TAIYUAN CITY, China, Dec. 19, 2012 /PRNewswire/ -- Longwei Petroleum Investment Holding Ltd. (NYSE MKT: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China ("PRC"), today announced that its November 2012 product sales volume increased 23.2% month-over-month at its Huajie facility.
For the month ended November 30, 2012, Longwei reported its product sales volume at its newly acquired Huajie facility increased 23.2% month-over-month to approximately 8,990 metric tons ("mt"), compared to 7,300mt for the month ended October 31, 2012. The increase in sales volume is attributable to the increase in new customer business at the Huajie facility, which profitably contributed $9.5 million in product revenues during November.
"The Huajie facility is ahead of schedule in its output," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "The new facility nearly doubles our storage capacity to a total of 220,000 metric tons and extends our reach into the fast-growing industrial area of northern Shanxi Province."
Since operations began in early October 2012, the Company has signed contracts with more than 16 major regional industrial companies in mining, steel and logistics. Longwei defines "major" customer as those customers with the purchase capacity to order at least 1.0% of the Company's total revenues. At fiscal year end June 30, 2012, Longwei had forty-six major customers at its Taiyuan and Gujiao facilities, which each accounted for at least 1.0% (or approximately $5.1 million) or more of total annual revenues. During the fiscal year ended 2012, no single customer accounted for more than 2.7% of total revenues. The Company has now added more than sixteen new major customers for its Huajie facility within the first two months of operations.
Longwei consummated an Asset Purchase Agreement for the purchase of the assets of Huajie Petroleum Co., Ltd. ("Huajie") on September 26, 2012. The Company acquired the assets of Huajie, a fuel storage depot in northern Shanxi Province (located in Xingyuan, Shanxi) including fuel tanks with a 100,000 metric ton storage capacity. The Company paid RMB700 million (approximately US$110.6 million) for the assets. The assets were non-operational with no revenue-producing history and included land use rights for 52,950 square meters of land, 100,000 tonnage fuel tanks with accessory facilities and equipment, a special transportation railway line, and a 3,000-square-meter office building. By way of clarification of the land area of the land use rights, the Company previously disclosed 52,950 square meters as equating to approximately 98 acres. The land area metric conversion from 52,950 square meters is approximately 79.4 Chinese Acres (or MU), or 13.1 U.S. Survey Acres.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China. The Company's oil and gas operations consist of transporting, storing and selling finished petroleum products, entirely in the PRC. The Company's headquarters are located in Taiyuan City, Shanxi Province. The Company has a storage capacity for its products of 220,000 metric tons located at three storage facilities within Shanxi: Taiyuan, Gujiao and Huajie, which have an individual storage capacity of approximately 50,000 metric tons ("mt"), 70,000mt, and 100,000mt, respectively. The Company has the necessary licenses to operate and sell petroleum products not only in Shanxi, but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi.
SOURCE Longwei Petroleum Investment Holding Ltd.
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