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Omega Navigation Enterprises, Inc. Reports Second Quarter 2010 Results

ATHENS, GREECE -- (Marketwire) -- 10/19/10 -- Omega Navigation Enterprises, Inc. (NASDAQ: ONAV) (SGX: ONAV50) ("Omega Navigation" or the "Company"), a provider of global marine transportation services focusing on product tankers, announced today its financial and operational results for the second quarter and six months ended June 30, 2010.

Second Quarter 2010 Results

For the quarter ended June 30, 2010, Omega Navigation reported total revenues of $19.0 million and Net Income of $2.4 million, or $0.15 per basic share, excluding losses on interest rate derivative instruments, incentive compensation grants expense and a one time settlement fee for the termination of a purchase agreement. Including these items, the Company reported Net Loss of $0.9 million or $0.05 per basic share. Adjusted EBITDA for the second quarter of 2010 was $6.1 million. Please see below for a reconciliation of Adjusted EBITDA to Cash from Operating Activities.

The Company fully owned and operated an average of eight product carriers during the second quarter of 2010, the same number as in the second quarter of 2009. In addition, in the second quarter of 2010, the Company has held and continues to hold a 50% interest in three double hull product / chemical tankers, namely the Omega Duke, the Megacore Honami and the Megacore Hibiscus, which are discussed in greater detail under "Recent Developments -- Fleet Development" below. The Omega Duke is accounted for by the equity method and is not consolidated in the Company's financial statements, while the Megacore Honami is reflected in the consolidated earnings. The results of the Megacore Honami will be deconsolidated in future quarters. The Omega King entered into a fixed rate time charter in the second quarter of 2010. Also, the Omega Queen, the Omega Prince and the Princess have been operating under floating rate time charters in the second quarter of 2010, with rates determined based on pools of similar vessels trading in the spot market. The Panamax vessels averaged $18,552 per vessel per day and the MR's averaged $16,686 per vessel per day (for each period net of voyage expenses) for the second quarter of 2010. In the second quarter of 2009, the Panamax vessels averaged $22,898 per vessel per day and the MR's averaged $19,083 per day per vessel (for each period net of voyage expenses).

Operating expenses for the Company's MR product tankers averaged $5,169 per vessel per day in the second quarter of 2010, as compared to $5,304 per vessel per day in the second quarter of 2009. Operating expenses for the Company's Panamax product tankers averaged $5,158 per vessel per day in the second quarter of 2010, as compared to $5,735 per vessel per day in the second quarter of 2009.

Six Months 2010 Results

For the six months ended June 30, 2010, Omega Navigation reported total revenues of $34.4 million and Net Income of $4.5 million, or $0.28 per basic share excluding a loss on interest rate derivative instruments, non cash incentive compensation grants expense and a loss related to the termination of a purchase agreement. Including these items, Net loss was $0.4 million or $0.02 per share. Adjusted EBITDA for six months ended June 30, 2010 was $14.4 million. Please see below for a reconciliation of Adjusted EBITDA to Cash from Operating Activities.

Excluding profit sharing, the Company's Panamax product carriers earned an average time-charter equivalent rate of $19,807 per vessel per day during the first six months of 2010, as compared to $23,692 per vessel per day (in each period net of voyage expenses), during the first six months of 2009. The Company's Handymax product tankers earned an average time charter equivalent rate of $16,370 per vessel per day during the first six months of 2010, as compared to $19,910 per vessel per day (in each period net of voyage expenses) during the first six months of 2009.

Operating expenses for the Company's MR product tankers averaged $5,241 per vessel per day in the first six months of 2010, as compared to $5,298 per vessel per day in the first six months of 2009. Operating expenses for the Company's Panamax product tankers averaged $5,679 per vessel per day in the first six months of 2010, as compared to $5,957 per vessel per day in the first six months of 2009.

Recent Developments

Fleet Development

The Company's current fleet includes 12 double hull product tankers with an aggregate carrying capacity of approximately 680,000 dwt. Eight of the vessels are wholly owned by the Company and four of the vessels are owned through equal partnership joint ventures with a wholly owned subsidiary of Glencore International AG.

The Company has previously announced that it has entered into an equal partnership joint venture named Megacore Shipping Ltd. with a wholly-owned subsidiary of Glencore International AG to acquire two 37,000 dwt Handysize double hull chemical / product tankers and seven Panamax double hull product tankers to be constructed at Hyundai Mipo Dockyard in South Korea. The two Handysize vessels, the Megacore Honami and the Megacore Hibiscus, were delivered in February and May 2010, respectively, to companies owned by Megacore Shipping Ltd. One LR1 Panamax tanker is expected to be delivered in October 2010. Four Panamax vessels are scheduled for delivery in 2011 and two Panamax vessels are scheduled for delivery in 2012.

The construction and acquisition of the remaining seven LR1 newbuildings, owned by Megacore Shipping Ltd, that are currently under construction are funded by debt and equity contributions by the shareholders. The Company is funding the pre-delivery construction schedule with respect to three and a half of these vessels, for which bank debt financing commitments have been secured, including pre-delivery as well as post delivery financing.

Moreover, the Company and Glencore International AG (through wholly-owned subsidiaries) have entered into an equal partnership joint venture, which on July 8, 2010, took delivery of one newbuilding 47,000 dwt double hull product/ chemical tanker, the Alpine Marina (sister ship to the Omega Duke), which was constructed at the Hyundai Mipo Dockyard in South Korea. The acquisition of the Alpine Marina was funded with previously secured bank debt financing and with equity contributions among the shareholders and will not be consolidated on the Company's balance sheet. The Alpine Marina is currently operating under a five-year time charter to ST Shipping with an excess earnings arrangement.

Financial Developments

The Company is currently in advanced discussions with its lenders to extend the term of its loans under the Senior Credit Facility and the Junior Credit Facility beyond the current maturity of April 2011. Both the Senior and Junior Credit Facilities are non amortizing until their respective maturity. While both loans will mature in six months, the Company believes it will reach a satisfactory outcome prior to the loans' maturity as the Company is currently in negotiations to extend or restructure the Company's debt.

As of June 30, 2010, the Company was fully compliant with all its loan covenants. Also, as of June 30, 2010, the Company's total debt, including pre-delivery advances for newbuildings, the debt on the Megacore Honami and other vessels under construction which will be deconsolidated in future quarters, was $359.1 million, while the outstanding balance under the Senior and Junior Credit Facilities was $242.7 million and $38.3 million, respectively.

Fleet Data

                                Panamax Tankers        Handymax Tankers
                            ----------------------  ----------------------
                              Three months ended      Three months ended
                            ----------------------  ----------------------
                             June 30,    June 30,    June 30,    June 30,
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
Number of vessels at end of
 period                              6           6           3           2
Average age of fleet (in
 years)                              5           4           3           3
Ownership days (1)                 546         546         273         182
Available days   (2)               546         527         273         182
Operating days  (3)                546         521         273         182
Fleet Utilization  (4)             100%         99%        100%        100%
Voyage revenues (net of
 voyage expenses) (7)       10,129,614  12,067,119   4,555,234   3,473,156
Time charter equivalent
 (TCE) rate $/day (5)(7)        18,552      22,898      16,686      19,083
Vessel operating expenses    2,816,105   3,131,227   1,411,077     965,343
Daily vessel operating
 expenses $/day(6)               5,158       5,735       5,169       5,304




                               Six months ended        Six months ended
                            ----------------------  ----------------------
                             June 30,    June 30,    June 30,    June 30,
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
Number of vessels at end of
 period                              6           6           3           2
Average age of fleet (in
 years)                              5           4           3           3
Ownership days (1)               1,086       1,086         488         362
Available days   (2)             1,086       1,054         488         362
Operating days  (3)              1,086       1,038         488         361
Fleet Utilization  (4)             100%         98%        100%        100%
Voyage revenues (net of
 voyage expenses) (7)       21,510,116  24,971,422   7,988,491   7,207,473
Time charter equivalent
 (TCE) rate $/day (5)(7)        19,807      23,692      16,370      19,910
Vessel operating expenses    6,167,390   6,469,399   2,557,626   1,917,794
Daily vessel operating
 expenses $/day(6)               5,679       5,957       5,241       5,298


(1) Ownership days are the aggregate number of days in a period during
    which each vessel in the Company's fleet has been owned by the Company.
    Ownership days are an indicator of the size of the Company's fleet over
    a period and affect both the amount of revenues and the amount of
    expenses that the Company records during a period.

(2) Available days are the number of the Company's ownership days less the
    aggregate number of days that the Company's vessels are off-hire due to
    scheduled repairs or repairs under guarantee, vessel upgrades or
    special surveys. The shipping industry uses available days to measure
    the number of days in a period during which vessels should be capable
    of generating revenues.

(3) Operating days are the number of available days in a period less the
    aggregate number of days that the Company's vessels are off-hire due to
    unforeseen circumstances. The shipping industry uses operating days to
    measure the aggregate number of days in a period during which vessels
    actually generate revenues.

(4) The Company calculates fleet utilization by dividing the number of the
    Company's fleet's operating days during a period by the number of its
    available days during the period. The shipping industry uses fleet
    utilization to measure a company's efficiency in finding suitable
    employment for its vessels and minimizing the number of days that its
    vessels are off-hire for reasons other than scheduled repairs or
    repairs under guarantee, vessel upgrades, special surveys or vessel
    positioning.

(5) Time charter equivalent, or TCE, is a measure of the average daily
    revenue performance of a vessel on a per voyage basis. Our method of
    calculating TCE is consistent with industry standards and is determined
    by dividing voyage revenues (net of voyage expenses) by available days
    for the relevant time period. Voyage expenses primarily consist of
    port, canal and fuel costs that are unique to a particular voyage,
    which would otherwise be paid by the charterer under a time charter
    contract, as well as commissions. TCE is a standard shipping industry
    performance measure used primarily to compare period-to-period changes
    in a shipping company's performance despite changes in the mix of
    charter types (i.e., spot charters, time charters and bareboat
    charters) under which the vessels may be employed between the periods.

(6) Daily vessel operating expenses, which include crew wages and related
    costs, the cost of insurance, expenses relating to repairs and
    maintenance (excluding drydocking), the costs of spares and consumable
    stores, tonnage taxes and other miscellaneous expenses, but excludes
    any pre-delivery expenses incurred at or prior to the delivery of the
    product tankers, are calculated by dividing vessel operating expenses
    by ownership days for the relevant period. The six month period ended
    June 30, 2010 excludes an amount of $0.3 million relating to the
    predelivery expenses of Megacore Honami.

(7) The three month period ended June 30, 2009, excludes $0.7 million of
    profit sharing revenue related to profit sharing on charters of the
    vessels, the Omega Lady Sarah, the Omega Lady Miriam, the Omega
    Emmanuel and the Omega Theodore. The six month period ended June 30,
    2009 excludes $2.4 million of profit sharing revenue related to profit
    sharing on charters of the vessels the Omega Lady Sarah, the Omega Lady
    Miriam, the Omega Emmanuel and the Omega Theodore.





                  Omega Navigation Enterprises Inc
              Consolidated Statements of Income/(Loss)
         (All amounts expressed in thousands of U.S. Dollars)

                            Three months ended         Six months ended
                        ------------------------  ------------------------
                          June 30,     June 30,     June 30,     June 30,
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------
CONTINUING OPERATIONS   (unaudited)  (unaudited)  (unaudited)  (unaudited)
Revenues:
Voyage revenue               18,940       16,711       34,445       35,388
Revenue from related
 parties                         94            -          119            -

Expenses:
  Voyage expenses             4,255          469        4,947          769
  Vessel operating
   expenses                   4,025        4,097        8,900        8,388
  Depreciation and
   amortization               5,227        4,787       10,142        9,476
  Management fees               311          349          692          651
  General and
   administrative
   expenses (including
   non cash
   compensation expense
   of $118, $260 for
   the quarter ended
   June 30, 2010 and
   2009 respectively
   and $291 and
   $910 for the six
   months ended June
   30, 2010 and 2009
   respectively)              1,412        1,595        2,844        3,333
  Foreign currency
   (gains)/losses               (80)          80         (104)          79
                        -----------  -----------  -----------  -----------
  Income from vessels
   operation                  3,884        5,334        7,143       12,692
                        -----------  -----------  -----------  -----------
  Loss on Termination
   of purchase
   agreements                (3,000)      (3,000)      (3,000)      (3,000)
  Income/(Loss) from
   Joint Venture
   companies                     (7)        (479)         126         (479)
                        -----------  -----------  -----------  -----------
Operating
 Income/(Expense)               877        1,855        4,269        9,213
Other income (expenses)
  Interest and finance
   costs                     (1,569)      (2,123)      (3,197)      (3,915)
  Interest income                14           35           34           80
  Change in fair value
   of warrants                    -            -            -        1,127
  Gain/(Loss) on
   derivative
   instruments                 (182)        (737)      (1,500)      (1,808)
                        -----------  -----------  -----------  -----------
  Total other income
   /(expenses), net          (1,737)      (2,825)      (4,663)      (4,516)
                        -----------  -----------  -----------  -----------
INCOME/(LOSS) FROM
 CONTINUING OPERATIONS         (860)        (970)        (394)       4,697

DISCONTINUED OPERATIONS
Income/(Loss) from
 discontinued
 operations of the bulk
 carrier fleet                    -            -            -            -
                        -----------  -----------  -----------  -----------
INCOME/(Loss) FROM
 DISCONTINUED
 OPERATIONS                       -            -            -            -
                        -----------  -----------  -----------  -----------
Net income/(Loss)              (860)        (970)        (394)       4,697
                        ===========  ===========  ===========  ===========





                       Omega Navigation Enterprises Inc
                         Consolidated Balance Sheets
              (All amounts expressed in thousands of US dollars)

                                                  June 30,
                                                    2010      December 31,
                                                (unaudited)      2009
                                                ------------  ------------
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                              907        15,564
  Accounts receivable, trade                           2,198         1,720
  Inventories                                            819           614
  Prepayments and other                                1,736         1,419
  Due from related parties                                 -            90
  Restricted cash                                      5,543         5,807
  Derivative asset                                         6             -
                                                ------------  ------------
Total current assets                                  11,209        25,214
                                                ------------  ------------

FIXED ASSETS:
  Vessels, net                                       459,261       423,762
  Property and equipment, net                             91            54
  Advances for vessels' under construction and
   acquisition                                        56,943        70,620
                                                ------------  ------------
Total fixed assets                                   516,295       494,436
                                                ------------  ------------

OTHER NON CURRENT ASSETS:
Deferred charges                                       1,653         2,110
Restricted cash                                           32           105
 Investments in Joint Ventures                        11,163         5,347
 Intangible assets                                       267           221
                                                ------------  ------------
Total other non current assets                        13,115         7,783
                                                ------------  ------------

                                                ============  ============
Total assets                                         540,619       527,433
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current portion of long term debt                  285,531       343,252
  Accounts payable                                     3,535         2,401
  Accrued and other current liabilities                3,802         3,211
  Deferred revenue                                        49           594
  Derivative liability                                 6,504         9,909
  Dividends payable                                       73           166
  Due to related parties                                 399             -
                                                ------------  ------------
Total current liabilities                            299,893       359,533
                                                ------------  ------------

NON-CURRENT LIABILITIES:
  Long term debt, net of current portion              73,001             -
  Dividends payable                                       32           105
  Other long term liabilities                              1             1
                                                ------------  ------------
Total non-current liabilities                         73,034           106
                                                ------------  ------------

                                                ------------  ------------
COMMITMENTS AND CONTINGENCIES:                             -             -
                                                ------------  ------------

Stockholders' equity:
  Common stock                                           159           158
  Additional paid-in capital                         201,910       201,618
  Accumulated deficit                                (34,377)      (33,982)
                                                ------------  ------------
Total stockholders' equity                           167,692       167,794
                                                ------------  ------------

                                                ------------  ------------
Total liabilities and stockholders' equity           540,619       527,433
                                                ============  ============





                      Omega Navigation Enterprises Inc
                    Consolidated Statements of Cash Flows
             (All amounts expressed in thousands of U.S. Dollars)


                          June 30,     June 30,     June 30,     June 30,
                            2010         2009        2010         2009
                        -----------  -----------  -----------  -----------
                        (unaudited)  (unaudited)  (unaudited)  (unaudited)
 Cash flows from
  operating activities
 Net income/(loss) from
  continuing operations        (860)        (970)        (394)       4,697

 Net cash provided by
  continuing operating
  activities                  4,445        2,152        7,633       12,584
                        -----------  -----------  -----------  -----------
 Net cash provided by
  continuing and
  discontinued
  operating activities        4,445        2,152        7,633       12,584
                        -----------  -----------  -----------  -----------

 Cash flows (used
  in)/provided by
  investing activities
 Net cash (used
  in)/provided by
  investing
  activities-continuing
  operations                 (8,936)         163      (37,653)         (47)
                        -----------  -----------  -----------  -----------
 Net cash (used
  in)/provided by
  investing activities-
  continuing and
  discontinued
  operations                 (8,936)         163      (37,653)         (47)
                        -----------  -----------  -----------  -----------

 Cash flows  provided
  by /(used in)
  financing activities
 Net cash provided
  by/(used in)
  financing
  activities-continuing
  operations                  2,995       (5,804)      15,363      (13,544)
                        -----------  -----------  -----------  -----------
 Net cash provided
  by/(used in)
  financing
  activities-continuing
  and discontinued
  operations                  2,995       (5,804)      15,363      (13,544)
                        -----------  -----------  -----------  -----------

 Net (decrease in cash
  and cash equivalents
                             (1,496)      (3,489)     (14,657)      (1,007)
 Cash and cash
  equivalents at the
  beginning of the
  period                      2,403       19,293       15,564       16,811
                        -----------  -----------  -----------  -----------
 Cash and cash
  equivalents at end of
  period                        907       15,804          907       15,804
                        ===========  ===========  ===========  ===========





    Reconciliation of Adjusted EBITDA (1) to Cash from Operating Activities
                (All amounts expressed in thousands of U.S. Dollars)

CONTINUING &
 DISCONTINUED
 OPERATIONS                Three months ended         Six months ended
                          June 30,     June 30,     June 30,     June 30,
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------

                        (unaudited)  (unaudited)  (unaudited)  (unaudited)
Net cash from operating
 activities                   4,445        2,152        7,633       12,584
Net increase/(decrease)
 in current assets and
 non current assets          (1,572)       3,093          510        3,367
Net (increase)/decrease
 in current liabilities
 excluding bank debt           (265)      (2,911)      (1,014)      (4,885)
Net interest expense          3,966        4,080        8,074        7,490
Warrants settled
 liabilities                      -            -            -        1,127
Stock based
 compensation expense          (118)        (260)        (291)        (910)
 Payments for
  drydocking costs                -          823            -        1,528
 Amortization of
  financing costs              (352)        (336)        (501)        (484)
                        -----------  -----------  -----------  -----------
 Adjusted EBITDA              6,104        6,641       14,411       19,817
                        ===========  ===========  ===========  ===========

(1) Adjusted EBITDA represents net income before interest, taxes,
    gains/losses on derivative instruments, depreciation and amortization.
    Adjusted EBITDA does not represent and should not be considered as an
    alternative to net income or cash flow from operations, as determined
    by US GAAP and the Company's calculation of Adjusted EBITDA may not be
    comparable to that reported by other companies. Adjusted EBITDA is
    included here because it is a basis upon which the Company assesses
    its liquidity position because the Company believes Adjusted EBITDA
    presents useful information to investors regarding the Company's
    ability to service and/or incur indebtedness.

About Omega Navigation Enterprises, Inc.

Omega Navigation Enterprises, Inc. is an international provider of global marine transportation services through the ownership and operation of double hull product tankers. The current fleet includes twelve hull product tankers with a carrying capacity of about 680,000 dwt, of which two double hull product / chemical tankers, with a capacity of 47,000 dwt, and two double hull product / chemical tankers, with a capacity of 37,000 dwt., are owned through equal partnership joint ventures with a wholly owned subsidiary of Glencore International, A.G. Furthermore, as previously announced, the joint venture company has entered into shipbuilding contracts with Hyundai Mipo Dockyard in South Korea, to construct and acquire seven additional double hull product tankers with a capacity of 74,000 dwt each scheduled for delivery between October 2010 and early 2012.

The Company was incorporated in the Marshall Islands in February 2005. Its principal executive offices are located in Athens, Greece and it also maintains an office in the United States.

Omega Navigation's common shares are traded on the NASDAQ National Market under the symbol "ONAV" and are also listed on the Singapore Exchange Securities Trading Limited under the symbol "ONAV 50."

Cautionary Statement Regarding Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, the Company's management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that the Company will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors other important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for product tanker and dry bulk shipping capacity, changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company's vessels, availability of financing and refinancing, 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, vessels breakdowns and instances of off-hires and other factors. Please see the Company's filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

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