Western Refining Says 'Howdy' to 34 New Stations

Enters into lease agreements for retail outlets in El Paso, southern New Mexico

Published in CSP Daily News

By
Greg Lindenberg, Online Editor

EL PASO, Texas -- Western Refining Inc. is acquiring a group of Howdy's gas stations in Texas and New Mexico, CSP Daily News has learned. It will take over operations beginning October 10.

Gary Hanson, a spokesperson for El Paso, Texas-based Western Refining, confirmed that the company "has entered into a long-term lease arrangement for 34 Howdy's locations located primarily in El Paso, Texas, and southern New Mexico."

He added, "These stores are a good fit for Western due to their geographic location, and they complement our refining and wholesale operations here in the Southwest. The convenience stores are branded Howdy's and there are no immediate plans to rebrand the convenience stores."

He also said that the majority of the locations sell Shell- or Chevron-branded fuel.

Hanson said he couldn't discuss the financial terms of the lease agreements. He said more details would be forthcoming when Western Refining holds its third-quarter earnings call on November 3.

"All of the current employees at those stores will probably be retained," he added. "They will be interviewed and drug tested--the things you normally do in a process like this."

Howdy's locations reportedly feature drive-through windows, local credit union ATMs and pay at the pump. They also offer the Automated Fueling System proprietary network to fleet commercial customers. The chain reportedly has created its market niche by offering a large selection of imported and microbrewed beer and wines. Some locations have McDonald's and car washes.

Western Refining had pursued the acquisition of the Howdy's chain back in late 2007 ( click here for previous CSP Daily News coverage), but dropped its pursuit of a deal in early 2008.

Hanson would not comment on why a deal fell through at that time.

An independent refining and marketing company, Western operates refineries in El Paso, and in Gallup, N.M.; refined products terminals in Albuquerque and Bloomfield, N.M., and Yorktown, Va.; and a fleet of crude oil and finished product truck transports and wholesale petroleum products operations in Arizona, California, Colorado, Nevada, New Mexico, Texas, Utah, Virginia and Maryland.

Western Refining Southwest Inc., its retail division, owns and operates approximately 160 convenience stores and gas stations located in New Mexico, Arizona and Colorado. The company markets under its own brands of Giant, Mustang and Sundial. A number of locations feature the brands of other oil companies and license Western branded fuel to other retail stores.

The locations offer a variety of merchandise, including soft drinks, snacks, beer, wine, liquor and hot and cold prepared food items. It also offers a variety of prepaid products (gift cards, wireless, debit cards) as well as financial services such as money orders, ATMs and check cashing.