Petroleum Heat and Power $90 Million Debt Priced

Business Wire, Feb 26, 1999

STAMFORD, Conn.--(BUSINESS WIRE)--Feb. 26, 1999--

- Star Gas and Petro Report Increase in January Volumes Sold -

Star Gas Partners, L.P. (Star) (NYSE:SGU) and Petroleum Heat and Power Co., Inc. (Petro) (NASDAQ:HEAT) jointly announced today that Petro's private placement of $90 million in investment grade debt has been committed to by six institutions. Separately, Star reported that for the month ended January 31, 1999, its year-over-year retail propane volume sold increased 36.9%, largely due to temperatures in its marketing areas which were 24.9% colder than last year. For the same period, Petro's home heating oil volume sold rose 24.6%, primarily as a result of temperatures in its marketing areas being 21.9% colder than the prior year.

Petro's privately placed investment grade debt will carry a weighted average coupon of 7.92% over an 8.54 year weighted average maturity. The transaction is subject to formal documentation of the private placement and is scheduled to close upon consummation of the Star/Petro merger.

Petroleum Heat and Power Co., Inc. is the largest retail distributor of home heating oil in the nation, serving approximately 340,000 customers in the Northeast and Mid-Atlantic regions, including the metropolitan areas of New York, Boston, Washington, D.C., Baltimore, Providence, New Haven, Stamford, as well as various areas in New Jersey.

Star Gas Partners, L.P., the nation's eighth largest retail propane distributor, serves more than 166,000 customers throughout 74 locations in the Midwestern states of Ohio, Indiana, Michigan, Kentucky, West Virginia and in the Northeast, from Maine to Southern New Jersey. Star operates under several trademarks and trade names including: Star Gas Service, Silgas, Blue Flame L.P. Gas, Maingas, Arrow Gas, Mid- Hudson Valley Propane, Coleman Gas Service, H&S Gas, Wilhoyte L.P. Gas, Rural Natural Gas, Pearl Gas, Bay State-Arrow Gas, Knowles L.P. Gas and Lowe Bros., & Dad.

This announcement is made only as a matter of record. The debt securities have not been registered under the Securities Act of 1933 or any state securities law, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.