Tulsa World: SGLP shows quarterly loss, is catching up on reporting

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SGLP shows quarterly loss, is catching up on reporting

By ROD WALTON World Staff Writer
Published: 8/26/2009 2:22 AM
Last Modified: 8/26/2009 4:00 AM

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

SemGroup Energy Partners LP suffered a $3.5 million net loss for its second quarter, but the bigger news Tuesday may be that the publicly traded spinoff of bankrupt SemGroup LP has caught up on most of its reporting responsibilities and may seek relisting on the Nasdaq stock market.

The company also plans to separate itself further from the bankrupt SemGroup by changing its name later this year.

The public SemGroup, also known as SGLP, generated $79.7 million in revenues for the first half of 2009, compared with $95.5 million in the same period last year. The company, however, previously gained most of its revenues through a storage and transport agreement for its privately held parent SemGroup prior to the July 2008 bankruptcy.

The crude oil gathering and transportation revenues were "significantly impacted by the private company's bankruptcy filing and has led to decreased volumes being transported," SGLP Chief Financial Officer Alex Stallings said in a statement.

"This business also has suffered from customers confusing us with the private company and producers who are reluctant to transact business with us due to unpaid amounts owed them by the private company," Stallings said.

"We continue to try and differentiate ourselves from the

private company and intend to change our name later this year."

SGLP's plan of survival includes the growth of its third-party storage and transport contracts. Third-party sources accounted for 81.3 percent of second-quarter revenues, compared with only 11 percent for the same time last year.

While SGLP avoided bankruptcy, the former subsidiary of SemGroup LP faces its own challenges.

It gained a credit waiver from lenders earlier this year but still has only $2.9 million in cash on hand, compared with $34.5 million in 2008's second quarter.

SGLP once again did not declare a quarterly cash distribution to unitholders. The company has not made a distribution, which are usually an attraction of master limited partnerships, since last year.

SemGroup LP spun off some of its pipeline and oil and asphalt storage and transport assets to form SGLP and take it public in July 2007. The private parent company, however, lost control of SGLP during last year's financial collapse and credit default.

SGLP offered no earnings release from May 2008 until earlier this year but now has delivered five overdue quarterly reports in about six months. The company was delisted from Nasdaq due to the lack of reporting.

SGLP executives did not conduct a conference call to discuss the earnings report. The company has not held any conference calls for media or analysts since last August.

SemGroup LP, meanwhile, is trying to emerge from Chapter 11 bankruptcy in the third quarter. The parent company wants to reorganize as a publicly traded entity focused on crude oil storage, transport and pipeline operations.

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

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O&Gtrader, ft. worth (8/26/2009 9:26:47 AM)

It appears that all the SemGroup LP bankruptcy examiner, Mr. Freeh, accomplished was to name some names and point some fingers, collect his fees and move on.

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