Tulsa World: Former SemGroup LP pursuer finds different Oklahoma energy partner

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Former SemGroup LP pursuer finds different Oklahoma energy partner

In this December 2008 file photo, John Catsimatidis addresses SemGroup employees in Tulsa. Tulsa World File

By ROD WALTON World Staff Writer
Published: 10/13/2009 10:35 AM
Last Modified: 10/13/2009 3:40 PM

Complete coverage: Read all the stories and documents related to the SemGroup collapse.

The company that New York billionaire John Catsimatidis formed to help him in an ill-fated bid to take control of bankrupt SemGroup LP instead has found a new Oklahoma energy partner, his firm announced Tuesday.

Catsimatidis’ publicly held United Refining Energy Corp. is merging with Oklahoma City-based private producer Chaparral Energy Inc. in a deal estimated at $1.8 billion. The transaction is expected to close no later than Dec. 11.

United Refining Energy Corp. was formed as a special purpose acquisition company, a kind of investment pool designed for a merger with another company. Late last year Catsimatidis set his sights on floundering SemGroup LP, the Tulsa midstream conglomerate which filed for Chapter 11 protection after admitting at least $2.4 billion in margin losses on failed oil futures trades.

He promised to keep SemGroup’s various units intact within the oil, gas and asphalt pipeline, storage and transportation fields. SemGroup also would stay in Tulsa, Catsimatidis said in December.

“What I see, I like,” he quipped at a meeting with SemGroup employees.

The proposed marriage between United Refining Energy and SemGroup hit a major snag, however, when Catsimatidis butted heads with SemGroup CEO Terry Ronan over the reorganization plan. SemGroup eventually sued Catsimatidis and his partners, alleging that they violated a confidentiality pact.

The Catsimatidis group countered by suing Ronan. Both lawsuits eventually were dismissed when the two sides settled and Catsimatidis moved on.

The New Yorker, who made his fortune in the grocery, aviation, energy and real estate businesses, will become executive chairman of the merged firm’s board of directors.

“We have spent almost two years looking for the right target for our SPAC, and I believe this is the best opportunity that we have considered,” Catsimatidis said in a statement. “Chaparral’s management team has demonstrated the ability to find lucrative oil and gas properties at prices that have resulted in superior returns on investments.”

SemGroup, meanwhile, is moving forward with its proposed reorganization plan offering $2.24 billion in cash and equity to creditors. A confirmation hearing is set Oct. 26 in Delaware federal court, and SemGroup hopes to emerge as a publicly traded midstream firm by early November. By ROD WALTON World Staff Writer

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Reader comments for this story have been moved to the most updated version of the story, now under the headline "Billionaire finds new partner in Oklahoma," which was published on 10/14/2009. So far, 7 comments have been made.