SemGroup Energy reports $3.5 million second quarter net loss

Aug 25, 2009 (Tulsa World - McClatchy-Tribune Information Services via COMTEX) -- SGLP | Quote | Chart | News | PowerRating -- 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.

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 added. "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 total second-quarter revenues, compared with only 11 percent for

the same time last year.

SGLP avoided the bankruptcy fate that befell SemGroup LP, but the former subsidiary faces its own challenges. The public firm 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 will not pay out a 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 the Nasdaq exchange due to the lack of reporting but now may be on target to request a relisting, according to reports.

SGLP executives have not held a conference call to discuss the earnings report. The company has not held any conference calls for media or analysts since August 2008.

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

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