cash equivalents) to total capitalization was 41.8%. This does not include the $ 30.5 million term loan facility announced above.

As of September 30, 2008, the Company had a total liquidity of approximately $75.2 million.

Capital expenditures
During October 2008, one of our Panamax drybulk carriers underwent its scheduled special survey for a period of approximately 22 days with a total cost of approximately $1.4 million. It is the policy of the Company to expense special survey costs as incurred.

Dividend Payment
OceanFreight’s Board of Directors declared a dividend of $0.77 per share in respect of the third quarter of 2008. The dividend was paid on November 6, 2008, to shareholders of record as of October 31, 2008.

On August 14, 2008, we paid a dividend in the amount of $0.77 per share in respect of the second quarter of 2008. This dividend payment satisfied the test under our Amended and Restated Articles of Incorporation for early conversion of all of our subordinated shares into common shares on a one-for-one basis. As a result, all 2,085,150 subordinated shares were converted into 2,085,150 common shares on August 15, 2008.

Since the Company’s listing on the NASDAQ Global Market in April 2007, OceanFreight has declared six consecutive quarterly dividends totaling $3.98 per share.

About OceanFreight Inc.
OceanFreight Inc. was incorporated in 2006 to acquire high quality secondhand vessels and deploy them on medium and long term charters. The Company began operations with the delivery of its first vessel in June 2007 and currently owns and operates a fleet of thirteen vessels, consisting of one Capesize drybulk carrier, eight Panamax drybulk carriers, one Suezmax tanker and three Aframax tankers with a total carrying capacity of 1,170,633 dwt. OceanFreight’s Inc. common stock is listed on the NASDAQ Global Market where it trades under the symbol "OCNF". Visit our website at www.oceanfreightinc.com

OceanFreight Inc. press release