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Evolution Fuels Enters into letter of intent for Dallas location; Petroleum Cons

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They certainly know how to pick a difficult spot to compete but this is good news;





Issue Date: CSP Daily News, October 14, 2009


Evolution Fuels of Lease First Fuel Station

Enters into letter of intent for Dallas location; Petroleum Consolidators eyeing 8 stations



DALLAS -- Evolution Fuels Inc. has announced that it has executed a letter of intent to enter into a lease agreement for the company's first fuel station under the brand "Evolution Fuels." The station will be located in the heart of the Dallas metropolitan area, near the upscale Park Cities neighborhood, the Uptown area and the Turtle Creek neighborhood. It will serve as the first marquee location for the company's planned rollout of its branded stations.


According to the company's business plan, the station will offer renewable fuel blends at the pump. The fuel dispensers, to be provided by Dresser Wayne, are designed to blend petroleum fuels with renewable fuels from the underground storage tanks within the dispenser as the fuel is delivered into the vehicle. The planned product offering includes E10 (10% ethanol blended with 90% petroleum gasoline), E20, E30 and E85, as well as B20 (20% biodiesel blended with 80% petroleum diesel). Although the octane content actually increases going from E10 to E30, the company foresees the pricing to be 5 cents to 10 cents per gallon lower for the E20 product compared to E10, and likewise the same discount for the E30 product compared to E20.


The company plans to uniquely image the station and offer specialty foods, beverages and other products in order to help create a recognizable brand as it rolls out more stations.


The E20 to E85 ethanol blends are intended for use in flex-fuel vehicles (FFVs), although recent studies have shown that many legacy vehicles on the road today may use E20 blends without incurring damage to the engines or fuel systems. Research and testing has been conducted by groups in collaboration with the U.S. Department of Energy (DOE) that show blends of up to 20% ethanol can be used in most legacy automobiles.


The company expects to sign the definitive lease agreement pursuant to the nonbinding letter of intent within the next 30 to 60 days, it said.


The Dallas-based company endeavors to market renewable transportation fuels at retail fuel stations. Its plan calls for the development of a chain of renewable fuel stations that extend from Texas to Mississippi that will be a combination of Evolution Fuels-branded fuel stations/convenience stores and western-motif truckstops modeled after the Willie's Place Truck Stop in Carl's Corner, Texas.


Separately, gasoline station/convenience store operator Petroleum Consolidators of America Inc., has announced that it has identified a portfolio of branded and unbranded retail gasoline stations/c-stores.


David Cohen, president and CEO of Petroleum Consolidators, said, "We are excited to have identified and begin exploring a possible acquisition of an eight-store chain. Our initial review, which began in late September, has been limited to a stringent analysis of the preliminary financials and our proprietary comparative pricing model of the acquisition."


He added, "We like the various elements of the transaction, but most importantly, there is not a long-term fuel supply agreement in place, and based on gross gallonage, this could enable us to become a direct fuel supplier for a major brand if we were to close on this transaction."


West Palm Beach, Fla.-based Petroleum Consolidators is implementing a targeted acquisition strategy to create a portfolio of consolidated retail gasoline facilities and wholesale fuel distributorships that will benefit from substantial operating efficiencies.

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