67 WALL STREET, New York - March 31, 2014 - The Wall Street Transcript has just published its Oil & Gas: Master Limited Partnerships Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Outlook for Natural Gas Liquids - Oil and Gas Investing - Shale Production Growth
Companies include: Susser Petroleum Partners LP (SUSP) and many more.
In the following excerpt from the Oil & Gas: Master Limited Partnerships Report, the President and CEO of Susser Petroleum Partners LP (SUSP) discusses company strategy and the outlook for this vital industry:
TWST: Tell us more about the recent acquisitions. I believe the Sac-N-Pac deal is one that you are referring to.
Mr. Dewbre: In September of last year we acquired Gainesville Fuels, which is a company that serves oil and gas drilling companies in North Texas and Southern Oklahoma, and it's a great business. It fits in well with the existing commercial business we already had. It provided some new geography for an existing business for us, and it generates above-average margins compared to the rest of our business. We've been very pleased with that.
The second acquisition that we just completed in January was Sac-N-Pac. It included 47 convenience stores and 20 dealer locations. We're supplying the fuel to all of those locations, but the 47 stores were acquired by our parent, Susser Holdings. As we look at other opportunities for growth, we have the opportunity to work with our parent to find synergies; we can convert assets from one class to another, and we feel like there's a lot of opportunity for growth on the acquisition front.
TWST: You mentioned in some cases you acquire the real estate of Stripes stores and then lease it back to the parent company. How much real estate is on the limited partnership's books?
Mr. Dewbre: When we went public in September of 2012, we had 53 sites that we leased to independent third-party dealers. Since that time, we've acquired 38 locations for about $153 million. We lease those back to Susser Holdings at an initial annual rate of 8% of the purchase price for an initial term of 15 years. By doing these store "drop downs" from the parent and related sale/leaseback transactions, we create new, stable sources of cash flow for the wholesale partnership, and the partnership makes additional growth capital available to expand the parent's Stripes chain at an attractive cost of capital.
TWST: Is there anything else you would add in terms of growth and the general corporate strategy going forward?
Mr. Dewbre: I mentioned there are three levers for growth, and we expect to continue pursuing all three. Susser Holdings built...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.