SOURCE: Omega Navigation

November 17, 2008 16:05 ET

Omega Navigation Enterprises, Inc. Reports Third Quarter and Nine Months 2008 Results

PIRAEUS, GREECE--(Marketwire - November 17, 2008) - Omega Navigation Enterprises, Inc. (NASDAQ: ONAV) (SGX: ONAV50), a provider of global marine transportation services focusing on product tankers, announced today its financial and operational results for the third quarter and nine months ended September 30, 2008.

The Company had previously announced the declaration of its quarterly cash dividend with respect to the third quarter of 2008 of $ 0.50 per share payable on November 28, 2008 to stockholders of record as of November 17, 2008.

Third Quarter 2008 Results

For the quarter ended September 30, 2008, Omega Navigation reported total revenues of $ 19.5 million and Net Income of $ 6.2 million or $ 0.41 per share, excluding a loss on its interest rate derivative instruments, a gain on warrants revaluation and incentive compensation grants. Including these items, the Company generated net income of $ 5.2 million, or $ 0.34 per basic share. EBITDA for the third quarter of 2008 was $ 14.8 million. Please see below for a reconciliation of EBITDA to Cash from Operating Activities.

Net Income included $ 1.8 million primarily attributable to profit sharing on charters of the vessels Omega Lady Miriam and Omega Emmanuel.

The Company owned and operated an average of 8 vessels, all product carriers, during the third quarter of 2008, the same number as in the third quarter of 2007. The Omega Lady Miriam entered her scheduled drydock on September 21, 2008, and therefore had only 83 revenue generating days during the third quarter of 2008. The drydock costs amounted to about $ 0.5 million and in accordance with our accounting policies we will defer this amount which will be amortized over the period through the next drydocking scheduled in 2013. Should we follow the alternative accounting policy and expense dry docking cost as incurred, our net income would be decreased by $ 0.5 million as of September 30, 2008. Excluding profit sharing, the Panamax product carriers in our fleet earned an average time-charter equivalent rate of $ 25,035 per day per vessel during the third quarter of 2008, versus $ 25,047 per day per vessel during the third quarter of 2007. The Handymax product tankers in our fleet earned an average time charter equivalent rate of $ 20,788 per vessel per day during the third quarter of 2008, versus $ 20,777 per day per vessel during the third quarter of 2007.

Since the inception of our product tankers' charters through the end of the third quarter of 2008, the profit sharing element of those charters that we have or are entitled to receive amounted to approximately $ 11.4 million. The Company has already received $8.9 million of cash and has recorded profit share revenues of $ 8.6 million, and currently expects to record an additional $ 2.8 million in quarters to follow for voyages performed through the third quarter of 2008. The table below presents the amount of profit share revenues recorded per quarter.


     Quarter                Amount of profit share
                             revenues recorded per
                                   quarter

1st Quarter 2007                $ 1.1 million
2nd Quarter 2007                $ 1.0 million
3rd Quarter 2007                $ 1.3 million
4th Quarter 2007                $ 0.6 million
1st Quarter 2008                $ 1.2 million
2nd Quarter 2008                $ 1.6 million
3rd Quarter 2008                $ 1.8 million
     Total                      $ 8.6 million

Operating expenses for our MR product tankers averaged $ 4,972 per day per vessel in the third quarter of 2008, versus $ 5,074 per day per vessel in the third quarter of 2007. Our Panamax product tankers averaged operating expenses of $ 5,577 per day per vessel in the third quarter of 2008, versus $ 4,380 per day per vessel in the third quarter of 2007. The increase of the daily operating expenses of the Panamax product tankers relates mainly to an increase in crew wages and maintenance cost for the Omega Lady Miriam which was incurred during drydock.

First Nine Months 2008 Results

For the nine months ended September 30, 2008, Omega Navigation reported total revenues of $ 57.6 million and Net Income of $ 15.4 million, or $ 1.01 per basic share. Excluding a loss on its interest rate derivative instruments, a gain on warrants revaluation and incentive compensation grants, the Company earned $ 16.9 million or $ 1.11 per basic share. EBITDA for the first nine months of 2008 was $ 40.1 million. Please see below for a reconciliation of EBITDA to Cash from Operating Activities.

Net Income included $ 4.6 million of revenues primarily arising from profit sharing on charters of the vessels Omega Lady Miriam, Omega Lady Sarah, Omega Theodore and Omega Emmanuel.

The Company owned and operated an average of 8 vessels, all product carriers, during the first nine months of 2008, and 7.3 product carriers during the first nine months of 2007. Excluding profit sharing, the Panamax product carriers in our fleet earned an average time-charter equivalent rate of $ 25,054 per day per vessel during the first nine months of 2008, versus $ 25,004 per day per vessel during the first nine months of 2007. The Handymax product tankers in our fleet earned an average time charter equivalent rate of $ 20,763 per vessel per day during the first nine months of 2008, versus $ 20,798 per day per vessel during the nine months of 2007.

Operating expenses for our Panamax product tankers averaged $ 5,353 per day per vessel in the first nine months of 2008, versus $ 4,566 per day per vessel, excluding any initial outfitting and pre-delivery expenses, in the first nine months of 2007. Our MR product tankers averaged operating expenses of $ 4,880 per day per vessel in the first nine months of 2008, versus $ 4,603 per day per vessel in the first nine months of 2007. The increase of the daily operating expenses of our Panamax product tankers as well as our MR product tankers relates mainly to an increase in crew wages.

Lower Interest Expense

Interest Expense and finance costs in the third quarter of 2008 were $ 3.1 million, and in the corresponding quarter of 2007 interest expense and finance costs were $ 5.2 million. For the nine months ended September 30, 2008, interest expense and finance costs were $ 10.3 million, versus $ 13.8 million in the same period of 2007. The difference between 2007 and 2008 is attributable to the current lower interest rate environment. We recently entered into an interest rate swap agreement whereby we fixed our interest cost for a notional amount of $ 100 million at a rate of 2.585%. The above arrangement, together with previous hedging arrangements, has the effect of lowering our overall interest rate exposure.

Fleet Developments

Current Fleet

Omega Navigation's current fleet includes eight double hull product tankers with an aggregate carrying capacity of 512,358 dwt. All of the Company's product tankers are employed under time charters having a minimum contracted term of three years from their respective delivery dates and are chartered to established charterers including Norden, ST Shipping (Glencore) and Torm. Six of the eight product tankers have profit sharing arrangements which enable the Company to share in the charter market's upside potential. The Company recently announced new charters on the Omega Lady Miriam and Omega Lady Sarah which ensures time charter coverage on these vessels into 2012. The following table illustrates the current contract expirations and renewals:

                                       Latest
                  Charter   Profit    Charter
Vessel              Rate    Sharing  Expiration         Renewal
Omega Queen       $ 26,500     No      Jun-09    Charterer’s extension
                                                  option at $28,500 through
                                                  Jun-11
Omega King        $ 26,500     No      Jul-09    Charterer’s extension
                                                  option at $28,500 through
                                                  Jul-11
Omega Lady Sarah  $ 24,000     Yes     Q3-12     New charter commences 2/3Q
                                                  ’09 at 25,500/day plus
                                                  50/50 profit sharing
Omega Lady Miriam $ 24,000     Yes     Q4-12     New charter commences 3/4Q
                                                  ’09 at 25,500/day plus
                                                  50/50 profit sharing
Omega Prince      $ 21,000     Yes     Jul-09    Charterer’s extension
                                                  option at $24,000 through
                                                  Jul-10
Omega Princess    $ 21,000     Yes     Aug-09    Charterer’s extension
                                                  option at $24,000 through
                                                  Aug-10
Omega Emmanuel    $ 25,500     Yes     Apr-10
Omega Theodore    $ 25,500     Yes     May-10

Acquisition contracts

On May 19, 2008 the Company announced that it had entered into an agreement with an unaffiliated third party to purchase two 47,000 dwt newbuilding double hull product tankers for $ 55.5 million each. The first vessel is scheduled to be delivered in the second quarter of 2009 and the second vessel is scheduled to be delivered in the third quarter of 2010. The purchase agreement required a deposit of 10% of the purchase price that was placed in a joint account of the sellers and buyers on May 29, 2008. The Company has entered into an agreement with a commercial bank to finance 90% of the above deposit payment with bank debt and the remainder of $1.2 million was financed from cash available from operations. The Company has also agreed with the same commercial bank for the financing of up to 75% of the purchase price of the vessels at the time of their respective deliveries. The agreed interest rate will range between 100 to 120 bps over LIBOR, depending on the applicable ratio of loan to vessels' market value and the financial covenants are in line with the existing covenants under our other senior secured credit facilities. At delivery, the vessels will each be chartered for three years to ST Shipping (a subsidiary of Glencore International A.G.) for a gross base rate of $ 21,135 per day per vessel. In addition, the charters also provide for profit sharing, whereby the Company will share equally in any upside above the base charter rate with the charterer, based on the vessels' actual quarterly trading results.

Newbuilding contracts

On June 19, 2007, the Company announced that it had signed shipbuilding contracts with Hyundai Mipo Dockyard, to construct and acquire five newbuilding double hull Handymax product tankers, each with a capacity of 37,000 dwt. Four of these vessels are scheduled for delivery in 2010 with the fifth scheduled for delivery in early 2011. With the addition of these seven vessels, Omega's fleet will consist of 15 product carriers with a total deadweight capacity of 791,358 tons.

The following table illustrates the delivery dates and charter arrangements on all the newbuildings:

                                   Profit       Charter
Vessel   Delivery   Charter Rate   Sharing    Expiration
       ------------ ------------ ------------ ------------
TBN1      Jun-09    $     21,135     Yes         Jun-12
TBN2      Mar-10    Confidential      No         Mar-13
TBN3      Jul-10    $     21,135     Yes         Jul-13
TBN4      Jul-10
TBN5      Sep-10
TBN6      Dec-10
TBN7      Feb-11

Note: TBN2 above rate is confidential but vessel is expected to generate annual EBITDA of about $ 6 million.

Management Commentary:

George Kassiotis, President and Chief Executive Officer of Omega Navigation, commented: "We are pleased to have concluded our tenth consecutive profitable quarter since our IPO in April 2006. We attribute our strong operational and financial results to our strategy of acquiring high quality modern vessels and seeking predictable and stable cash flows through the long term employment of our vessels. In addition, the fact that the charters of six of our eight product tankers have profit sharing has enabled us to participate in the upside of the charter market and thereby maximize our profitability and the return for our shareholders. The profit sharing agreements in 2008 have allowed the Company to enjoy particularly strong earnings.

"We continue to return strong operating results even in this most challenging economic environment. As evidenced by our recent charters of the Omega Lady Miriam and Omega Lady Sarah, time charter rates in the product tanker sector have remained solid, while rates in some other shipping sectors have come under some pressure. With oil prices significantly below the highs we saw this past summer, we are cautiously optimistic that demand for petroleum products in the short term will rebound and we continue to be bullish about our sector in the long term. Based on current charter rates and the continued performance of each of our charterers, we believe that we are well positioned to continue to operate profitably even in this economic climate. We also believe that we continue to have strong relationships with our commercial lenders, that are large European and Asian banks which to date have held up extremely well, even in this credit crisis.

"All of the vessels in our current fleet are under three-year time charters with established charterers pursuant to which we have contracted 100% of our operating days for 2008 and 79% for 2009. The charters on the Panamax Ice Class vessels delivered to us in March and April of 2007, respectively, extend to 2010. The recently announced acquisition of two newbuilding product tankers to be delivered to us in the second quarter of 2009 and the third quarter of 2010, respectively, have also been fixed on three-year time charters, thereby enhancing the stability and visibility of our cash flows. In addition, a three-year time charter has been concluded on the first of the five newbuilding vessels we contracted for in mid 2007. This brings our overall fleet coverage to 80% in 2009. The table above shows that, assuming that each of charterers continue to perform in accordance with the terms of their respective charters, we are well on our way for both our current fleet and our newbuildings in securing profitable time charters for the entire fleet which will continue to allow us to achieve strong and visible earnings.

"We would like to reiterate that we are continuing to pursue a strategy of prudent growth, gradually expanding our fleet and our revenue and profit generation potential. Based on the activity we have announced so far, we expect to add seven newbuilding product carriers to our fleet, thereby expanding it to a total of 15 vessels, and solidifying our position as a major player in the global product tanker market. We expect to be taking delivery of these seven vessels between the second quarter of 2009 and the first quarter of 2011. In addition, the two MR resale acquisitions are on terms that are favorably comparable to the current value of a promptly delivered vessel, and current newbuilding contract values for vessels similar to our five newbuildings currently exceed the prices that we contracted for.

"We remain optimistic about the long term fundamentals of the product tanker market, the area of our strategic focus. We believe that we enjoy strong competitive advantages in this market with our focused business strategy, our fleet of young high quality vessels, long term employment with established charterers, a solid and flexible capital structure and a strong management team, enabling us to continue delivering strong, stable and predictable results for our shareholders.

"Finally, we continued with our stable dividend policy, declaring our tenth consecutive quarterly dividend of $ 0.50 per common share with respect to the third quarter of 2008."

Quarterly Dividend

On November 3, 2008 the Company announced its tenth consecutive quarterly dividend since it went public, of $ 0.50 per common share, payable on November 28, 2008 to shareholders of record as of November 17, 2008.

Gregory McGrath, Chief Financial Officer of Omega Navigation, commented, "We have now paid or declared on schedule ten consecutive quarterly dividends since going public in the amount of $ 0.50 per common share, aggregating $ 5.00 per common share. Our overall objective is to pursue a strategy of disciplined growth, while at the same time implementing a stable, dividend payout. We believe this strategy will maximize shareholder value over the long term.

"As of September 30, 2008, the Company had a ratio of debt to market value of about 55% with respect to the current eight vessel fleet and a net debt to book capitalization ratio of 64%, including debt already incurred under the pre-delivery financing of the seven newbuildings, which we believe are modest ratios for industry standards given our strong time charter coverage and the young age and quality of our fleet.

"Asset values in the product tanker sector have held up reasonably well, and would have to fall significantly to trigger a default under our security value maintenance loan covenants.

"The restructuring of our debt facility toward the end of the first quarter of this year has had the effect of taking advantage of our current low interest rate environment, decreasing our interest expenses, while at the same time it has increased our financial flexibility and we believe it will enhance our ability to pursue our strategy of prudent growth aimed at increasing shareholder value in the longer term."

Fleet Data

                         Panamax Tankers             Handymax Tankers
                        Three months ended          Three months ended
                    --------------------------  --------------------------
                    September 30, September 30, September 30, September 30,
                        2008          2007         2008           2007
                    ------------  ------------  ------------  ------------
Number of vessels
 at end of period              6             6             2             2
Average age of
 fleet (in years)              3             2             2             1
Ownership days (1)           552           552           184           184
Available days (2)        543.19           552           184           184
Operating days (3)        543.19           552           184           184
Fleet Utilization (4)        100%          100%          100%          100%
Voyage revenues
 (net of voyage
 expenses) (7)      $ 13,598,722  $ 13,826,103  $  3,824,960  $  3,822,940
Time charter
 equivalent (TCE)
 rate $/day (5)(7)        25,035        25,047        20,788        20,777
Vessel operating
 expenses (net of
 predelivery
 expenses)          $  3,078,328  $  2,418,015  $    914,902  $    933,632
Daily vessel
 operating expenses
 $/day(6)                  5,577         4,380         4,972         5,074
                    ------------  ------------  ------------  ------------


                        Nine months ended           Nine months ended
                    --------------------------  --------------------------
                    September 30, September 30, September 30, September 30,
                        2008         2007           2008          2007
                    ------------  ------------  ------------  ------------
Number of vessels
 at end of period              6             6             2             2
Average age of
 fleet (in years)              3             2             2             1
Ownership days (1)         1,644      1,436.76           548           546
Available days (2)      1,635.19      1,436.76           548           546
Operating days (3)      1,635.19      1,436.76           548           546
Fleet Utilization (4)        100%          100%          100%          100%
Voyage revenues
 (net of voyage
 expenses) (7)      $ 40,967,355  $ 35,925,253  $ 11,378,182  $ 11,355,851
Time charter
 equivalent (TCE)
 rate $/day (5)(7)        25,054        25,004        20,763        20,798
Vessel operating
 expenses (net of
 predelivery
 expenses)          $  8,799,990  $  6,560,027  $  2,674,263  $  2,513,188
Daily vessel
 operating expenses
 $/day(6)                  5,353         4,566         4,880         4,603
                    ------------  ------------  ------------  ------------

(1) Ownership days are the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.

(2) Available days are the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.

(3) Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.

(4) We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.

(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by available days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods.

(6) Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, but excludes any pre-delivery expenses incurred at or prior to the delivery of the product tankers, are calculated by dividing vessel operating expenses by ownership days for the relevant period. For the nine months ended September 30, 2008, and September 30, 2007, pre-delivery expenses of Panamax product tankers amounted to $ 0 million and $ 0.8 million respectively.

(7) For the three months ended September 30, 2008, excludes $ 1.8 million of profit sharing revenue booked in the third quarter of 2008 related to profit sharing on charters of the vessels Omega Lady Sarah, Omega Lady Miriam, Omega Emmanuel and Omega Theodore. For the nine months ended September 30, 2008, excludes $ 4.6 million of profit sharing revenue booked in the first nine months of 2008 related to profit sharing on charters of the vessels Omega Lady Sarah, Omega Lady Miriam, Omega Emmanuel, Omega Theodore, Omega Prince and Omega Princess.

Fleet Profile and Employment:

The table below describes the profile and employment of the Company's fleet as of today:*

                                             Delivery  Daily       Latest
        Sister   Year   Deadweight           Date      Hire        Re-
Vessel  Ship (1) Built  (dwt)       Type               Rate (2)    delivery
CURRENT FLEET
Panamax Product Tankers
Omega
 Queen    A      2004   74,999       LR1      May-06   $26,500 (3) Jun-09
Omega
 King     A      2004   74,999       LR1      Jun-06   $26,500 (3) Jul-09
Omega
 Lady
 Sarah    C      2004   71,500       LR1 –    Jun-06   $24,000/(4)  Q3-12
                                     Ice               $25,500
                                     Class 1C
Omega
 Lady
 Miriam   C      2003   71,500       LR1 –    Aug-06   $24,000/(4)  Q4-12
                                     Ice               $25,500
                                     Class 1C
Omega
 Emmanuel D      2007   73,000       LR1 -    Mar-07   $25,500 (6) Apr-10
                                     Ice
                                     Class 1A
Omega
 Theodore D      2007   73,000       LR1 -    Apr-07   $25,500 (6) May-10
                                     Ice
                                     Class 1A
Handymax Product Tankers
Omega
 Prince   B      2006   36,680       MR1 -    Jun-06   $21,000 (5) Jul-09
                                     Ice
                                     Class 1A
Omega
 Princess B      2006   36,680       MR1 -    Jul-06   $21,000 (5) Aug-09
                                     Ice
                                     Class 1A
TOTAL (DWT):           512,358
Additional Handymax Vessels
TBN1      F      2009   47,000       MR2 IMO  Jun-09   $21,135 (8) Jun-12
                                     II
TBN2      E      2010   37,000       MR1 IMO  Mar-10   Confi-  (7) Mar-13
                                     II/III             dential
TBN3      F      2010   47,000       MR2 IMO  Jul-10   $21,135 (8) Jul-13
                                     II
TBN4      E      2010   37,000       MR1 IMO  Jul-10
                                     II/III
TBN5      E      2010   37,000       MR1 IMO  Sep-10
                                     II/III
TBN6      E      2010   37,000       MR1 IMO  Dec-10
                                     II/III
TBN7      E      2011   37,000       MR1 IMO  Feb-11
                                     II/III
Total (DWT):           279,000

* This table assumes the full performance by each our current and anticipated customers under our current and contracted charters.

(1) Each vessel is a sister ship of each other vessel that has the same letter.

(2) This table shows gross charter rates and does not include brokers' commissions, which are 1.25% of the daily time charter rate.

(3) The Company has granted Torm the option to extend the charter for 24 months at a minimum daily time charter hire rate of $28,500.

(4) In 3rd and 4th quarter 2009 the Omega Lady Sarah and Omega Lady Miriam will enter into a new charter with ST Shipping at a rate of $25,500. Plus any additional income under profit sharing agreements, according to which charter earnings in excess of $25,500 per day will be divided equally between Omega Navigation and ST Shipping.

(5) Plus any additional income under profit sharing provisions of the charter agreements with D/S Norden A/S. The Company has granted the charterers the option to extend the charter for 12 months at a minimum daily time charter hire rate of $ 24,000.

(6) Plus any additional income under profit sharing arrangements, according to which charter earnings in excess of $ 25,500 per day will be divided equally between Omega Navigation and ST Shipping. When the vessels trade in ice conditions, the profit sharing between Omega Navigation and ST Shipping is 65/35% respectively.

(7) Rate is confidential but the vessel is expected to generate annual EBITDA of about $6 million. The Company has granted NYK the option to extend the charter for two one year periods at higher rates.

(8) Plus any additional income under profit sharing arrangements, according to which charter earnings in excess of $ 21,135 per day will be divided equally between Omega and ST Shipping.

Conference Call Details:

As previously announced, the Company's management will host a conference call tomorrow, November 18, 2008 at 10:00am EST to discuss its third quarter 2008 results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-866-819-7111 (US Toll Free Dial In), 0800-953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard International Dial In). Please quote "Omega."

A telephonic replay of the conference call will be available until November 25, 2008 by dialling 1-866-247-4222 (US Toll Free Dial In), 0800-953-1533 (UK Toll Free Dial In) or +44(0)1452-55-00-00 (Standard International Dial In). Access Code: #3663884.

                     Omega Navigation Enterprises Inc
                     Consolidated Statement of Income
           (All amounts expressed in thousands of U.S. Dollars)



                           Three months ended         Nine months ended
                        ------------------------  ------------------------
                         September    September    September    September
                          30, 2008     30, 2007     30, 2008     30, 2007
                        (unaudited)  (unaudited)  (unaudited)  (unaudited)
                        -----------  -----------  -----------  -----------
CONTINUING OPERATIONS
Revenues:
Voyage revenue               19,495       19,231       57,647       51,367

Expenses:
  Voyage expenses               262          242          740          673
  Vessel operating
   expenses                   3,993        3,326       11,474        9,847
  Depreciation and
   amortization               4,749        4,750       14,092       12,809
  Management fees               312          297          933          823
  Options’ premium                -            -            -          200
  General and
   administrative
   expenses                   1,138        1,021        3,644        3,210
  Incentive compensation        208          136        1,151          311
  Foreign currency
   (gains) / losses             (87)          44          (12)          62
                        -----------  -----------  -----------  -----------
Operating income              8,920        9,415       25,625       23,432
                        -----------  -----------  -----------  -----------

Other income (expenses)
  Interest and finance
   costs                     (3,146)      (5,163)     (10,339)     (13,758)
  Interest income               205          284          466        1,605
  Change in fair value of
   warrants                   1,105          685          369          233
  Loss on derivative
   instruments               (1,904)        (938)        (740)        (572)
                        -----------  -----------  -----------  -----------
Total other income
 /(expenses), net            (3,740)      (5,132)     (10,244)     (12,492)
                        -----------  -----------  -----------  -----------

                        -----------  -----------  -----------  -----------
INCOME FROM CONTINUING
 OPERATIONS                   5,180        4,283       15,381       10,940
                        -----------  -----------  -----------  -----------

DISCONTINUED OPERATIONS
Income/(Loss) from
 discontinued
 operations of the bulk
 carrier fleet                    -            -           20         (154)

                        -----------  -----------  -----------  -----------
INCOME/(LOSS) FROM
 DISCONTINUED
 OPERATIONS                       -            -           20         (154)
                        -----------  -----------  -----------  -----------

                        -----------  -----------  -----------  -----------
Net income                    5,180        4,283       15,401       10,786
                        ===========  ===========  ===========  ===========




                     Omega Navigation Enterprises Inc
                        Consolidated Balance Sheet
           (All amounts expressed in thousands of U.S. Dollars)



                                               September 30, December 31,
                                                   2008          2007
                                                -----------  -----------
                                                (unaudited)
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                          13,842        8,893
  Accounts receivable, trade                            146          179
  Inventories                                           596          501
  Prepayments and other                                 694          848
  Restricted cash                                       167          417
  Derivative asset                                      137            -
                                                -----------  -----------
Total current assets                                 15,582       10,838
                                                -----------  -----------

FIXED ASSETS:
  Vessels, net                                      447,209      461,251
  Property and equipment, net                            76          103
  Advances for vessels’ acquisition                  57,206       44,869
                                                -----------  -----------
Total fixed assets                                  504,491      506,223
                                                -----------  -----------

OTHER NON CURRENT ASSETS:
  Deferred charges                                    1,191          343
  Derivative asset                                      403            -
  Restricted cash                                     5,140        5,081
                                                -----------  -----------
Total other non current assets                        6,734        5,424
                                                -----------  -----------

Total assets                                        526,807      522,485
                                                ===========  ===========

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
  Current portion of long term debt                      69          781
  Accounts payable                                    1,196          869
  Accrued and other current liabilities               2,969        2,740
  Deferred revenue                                      349        1,869
  Warrants                                            6,729            -
  Derivative liability                                  796        1,151
  Dividends payable                                      68           30
                                                -----------  -----------
Total current liabilities                            12,176        7,440
                                                -----------  -----------

NON-CURRENT LIABILITIES:
  Long term debt, net of current portion            334,656      322,565
  Warrants                                                -        7,097
  Derivative liability                                1,318          428
  Long Term Dividends payable                           140           81
  Other Long Term Liabilities                            16            -
                                                -----------  -----------
Total non-current liabilities                       336,130      330,171
                                                -----------  -----------

                                                -----------  -----------
COMMITMENTS AND CONTINGENCIES:                            -            -
                                                -----------  -----------

Stockholders' equity:
  Common stock                                          152          151
  Additional paid-in capital                        198,198      197,047
  Accumulated deficit                               (19,849)     (12,324)
                                                -----------  -----------
Total stockholders' equity                          178,501      184,874
                                                -----------  -----------

Total liabilities and stockholders' equity          526,807      522,485
                                                ===========  ===========



                     Omega Navigation Enterprises Inc
                   Consolidated Statement of Cash Flows
           (All amounts expressed in thousands of U.S. Dollars)


                           Three months ended         Nine months ended
                        ------------------------  ------------------------
                         September    September    September    September
                          30, 2008     30, 2007     30, 2008     30, 2007
                        (unaudited)  (unaudited)  (unaudited)  (unaudited)
                        -----------  -----------  -----------  -----------
Cash flows from
 operating activities
Net income from
 continuing operations        5,180        4,283       15,381       10,940

Net cash provided by
 continuing operating
 activities                  10,441        9,579       29,490       25,359
Net cash used in
 discontinued operating
 activities                       -            -            -         (692)
                        -----------  -----------  -----------  -----------
Net cash provided by
 continuing and
 discontinued operating
 activities                  10,441        9,579       29,490       24,667
                        -----------  -----------  -----------  -----------

Cash flows used in
 investing activities
Net cash used in
 investing
 activities-continuing
 operations                    (340)     (22,400)     (12,341)    (142,734)
Net cash provided by
 investing
 activities-discontinued
 operations                       -            -            -       81,468
                        -----------  -----------  -----------  -----------
Net cash used in
 investing activities-
 continuing and
 discontinued
 operations                    (340)     (22,400)     (12,341)     (61,266)
                        -----------  -----------  -----------  -----------

Cash flows (used
 in)/provided by
 financing activities
Net cash (used
 in)/provided by
 financing
 activities-continuing
 operations                  (7,486)       3,757      (12,200)      79,755
Net cash used in
 financing
 activities-discontinued
 operations                       -            -            -      (37,394)
                        -----------  -----------  -----------  -----------
Net cash (used
 in)/provided by
 financing
 activities-continuing
 and discontinued
 operations                  (7,486)       3,757      (12,200)      42,361
                        -----------  -----------  -----------  -----------

Net increase/(decrease)
 in cash and cash
 equivalents                  2,615       (9,064)       4,949        5,762
Cash and cash
 equivalents at the
 beginning of the
 period                      11,227       18,688        8,893        3,862
                        -----------  -----------  -----------  -----------
Cash and cash
 equivalents at end of
 period                      13,842        9,624       13,842        9,624
                        ===========  ===========  ===========  ===========




                     Omega Navigation Enterprises Inc
      Reconciliation of EBITDA (1) to Cash from Operating Activities
           (All amounts expressed in thousands of U.S. Dollars)



CONTINUING OPERATIONS      Three months ended         Nine months ended
                        ------------------------  ------------------------
                         September    September    September    September
                          30, 2008     30, 2007     30, 2008     30, 2007
                        (unaudited)  (unaudited)  (unaudited)  (unaudited)
                        -----------  -----------  -----------  -----------
Net cash from operating
 activities                  10,441        9,579       29,490       25,359
  Net increase/(decrease)
   in current assets           (239)         (29)         (92)         123
  Net (increase)/decrease
   in current liabilities
   excluding bank debt         (329)         (49)         831         (618)
  Incentive compensation       (208)        (136)      (1,151)        (311)
  Write off of options’
   premium                        -            -            -         (200)
  Change in fair value of
   warrants                   1,105          685          369          233
  Net interest
   (income)/expense           3,628        4,878       10,618       12,108
  Payments for drydocking
   costs                        528            -          528            -
  Amortization of
   financing costs             (152)         (78)        (507)        (220)
EBITDA                       14,774       14,850       40,086       36,474




CONTINUING &
 DISCONTINUED
 OPERATIONS                Three months ended         Nine months ended
                        ------------------------  ------------------------
                         September    September    September    September
                          30, 2008     30, 2007     30, 2008     30, 2007
                        (unaudited)  (unaudited)  (unaudited)  (unaudited)
                        -----------  -----------  -----------  -----------

Net cash from
 operating activities        10,441        9,579       29,490       24,667
  Net decrease in current
   assets                      (239)         (29)         (92)         (48)
  Net (increase)/decrease
   in current liabilities
   excluding bank debt         (329)         (49)         851          132
  Incentive compensation       (208)        (136)      (1,151)        (311)
  Write off of options’
   premium                        -            -            -         (200)
  Change in fair value of
   warrants                   1,105          685          369          233
  Net interest
   (income)/expense           3,628        4,878       10,618       12,237
  Payments for drydocking
   costs                        528            -          528            -
  Amortization of
   financing costs             (152)         (78)        (507)        (261)
EBITDA                       14,774       14,850       40,106       36,449

(1) EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by US GAAP and our calculation of EBITDA may not be comparable to that reported by other companies. EBITDA is included here because it is a basis upon which we assess our liquidity position because we believe it presents useful information to investors regarding our ability to service and/or incur indebtedness.

About Omega Navigation Enterprises, Inc.

Omega Navigation Enterprises, Inc. is an international provider of global marine transportation services through the ownership and operation of double hull product tankers. The current fleet includes eight double hull product tankers with a carrying capacity of 512,358 dwt which are chartered out under three-year time charters with an average age of less than three years. The company has also announced the signing of shipbuilding contracts to construct and acquire five additional product tankers with a capacity of 37,000 dwt each scheduled for delivery between March 2010 and early in 2011 and two additional product tankers with a capacity of 47,000 dwt the first scheduled for delivery on the second quarter 2009 and the second scheduled for delivery on the third quarter 2010. With the addition of these seven vessels, Omega's fleet will expand to 15 product tankers with a total deadweight capacity of 791,358 dwt.

The Company was incorporated in the Marshall Islands in February 2005. Its principal executive offices are located in Piraeus, Greece and it also maintains an office in the United States.

Omega Navigation's Class A Common Shares are traded on the NASDAQ National Market under the symbol "ONAV" and are also listed on the Singapore Exchange Securities Trading Limited under the symbol "ONAV 50."

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," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "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, the Company's management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes 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 the Company's control, the Company cannot assure you that the Company will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors other important factors that, in the Company's 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 for product tanker and dry bulk shipping capacity, changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company's vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see the Company's filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

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