Gas Station Sell-Off to Put Millions in Exxon Mobil’s Tank
- Jun 13, 2008
Exxon Mobil Corp.’s plans to dispose of the last 2,000-plus gas stations it owns reflects the movement by energy companies to monetize their real estate assets, industry experts say. “Really what they’re doing is taking the capital out of the land and investing it back into the company,” explained Don Naughton, a Houston-based managing director for Grubb & Ellis Co. For the past several years, Naughton has represented Royal Dutch Shell in a similar program and has sold upwards of 500 Shell service stations. CB Richard Ellis Inc. is also marketing stations for Shell. Each Exxon Mobil station could command in the range of $1 million for the land alone, not counting additional costs for underground storage tanks, canopies, and other equipment, estimated Naughton. The world’s biggest public energy company yesterday confirmed reports by the DallasMorning News and other media outlets that the last 800-plus stations it directly operates will go on the market, along with some 1,400 additional locations operated by distributors. Those locations will continue to use the Exxon Mobil name and sell the company’s products. “I think you’re going to see that the program’s going to take them a couple of years,” Naughton said. Under federal law, Exxon Mobil must give each service station’s dealer the right of first refusal when the station goes on the market. If the local owners decline, Exxon Mobil can then open the field to other bidders. In many cases, gasoline distributors–the local intermediaries–may acquire the stations, Naughton said. Exxon Mobil will follow in the footsteps of BP Plc as well as Royal Dutch Shell, which are also selling off their gas stations. The move came as no surprise, since high oil prices have squeezed the margins for service stations. Even the repeated jumps in retail gas prices have not allowed local retailers to keep up with skyrocketing oil prices.