Soco gas stations switch from Exxon to Liberty brand

June 08--A third-generation oil man, Mykel Stockton has seen business gush, and he's seen it run dry. His Soco Express service stations have hit a trough now, but the Billings man sees boom times ahead.

After a quarter century, ExxonMobil broke ties last month with Soco Express, forcing its Billings-based parent company, Stockton Oil, to rebrand and sell independently under Liberty Petroleum.

The fraying of the relationship dates back three years when Soco suffered big losses during summer flooding and missed

a payment to Exxon. As Liberty, the nine Eastern Montana stations have gained flexibility but lost the security of big corporate backing.

"It's sad how I caused this to crumble, this relationship with Exxon. On the other hand, it's very exciting to create something with Liberty going forward," Stockton, 48, said.

New look

The biggest change for customers is the store design, Stockton said. Virginia-based Liberty has a bright, patriotic logo, painted to look like an American flag stretched above the fuel pumps.

Soco has 100 employees at its nine stores. Five are in Billings, including Lockwood. The remaining stations are in Roundup, Hardin, Lewistown and Crow Agency.

The renovations are complete at Soco's largest station at 2344 Central Ave., which has a Subway restaurant inside. The other eight stations should be finished within weeks at a total cost of $270,000, Stockton said.

Liberty has 400 retail locations nationwide. The nearest is in Idaho, and Soco has exclusive rights to the brand in Montana for three years, according to Stockton. Liberty was founded in 2000 by three mid-Atlantic distributors seeking to leverage independent retailers under one brand.

It's a good fit for Stockton, who had been growing frustrated with what he felt was an impersonal relationship with out-of-state Exxon marketers.

"Exxon is out, and Liberty is in," Stockton said.

Problems with Exxon began in the summer of 2011 when the Yellowstone, Musselshell and Little Big Horn rivers cut off road access for thousands in Eastern Montana and caused millions in damage.

Soco stations in Roundup, Lewistown and Crow Agency escaped the worst of the rivers' wrath but were forced to close anyway because drivers couldn't get to them. Stockton said he lost $325,000, a month's worth of revenue, and insurance wouldn't cover the loss because the stores weren't damaged, Stockton said.

When Exxon attempted to "draft" its regular 10-day payment, Soco Express didn't have enough money to cover it, Stockton said.

"You don't recover (from) this overnight," he said.

ExxonMobil spokesman Christian Flathman said the company tried to work with Soco but couldn't reach a resolution "after multiple attempts." Exxon did not renew the contract because "contractual obligations" weren't being met, the Virginia-based Flatham wrote, declining to go into specifics.

Stockton said he'd never missed a payment to Exxon before the floods and hasn't missed one since, but the company has struggled with other bills. In 2012, the business was late on about $40,000 in property taxes and penalized by Yellowstone County, and Stockton missed the May 31 deadline for about $4,000 in property taxes this year, according to the county treasurer's office.

As independent retailers, Soco stores buy gasoline from all three Billings-area refineries: ConocoPhillips, CHS in Laurel, and yes, even . This flexibility means the stores can buy from whoever is selling the cheapest fuel on a given day, Stockton said.

But it carries risk, he acknowledged. Without a big-name supplier, Soco stores lack a guaranteed supply -- a dicey situation in a fuel shortage or times of high demand.

"It's very scary to branch off and do something like this. When you have Exxon or Conoco ... it's a comforting feeling. Now you're flying alone," Stockton said.

History of change

The loss of Exxon is a blow, but it's hardly the first time the six-decade-old Stockton Oil has faced adversity, according to the company.

The company traces its roots to the late 1940s, when Stockton's grandfather, Dan Stockton Sr., was an agent for John Rockefeller's Standard Oil in Lewistown. He moved to Billings and opened an independent station, then began selling Phillips 66 fuel.

Over the next three decades, Stockton bought more stations and added to the Phillips 66 brand. The company saw two major changes in 1979: the founder retired and turned the reins over to Mykel's father, Dan Jr., and Phillips 66 pulled out of Montana.

Stockton then created the Soco Express brand to market fuel and later partnered with Sinclair and displayed the company's iconic dinosaur logo.

In 1988, Exxon changed its direct distribution method and named Soco Express its distributor for the Billings area.

Since then, convenience stores have grown into a $700 billion business nationwide, and the model has changed. Margins on fuel sales slimmed down, and retailers increasingly relied on food, beverage and other sales to make a profit.

"We're trying to drive them into the store. That's where the money is," Stockton said.

It's a steeper challenge without the marketing muscle of Exxon, but Stockton is optimistic. He started in the business at age 15, mowing yards, painting buildings and doing grunt work, he said.

Moving through the ranks, Stockton gained an appreciation for the business, and he wants to ensure the fourth generation, his two sons, can take over one day.

"Since I was around the business all the time, I fell in love with it,' Stockton said.

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