NGL Energy Partners now publicly owned

June 7, 2011 By    

NGL Energy Partners LP is now the nation’s sixth publicly owned propane retail company.

It launched last September when NGL Supply combined with propane retailer Hicksgas to form a new wholesale supply and marketing, midstream and retail propane operation named Silverthorne Energy Partners. An initial public offering of 3.5 million common units was held May 12.

Michael Krimbill is CEO and Brad Atkinson vice president of business development. Both are former executives with Heritage Propane.

Under the Silverthorne name, it ranked 12th in LP Gas Magazine’s current retail propane Top 50 list, selling about 53 million retail propane gallons annually and serving more than 60,000 retail customers in 2010.

Our stock analyst at Wells Fargo Securities will monitor its performance and post results in the magazine’s monthly LP Gas Stock Index.

Marketing perspective – Recent discussions about the steady decline in domestic propane sales over the last decade have some marketers questioning the effectiveness of the Propane Education & Research Council’s (PERC) promotional efforts.

PERC has invested $250 million in research, education, training, marketing and product development to drive industry growth since the late 1990s. Over the years, PERC’s largest expenditure had been in raising awareness among consumers, homeowners and builders. Its best-known campaign was the Energy Guys – the comical, white T-shirted duo of Propane and Electricity sparring on radio and TV commercials, and in print ads. The characters were such hits that many retailers used them in their own marketing and on the sides of their bobtails.

Interestingly, the milk industry’s bigger and more popular “Got Milk” campaign efforts didn’t fare any better. That industry was authorized to promote milk and other dairy products in the marketplace via its check-off program in 1983. More than $1.1 billion was spent slapping signature white mustaches on a slew of pop culture heroes – from David Beckham to Elizabeth Hurley and even Superman.

Yet consumption dropped through 2005, according to the non-profit research group ProCon.org. Despite a population growth of 74 million, yearly milk consumption fell almost 125 million gallons to 6.2 billion gallons from 1978 through 2005 – cutting per-person consumption by about one-third.

Personal salute – I’d like to offer a personal salute to outgoing Heritage Propane President Bill Powers, who ends an impressive 30-year career in the propane and heating oil industries when he steps into retirement July 1.
Bill has been a quiet but effective leader at the former Petro and Star Gas companies before his tenure at Heritage, where he effectively filled some large shoes succeeding R.C. Mills and Jim Bertelsmeyer as chief executive.

Equally impressive is his passion to teach others about prostate cancer and the merits of early detection. Himself a survivor, Powers understands the personal trauma of a disease that 2 million American men fight daily.
More than 90 percent of prostate cancer patients are diagnosed in the earliest stages, when the long-term survival rate nears 100 percent. That’s why encouraging more men to get tested has been a mission of Powers in his home community and within Heritage.

Bill’s concern and guidance helped launch a campaign to spread the word among the propane industry’s 56,000 mostly male employees. He and Heritage colleague Ed Varney formed a group to help raise awareness and promote early detection among our industry brethren. The group is called Propane Professionals Promoting Prostate Care – PROS4CARE for short.

The group hosts a golf outing that’s raised more than $70,000 since 2008. With more time, Bill expects to play in this year’s outing, which will be held on Columbus Day – Monday, Oct. 11 – at the Tour 18 Golf Club in Houston. I hope you can join him and other industry colleagues in supporting this vital cause. For details, go to the event website at www.txpropane.com.

Brian Richesson

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at brichesson@northcoastmedia.net or 216-706-3748.

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