Sem Group meltdown

[Bat Bat]

The SemGroup Brief

SemGroup Downfall May Be At The Center Of Mayor's Recent Actions

What did the Mayor know about SemGroup's collapse and when and what actions did she take as a result?  Why did the Mayor in a veil of secrecy agree to have the City added to a four plus year old lawsuit so the City could pay the Bank of Oklahoma the full value of a loan gone bad for which the City was under no obligation to pay?  Why settle for the full value of $7.1 million?  Why now?  Why did the Mayor push to have the City Council approve the new downtown ball park on July 10, 2008?  Why could the decision not have been deferred a week until July 17, 2008 as a number of City Councilors suggested?  Why was the contribution amount of each donor for the new downtown ball park not made public prior to the City Council vote on July 10, 2008?  Why was the exclusive period with the Drillers extended the day before the public became aware of the SemGroup demise?

The answer may be that Mayor knew that SemGroup was coming unraveled, that she knew SemGroup had committed a little over $7 million to the construction of the downtown ball park, that knew that SemGroup would not be able to live up to such commitment and that such fact would be made public by the middle of this past week (prior to the July 17, 2008 City Council meeting), that she knew that she needed to get the financing mechanism for the ball park approved by the City Council before SemGroup's demise became public, and that she knew that she needed to find someone to step-in and pick-up SemGroup's commitment.  While the last leg of this answer has yet to be fulfilled, it could easily be foreseen that the Bank of Oklahoma may step-up and assume SemGroup's approximate $7 million ball park commitment albeit with $7.1 million in taxpayer's money.

Far fetched?  Hardly, considering how obsessive the Mayor is with downtown revitalization and her own political legacy, how much time and effort the Mayor and other officers and directors of the Bank of Oklahoma have invested in building a ball park downtown, that the Bank of Oklahoma carried a substantial portion of SemGroup's debt and was in a position to know of SemGroup's liquidity problems far in advance of the public, that SemGroup's CEO served on the Board of Directors of Bank of Oklahoma (until this past Wednesday when he resigned, but such fact was not made available to the public until late Friday afternoon), that such public company Board resignations do not happen over a period of a day or two but are often well thought out and planned (usually months in advance) by the company and the remainder of the Board, that SemGroup's CEO serves on the Mayor's advisory committee, and that the Mayor was a former Board member of the Bank of Oklahoma.

--------------------

Regardless of whether or not The SemGroup Brief is true, there are questions that need to be answered.  Who is stepping into SemGroup's shoes for its donation to Driller's stadium?  The Bank of Oklahoma?  The taxpayers?  The property owners within the IDL?  How does the final agreement between the city and the Drillers provide for contingencies such as a donor failing to make their contribution?  The bottom line is that we don't want this to become another Great Plains Airlines where the taxpayers are left holding the bag.

[RecycleMichael]

The names of the donors were released and printed by the Tulsa World before all this happened. SemGroup was not on the list.

[Bat Bat]

As reported in the Tulsa World on the 19th:

SemGroup is also a major donor for a proposed downtown ballpark project that includes a multipurpose stadium to house the Tulsa Drillers, the city's Double-A baseball team.

Kivisto and SemGroup had discussed but not committed to a $7.5 million contribution and naming rights for the stadium, said Tulsa Mayor Kathy Taylor.

[cannon_fodder]

SemGroup was listed as a donor several times RM:
"SemGroup is also a major donor for a proposed downtown ballpark project that includes a multipurpose stadium to house the Tulsa Drillers, the city's Double-A baseball team. "

http://www.tulsaworld.com/news/article.aspx?articleID=20080719_11_A1_spancl898497

There were listed before in passing with big lists.  They never have released any levels of donations for most of them. I really hope SemGroup pulls through and continues their community support.

[FOTD]

Agreed CF. Time for calm and not the time to go double posting battie all over TNF.

[RecycleMichael]

A local company wanted to contribute, but couldn't because of their own cash/credit issues. Other contributors could commit.

I guess I don't understand the why people think there is something there.

[cannon_fodder]

SGLP's board (publicly traded subsidiary) has been taken over by creditors Manchester Securities and Alerian Capital Management:
http://biz.yahoo.com/ap/080721/semgroup_energy_partners_investors.html?.v=1

The board:
2 from Manchester
1 from Alerian
2 from SemGroup LP

[Conan71]

Aside from an over-ambitious appetite for acqusitions and looking like they got pinched on falling oil prices, I have a hard time believing there is anything sinister there.  I'd wondered a few times about the meteoric rise and sudden prominence in the community.

Then again, I thought there was no way there would have been accounting shenanigans at CFS when word first leaked they had problems.  I've still not heard anything about job status at SEM.  FAIK, all their terminal personnel we deal with are still there and have not had hints of being let go.

As far as tangible assets, they've bought a lot of pipeline, tanks, and asphalt terminals.  Of course, it looks like those are all likely encumbered assets so any liquidation is likely only going to benefit a few note holders.

[dbacks fan]

quote:Originally posted by Bat Bat

As reported in the Tulsa World on the 19th:

SemGroup is also a major donor for a proposed downtown ballpark project that includes a multipurpose stadium to house the Tulsa Drillers, the city's Double-A baseball team.

Kivisto and SemGroup had discussed but not committed to a $7.5 million contribution and naming rights for the stadium, said Tulsa Mayor Kathy Taylor.

Anybody remember the Robert Sutton Stadium issue?

[Renaissance]

Ha, wow--the vultures are circling already:

http://www.marketwatch.com/news/story/roy-jacobs--associates-announces/story.aspx?guid=%7BA783526B-942E-45E1-9091-01E5C558D118%7D&dist=hppr

Amazing how fast plaintiffs' attorneys will detect and go after a company on the ropes.  Although I guess it's a living--securities fraud litigation can be very lucrative.

[cannon_fodder]

quote:That's all I can find as proof of hard loans. BOKF is a public company, if they foresee a massive loss they are likely to issue a warning. Lest they face a shareholder suit and probably SEC investigation (like SeMGroup) :
http://www.marketwatch.com/news/story/roy-jacobs--associates-announces/story.aspx?guid=%7BA783526B-942E-45E1-9091-01E5C558D118%7D&dist=hppr

Beat you to it by 3 days.  Bwahahahaaa!  [^]

[Friendly Bear]

quote:Originally posted by Floyd

Ha, wow--the vultures are circling already:

http://www.marketwatch.com/news/story/roy-jacobs--associates-announces/story.aspx?guid=%7BA783526B-942E-45E1-9091-01E5C558D118%7D&dist=hppr

Amazing how fast plaintiffs' attorneys will detect and go after a company on the ropes.  Although I guess it's a living--securities fraud litigation can be very lucrative.

Breaking News:

Mayor Kathy Taylor has agreed to add the City of Tulsa as a Defendant in the class action lawsuit filed this week against defendant SemGroup.  

She will personally negotiate a settlement in a amount not to exceed the amount of the claim.

News at 10:00.

[]

[HazMatCFO]

Margin call boys.. All accounts settled at the end of the day without exceptions.

http://www.youtube.com/watch?v=djoU_l_IECo&feature=related

[cannon_fodder]

SemGroup hedged it's oil trading with a Short of 500,000 barrel at $96.  Contracts it had to buy at $147 per barrel.  The latest news is Moody's has further downgraded SemGroups debt (to B2, or a 5 on a 19 point scale) - making it even harder to get our of this mess.

Also, BOk financial had $130,000,000.00 in exposure to SemGroup at the end of 2007.

Yet another firm has filed a class action suit against SemGroup LP (parent) for market manipulation.
http://uk.reuters.com/article/wtMostRead/idUKN2144018120080721


The publicly traded company (SemGroup Energy Partners, SGLP) has a conference call today at 10AM.
http://www.tradingmarkets.com/.site/news/Stock%20News/1772137/

One source is reporting creditors have seized control of the board at the parent company, but that is incorrect and attributed to name confusion.
http://www.smallcapinvestor.com/articles/07212008-semgroup_energy_jumps_20_on_news_parent_company_taken_o
The official press release and SEC filing indicate it was the subsidiary SGLP that has been taken over:
http://www.semgrouplp.com/newsandmedia/pressreleases/pressreleasedetail.aspx?id={E9E469F3-A213-4D70-A412-C4746403568E}

[Friendly Bear]

quote:Originally posted by cannon_fodder

SemGroup hedged it's oil trading with a Short of 500,000 barrel at $96.  Contracts it had to buy at $147 per barrel.  The latest news is Moody's has further downgraded SemGroups debt (to B2, or a 5 on a 19 point scale) - making it even harder to get our of this mess.

Also, BOk financial had $130,000,000.00 in exposure to SemGroup at the end of 2007.

Yet another firm has filed a class action suit against SemGroup LP (parent) for market manipulation.
http://uk.reuters.com/article/wtMostRead/idUKN2144018120080721


The publicly traded company (SemGroup Energy Partners, SGLP) has a conference call today at 10AM.
http://www.tradingmarkets.com/.site/news/Stock%20News/1772137/

One source is reporting creditors have seized control of the board at the parent company, but that is incorrect and attributed to name confusion.
http://www.smallcapinvestor.com/articles/07212008-semgroup_energy_jumps_20_on_news_parent_company_taken_o
The official press release and SEC filing indicate it was the subsidiary SGLP that has been taken over:
http://www.semgrouplp.com/newsandmedia/pressreleases/pressreleasedetail.aspx?id={E9E469F3-A213-4D70-A412-C4746403568E}

Reuters News Service reported today that Moody's had downgraded the debt of Sem Group to Junk Bond status.

"Moody's Investors Service downgraded SemGroup debt for the second time in a week on Monday, citing concern over SemGroup's ability to raise funds in the current credit crunch.

The rating agency also questioned the size of SemGroup's energy-hedging program and suggested SemGroup may have shorted more oil than necessary to hedge its normal trading business.

"It would appear that SemGroup's cash margin requirements exceed what Moody's would have expected given the scale and other characteristics of SemGroup's hedged trading activity in the past," Moody's analyst Andrew Oram said in a release.

SemGroup officials were not available to comment"

Translation of: Shorted more oil than necessary to hedge its normal trading business = GAMBLE.

Here's the Link:

http://www.reuters.com/article/marketsNews/idINN2144018120080721?rpc=44