Star Gas Completes Acquisition of Petroleum, Heat and Power

Business Wire, March 26, 1999

STAMFORD, Conn.--(BUSINESS WIRE)--March 26, 1999--Star Gas Partners, L.P. (Star) (NYSE:SGU) announced today that it has completed the acquisition of Petroleum Heat and Power Co., Inc. (Petro) (NASDAQ:HEAT).

In conjunction with that transaction, the public sale of 8.7 million Master Limited Partnership Common Units and the private placement of $90 million of Senior Notes has also been consummated. Beginning Monday March 29, 1999, the Star Senior Subordinated Units received by Petro shareholders to effect this merger will be listed and begin trading on The New York Stock Exchange under the symbol "SGH."

In commenting on these events, Irik Sevin, Chairman of Star Gas, said: "All of the individuals involved are very excited with the consummation of this Transaction. We believe the combination of these two businesses provides Star with increased opportunity to grow through acquisitions in both the propane and heating oil industries, as well as to realize the benefits from base business operating initiatives. While there are certainly challenges ahead to achieving the potential benefits from this combination, the management of the combined company looks forward to realizing these opportunities which should be facilitated by Star's significantly larger equity capital base and scope of operations."

Star Gas Partners, L.P. is a leading distributor of propane and home heating oil and has been an active consolidator in these industries. Star is the nation's eighth largest retail propane distributor, serving more than 166,000 customers throughout the Midwest and Northeast. Through its wholly-owned Petro subsidiary, Star is the nation's largest retail distributor of home heating oil, serving approximately 340,000 customers in the Northeast and Mid-Atlantic.

This news announcement contains certain forward-looking information that is subject to certain risks and uncertainties as indicated from time to time in the Company's 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission. Included among these risks and uncertainties are the effects of the weather on the Company's financial results, competitive and propane and heating oil pricing pressures and other factors impacting the propane and home heating oil distribution industries.