FUEL News SMF Energy Corporation Announces Intent to Merge and Consolidate with Refinery Company.
Date: Tue, 18 Mar 2008 14:25:24 -0400
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News for 'FUEL' - (SMF Energy Corporation Announces Intent to Merge and Consolidate with Refinery Company)
FORT LAUDERDALE, Fla., Mar 18, 2008 (BUSINESS WIRE) -- SMF Energy Corporation,
(NASDAQ:FUEL) ("SMF" or the "Company"), a leading provider of petroleum product
distribution services, transportation logistics and emergency response services
to the trucking, construction, utility, energy, chemical, manufacturing,
telecommunication and government service industries, today announced that it has
entered into a non-binding letter of intent with Houston-based Lazarus Energy
Holdings LLC ("Lazarus Holdings") to acquire Lazarus Energy, LLC ("Lazarus
Energy" and jointly with Lazarus Holdings, "Lazarus"), which owns the Nixon
Refinery located 50 miles east of San Antonio, Texas and 70 miles southeast of
Austin, Texas.
Lazarus has been working to renovate and bring back into production the Nixon
Refinery after purchasing it in 2006. Built in 1981 to environmental
specifications meeting today's requirements and idled since 1993, the Nixon
Refinery is expected to re-commence operations by June 2008, with an initial
crude oil processing capacity of 15,000 barrels per day, and a projected
increase in daily thruput capacity to 20,000 barrels by early 2009.
The Nixon Refinery will process light, sweet crude oil into an initial estimated
220 million gallons per year of petroleum products, with the annual rate
expected to increase to 300 million gallons. Those products will include diesel
and jet fuel, as well as naphtha and atmospheric tower bottoms, both of which
are highly valued by other refiners as feedstock for producing gasoline. The
Nixon Refinery is surrounded by high quality local crude production and benefits
from direct pipeline access to crude. It has 265,000 barrels of storage on its
56-acre site and is expected to realize a positive transportation differential
to the San Antonio market for its finished products, together with access to a
number of other refineries for feedstock production.
While some of the products produced by the Nixon Refinery will be delivered by
SMF to new and existing SMF customers in the San Antonio, Austin and surrounding
markets, SMF will also benefit from the Nixon Refinery production in the rest of
its ten (10) state distribution system via the exchange of the Nixon products
with other regional refiners. The combined operations are expected to provide
SMF with increased supply alternatives, improved supply procurement and credit
economics, and to enhance the earning opportunities of the Nixon Refinery. SMF
will also provide its enterprise resource management systems, including back
office, accounting and reporting systems, to support the combined SMF and
Lazarus Energy manufacturing, supply, distribution and marketing operations.
Lazarus Holdings also owns three (3) other idled refineries which are located at
Longview, Texas, Mermentau, Louisiana and Church Point, Louisiana. Under the
proposed agreement with Lazarus Holdings, SMF will have an option to acquire
these additional three (3) refineries which have an aggregate estimated crude
capacity of 60,000 barrels per day and annual refined product production of 800
million to 900 million gallons. Upon completion of the acquisition, Lazarus
Energy will become a wholly-owned subsidiary of SMF; the owners of Lazarus
Holdings will become the majority shareholders of SMF; and the operating
management and personnel of Lazarus will become employees of SMF's refinery
unit. It is anticipated that the definitive merger agreement, which will set
forth the terms, conditions and valuation of the merger and related options,
including the relative ownership of SMF's existing shareholders and the owners
of Lazarus Holdings, will be finalized on or before May 31, 2008.
Lazarus Holdings was founded by Jonathan Carroll. In 1991, Mr. Carroll partnered
with Apollo Management, L.P., one of the world's largest private equity
investment companies, to acquire Direct Gas Supply ("DGS"), a natural gas
marketing concern, from British Petroleum. In 1995, Mr. Carroll sold DGS, which
had grown from $30 million to nearly $400 million in revenue, to ENSERCH (now
part of TXU Corp.). Mr. Carroll then served as President of Enserch Energy
Services, a company formed by the merger of ENSERCH, DGS and Sunrise Energy
Services, which resulted in an integrated marketing, trading and structured
finance unit with nearly $2 billion in revenue. The co-owners of Lazarus
Holdings include several senior partners and members of Ares Management LLC and
Apollo Management, L.P.
Richard E. Gathright, SMF Chairman, CEO and President of SMF Energy, commented,
"The combination of SMF and Lazarus will create an integrated company from
refining through distribution. As a result, we will benefit from strong
economies of scale, cost efficiencies, increased credit availabilities and the
full utilization of the SMF management resources platform we have developed over
the last three years. The benefits of our combination with Lazarus include our
expected ability to exchange refinery production for products in markets such as
Florida where we historically experience tight supplies, and our ability to
capture value from the use of our truck fleet to deliver new Nixon Refinery
supply into the tightly supplied San Antonio and Austin markets."
About SMF Energy Corporation (NASDAQ:FUEL)
SMF Energy Corporation is a leading provider of petroleum product distribution
services, transportation logistics and emergency response services to the
trucking, manufacturing, construction, shipping, utility, energy, chemical,
telecommunication and government services industries. The Company provides its
services and products through 26 locations in the ten states of Alabama,
California, Florida, Georgia, Louisiana, Mississippi, North Carolina, South
Carolina, Tennessee and Texas. The broad range of services the Company offers
its customers includes commercial mobile and bulk fueling; the packaging,
distribution and sale of lubricants; integrated out-sourced fuel management;
transportation logistics and emergency response services. The Company's fleet of
custom specialized tank wagons, tractor-trailer transports, box trucks and
customized flatbed vehicles delivers diesel fuel and gasoline to customers'
locations on a regularly scheduled or as needed basis, refueling vehicles and
equipment, re-supplying fixed-site and temporary bulk storage tanks, and
emergency power generation systems; and distributes a wide variety of
specialized petroleum products, lubricants and chemicals to our customers. In
addition, the Company's fleet of special duty tractor-trailer units provides
heavy haul transportation services over short and long distances to customers
requiring the movement of over-sized or over-weight equipment and manufactured
products. More information on the Company is available at www.mobilefueling.com.
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of
the safe harbor provision of the Private Securities Litigation Reform Act of
1995. Because these statements depend on assumptions as to future events, they
should not be relied on by shareholders or other persons in evaluating the
Company. Although management believes that the assumptions reflected in such
forward-looking statements are reasonable, actual results could differ
materially from those projected. In addition, there are risks and uncertainties
which could cause future events to differ from those anticipated by the Company,
including but not limited to those cited in the "Risk Factors" section of the
Company's Form 10-K for the year ended June 30, 2007 and the in the Form 10-Q
for the quarter ended December 31, 2007.
SOURCE: SMF Energy Corporation
CONTACT: SMF Energy Corporation, Fort LauderdaleRobert W. Beard, Senior Vice President andInvestor Relations Officer, 954-308-4200
Copyright Business Wire 2008
-0-
KEYWORD: United States
North America
Florida
Tennessee
INDUSTRY KEYWORD: Energy
Oil/Gas
Transport
Trucking
SUBJECT CODE: Merger/Acquisition
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