Longwei Petroleum Announces Interim Operating Highlights

TAIYUAN CITY, China, Sept. 7 /PRNewswire-Asia-Firstcall/ -- Longwei Petroleum Investment Holding Limited (NYSE Amex: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of oil and gas in the People's Republic of China ("PRC"), today provided select operating data and highlights for the final month of its fiscal year ended June 30, 2010.

During the month of June, Longwei generated roughly $39 million in revenues, an increase of 130% from $17.0 million in June 2009. Gross profit in June of this year reached $8.1 million, up 138% from $3.4 million in the same period last year.

Total revenues for the fiscal year ended June 30, 2010 were $339.4 million, a 72% increase from fiscal 2009 revenues of $196.8 million. Sales figures for the fiscal year ended June 30, 2010 surpassed management's previously stated fiscal 2010 guidance of $310.8 million by 9.2%. Gross profit for the twelve-month period ended June 30, 2010 was $68.5 million, up 119% from fiscal 2009 gross profit of $31.3 million.

"We are very pleased with our financial performance in June and over the last few months, thanks in large part to the quick ramp-up of business at our new Gujiao storage facility," said Cai Yongjun, President and CEO of Longwei. "Building on our strong growth this past year, we expect sales in fiscal 2011 to exceed $500 million. The outlook for our industry and economic environment is promising, as China's rapid economic growth recently propelled it past Japan as the world's second largest economy in terms of GDP. Coupled with China's growing dominance in the automobile market and strong industrial growth in our operating region, Longwei is in an ideal position to capitalize on the boom in oil demand."

China's economic growth is becoming increasingly dependent on meeting its rapidly growing demand for oil from both domestic supply and foreign imports. China's net crude imports in June totaled a record 22.1 million tons, or roughly 5.4 million barrels per day, and imports are expected to make up roughly 55% of its total oil consumption this year. Increasing oil demand is not only attributable to increased vehicle use in the world's largest new car market, but also to industrial activity in China's fastest-growing provinces, including Shanxi province, where Longwei primarily operates. Coal mines and power plants represent two of the Company's largest types of industrial customers, and both sectors are expected to experience significant growth in late 2010 and 2011, which the Company expects will further drive demand for the oil it provides. Electricity demand in China grew 22% in the first half of 2010, and provincial officials expect coal output in Shanxi Province, historically the country's top coal producer, to rise by up to 30 percent this year.

Michael Toups, CFO of Longwei, commented, "As one of the largest oil and gas distributors in China, Longwei is a direct beneficiary of the long-term upward trend in oil consumption and vehicle use in China. Last year China became the largest new automobile market in the world, and a recent International Energy Agency report suggests that China may now also be the top global energy consumer as well. These immense outside developments, taken in conjunction with our strong internal growth, continue to substantiate our business model and underscore the attractiveness of our industry. We look forward to another record year for Longwei in 2011."

About Longwei Petroleum Investment Holding Limited

Longwei Petroleum Investment Holding, Limited (the "Company") is an energy company engaged in the storage and distribution of oil and gas in the People's Republic of China ("PRC"). The Company's oil and gas operations consist of transporting, storing, and selling finished petroleum products, entirely in the PRC. The Company's headquarters is located in Taiyuan City, Shanxi Province ("Shanxi"). The Company has a storage capacity for its Products of 120,000 metric tons located at storage facilities in Taiyuan City and Gujiao, Shanxi. The Company's Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, respectively. The Company is 1 of 3 licensed intermediaries in Taiyuan City and the sole licensed intermediary in Gujiao that operates its own large scale storage tanks. The Company has the necessary licenses to operate and sell 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. The Company seeks to earn profits by selling its Products at competitive prices to large-scale gas stations, coal plants, other power-supply customers and small, independent gas stations. The Company also earns revenue by acting as a purchasing agent for other intermediaries in Shanxi and through the sale of diesel and gasoline at gas stations located at each of the Company's facilities. The sales price and the cost basis of the Company's products are largely dependent on regulations and price control measures instituted and controlled by the PRC government as well as the price of crude oil. The price of crude oil is subject to fluctuation due to a variety of factors, all of which are beyond the Company's control.

For further information on Longwei Petroleum Investment Holding Limited, please visit http://www.longweipetroleum.com. You may register to receive Longwei Petroleum Investment Holding Limited's future press releases or request to be added to the Company's distribution list by contacting Dave Gentry at [email protected].  

Forward-Looking Statements

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.

SOURCE Longwei Petroleum Investment Holding Limited