As part of its overall strategic plan, the company has formed an alliance with J&J, a commercial real-estate developer with a focus on fuel stations, convenience stores and truckstop travel plazas. This alliance extends Evolution's planned rollout region [image-nocss] to the state of Kansas and helps to expedite the plan in other areas of the southwestern United States.
The first lease has been executed for a fuel station in Manhattan, Kansas. This station is currently in operations under the Evolution Fuels brand. The company expects to have the re-imaging of the station completed within the next two weeks and to implement sales of blended ethanol as quickly as possible. This station is located in a high-traffic area averaging more than 24,000 vehicles per day surrounded by major retailers and a large shopping mall, and is the first in a series of planned rollouts in Kansas.
The second station is a newly built fuel station/convenience store strategically located on a prime intersection that serves as a major corridor within eastern Topeka, Kansas, averaging more than 25,000 vehicles per day. The company said it expects to execute the lease for this fuel station within the next few days, and expects the scheduled construction to be complete and the station operational by the end of this month.
The third station is a newly built fuel station/convenience store and is also located on a prime intersection of Topeka that experiences an average traffic count of more than 18,000 vehicles per day. The company said it expects to execute the lease for this fuel station within the next few days, and expects the scheduled construction to be complete and the station operational by mid-February.
As part of its letter of intent with J&J, the company also has an option to lease six additional fuel stations and four additional truckstop travel plazas, with all truckstops to be operated under Evolution's "Legends Travel Plazas" brand. As part of the terms of the agreement, the company has a one-year option to acquire any of the facilities that it leases from J&J, including the initial three stations in Topeka and Manhattan.
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"The retail locations in Kansas afford Evolution the opportunity of immediate operations of top-flight fuel stations in an excellent geographic region for the sale of blended renewable fuels," said Evolution Fuels CEO Dennis McLaughlin. "We are pleased to have an ideal partner in J&J for the rapid rollout of the Evolution Fuels brand in Kansas, and for the potential rollout of more stations in other strategic areas in the near future. We will continue to focus our efforts on similar rollouts in selected regions of the southwestern and southeastern United States."
The company also announced, in accordance with its strategic plan, that it is currently finalizing the lease agreement for its first Dallas station, adjacent to the Park Cities neighborhood. The company expects to execute the lease by the end of this week, followed by several weeks of engineering and construction.
The company also announced it would not pursue the lease of a second station in Dallas, pursuant to a nonbinding letter of intent previously announced in November of last year. Likewise, upon further consideration, the company has also decided not to acquire two fuel station locations, one in Alabama and one in Mississippi, that were previously announced in October of last year. After extensive due diligence, the company determined that at this time, these locations did not provide the necessary branding opportunity and acceptable level of profitability necessary to proceed.
Evolution Fuels endeavors to market renewable transportation fuels at retail fuel stations that will provide fuels to competing fuel stations by virtue of the blending capability within the fuel dispensers at its stations and offering the blends at competitive prices.
The stations will offer ethanol/gasoline blends of fuel including 10% ethanol/90% gasoline (E10), 20% ethanol/80% gasoline (E20), 30% ethanol/80% gasoline (E30) and 85% ethanol/15% gasoline (E85). The latter three blends are intended for flex-fuel vehicles, although recent studies have shown that many legacy vehicles on the road today may use E20 and E30 blends without incurring damage to the engines or fuel systems.
The company's plan calls for the development of a chain of renewable fuel stations in the southwestern and southeastern United States that will be a combination of Evolution Fuels-branded fuel stations/convenience stores and western-motif truckstops modeled after Willie's Place Truck Stop in Carl's Corner, Texas.
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