Release Details

STAMFORD, CT (January 31, 2002) -- Star Gas Partners, L.P. (NYSE: SGU, SGH), a diversified home energy distributor and services provider specializing in heating oil, propane, natural gas and electricity, today reported results for the fiscal 2002 first quarter, ended December 31, 2001. For the three months ended December 31, 2001, Star’s EBITDA was $31.3 million, compared to $36.3 million in the year-ago period. This 13.8% reduction was the result of abnormally warm weather during this past quarter, with temperatures approximately 30% above prior year levels in Star’s markets. The EBITDA decline was significantly less than the impact of weather due to $6.2 million of weather insurance and Star’s successful cost control program, which reduced base company operating expenses by approximately $7.5 million. Also offsetting the abnormal weather conditions was the positive contribution from the 26 acquisitions made since October 1, 2000 and an approximate 3.2 cents per gallon gross profit margin increase.

Diluted net income per limited partner unit was $.42 per unit in the fiscal 2002 first quarter, compared to $.86 per unit in the prior year, as the Partnership’s depreciation, amortization and interest expenses did not decline commensurately with the weather-related EBITDA reduction.

During the first quarter of fiscal 2002, Star purchased four propane and heating oil companies for an aggregate purchase price of $23.5 million. These acquisitions represent approximately 13,000 additional customers.

In commenting on Star’s performance, Chairman Irik P. Sevin, indicated: “While the abnormally warm temperatures experienced in the first quarter were obviously very disappointing, Star succeeded in limiting the impact of these conditions. Despite the unusual weather, EBITDA declined only approximately 14% due to three factors: Star’s base company operating focus enabled us to significantly reduce expenses and improve gross profit margins; our disciplined acquisition strategy resulted in positive financial contributions from our recently acquired companies; and, our strategic purchase of weather insurance helped stabilize earnings and cash flow. Based on our past success in helping mitigate the impact of abnormal weather conditions, Star recently purchased $2 million of additional weather insurance coverage for fiscal 2002.”

Mr. Sevin, continued, “In January 2002, the Partnership successfully completed a $34.7 million public equity offering. This underwriting helped Star maintain a balanced capital structure while providing it with the funds and flexibility to pursue three ongoing growth initiatives: first, to utilize Star’s unique size in the home heating oil industry to access technological developments allowing us to operate even more effectively, and in regard to this endeavor, the Partnership is presently considering a number of organizational, operating and management realignments; second, to continue to profitably, and in a disciplined fashion, acquire home heating oil and propane distributorships; and lastly, to further expand upon our service-based relationships with over 850,000 customers by marketing additional rationally related products.”

Star Gas Partners, L.P., is a leading distributor of home heating oil, propane and deregulated natural gas and electricity. Star is the nation's largest retail distributor of home heating oil and the nation's eighth largest retail propane distributor. Star owns a 80.0% controlling interest in Total Gas & Electric, which sells natural gas and electricity 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 Partnership’s 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission. Included risks and uncertainties are the effects of the weather on the Partnership’s financial results, competitive and propane and heating oil pricing pressures and other factors impacting the propane, home heating oil, natural gas and electricity distribution industries.