In a note that followed a five-year fixture involving Maersk Oil Qatar and the 442,000-dwt FSO Africa (built 2002), Michael Webber told clients that subsequent agreements could add between $5 and $7m in quarterly cash to a joint venture with Euronav, which holds a 50% stake in the floating storage and offloading (FSO) unit.

“Perhaps more importantly the 5-year tenor of the contract and higher cash flow should increase the value of this non-core holding, which could come in handy for OSG during its ongoing negotiations with its lenders,” the analyst added in reference to higher cash flow from what he described as a “solid asset sale candidate”.

“While we remain on the sidelines given limited visibility into OSG's refinancing/restructuring process and an extremely soft tanker market, we believe this announcement from Euronav is a quiet positive for OSG, and likely adds some modest incremental flexibility.”

New York-quoted shares of the tanker owner, which is based in Manhattan and led by long-time chief executive Morten Arntzen, climbed 5.70% before hitting $6.86 in the hours following Euronav’s FSO update.

As we reported, OSG has lost money for 13 consecutive quarters and seen a once-comfortable liquidity position evaporate. The owner faces a cash gap when it trades in an existing $1.5bn revolving unsecured credit line for a new $900m version in February.

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