FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

FINANCIAL INSTRUMENTS [Abstract]

FINANCIAL INSTRUMENTS

16.   FINANCIAL INSTRUMENTS

Interest rate risk management

In certain situations, the Company may enter into financial instruments to reduce the risk associated with fluctuations in interest rates. The Company does not hold or issue instruments for speculative or trading purposes. As at December 31, 2011, the Company is not party to any interest rate swaps to hedge interest rate exposure.

Foreign currency risk

The majority of the Company's transactions, assets and liabilities are denominated in United States dollars, the functional currency of the Company. There is no significant risk that currency fluctuations will have a negative effect of the value of the Company's cash flows.

Fair values

The carrying value and estimated fair value of the Company's financial instruments at December 31, 2011 and 2010 are as follows:

	2011		2011		2010		2010
(in thousands of $)	Fair Value		Carrying Value		Fair Value		Carrying  Value
Cash and cash equivalents		46,848		46,848		56,771		56,771
Restricted cash		15,000		15,000		15,000		15,000
Floating rate debt		153,740		153,740		157,340		157,340

The carrying value of cash and cash equivalents, and restricted cash, is a reasonable estimate of fair value.

The estimated fair value for floating rate long-term debt is considered to be equal to the carrying value since it bears variable interest rates, which are reset on a quarterly basis.

Concentrations of risk

There is a concentration of credit risk with respect to cash and cash equivalents to the extent that substantially all of the amounts are carried with Skandinaviska Enskilda Banken, The Royal Bank of Scotland plc, DnB and Nordea Bank Norge ASA. The Company does not require collateral or other security to support financial instruments subject to credit risk.