SemGroup Energy Partners, L.P. ("SGLP") (Pink Sheets: SGLP) today
announced a net loss of $2.9 million, or $0.08 per basic and diluted
common unit, on total revenues of $40.0 million, for the three months
ended September 30, 2009. For the nine months ended September 30, 2009,
SGLP announced a net loss of $8.0 million, or $0.23 per basic and
diluted common unit, on total revenues of $119.7 million.
These results compare to a net loss of $11.9 million and net income of
$19.5 million on revenues of $53.8 million and $149.3 million for the
three and nine months ended September 30, 2008, respectively.
SGLP generated $14.1 million and $45.0 million in earnings before
interest, taxes, depreciation and amortization, or EBITDA, for the three
and nine months ended September 30, 2009, respectively. This EBITDA is
inclusive of certain expenses totaling $3.0 million and $10.1 million
for the three and nine months ended September 30, 2009, respectively,
related primarily to incremental professional and legal expenses
associated with the bankruptcy of SemGroup, L.P. (the "Private Company")
and the reconstruction of SGLP's business following the Private
Company's bankruptcy. These expenses are expected to be nonrecurring.
EBITDA is a non-generally accepted accounting principles (or "non-GAAP")
financial measure that is explained and reconciled to net income (loss)
later in this press release.
Net income (loss) and EBITDA continue to be impacted by decreased
revenues in the Crude Oil Gathering and Transportation and Asphalt
Services segments. Revenues in the Crude Oil Gathering and
Transportation segment have been significantly impacted by the Private
Company's bankruptcy filing which has led to decreased volumes being
transported. Historically, the Private Company was a purchaser of crude
oil and utilized SGLP's gathering and transportation assets to deliver
its crude oil to market. As SGLP is not in the business of purchasing
crude oil, the utilization of SGLP's crude oil gathering and
transportation assets is now dependent on third party purchasers of
crude oil, some of whom own alternative gathering and transportation
assets.
Further, revenues in the Asphalt Services segment were impacted by the
Private Company's rejection of the Terminalling Agreement effective
March 31, 2009, and the timing of SGLP's entering into new leases and
storage agreements with third party customers in the middle of the
second quarter of 2009.
The negative revenue impacts were partially offset by comparable
year-over-year revenues from the Crude Oil Terminalling and Storage
segment which reflect continued strong demand for crude oil storage.
General and administrative expenses decreased $20.1 million and $10.3
million for the three and nine months ended September 30, 2009,
respectively, as compared to similar periods in 2008. General and
administrative expenses for the three and nine months ended September
30, 2008 include an incremental $18.0 million of non-cash compensation
expense due to the vesting of all outstanding awards under SGLP's Long
Term Incentive Plan resulting from the change of control of SGLP's
general partner that occurred in July of 2008. This decrease was
partially offset in the three months ended September 30, 2009 by
increased costs related to legal and financial advisers as well as other
related costs incurred in connection with events related to the Private
Company's bankruptcy, the securities litigation and governmental
investigations, and our efforts to enter into storage contracts with
third party customers and pursue other strategic opportunities.
Interest expense increased by $0.2 million and $19.8 million for the
three and nine months ended September 30, 2009, respectively compared to
similar periods in 2008. The increase was primarily due to both an
increase in average borrowings outstanding as a result of our financing
of the purchase of pipeline and storage assets from the Private Company
in early 2008 and higher interest rates under our amended credit
facility.
On October 8, 2009, SGLP announced that Vitol, Inc. entered into an
agreement to purchase the general partner of SGLP. Vitol Inc. is the
principal U.S. subsidiary of the Vitol Group. Vitol is engaged in the
global physical supply and distribution of crude oil, petroleum
products, coal, natural gas, and other commodities. Vitol was founded in
1966, and is headquartered in the Netherlands. Vitol moves over 5
million barrels of crude oil and petroleum products every day throughout
the world, charters more than 3,000 ships annually and had annual
revenues of $191 billion in 2008.
Kevin Foxx, President and Chief Executive Officer of SGLP's general
partner, stated, "Third quarter results and the pending change of
control of our general partner are anticipated to further stabilize our
transportation and storage business. We expect the Vitol transaction to
close in the near future after consent is received from our lenders and
look forward to the new era with Vitol as the owner of our general
partner. Lastly, we are pleased to announce that we are changing our
name to Blueknight Energy Partners, L.P. and expect the change to become
effective on December 1, 2009. We are extremely excited to continue our
business as Blueknight Energy Partners and expanding our presence under
a new flag and leadership. We will update information regarding our
ticker symbol as soon as a new one has been assigned to us."
About SGLP
SGLP owns and operates a diversified portfolio of complementary
midstream energy assets consisting of approximately 8.2 million barrels
of crude oil storage located in Oklahoma and Texas, approximately 6.7
million barrels of which are located at the Cushing, Oklahoma
interchange, approximately 1,150 miles of crude oil pipeline located
primarily in Oklahoma and Texas, over 200 crude oil transportation and
oilfield services vehicles deployed in Kansas, Colorado, New Mexico,
Oklahoma and Texas and approximately 7.4 million barrels of combined
asphalt and residual fuel storage located at 46 terminals in 23 states.
SGLP provides crude oil terminalling and storage services, crude oil
gathering and transportation services and asphalt services. SGLP is
based in Tulsa, Oklahoma. For more information, visit SGLP's web site at www.SGLPEnergy.com.
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Forward-Looking Statements
This news release includes forward-looking statements. Statements
included in this press release that are not historical facts (including
any statements concerning the Vitol transaction, expectations relating
to SGLP's asphalt facilities and any statements concerning plans and
objectives of management for future operations or economic performance,
or assumptions related thereto) are forward-looking statements. Such
forward-looking statements are subject to various risks and
uncertainties. These risks and uncertainties include, among other
things, uncertainties relating to bankruptcy filings of the Private
Company, uncertainties relating to future operations of SGLP's asphalt
operations, uncertainties relating to pursuing strategic alternatives
for SGLP's business, insufficient cash from operations, market
conditions, governmental regulations and factors discussed in SGLP's
filings with the Securities and Exchange Commission. If any of these
risks or uncertainties materializes, or should underlying assumptions
prove incorrect, actual results or outcomes may vary materially from
those expected. SGLP undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Use of Non-GAAP Financial Measures
This press release includes the non-GAAP financial measure of EBITDA. A
Reconciliation of this non-GAAP financial measure to its most directly
comparable financial measure calculated and presented in accordance with
United States generally accepted accounting principles is included in
the table below. EBITDA should not be considered as an alternative to
GAAP measures such as net income, operating income, net cash flows
provided by operating activities or any other GAAP measure of liquidity
or financial performance. SGLP defines EBITDA as net income or loss
before interest, income taxes, depreciation and amortization. EBITDA is
presented because it provides additional information with respect to the
expected performance of SGLP's fundamental business, as well as its
ability to meet future debt service, capital expenditures and working
capital requirements.
The following table presents a reconciliation of EBITDA to net income
(loss) for the periods shown:
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2008 |
|
2009 |
|
2008 |
|
2009 |
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(11,851
|
)
|
|
$
|
(2,859
|
)
|
|
$
|
19,503
|
|
$
|
(7,978
|
)
|
Add: Interest expense
|
|
|
11,041
|
|
|
|
11,242
|
|
|
|
15,905
|
|
|
35,742
|
|
Income taxes
|
|
|
59
|
|
|
|
51
|
|
|
|
227
|
|
|
159
|
|
Depreciation and amortization
|
|
|
5,814
|
|
|
|
5,644
|
|
|
|
15,587
|
|
|
17,055
|
|
EBITDA |
|
$
|
5,063
|
|
|
$
|
14,078
|
|
|
$
|
51,222
|
|
$
|
44,978
|
|
|
|
|
|
|
|
|
|
|
Results of Operations
The following table summarizes the financial results for the three and
nine months ended September 30, 2008 and 2009:
|
|
Three Months ended |
|
Nine Months ended |
|
|
September 30, |
|
September 30, |
|
|
2008 |
|
2009 |
|
2008 |
|
2009 |
|
|
|
|
|
|
|
Service revenues:
|
|
|
|
|
|
|
|
|
Crude oil terminalling and storage revenues:
|
|
|
|
|
|
|
|
|
Third party
|
|
$
|
4,661
|
|
|
$
|
10,286
|
|
|
$
|
5,672
|
|
$
|
30,604
|
|
Related party
|
|
|
6,666
|
|
|
|
715
|
|
|
|
26,361
|
|
|
2,571
|
|
Total crude oil terminalling and storage
|
|
|
11,327
|
|
|
|
11,001
|
|
|
|
32,033
|
|
|
33,175
|
|
Crude oil gathering and transportation revenues:
|
|
|
|
|
|
|
|
|
Third party
|
|
|
10,910
|
|
|
|
13,254
|
|
|
|
20,548
|
|
|
41,391
|
|
Related party
|
|
|
10,668
|
|
|
|
279
|
|
|
|
47,628
|
|
|
1,689
|
|
Total crude oil gathering and transportation
|
|
|
21,578
|
|
|
|
13,533
|
|
|
|
68,176
|
|
|
43,080
|
|
Asphalt revenues:
|
|
|
|
|
|
|
|
|
Third party
|
|
|
-
|
|
|
|
15,481
|
|
|
|
2
|
|
|
21,630
|
|
Related party
|
|
|
20,889
|
|
|
|
4
|
|
|
|
49,073
|
|
|
21,817
|
|
Total asphalt
|
|
|
20,889
|
|
|
|
15,485
|
|
|
|
49,075
|
|
|
43,447
|
|
Total revenues
|
|
|
53,794
|
|
|
|
40,019
|
|
|
|
149,284
|
|
|
119,702
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Crude oil terminalling and storage
|
|
|
991
|
|
|
|
1,552
|
|
|
|
4,759
|
|
|
5,081
|
|
Crude oil gathering and transportation
|
|
|
16,212
|
|
|
|
14,038
|
|
|
|
51,334
|
|
|
43,143
|
|
Asphalt
|
|
|
10,165
|
|
|
|
8,889
|
|
|
|
24,312
|
|
|
23,201
|
|
Total operating expenses
|
|
|
27,368
|
|
|
|
24,479
|
|
|
|
80,405
|
|
|
71,425
|
|
|
|
|
|
|
|
|
|
|
Gain on settlement transaction
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
2,585
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses:
|
|
|
27,177
|
|
|
|
7,106
|
|
|
|
33,244
|
|
|
22,939
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(751
|
)
|
|
|
8,434
|
|
|
|
35,635
|
|
|
27,923
|
|
Interest expense
|
|
|
11,041
|
|
|
|
11,242
|
|
|
|
15,905
|
|
|
35,742
|
|
Income tax expense
|
|
|
59
|
|
|
|
51
|
|
|
|
227
|
|
|
159
|
|
Net income (loss)
|
|
$
|
(11,851
|
)
|
|
$
|
(2,859
|
)
|
|
$
|
19,503
|
|
$
|
(7,978
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average number of units:
|
|
|
|
|
|
|
|
|
Common units
|
|
|
21,426
|
|
|
|
21,557
|
|
|
|
20,015
|
|
|
21,557
|
|
Subordinated units
|
|
|
12,571
|
|
|
|
12,571
|
|
|
|
12,571
|
|
|
12,571
|
|
Restricted and phantom units
|
|
|
641
|
|
|
|
480
|
|
|
|
552
|
|
|
472
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per common unit
|
|
$
|
(0.33
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
0.50
|
|
$
|
(0.23
|
)
|
Basic and diluted net income (loss) per subordinated unit
|
|
$
|
(0.33
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
0.50
|
|
$
|
(0.23
|
)
|
SGLP Investor Relations
Mike Brochetti, 918-237-4032
investor@sglpenergy.com
Posted on Fri, November 13, 2009
by bkep