A crude oil marketing, terminalling and hauling company, One Cypress Energy was created by energy industry veterans in late 2011 to put their lessons from past business cycles to good use. Thanks to the company’s extensive refinery knowledge, One Cypress Energy understands the complete crude oil value chain and strives to help its partners maximize opportunities in each cycle.
Bruce Smith and Greg Wright, who had served as CEO and CFO, respectively, of Tesoro Corp., founded One Cypress Energy and put together an experienced team that could specialize in logistics, supply and trading. The company has gotten off to a solid start over the past few years because of its understanding of crude markets and user needs, as well as its ability to leverage relationships for market entry and successful integration of assets and people.
Pieces in Place
One Cypress Energy has two business units. It is involved in purchasing North American crude oil and it also operates a liquids terminal in the Port of Brownsville, Texas.
“The company was formed with the acquisition of two assets, Geer Tank Trucks and US Petroleum Depot,” Senior Vice President of Corporate Strategy and Finance Scott Phipps says. “Our purchasing operations have developed strong relationships in the Barnett Shale play, and we have built a new 12-inch pipeline to provide deep-water access in Brownsville.”
The company’s crude purchasing service allows One Cypress Energy to offer flexible and competitive pricing thanks to extensive marketing channels and asset-based partnerships. The company contracts with Sunline Commercial Carriers for crude-and water-hauling service, and its back-office services allow the company to extend division order and accounting services to its U.S. producing customers.
In addition, the One Cypress Energy team has experience in the mid-stream and downstream energy sector, allowing it to serve a diversified selection of end-user markets. All of these capabilities help the company to forge long-term partnerships based on integrity, trust and strong corporate governance.
“We’ve had to develop experience in the midstream sector and find ways to establish ties and relationships with producers,” Senior Vice President of Marketing John Summers says. “Also, our partnership with Sunline has been critical, as they are completely aligned with our efforts.”
As for its terminal operations in Brownsville, One Cypress Energy has a storage capacity of seven carbon steel tanks that range in size from 10,000 to 30,000 barrels. Its total terminal capacity is 125,000 barrels. The company can handle specialty chemicals, petroleum products, base oils, biodiesel, wax, vegetable oil and molasses.
“Historically, most of our business has been product coming in from Mexico on the ground by truck or rail and then loaded onto vessels and leaving by water,” Senior Vice President of Terminal Operations Chad Smith says. “We’ve been able to find the best ways to maximize the use of our terminalling facility and put our understanding of market dynamics to work.”
The terminal serves vessel, barge, tank truck, ISO container and railcar transportation modes. It has two marine berths, 13 railcar-working spots and four truck-loading bays. Additional services include blending, filtering, foreign trade zone and transloading. The terminal is also well positioned for expansion opportunities.
Like all organizations in the industry, One Cypress Energy is looking to deal with the drop in crude prices in the best way possible. The company has added to its crude marketing team to look for ways to build relationships and expand its geographic reach.
“We’ve learned that the most important thing for producers is to get crude moving so they can continue to operate, which is why we are extremely focused on customer service,” Summers says. “We have an opportunity to find customers who are looking for better service.”
“Because we compete against some very large companies, we need to be flexible and provide higher levels of service to producers,” Phipps adds. “Our priority is to grow our business in markets where we are while also branching out to build our name in a few other markets.”
At the same time, the company is looking to enhance its terminal operations. One Cypress Energy has already added more offloading stations and metering capabilities, and brought on the new pipeline. These investments have expanded capacity, provided greater efficiency and provided better tracking capabilities.
Now the goals include building more tankage and bringing in new tenants. The terminal’s current customer is looking to expand its tankage capacity, and additional tankage would help the company attract new customers.
“We have maximized the terminal’s existing footprint and now we are focused on helping the terminal to meet its growth potential,” Smith says.