Teekay Tankers Ltd.

During the call, our participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question and answer session. At this time, if you have a question, participants will be asked to press star 1 to register for a question. For assistance during the call, please press star 0 on your touchtone telephone. As a reminder, this call is being recorded. Now, for opening remarks and introductions, I would like to turn the call over to the company. Please go ahead.

Before we begin, I would like to direct all participants to our website at www.tk.com, where you will find a copy of the third quarter 2023 earnings presentation. Kevin and Stuart will review this presentation during today's conference call. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the third quarter 2023 earnings release and earnings presentation available on our website. I will now turn the call over to Kevin McKay, TK Tanker's President and CEO, to begin.

Thank you, Ed. Hello, everyone, and thank you very much for joining us today for TK Tanker's third quarter 2023 earnings conference call. Joining me on the call today are Stuart Andrade, TK Tanker's CFO, and Christian Waldegrave, our Director of Research. Moving to our recent highlights on slide three of the presentation, TK Tankers generated total adjusted EBITDA of approximately $106 million in the third quarter, up from the $92 million we generated in the same quarter of last year. We reported adjusted net income of approximately $77 million, or $2.24 per share, an increase from last year's third quarter levels of $58 million, or $1.70 per share respectively. Our significant operating leverage combined with the historical high third quarter spot rates resulted in TK tankers generating our highest ever third quarter adjusted net income. As a reminder, for every $5,000 increase in tanker rates above our free cash flow breakeven of $16,000 per day, we expect to generate approximately $2.60 of annual free cash flow per share. We will provide further information of this later in the presentation. In line with our fixed quarterly dividend policy, we have declared a cash dividend of 25 cents per share for the third quarter of 2023. As previously announced, we completed the repurchase of four vessels which were on sell-leaseback arrangements for $57 million. These vessels were financed with our $350 million revolving credit facility. In the market, rates remained firm on a historical basis, with average midsize rates the highest for a third quarter in 15 years. These high average spot rates were achieved despite spot tanker rates declining in the second half of the quarter due to a combination of reduced exports from OPEC Plus and normal seasonality. Spot tanker rates have, however, firmed significantly once again through the early part of the fourth quarter, and we believe that increased tanker demand and seasonal factors will continue to support rates through the winter months. While seasonality and geographical factors will continue to play a role, tanker market fundamentals point to continued strength over the next two to three years, underpinned by a very positive fleet supply outlook. Finally, we extended one in-charter vessel for an additional 12 months at a rate of $21,250 per day. Our in-charter fleet of eight vessels now has an average charter in rate of $25,400 per day. And the company also has two vessels chartered out at an average of $43,500 per day. Turning to slide four, we look at third quarter dynamics in the spot tanker market. Bot tanker rates remained historically firm during the third quarter, though rates fell during the second half of the quarter due to reduced exports from the OPEC Plus group and normal seasonality. Saudi Arabia announced a voluntary supply cut of a million barrels a day in July 2023 and has pledged to keep these cuts in place to the end of the year, which has negatively impacted crude tanker demand for larger ships. In addition, Russian crude oil exports fell during the third quarter as higher Russian domestic demand during the summer resulted in less crude oil available for export. Seasonal factors also played a part. with lower crude demand from refineries during the quarter due to normal seasonal maintenance. Despite these factors, tanker rate averages remain firm on a historical basis, with TNK recording the best mid-side tanker spot rates for a third quarter in the past 15 years. At the start of Q4, spot tanker rates have increased sharply as seaborne crude oil volumes have increased. as shown by the chart on the right of the slide. We believe that this marks the start of a seasonally strong winter market, and we will give more detail of our outlook for the coming months later in the presentation. Turning to slide five, we provide an update on our Suezmax and AfriMax size spot rates in the third quarter to date. Based on approximately 42% and 37% of revenue dated booked, TK Tanker's third quarter to date Suezmax and AfriMax size vessel bookings have averaged approximately 26,500 per day and 38,800 per day respectively. As you'll see from the green dots on the chart, the current reported rates from Clarkson's are now sharply higher. which speaks to the tightness in the tanker market and the effect of increased seaborne crude volumes. As voyages agreed during the latter part of Q3 and early October are completed and replaced by those reflecting the more recent higher spot market, we expect our own spot rate results to strengthen as we move further through the quarter, provided rates remain firm. Importantly, I would highlight the value being created by TNK's eight-vessel chartered-in fleet with six trading in strong spot market. With an average in-charter rate of $25,400 per day, the chartered-in fleet has a current mark-to-market value of approximately $56 million. Turning to slide six, we look at our outlook for the upcoming winter tanker market. As mentioned earlier, spot tanker rates have risen sharply at the start of the fourth quarter. One of the main drivers has been an increase in crude oil exports from key load regions, including a reversal of supply cuts from both Russia and Saudi Arabia. As shown by the chart on the left, Russian crude oil exports have recovered from a low of 3.1 million barrels per day in July to 3.5 million barrels per day in October. With over 90% of these volumes heading long haul to India and China on Afromaxes and Suezmaxes, this increase has resulted in the return of significant midsize tanker demand as we saw earlier in the year. Similarly, crude oil exports from Saudi Arabia have increased from a low of 5.5 million barrels per day in August to an average of 6.5 million barrels per day in October. This increase comes despite Saudi Arabia's voluntary production cut of 1 million barrels per day remaining in place as lower domestic demand and refinery maintenance have made more oil available for export. Crude oil exports have also been strong from other key midsize tanker load regions, such as the US Gulf and West Africa. The removal of U.S. sanctions on the Venezuelan oil industry could give a further boost in the coming months as more oil is expected to flow to the U.S. and Europe on mainstream Afromax and Suezmax tannage at the expense of movements to China on the Dark Fleet. Higher refinery throughput should also support crude tanker demand in the coming months as refiners increase their crude purchases ahead of the winter demand season. As shown by the chart, the IEA expects the global refinery throughput will increase by 2.4 million barrels per day between October and December, which should be positive for tanker demand. Normal winter market factors such as weather delays are expected to give further support to rates by tightening available vessel supply, as is normal during the fourth and first quarters of the year. Turning to slide seven, we highlight the positive tanker supply fundamentals which we believe will underpin a strong tanker market over the next two to three years. Firstly, the tanker order book remains close to historic lows at just under 6% of the existing tanker fleet size. As per Clarkson's, Global Shipyard Forward Cover currently stands at three and a half years, the highest level since 2009, with 90% of the order book comprising vessels other than tankers. This means that the delivery of the small tanker order book will be spread out over a longer than normal period, and that there are limited berths available for additional deliveries prior to 2027. While we acknowledge the pace of tanker ordering has increased in 2023 compared to last year's historical low levels, this increase needs to be put into context. Just under 24 million deadweight tons of new tanker orders has been placed to date during 2023, which is in line with the average level of new build ordering over the last 20 years. Furthermore, the tanker fleet is aging, with a significant portion of the fleet reaching potential replacement age in the next few years. At present, 11% of the midsize tanker fleet is aged 20 years or older, with another 14% reaching age 20 between 2024 and 2026. The combination of a smaller tanker order book, an aging tanker fleet, and a lack of shipyard capacity are expected to lead to very low levels of tanker fleet growth for at least the next two to three years. Using our internal ship supply forecast model, which is based on the current order book and assumes very conservative levels of ship recycling, we project that less than 1% fleet growth in 2024 and 2025 and negative fleet growth in 2026. I'll now turn the call over to Stuart to cover the financial slide.