SUMMARY OF PERFORMANCE IN 2006

For the year, I.M. Skaugen Group (IMS) reported a net result of USD10.6 million (USD20.5 million in 2005). The result on an EBITDA basis was USD34.6 million (USD46.3 million in 2005).

Through the efforts made within our IMS business during 2006, we are well placed in 2007 to further develop our operations in Norgas, SMC and improve the performance of SPT.

Overall trading conditions for Norgas for the year were favorable, but we had a decline in earnings due to somewhat lower volumes of trade with some of our key customers and higher cost. The bunker cost, due to high oil prices as well as all other operating cost, were higher due to a general increase across the board in the shipping industry for most if not all products and services we require.

IMS created a new division in 2006, Skaugen Marine Construction (SMC ). Through SMC we have streamlined our marine construction activity in China for building of new gas carriers. With responsibility for all aspects of this programme including managing our Chinese joint venture partnerships - the work of SMC is key to the future financial and operational success of the Group. The pioneering new build programme comprises 16 vessels for delivery between now and 2010, 12 of these have been confirmed and one has been delivered. We are building a number of 10,000 cbm vessels that have the ability to carry LNG, in addition to ethylene, LPG and other petrochemical gases. Norgas will be the first company ever to offer this configuration of vessel to customers.

The first SMC ship - "Mei Wen Ti", a 3,200 cbm pressurized LPG carrier - was delivered on budget on 3rd January, 2007. The delivery signals a new era within I.M. Skaugen - an era where new, high quality gas carriers will be delivered approximately every six months at a price below what our competitors are paying. It enables us to renew and expand our fleet, with vessels that will offer special capabilities and added flexibility, at attractive price levels.

Trading conditions for SPT were difficult throughout the year, but improved in the second half of the year. In 2006, the weighted average tanker cost has been a challenge for SPT in a very strong tanker market. With the delivery of six new purpose built Aframax tankers commencing in mid-2007 and ending early 2008, the tanker cost will come down as the vessels have been taken on attractive long term bareboat charters.