SemGroup

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SemGroup
Type Public
Traded as NYSESEMG
Industry Oil and gas industry
Founded 2001
Founders Thomas L. Kivisto
Gregory C. Wallace
Headquarters Tulsa, Oklahoma, United States
Area served Worldwide
Key people Norman J. Szydlowski (President & CEO)
Products Pipeline transport
Asphalt
Services Oil transportation and storage
Revenue Decrease US$ 1.24 billion (FY 2012)
Operating income Increase US$ 57.35 million (FY 2012)
Net income Increase US$ 22.10 million (FY 2012)
Total assets Increase US$ 1.75 billion (FY 2012)
Total equity Increase US$ 892.4 million (FY 2012)
Employees 690
Subsidiaries
Website www.semgroupcorp.com
Footnotes / references
[1]

SemGroup headquartered in Tulsa, Oklahoma, is a transporter of oil and natural gas through pipelines from refineries to end users, as well as the manufacturer and seller of asphalt. The company as of 2007 was the 18th largest private company in the US, but filed for bankruptcy in 2008.[2] As of December 2009, the company had restructured and emerged from bankruptcy at a reduced size.

History[edit]

SemGroup LP was founded in February 2001. On July 9, 2007 SemGroup announced that it would establish a publicly traded affiliate, SemGroup Energy Partners LP, who would be traded on NASDAQ, under the symbol SGLP.[3] This affiliate company was delisted from NASDAQ effective February 20, 2009.[4]

Bankruptcy[edit]

In July 2008, SemGroup ran into liquidity problems and warned that it may have to file for bankruptcy as part of a financial restructuring. Adding to SemGroup's troubles, hedge funds run by Alerian Capital Management and Elliot Associates exercised the terms of a secured loan made to SemGroup and took over the general partnership interest in SemGroup Energy Partners LP. On July 22, 2008, Semgroup, LP filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Delaware.[5][citation needed] The company listed both debts and assets of more than $1 billion.

New York billionaire John Catsimatidis then became engaged in efforts to take over SemGroup, and he gained control over a majority of the company's management committee. He was met by opposition from the company's existing management, who argued for selling off at least some of the company's assets, while Catsimatidis stated his intention to keep the company together.[6] On February 11, 2009 Catsimatidis was sued by a group of SemGroup executives, seeking removal of Catsimatidis and his allies from the committee.[7] In turn, the company and its unsecured creditors committee sued former CEO Tom Kivisto and former CFO Gregory C. Wallace, seeking return of $362 million that they claim the defendants used for their own transactions and benefits.[8]

In April, 2009, former FBI director Louis Freeh released a report on the circumstances surrounding the SemGroup bankruptcy.[9] In July, Catsimatidis and the company reached a settlement, pursuant to which Catsimatidis acquired a piece of SemGroup's asphalt business and dropped his competing plan for the company's proposed reorganization.[10][11]

Recovery[edit]

On December 1, 2009, SemGroup exited bankruptcy under a new corporate structure, eliminating its master limited partnership and becoming a publicly traded company focused on asphalt manufacture and marketing and on oil and natural gas storage and transport, with about 140 employees in Tulsa and 1,000 overall.[12] On the same day, the former SemGroup Energy Partners LP adopted a new name, Blueknight Energy Partners LP; Blueknight is now separate in ownership and assets (although sharing a pipeline system with SemGroup).[13]

SemGroup Corporation's common stock (NYSESEMG) was listed on the New York Stock Exchange as of November 11, 2010,[14] and two of its representatives were invited to ring the NYSE opening bell on December 17, 2010,[15] as the company assumed what a Wall Street Journal reporter described as "a new identity as a conservative middleman to the Midwestern oil and gas industry."[16]

Meanwhile, global oil trader Vitol Group took control of Blueknight (the former SemGroup Energy Partners LP). In October 2010, Vitol made a deal to add Charlesbank Capital Partners as a second general partner; this led to public charges, by an investment fund associated with billionaire Michael Dell, that the transaction was improper self-dealing intended to take money from Blueknight's existing limited partners. Vitol denied these charges.[16][17][18]

Activities[edit]

SemGroup LP is engaged in diversified services for the North American crude oil and refined products industry. Operations include gathering, transporting, marketing and hedging services. SemGroup owns and operates carrier pipelines, oil transport and service trucks, pipeline injection stations and terminal storage in Oklahoma, Louisiana, Kansas, and Texas. Canadian operations are located in Alberta, British Columbia, and Saskatchewan. The company is based in Tulsa, Oklahoma, USA.

SemMaterials[edit]

SemMaterials is the division of SemGroup primarily responsible for asphalt and emulsion production. The division head is Frank Panzer.

Rose Rock Midstream[edit]

Rose Rock Midstream, formed by SemGroup, is a publicly traded company (NASDAQRRMS) that owns, operates, develops, and acquires a diversified portfolio of midstream energy assets.[1] Rose Rock Midstream is in the business of crude oil gathering, transportation, storage and marketing. The company holds a 17 percent ownership of White Cliffs Pipeline.[19]

Leadership team[edit]

Thomas L. Kivisto co-founded SemGroup and served as its President and Chief Executive Officer. Another co-founder was Gregory C. Wallace, who served as Vice President, Chief Financial Officer, and Secretary. In 2008, Terry Ronan replaced Kivisto as President and CEO. In September 2009, SemGroup announced a new leadership team, to be led by a new president and CEO, Norm Szydlowski, an experienced oil industry executive who had previously served as president and CEO of Colonial Pipeline Co. A new board was also announced, to be chaired by John F. Chlebowski, a director of NRG Energy, Inc. and previously president/CEO of GATX Terminals.[20]

References[edit]

  1. ^ a b "SemGroup Corporation (SEMG)". Yahoo! Finance. 
  2. ^ "The 35 Largest US Private Companies". CNN. May 28, 2008. 
  3. ^ John Stancavage (2007-07-09). "SemGroup nears IPO". Tulsa World. Retrieved 2007-07-09. 
  4. ^ Rod Walton, "Nasdaq will delist SGLP," " Tulsa World, February 19, 2009.
  5. ^ forbes.com "Did Goldman Goose Oil?" - March 25, 2009
  6. ^ Rod Walton, "Business brawler?" Tulsa World, January 25, 2009.
  7. ^ "SemGroup executives sue Catsimatidis; SemGroup Energy Partners also warns of asphalt meltdown", Tulsa World, February 11, 2009.
  8. ^ Rod Walton, "Kivisto is sued over use of funds: A lawsuit says he used SemGroup funds for his own oil trading," Tulsa World, February 19, 2009.
  9. ^ [1]
  10. ^ Rod Walton, "SemGroup suitor drops out: The colorful New York billionaire settles for asphalt assets", Tulsa World, July 21, 2009.
  11. ^ "Catsimatidis to support SemGroup reorganization", Reuters, July 20, 2009.
  12. ^ Rod Walton, "SemGroup exits Chapter 11", Tulsa World, December 1, 2009.
  13. ^ Rod Walton, "Blueknight steps to center stage: The heir to the Tulsa energy company sheds its former name", Tulsa World, December 2, 2009.
  14. ^ Rod Walton, "SemGroup debuts on NYSE", Tulsa World, November 12, 2010.
  15. ^ Rod Walton, "SemGroup duo ring NYSE opening bell", Tulsa World, December 17, 2010.
  16. ^ a b Brian Baskin, "SemGroup Works to Turn It Around: After a Disastrous Bet and a Bankruptcy Stay, Firm Tries to Forge New Identity", The Wall Street Journal, December 20, 2010.
  17. ^ Shira Ovide, "Michael Dell’s Investment Firm Rails Against ‘Self-Dealing’ Energy Deal", The Wall Street Journal, December 17, 2010.
  18. ^ Rod Walton, "Blueknight investor attacks restructuring deal", Tulsa World, December 21, 2010.
  19. ^ "Rose Rock Midstream (RRMS)". 
  20. ^ John Stancavage, "SemGroup announces new president, board of directors", Tulsa World, September 9, 2009.

External links[edit]