Longwei Petroleum Commences Operations at its Huajie Fuel Storage Depot

TAIYUAN CITY, China, Oct. 15, 2012 /PRNewswire-FirstCall/ -- 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"), announced that it has commenced operations at its Huajie fuel storage depot in northern Shanxi Province. 

Longwei received its first shipment of petroleum to the new Huajie facility last week and began to sell product to customers on October 11, 2012.  The Company's engineers and staff have been working on the facility assets since closing to bring it to operational status and begin distribution activities.  Longwei finalized the RMB 700 million (approximately US $110.6 million) purchase of the assets of Huajie Petroleum Co., Ltd. ("Huajie"), a fuel storage depot with a 100,000-metric-ton storage capacity, on September 26, 2012.  

"The Huajie facility nearly doubles our storage capacity to a total of 220,000 metric tons and extends our reach into the fast-growing industrial region of northern Shanxi Province," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei.  "We are pleased to have closed on the Huajie asset purchase using our own cash resources without dilution to our shareholders."

The Huajie facility is located in Xingyuan Township, Fanshi County (south of the main train station) in northern Shanxi Province, PRC.  The assets purchased include fuel storage tanks with a 100,000-metric-ton capacity with accessory facilities and equipment, delivery and distribution platforms, including a dedicated rail spur, and a vehicle loading and unloading station.  The purchase also included a 3,000-square-meter office building and land use rights for 98 acres of land adjacent to the main regional rail line.  The new facility is in a growing industrial and mining region, approximately 200 kilometers north of Taiyuan.

"We are confident we can quickly ramp up sales at the Huajie facility based on regional demand and relationships we have established," said Michael Toups, Chief Financial Officer of Longwei.  "Closing on the Huajie facility has allowed us to increase our regional presence and attract new customers.  With the addition of the Huajie facility, we have strengthened our lead as the largest non-state-owned fuel storage and distribution business in the province."

The Company recently reported revenues of US $510.6 million and net income of US $65.1 million for the fiscal year ended June 30, 2012.  At the June 30, 2012 fiscal year-end, the Company reported total assets of US $342.3 million and a book value per share of $3.31.

Longwei will post a video of the Huajie facility's initial operations, recorded on October 11, 2012, to its corporate website at http://www.longweipetroleum.com/operations/storage-operations.   Photos and videos of the Company's three facilities can be seen on the "Operations" section of the website.

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.

The Company seeks to earn profits by selling its products at competitive prices with timely delivery to transportation companies, coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue from agency fees by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company's Taiyuan and Gujiao facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.

Longwei was recently named to the Forbes list of "Asia's 200 Best Under a Billion" from a universe of 15,000 companies.  Forbes ranked the companies based on sales growth, earnings growth and return on equity in the past 12 months and over three years.  As was reported, Longwei's three-year track record is 45% sales growth, 28% earnings per share growth and 28% return on equity.  The Forbes article can be found at: http://www.forbes.com/sites/christinasettimi/2012/07/25/asias-200-best-under-a-billion.

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.

Contact:      

At the Company:
Michael Toups, Chief Financial Officer
Tel: U.S. Office +1 727-641-1357
Email: [email protected]
Web: http://www.longweipetroleum.com

Investor Relations:
Mike Bowdoin
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 110
Email: [email protected]
Web: http://www.redchip.com

SOURCE Longwei Petroleum Investment Holding Ltd.