Petro Consolidators Updates Plans for '09

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Petro Consolidators Updates Plans for '09

PALM BEACH GARDENS, Fla. -- Petroleum Consolidators of America Inc., a gasoline station/convenience store operator based here, reported it has made several positive developments regarding its roll-up strategy, as well as continued progress into the wholesale fuel supply segment, and potential entrance in the oil and gas industry.

The three major revenue streams targeted by the company include:
-- Retail gas stations with supported convenience stores.
-- Wholesale fuel supply contracts from company-owned stores and outside operators.
-- Oil production from existing producing wells.

Petroleum Consolidators announced in 2007 that, as part of its roll-up strategy, the company expected to acquire at least six retail gasoline facilities. These six acquisitions were expected to generate $22 million in revenue and $2.3 million in income.

The company did not acquire six retail sites, but did successfully integrate two major acquisitions during the first two quarters of 2007. Petroleum Consolidators said it chose to reduce its exposure with additional stores in 2007 and 2008 because of federal government mandates requiring underground storage tank (UST) replacement, which would have created an unnecessary financial burden given the prohibitive cost.

The company intends to resume its acquisition strategy now. Having taken the time to streamline operations, locate key facilities at bargain prices and clearly define the hurdles that plagued the industry in 2007-2008, management said it believes the company could easily see an increase in numbers over the short and long-term periods.

Starting this calendar year, Petroleum Consolidators is focused on reaching its objective of acquiring 50 to 60 stations during the next three years. Unlike other industries, the distressed economy has increased the number of targeted revenue-producing locations, which in turn leads to an opportunistic market, according to the company.

In reference to falling gas prices, Petroleum Consolidators president and CEO David Cohen stated, "The falling price is actually helping owners of gas stations because of lower credit card fees that operators are obligated to pay with their merchant accounts. When gas comes down, you can make better margins."

Regarding its migration into the wholesale fuel supply field, the company said it has an advantage since it already owns stations. It plans to continue using a major oil company as a supplier, such as Valero, ExxonMobil or BP. “Now, we could use our own supply, which will enhance our bottom line and provide cost efficiencies by delivering fuel to other related stations and stations within close proximity of ours,” Cohen said.