VESSELS	6 Months Ended
Jun. 30, 2020
VESSELS [Abstract]
VESSELS	Note 5 — Vessels: Vessel Impairments The Company gave consideration as to whether events or changes in circumstances had occurred since December 31, 2019 that could indicate that the carrying amounts of the vessels in the Company’s fleet may not be recoverable as of June 30, 2020. Factors considered included declines in valuations for vessels of certain sizes and ages, any negative changes in forecasted near term charter rates, and an increase in the likelihood that the Company will sell certain of its vessels before the end of their estimated useful lives in conjunction with the Company’s fleet renewal program. In addition, the economic impacts of the novel coronavirus (COVID-19) did not have immediate material negative impacts on the markets for our vessels and there was a very strong rate environment for our fleets for fixtures concluded during the latter portion of the first quarter of 2020 into the second quarter of 2020, which was principally due to temporary increases in oil production and a growth in demand for floating storage. Commencing towards the end of the second quarter of 2020, however, as the worldwide impacts of COVID-19 began to moderate, and reductions in oil production were implemented effectively and oil demand increased, the demand for floating storage started to decline as onshore and offshore oil inventories were drawn down, which could negatively impact the demand for oil tankers. The extent to which this will negatively impact the tanker rate environment will depend on the timing, magnitude and regions of oil demand recoveries. The Company concluded that the increased likelihood of disposal prior to the end of their respective useful lives constituted impairment triggering events for two older VLCCs as of June 30, 2020. In regard to the vessels in the Company’s fleet that are not currently being marketed for sale, the Company determined that the negative market developments noted above did not rise to the level of impairment triggering events as of June 30, 2020. If such declines continue for a protracted period of time or worsen, we will re-evaluate whether these changes in industry conditions constitute impairment triggers for additional vessels in the Company’s fleet. In developing estimates of undiscounted future cash flows for performing Step 1 of the impairment tests, the Company utilized weighted probabilities assigned to possible outcome for each of the two vessels for which impairment triggering events were determined to exist. As the Company is considering selling the two vessels as a part of its fleet renewal program, 25% probabilities were assigned to the possibility that the two VLCCs would be sold prior to the end of their respective useful lives. The carrying value for one of the two VLCCs was estimated to be unrecoverable in the Step 1 test. In estimating the fair value of the vessel for the purposes of Step 2 of the impairment test, the Company developed fair value estimates that utilized a market approach which considered an average of two vessel appraisals. Based on the tests performed, an impairment charge totaling $5.5 million was recorded on the 2002-built VLCC to write-down its carrying value to its estimated fair value at June 30, 2020. Vessel Acquisitions and Deliveries In December 2019, the Company entered into a memorandum of agreement for the acquisition of a 2009-built LR1 for a purchase price of $18.8 million, which was delivered during the first quarter of 2020. Vessel Sales During the fourth quarter of 2019, the Company entered into memorandums of agreements to sell a 2002-built Aframax and a 2001-built Aframax. The 2002-built Aframax was delivered to its buyer in January 2020. The memorandum of agreement for the sale of the 2001-built Aframax was cancelled by the buyer in June 2020. The Company recognized an aggregate gain of approximately $4.1 million on these transactions, which included the recognition of a non-refundable deposit of $1.4 million paid to the Company in March 2020 pursuant to an amendment to the memorandum of agreement for the sale of the 2001-built Aframax that extended the delivery window for the vessel at the request of the buyer, prior to the June cancellation of the sale.

VESSELS

6 Months Ended

Jun. 30, 2020

Note 5 — Vessels:

Vessel Impairments

The Company gave consideration as to whether events or changes in circumstances had occurred since December 31, 2019 that could indicate that the carrying amounts of the vessels in the Company’s fleet may not be recoverable as of June 30, 2020. Factors considered included declines in valuations for vessels of certain sizes and ages, any negative changes in forecasted near term charter rates, and an increase in the likelihood that the Company will sell certain of its vessels before the end of their estimated useful lives in conjunction with the Company’s fleet renewal program. In addition, the economic impacts of the novel coronavirus (COVID-19) did not have immediate material negative impacts on the markets for our vessels and there was a very strong rate environment for our fleets for fixtures concluded during the latter portion of the first quarter of 2020 into the second quarter of 2020, which was principally due to temporary increases in oil production and a growth in demand for floating storage. Commencing towards the end of the second quarter of 2020, however, as the worldwide impacts of COVID-19 began to moderate, and reductions in oil production were implemented effectively and oil demand increased, the demand for floating storage started to decline as onshore and offshore oil inventories were drawn down, which could negatively impact the demand for oil tankers. The extent to which this will negatively impact the tanker rate environment will depend on the timing, magnitude and regions of oil demand recoveries. The Company concluded that the increased likelihood of disposal prior to the end of their respective useful lives constituted impairment triggering events for two older VLCCs as of June 30, 2020. In regard to the vessels in the Company’s fleet that are not currently being marketed for sale, the Company determined that the negative market developments noted above did not rise to the level of impairment triggering events as of June 30, 2020. If such declines continue for a protracted period of time or worsen, we will re-evaluate whether these changes in industry conditions constitute impairment triggers for additional vessels in the Company’s fleet.

In developing estimates of undiscounted future cash flows for performing Step 1 of the impairment tests, the Company utilized weighted probabilities assigned to possible outcome for each of the two vessels for which impairment triggering events were determined to exist. As the Company is considering selling the two vessels as a part of its fleet renewal program, 25% probabilities were assigned to the possibility that the two VLCCs would be sold prior to the end of their respective useful lives. The carrying value

for one of the two VLCCs was estimated to be unrecoverable in the Step 1 test. In estimating the fair value of the vessel for the purposes of Step 2 of the impairment test, the Company developed fair value estimates that utilized a market approach which considered an average of two vessel appraisals. Based on the tests performed, an impairment charge totaling $5.5 million was recorded on the 2002-built VLCC to write-down its carrying value to its estimated fair value at June 30, 2020.

Vessel Acquisitions and Deliveries

In December 2019, the Company entered into a memorandum of agreement for the acquisition of a 2009-built LR1 for a purchase price of $18.8 million, which was delivered during the first quarter of 2020.

Vessel Sales

During the fourth quarter of 2019, the Company entered into memorandums of agreements to sell a 2002-built Aframax and a 2001-built Aframax. The 2002-built Aframax was delivered to its buyer in January 2020. The memorandum of agreement for the sale of the 2001-built Aframax was cancelled by the buyer in June 2020. The Company recognized an aggregate gain of approximately $4.1 million on these transactions, which included the recognition of a non-refundable deposit of $1.4 million paid to the Company in March 2020 pursuant to an amendment to the memorandum of agreement for the sale of the 2001-built Aframax that extended the delivery window for the vessel at the request of the buyer, prior to the June cancellation of the sale.