Frontline Plc — Interim / Quarterly Report 2014

Nov 25, 2014

FRO - THIRD QUARTER AND NINE MONTHS 2014 RESULTS

FRO - THIRD QUARTER AND NINE MONTHS 2014 RESULTS

Highlights

* Frontline reports a net loss attributable to the Company of $59.6 million

for the third quarter of 2014, equivalent to a loss per share of $0.60.

* Frontline reports a net loss attributable to the Company of $14.5 million

for the third quarter of 2014, when excluding impairment losses and loss on

de-consolidation of the Windsor group of $45.2 million, equivalent to a loss

per share of $0.15.

* Frontline reports a net loss attributable to the Company of $150.0 million

for the nine months ended September 30, 2014, equivalent to a loss per share

of $1.55.

* Frontline reports a net loss attributable to the Company of $48.6 million

for the nine months ended September 30, 2014, when excluding impairment

losses and loss on de-consolidation of the Windsor group of $101.4 million,

equivalent to a loss per share of $0.50.

* Frontline has issued 1,140,226 new shares under the ATM program in the third

quarter.

* Frontline agreed with Ship Finance in July 2014 to terminate the long term

charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and

Front Commerce and Ship Finance simultaneously sold the vessels to unrelated

third parties. The charter parties for the Front Commerce, Front Comanche

and Front Opalia terminated on November 4, November 12 and November 19,

respectively.

* In October 2014, the Company bought $17.8 million notional principal of its

4.50 % Convertible Bond Issue 2010/2015 at a purchase price of 91.654%.

* In October 2014, Frontline entered into a private agreement to exchange

$23.0 million of the Company's 4.5% Convertible Bond for an aggregate of

8,251,724 shares and a cash payment of $10 million plus accrued interest.

Third Quarter and Nine Months 2014 Results

The Board of Frontline Ltd. (the "Company" or "Frontline") announces a net loss

attributable to the Company of $59.6 million in the third quarter, equivalent to

a loss per share of $0.60, compared with a net loss of $78.2 million for the

second quarter, equivalent to a loss per share of $0.81.

The Company has recorded a vessel impairment loss of $41.5 million in the three

months ended September 30, 2014. This loss relates to the VLCCs Front Opalia,

Front Commerce, Front Comanche and Ulriken. Impairment losses are taken when

events or changes in circumstances occur that cause the Company to believe that

future cash flows for an individual vessel will be less than its carrying value

and not fully recoverable. In such instances an impairment charge is recognized

if the estimate of the undiscounted cash flows expected to result from the use

of the vessel and its eventual disposition is less than the vessel's carrying

amount.

The average daily time charter equivalents ("TCEs") earned in the spot and

period market in the third quarter by the Company's VLCCs and Suezmax tankers

were $24,600 and $18,600 compared with $13,900 and $12,400 in the preceding

quarter. The spot earnings for the Company's VLCCs and Suezmax vessels were

$23,900 and $19,500 compared with $12,500 and $12,400 in the preceding quarter.

Contingent rental expense represents amounts accrued following changes to

certain charter parties in December 2011 and increased in the third quarter as

compared to the second quarter primarily due to an increase in actual spot

market rates.

Interest expense, net of capitalized interest, was $26.4 million in the third

quarter of which $10.7 million relates to the Company's subsidiary Independent

Tankers Corporation Limited ("ITCL").

Frontline announces a net loss attributable to the Company of $150.0 million for

the nine months ended September 30, 2014, equivalent to a loss per share of

$1.55. The average daily TCEs earned in the spot and period market in the nine

months ended September 30, 2014 by the Company's VLCCs and Suezmax tankers were

$23,800 and $19,300 compared with $15,800 and $13,600 in the nine months ended

September 30, 2013. The spot earnings for the Company's VLCCs and Suezmax

vessels were $23,000 and $19,700 in the nine months ended September 30, 2014

compared with $13,300 and $13,600, respectively, in the nine months ended

September 30, 2013.

As of September 30, 2014, the Company had total cash and cash equivalents of

$104.6 million and restricted cash of $16.1 million. Restricted cash includes

$15.3 million relating to deposits in ITCL.

The Company estimates average total cash cost breakeven rates for the remainder

of 2014 on a TCE basis for VLCCs and Suezmax tankers of approximately $22,900

and $18,100, respectively.

Fleet Development

The Company has de-consolidated several of the subsidiaries and related entities

in the Windsor group (the "Windsor group"), owned by ITCL in the third quarter

of 2014 as a consequence of the Chapter 11 filing and the fact the Windsor group

is consolidated under the variable interest entity model. The Company has

recorded a Loss on de-consolidation in the third quarter of $3.6 million. The

Company will enter into a revised management agreement with the reorganized

Windsor group and will continue to provide commercial management for its

vessels.

In July 2014, the Company agreed with Ship Finance to terminate the long term

charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and Front

Commerce and Ship Finance simultaneously sold the vessels to unrelated third

parties. The charter parties for the Front Commerce Front Comanche and Front

Opalia terminated on November 4, November 12 and November 19, respectively.

Newbuilding Program

The Company had one Suezmax newbuilding contract with estimated delivery during

January 2015 and is committed to make newbuilding installments of $40.9 million

as of the date of this report.

Corporate

The Company issued 1,140,226 new ordinary shares under its ATM program in the

three months ended September 30, 2014 and had an issued share capital at

September 30, 2014 of $99,346,513 divided into 99,346,513 ordinary shares

(December 31, 2013: $86,511,713 divided into 86,511,713 ordinary shares). The

weighted average number of shares outstanding for the quarter was 99,261,267.

In October 2014, the Company bought $17.8 million notional principal in the

4.50 % Frontline Ltd. Convertible Bond Issue 2010/2015 - ISIN NO 001057149.0 at

a purchase price of 91.654%.

In October 2014, the Company entered into a private agreement to exchange $23.0

million of the outstanding principal amount of the Company's 4.5% Convertible

Bond Issue 2010/2015 for an aggregate of 8,251,724 shares and a cash payment of

$10 million plus accrued interest.

The Market

The market rate for a VLCC trading on a standard 'TD3' voyage between the

Arabian Gulf and Japan in the third quarter of 2014 was WS 45, representing an

increase of WS 7 point from the second quarter of 2014 and WS 9 higher than the

third quarter of 2013. The flat rate decreased by 6.7 percent from 2013 to 2014.

The market rate for a Suezmax trading on a standard 'TD5' voyage between West

Africa and Philadelphia in the third quarter of 2014 was WS 71, representing an

increase of WS 8 points from the second quarter of 2014 and an increase of WS

15 points from the third quarter of 2013. The flat rate decreased by 6 percent

from 2013 to 2014.

Bunkers at Fujairah averaged $598/mt in the third quarter of 2014 compared to

$601/mt in the second quarter of 2014. Bunker prices varied between a high of

$628/mt on July 24(th) and a low of $575/mt on September 29(th).

The International Energy Agency's ("IEA") November 2014 report stated an OPEC

crude production of 30.5 million barrels per day (mb/d) in the third quarter of

2014. This was an increase of 0.4 mb/d compared to the second quarter of 2014.

The IEA estimates that world oil demand averaged 93.1 mb/d in the third quarter

of 2014, which is an increase of 1.6 mb/d compared to the previous quarter. IEA

estimates that world oil demand in 2015 will be 93.6 mb/d, representing an

increase of 1.3 percent or 1.2 mb/d from 2014.

The VLCC fleet totalled 634 vessels at the end of the third quarter of 2014,

four vessels up from the previous quarter. Four VLCCs were delivered during the

quarter, none were removed. The order book counted 93 vessels at the end of the

third quarter, which represents 15 percent of the VLCC fleet.

The Suezmax fleet totalled 450 vessels at the end of the third quarter, up two

from the end of the previous quarter. Three vessels were delivered during the

quarter whilst one was removed. The order book counted 44 vessels at the end of

the third quarter, which represents approximately 10 percent of the Suezmax

fleet.

Strategy and Outlook

In October 2014, Frontline reduced the outstanding under the convertible bond

loan with maturity in April 2015 from $190 million to $149.2 million through buy

back and debt/equity swap. Following this, and the termination of the three

charter parties for Front Commerce, Front Comanche and Front Opalia in November

2014 total debt and capital lease obligations are approximately $956 million.

The tanker market has showed some strength in the fourth quarter. A strong

market creates some flexibility for the Company going forward. The Board is

continuing to consider several alternatives in restructuring the Company's debt

and capital lease obligations. The target is to rebuild Frontline into being a

leading tanker company.

Forward Looking Statements

This press release contains forward looking statements. These statements are

based upon various assumptions, many of which are based, in turn, upon further

assumptions, including Frontline management's examination of historical

operating trends. Although Frontline believes that these assumptions were

reasonable when made, because assumptions are inherently subject to significant

uncertainties and contingencies which are difficult or impossible to predict and

are beyond its control, Frontline cannot give assurance that it will achieve or

accomplish these expectations, beliefs or intentions.

Important factors that, in the Company's view, could cause actual results to

differ materially from those discussed in this press release include the

strength of world economies and currencies, general market conditions including

fluctuations in charter hire rates and vessel values, changes in demand in the

tanker market as a result of changes in OPEC's petroleum production levels and

world wide oil consumption and storage, changes in the Company's operating

expenses including bunker prices, dry-docking and insurance costs, changes in

governmental rules and regulations or actions taken by regulatory authorities,

potential liability from pending or future litigation, general domestic and

international political conditions, potential disruption of shipping routes due

to accidents or political events, and other important factors described from

time to time in the reports filed by the Company with the United States

Securities and Exchange Commission.

The Board of Directors

Frontline Ltd.

Hamilton, Bermuda

November 24, 2014

Questions should be directed to:

Robert Hvide Macleod: Chief Executive Officer, Frontline Management AS

+47 23 11 40 84

Inger M. Klemp: Chief Financial Officer, Frontline Management AS

+47 23 11

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1873959]