Tulsa World: SGLP amends credit deal with lenders

MAKE US YOUR HOMEPAGE | Wednesday, February 10, 2010 | WIRELESS

Home > Business

Newspaper View Print this story

Comment

RSS

Bookmark

SGLP amends credit deal with lenders
It will downsize the company's revolving credit by $10 million.

By ROD WALTON World Staff Writer
Published: 11/26/2009 2:32 AM
Last Modified: 11/26/2009 5:20 AM

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

SemGroup Energy Partners LP, which is already entering a new era with new leadership, soon-to-be new name and slightly less debt, now has a new credit deal with its lenders, the Tulsa midstream oil and gas firm announced Wednesday.

The amended credit agreement downsizes SGLP's revolving credit facility by $10 million to $40 million and prohibits the company from engaging in commodity hedging or price speculation, according to Wednesday's filing with the U.S. Securities and Exchange Commission.

The deal also noted that SGLP, which will be called Blueknight Energy Partners starting next week, has lopped $11 million off its revolving credit and outstanding borrowing totals compared with the credit amendment signed in April. The outstanding borrowing, however, stands at $422.5 million, while cash on hand is down to $19.3 million from the $29 million listed in April.

SGLP officials previously noted that cash flow will be down as the company pays off more debt. Vitol Inc. this week announced that its purchase of SGLP's general partner interest from Manchester Securities is complete.

"Now that Vitol deal is closed we are excited about the growth opportunities," a SGLP spokesman said.

Earlier this week, longtime SGLP leaders Kevin Foxx and Michael Brochetti announced their departures as CEO and treasurer, respectively. Foxx and Brochetti will stay on as consultants while Blueknight looks for new executives to replace them, according to reports.

Former Teppco Partners executive Michael Cockrell will move into SGLP's president and chief operating officer posts. Foxx jointly worked as CEO and president prior to his departure.

Under Foxx's leadership the publicly traded SGLP avoided the bankruptcy fate of onetime parent company SemGroup LP. The loss of millions in fee-based storage and transport services for SemGroup, however, devastated SGLP and put its fate in doubt for 16 months.

The future may remain uncertain, despite the new name and Vitol's commitment. SGLP reported net losses for each of its last four quarters on record, while the $422.5 million outstanding debt burden is higher than its market capitalization of about $320 million, according to reports.

SGLP has survived by finding third-party storage and transporation customers, according to reports. The company owns and operates midstream energy assets including 8.2 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 owned controlling interest in SGLP until the parent's bankruptcy triggered a July 2008 credit default.

Manchester Securities and Alerian Capital Management took over board control at that point.

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

Newspaper View Print this story

Comment

RSS

Bookmark

Reader Comments

Show: Most Recent Comment First

Add your comment

0 comments have been made on this story so far. Tell us what you think below!

Reporting Comments

If you see a comment that violates our terms and conditions, please help us by clicking the "Report this Comment" link next to a comment. That will alert the web staff to review the comment. Thank you. -- Web Editor Jason Collington

Add Your Comment
In order to post a comment on this article, you must sign in to Tulsaworld.com. If you do not have a site account, you can create an account for free.