Tulsa World: SemGroup releases 3Q report

MAKE US YOUR HOMEPAGE | Saturday, November 21, 2009 | WIRELESS

Home > News > Article

Newspaper View Print this story

Comment

RSS

Bookmark

SemGroup releases 3Q report
SGLP also announces leases or contracts on 39 of its 46 asphalt sites.

By ROD WALTON World Staff Writer
Published: 5/29/2009 2:24 AM
Last Modified: 5/29/2009 4:34 AM

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

SemGroup Energy Partners LP's journey back to accountability took another step forward this week when the Tulsa-based midstream energy company released its report for last year's third quarter.

The report, which is about six months late due to challenges facing the former subsidiary of bankrupt SemGroup LP, showed publicly traded SGLP with an $11.85 million net loss for the three-month period. The company's total "current assets" as of Sept. 30, however, rose to $48.8 million from only $13.9 million six months earlier.

The net loss was due to an $18 million non-cash charge related to the early vesting of units under SGLP's long-term incentive plan, a company spokesman said. SGLP, however, will not hold a conference call to expand on details.

SGLP has not had a public conference call since August and has not publicly taken questions from media and analysts since July.

The company's third-quarter results seemed to show progress despite the net loss. Earnings for the nine months ending Sept. 30 totaled $19.5 million, compared to a $20.1 million net loss in the same period a year earlier.

SGLP also announced contracts or leases on 39 of its 46 asphalt facilities. The public SemGroup offers fee-based storage, terminal and transport services in

oil and asphalt.

"We believe our ability to get these facilities quickly under contract highlights the strategic location and strong industry demand for our asphalt and residual fuel oil assets," Jerry Parsons, SGLP's executive vice president for asphalt operations, said in a statement.

Twenty of those SGLP facilities are being leased to Jackson, Miss.-based Ergon Asphalt and Emulsions Inc. The sites, spread over 10 states, have allowed Ergon to double its production capacity, according to reports.

SemGroup LP spun off millions of dollars' worth of storage, terminal and pipeline assets to form SGLP and take it public in July 2007.

The parent company was once considered one of the nation's fastest growing and largest private entities, but its liquidity was sapped through a series of failed oil futures transactions, according to reports.

SemGroup LP filed for Chapter 11 protection July 22 in U.S. Bankruptcy Court in Wilmington, Del. The company traders, including co-founder Tom Kivisto, lost more than $2.4 billion on the oil futures market, court records indicate.

The public SGLP was not a debtor in that bankruptcy but lost a majority of the revenue it received in its throughput agreement with the parent SemGroup. The public subsidiary also fell into credit default, and hedge funds Alerian Capital Management and Manchester Securities took control of the SGLP board after the parent SemGroup defaulted on a $150 million loan.

This spring heralded some positive developments for SGLP.

The company gained a two-year credit waiver from its senior lending group and was able to borrow again.

In March, SGLP finally released its second-quarter 2008 financial results, which showed a $21.6 million profit. SGLP also received some SemMaterials storage assets in a settlement with its former parent company earlier this year.

Shares of SGLP were up to $5.45 per unit Thursday on the over-the-counter "pink sheets" electronic market. SGLP units dropped as low as 80 cents last year on Nasdaq, but the company was later delisted from that exchange due to its lack of financial reporting.

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

4 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

Some reader comments for this story were copied from "SemGroup Energy Partners reports 2008 third-quarter loss; asset rise," which was published on 5/28/2009.

	Report Comment Hawktalk, (5/28/2009 12:34:07 PM) Who rented the SGLP storage?
	Report Comment Tulsa World Staff Writer Rod Walton, Bartlesville (5/28/2009 1:51:48 PM) Hawktalk, One of the customers is Ergon Asphalt and Emulsion Inc. out of Jackson, Miss. They will be leasing 20 facilities spread out over 10 states, according to that company's release. We'll add that to the later version of the story. SGLP would not divulge the others. Thanks. Rod Walton Energy Writer Tulsa World
	Report Comment Hawktalk, (5/28/2009 6:43:34 PM) I had heard the rumor that Ergon had taken some of the tanks. Nice to see this development.
	Report Comment Dr. E. Ville, Roach (5/29/2009 11:05:41 PM) It is certainly good to see SGLP improving. The industry is still strong.

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.