Tulsa World: Sem spinoff renamed Blueknight

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Sem spinoff renamed Blueknight
SemGroup Energy Partners also reports a third-quarter loss of $2.9 million.

By ROD WALTON World Staff Writer
Published: 11/14/2009 2:26 AM
Last Modified: 11/14/2009 4:08 AM

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

The publicly traded former subsidiary of SemGroup LP took a big step in separating itself from the bankrupt parent company Friday, announcing a name change and a third-quarter earnings report.

SemGroup Energy Partners LP, also known by its ticker symbol SGLP, revealed it will be called Blueknight Energy Partners LP. The name change should take effect by Dec. 1.

Company officials gave no story behind the new name but noted that blue is a color connected to Vitol Inc., which is buying the SGLP general partner interest from hedge fund Manchester Securities.

"We expect the Vitol transaction to close in the near future after consent is received from our lenders," SGLP CEO Kevin Foxx said in a statement. "We are extremely excited to continue our business as Blueknight Energy Partners."

Tulsa-based SGLP reported a third-quarter net loss of $2.9 million. Revenue totaled $40 million, but $3 million in legal and professional expenses related to SemGroup LP's bankruptcy was reflected on the company's ledger.

"Third-quarter results reflect continued progress toward stabilizing our crude oil and asphalt storage revenues," Foxx said.

"We still have much work to do to regain crude oil pipeline and transportation volumes, but remain hopeful that

our future new relationship with Vitol and further distancing from SemGroup will be viewed positively in the marketplace."

The company, spun off by SemGroup LP in mid-2007, logged $119.7 million in revenue and $8 million in net losses for the first nine months of 2009.

Last year's nine-month revenues and profits totaled $149.3 million and $19.5 million, respectively.

The public SGLP was not part of SemGroup LP's July 2008 bankruptcy but suffered deep cuts in revenue due to the collapse of its $100 million-plus annual agreement to move oil and asphalt for the parent company. The subsidiary also fell behind in financial reporting duties but caught up by August.

SGLP has survived by finding third-party storage and transportation customers. The company owns and operates8.2 million barrels of crude oil storage in Oklahoma and Texas; 1,150 miles of pipeline, asphalt and residual fuel oil storage; and transportation vehicles.

SemGroup LP owned the controlling general interest in SGLP until a July 2008 loan defaulted when Manchester Securities and Alerian Capital Management took control of the board.

Trading for SGLP was listed at $8.85 per unit Friday on the open "pink sheets" electronic market. The company's value fell below $1 per unit in the months following SemGroup's bankruptcy but has steadily climbed despite being delisted from the Nasdaq stock exchange.

SGLP went 10 months without releasing an earnings report until earlier this year. Company executives have not commented on SGLP's earnings or business since an August 2008 conference call.

No conference call was planned about the third-quarter report released Friday, officials said.

Rod Walton 581-8457
rod.walton@tulsaworld.com By ROD WALTON World Staff Writer

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Some reader comments for this story were copied from "SemGroup Energy Partners changes name, issues 3Q report," which was published on 11/13/2009.

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Few Clothes, America (11/14/2009 11:44:46 AM)

I don't think a name change is going to matter.

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