SemGroup

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SemGroup
Public
Traded as NYSESEMG (Class A)
Russell 2000 Component
Industry Oil and gas industry
Founded 2000
Founder Thomas L. Kivisto
Gregory C. Wallace
Headquarters Tulsa, Oklahoma, United States
Area served
Worldwide
Key people
Carlin Conner CEO
Products Pipeline transport
Terminaling and storage
Natural gas processing
Asphalt
Services Midstream service company
Revenue Increase US$ 2.08 billion (FY 2017)
Decrease US$ 97.5 million (FY 2017)
Decrease US$ (17.15 million) (FY 2017)
Total assets Increase US$ 5.4 billion (FY 2016)
Total equity Increase US$ 1.7 billion (FY 2016)
Number of employees
1,300
Subsidiaries
Website www.semgroupcorp.com
Footnotes / references
[1] [2]

SemGroup transports oil, natural gas and other products across North America through a network of pipelines, processing plants, refinery-connected storage facilities and deep-water marine terminals. The company began trading on the New York Stock Exchange under the symbol 'SEMG' in 2010.[3] The company was originally founded in 2000[4] and as of 2007 was the 18th largest private company in the US, but filed for bankruptcy in 2008.[5] As of December 2009, the company had restructured and emerged from bankruptcy at a reduced size. The company's headquarters are in Tulsa, Oklahoma.

History[edit]

SemGroup LP was founded in 2000.[6] 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.[7] This affiliate company was delisted from NASDAQ effective February 20, 2009.[8] SemGroup Corporation later began trading on the NYSE in 2010 under its current symbol SEMG. [9]

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.[10][11][12] 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.[13] On February 11, 2009 Catsimatidis was sued by a group of SemGroup executives, seeking removal of Catsimatidis and his allies from the committee.[14] 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.[15]

In April 2009, former FBI director Louis Freeh released a report on the circumstances surrounding the SemGroup bankruptcy.[16] 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.[17][18]

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.[19] 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).[20]

SemGroup Corporation's common stock (NYSESEMG) was listed on the New York Stock Exchange as of November 11, 2010,[21] and two of its representatives were invited to ring the NYSE opening bell on December 17, 2010,[22] 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."[23]

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.[23][24][25]

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 terminals, 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, United States. In early 2018 the company closed on the sale of two of its former business units, a Mexican asphalt business[26] and a petroleum products storage facility in the U.K.[27] The company's CEO Carlin Conner described both asset sales as part of SemGroup's strategy to simplify its asset portfolio and focus on operations along the Gulf Coast, Mid-Continent and Canada.[26][27]

SemCAMS is a business unit of SemGroup based in Calgary, Alberta. SemCAMS operates four gas processing plants located in the Western Canadian Sedimentary Basin. SemCAMS offers midstream service options for wet or dry, sweet or sour gas gathering and processing, as well as dehydration, field compression and sulfur forming and handling.[28]

Houston Fuel Oil Terminal Company was acquired by SemGroup in July 2017. Often referred to as 'HFOTCO,' the business unit operates one of the largest oil terminals in the U.S. HFOTCO is located in the Houston Ship Channel on the U.S. Gulf Coast.[29]

Rose Rock Midstream was a master limited partnership formed by SemGroup that traded under the ticker symbol 'RRMS.' SemGroup announced in May 2016 an agreement to acquire all of the remaining outstanding units of Rose Rock Midstream that it did not already own in an all stock-for-unit transaction that closed in September of that year. Rose Rock currently operates as a business unit under SemGroup.[30]

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.[31]

Current President and CEO Carlin G. Conner was later named to the company's top role, taking over the position on April 1, 2014.[32] Thomas R. McDaniel became chairman of the SemGroup board of directors on Jan. 1, 2017. McDaniel has served as a director of SemGroup since 2009.[33]

References[edit]

  1. ^ "SemGroup Corporation (SEMG)". Yahoo! Finance. 
  2. ^ "SemGroup Corporation (SEMG)". 
  3. ^ "SemGroup Corporation to Begin Trading on the New York Stock Exchange". www.businesswire.com. Retrieved 2017-07-17. 
  4. ^ "SemGroup emerges from bankruptcy - News - OIPA". www.oipa.com. Retrieved 2017-07-17. 
  5. ^ "The 35 Largest US Private Companies". CNN. May 28, 2008. 
  6. ^ "SemGroup founders settle lawsuit | Turnaround Consulting | Financial Advisory | MorrisAnderson". www.morrisanderson.com. Retrieved 2017-07-17. 
  7. ^ John Stancavage (2007-07-09). "SemGroup nears IPO". Tulsa World. Retrieved 2007-07-09. 
  8. ^ Rod Walton, "Nasdaq will delist SGLP," " Tulsa World, February 19, 2009.
  9. ^ https://www.businesswire.com/news/home/20101109007604/en/SemGroup-Corporation-Trading-New-York-Stock-Exchange
  10. ^ "SemGroup Chapter 11 Petition" (PDF). PacerMonitor. PacerMonitor. Retrieved 9 June 2016. 
  11. ^ forbes.com "Did Goldman Goose Oil?" - March 25, 2009
  12. ^ Jones, Dow (2008-07-23). "SemGroup Files for Bankruptcy". The New York Times. ISSN 0362-4331. Retrieved 2017-06-15. 
  13. ^ Writer, ROD WALTON World Staff. "Business brawler?". Tulsa World. Retrieved 2017-06-16. 
  14. ^ Reports, Staff and Wire. "SemGroup executives sue Catsimatidis". Tulsa World. Retrieved 2017-06-16. 
  15. ^ Writer, ROD WALTON World Staff. "Kivisto is sued over use of funds". Tulsa World. Retrieved 2017-06-16. 
  16. ^ "SemGroup examiner pins collapse on former execs". Reuters. April 16, 2009. Retrieved 2017-06-15. 
  17. ^ Writer, ROD WALTON World Staff. "SemGroup suitor drops out". Tulsa World. Retrieved 2017-06-16. 
  18. ^ "Catsimatidis to support SemGroup reorganization", Reuters, July 20, 2009.
  19. ^ Writer, ROD WALTON World Staff. "SemGroup emerges from Chapter 11 bankruptcy". Tulsa World. Retrieved 2017-06-15. 
  20. ^ Rod Walton, "Blueknight steps to center stage: The heir to the Tulsa energy company sheds its former name", Tulsa World, December 2, 2009.
  21. ^ Writer, ROD WALTON World Staff. "SemGroup Corp. to begin trading on NYSE on Thursday". Tulsa World. Retrieved 2017-06-15. 
  22. ^ Rod Walton, "SemGroup duo ring NYSE opening bell", Tulsa World, December 17, 2010.
  23. ^ 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.
  24. ^ Shira Ovide, "Michael Dell’s Investment Firm Rails Against ‘Self-Dealing’ Energy Deal", The Wall Street Journal, December 17, 2010.
  25. ^ Rod Walton, "Blueknight investor attacks restructuring deal", Tulsa World, December 21, 2010.
  26. ^ a b "Tulsa-based Semgroup to sell asphalt business for $70 million". NewsOK.com. 2018-01-09. Retrieved 2018-05-01. 
  27. ^ a b "PLUGGING IN: Oklahoma energy briefs for April 13, 2018". NewsOK.com. 2018-04-13. Retrieved 2018-05-01. 
  28. ^ Creative, Byers. "SemCAMS - SemGroup Corporation". www.semgroupcorp.com. Retrieved 2017-06-15. 
  29. ^ "The Houston Fuel Oil Terminal : A look at the Gulf Coast's largest oil terminal". www.ogfj.com. Retrieved 2017-07-17. 
  30. ^ Creative, Byers. "Rose Rock - SemGroup Corporation". www.semgroupcorp.com. Retrieved 2017-06-15. 
  31. ^ John Stancavage, "SemGroup announces new president, board of directors", Tulsa World, September 9, 2009.
  32. ^ "Stocks". Bloomberg.com. Retrieved 2017-06-14. 
  33. ^ "SemGroup Selects Thomas R. McDaniel as New Chairman Following Retirement of John Chlebowski - Oklahoma Energy Today". Oklahoma Energy Today. 2016-12-15. Retrieved 2017-06-14. 

External links[edit]