Continental Fuels, Inc. (CFUL.OB) distributes crude and refined petroleum products. The company’s primary business is purchasing, selling, storing, blending and transporting petroleum products, both in the domestic markets and international markets.
Continental Fuels acquired US Petroleum Depot, Inc. and UPDA Texas Trading, Inc. in April 2007. UPDS Texas Trading, Inc. was renamed Continental Trading Enterprises, Inc. Through these acquisitions, Continental Fuels gained control of petroleum storage and terminal facilities at the International Port of Brownsville, Texas. In addition, Continental Trading has supply contracts and sales agreements with several important refineries for the purchase and sale of crude and condensate. The Port of Brownsville terminal facility includes many integral terminals for various loading and is well equipped to handle barges and tankers up to the Suez-max size.
The Company completed the purchase of all the outstanding shares of Geer Tank Trucks, Inc., a crude oil purchasing company, in late 2007. Geer Tank Trucks has five locations in North Texas and generates nearly $50 million in annualized revenues. Continental Fuels gains four pipeline terminals with connections to major pipeline companies, five service yards in various locations across North Texas, more than thirty 200 barrel transports, 50 frac tanks, and water hauling and disposal facilities.
Oil consumption in the United States is expected to increase in 2008 and 2009.West Texas Intermediate (WTI) crude oil prices, which averaged $72.30 per barrel in 2007, are projected to average $87 per barrel in 2008. Oil prices hit $100 per barrel in the beginning of 2008. Market analysts predict prices will remain high for the foreseeable future and some experts are predicting $125 or even $150 per barrel oil.
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