SOURCE: Quintana Maritime Limited

April 10, 2007 16:10 ET

Quintana Maritime Limited Expands Presence Into Capesize Sector by Entering Into Joint Venture With Sponsors and Secures a Five-Year Charter With EDF Trading

ATHENS, GREECE -- (MARKET WIRE) -- April 10, 2007 -- Quintana Maritime Limited (NASDAQ: QMAR) announced today that it has formed a joint venture, Christine Shipco LLC, together with affiliated companies controlled by the major sponsors of the Company, Corbin Robertson, Jr. and Hans Mende, for the purpose of acquiring and operating a 180,000 deadweight-ton (dwt) Capesize vessel. The vessel is being built at Imabari, a major Japanese shipyard, with delivery expected March 2010. The expected total cost at delivery to the joint venture, including contract costs and financing costs will approximate $76 million.

Each sponsor's affiliated company will control 28.6% of the ship-owning company and those affiliates will fund all related installments due to the yard together with related financing costs, until the vessel's delivery. The Company will pay approximately $36.2 million at delivery in March 2010 and will control 42.8% of the shipowning company. The Company will collect, from January 1, 2007 until the delivery of the vessel, $60,000 per annum from the affiliates in their capacity as shareholders in the shipowning company as management fees for supervising the construction of the vessel. Upon delivery, the Company will manage the ship on behalf of the joint venture, and the shipowning company will pay QMAR a management fee based on the Company's budgeted management costs, subject to adjustment in certain circumstances.

The Company's Conflicts Committee, which comprises three of the Company's independent, non-executive directors, has approved the transaction.

The Company has secured a five-year charter from the vessel's delivery in March 2010 at a net daily floor rate of approximately $25,250 with a 50% profit sharing (based on the monthly AV4 BCI average, as published by the Baltic Exchange) above the floor rate with EDF Trading, a wholly owned subsidiary of EDF, one of the largest utility companies in Europe. EDF trades on Euronext under the ticker "EDF."

Stamatis Molaris, President and Chief Executive Officer of Quintana Maritime, commented, "We are very pleased to have entered into a partnership with our two strategic sponsors which further cements their long-term commitment to our Company as well as to the sector. Our shareholders will benefit from our further expansion into the fast-growing Capesize sector with high-quality assets secured at attractive prices, without facing any cash flow dilution during the vessel's construction period and without stretching our balance sheet's ability to deliver profitable growth." He further commented, "We are also welcoming the beginning of a relationship with one of the major users of commodities in the world, EDF Trading. Developing long-term relationships with major end users and producers of commodities is a key part of our strategy, and its success is fully manifested in the quality of our customer base. We are looking forward to a growing relationship with this investment-grade customer. The structure of the time charter contract insulates our shareholders' return from downside market risk while providing significant cash flow upside potential in the Capesize sector."

Fleet Table as of April 10, 2007

                                            Year      Age  Expiration Date
CURRENT FLEET           Type        DWT    Built  (in yrs) (minimum period)

Iron Manolis(A)      Kamsarmax     82,300   2007      0.0    December 2010
Iron Brooke(A)       Kamsarmax     82,300   2007      0.1    December 2010
Iron Miner            Capesize    177,000   2007      0.1     January 2012
Iron Lindrew(A)      Kamsarmax     82,300   2007      0.1    December 2010
Iron Knight(A)         Panamax     76,429   2004      2.8    December 2010
Coal Hunter(A)       Kamsarmax     82,300   2006      0.3    December 2010
Pascha(A)            Kamsarmax     82,300   2006      0.3    December 2010
Coal Gypsy(A)        Kamsarmax     82,300   2006      0.4    December 2010
Iron Anne(A)         Kamsarmax     82,000   2006      0.5    December 2010
Iron Vassilis(A)     Kamsarmax     82,000   2006      0.7    December 2010
Iron Bill(A)         Kamsarmax     82,000   2006      0.9    December 2010
Santa Barbara(A)     Kamsarmax     82,266   2006      1.0    December 2010
Ore Hansa(A)         Kamsarmax     82,229   2006      1.1    December 2010
Iron Kalypso(A)      Kamsarmax     82,204   2006      1.2    December 2010
Iron Fuzeyya(A)      Kamsarmax     82,229   2006      1.2    December 2010
Iron Bradyn(A)       Kamsarmax     82,769   2005      2.1    December 2010
Grain Harvester(A)     Panamax     76,417   2004      2.6        July 2009
Grain Express(A)       Panamax     76,466   2004      3.0    December 2010
Kirmar(B)             Capesize    165,500   2001      5.5       March 2008
Iron Beauty(B)        Capesize    165,500   2001      5.7       April 2010
Coal Pride(E)          Panamax     72,600   1999      7.4    February 2009
Iron Man(C)            Panamax     72,861   1997      9.8       March 2010
Coal Age(C)            Panamax     72,861   1997      9.8   September 2007
Fearless 1(C)          Panamax     73,427   1997      9.9       March 2008
Barbara(D)             Panamax     73,390   1997     10.2        July 2007
Linda Leah(D)          Panamax     73,390   1997     10.2    February 2008
King Coal              Panamax     72,873   1997     10.3       March 2008
Coal Glory(C)          Panamax     73,670   1995     12.1        June 2008

Total Current                                       years
 Fleet              28 Vessels  2,473,881         avg (G)
                    ----------  --------- ------ --------   --------------

FLEET TO BE                                 Year    Age
DELIVERED               Type        DWT    Built  (in yrs)  Delivery Range

Lowlands Beilun(C)    Capesize    170,162   1999      7.9       April 2007
Newbuilding(E)(F)     Capesize    180,000   2010        *       March 2010
Total Fleet to be
 Delivered           2 Vessels    350,162

TOTAL FLEET         30 Vessels  2,824,043             3.5
                                                  avg (G)
                    ----------  --------- ------ --------   --------------
* Under Construction

(A), (B), (C), (D) and (E) indicate sister ships. As of April 10, 2007, Quintana had five sets of sister ships, including the vessels recently acquired from Metrobulk. All seventeen ships that are part of the Metrobulk acquisition are sister ships. Sister ships indicate vessels of the same class made in the same shipyard. The sister-ship concept further enhances our operational flexibility and efficiency.

(F) Quintana holds a 42.8% interest in the joint venture that will own this vessel.

(G) On a dwt weighted average


Quintana Maritime Limited, based in Greece, is an international provider of dry bulk cargo marine transportation services. As of today, the company owns and operates a fleet of 28 vessels, including 14 Kamsarmax bulkers, 11 Panamax size vessels and 3 Capesize vessels with a total carrying capacity of 2,473,881 dwt and an average age of 3.7 years on a dwt weighted average. It has also entered into agreement to acquire an additional Capesize vessel with 170,162 dwt cargo capacity with expected delivery in April 2007. In addition, Quintana is a 42.8% owner in a joint venture that has recently ordered a Capesize newbuilding of an aggregate capacity of 180,000 dwt with expected delivery ex-yard in March 2010. Once all acquisitions and newbuild order are completed and assuming no vessel disposals, Quintana will have a fleet of 30 dry bulk vessels, including 5 Capesize vessels, 11 Panamax vessels and 14 Kamsarmax vessels, with a total capacity of 2,824,043 dwt. The deadweight average age of the whole fleet, including the Capesize vessel on order, currently is 3.5 years.

Forward-Looking Statement

This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenues and time charters. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

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