Sem Group meltdown

[Conan71]

quote:Originally posted by inteller

quote:Originally posted by Floyd

quote:Originally posted by inteller

quote:Originally posted by tulsacyclist

cannon_fodder, I appreciate all of the research/info you're sharing here. It's helping me make a little more sense of it all.

well I hope it all brings you solace because Kaiser's house of cards is getting pretty wobbly.  If the qui tam suit is successful in getting our 7.1 mil back I know a loan officer or two over there that will be going to jail.

the most ridiculous thing is BoK will probably sell williams various semgroup assets for a song.  which would be highly ironic because if I remember correctly semgroup bought some williams assets when they were near bankruptcy.

Who's filing a qui tam?

Sutton, Davis & Staggs Law Office 91st/Yale

Sutton- that's ironic since we were talking about Sutton Driller's stadium on this thread as well.  I'm sure no relation.

It's not that unusual for energy/petroleum infrastructure/transportation/storage companies to buy and sell assets back and forth.  I can't even tell you how many times SEM's terminal at POC has been sold in the last 20 years.

Koch might be a player in buying back some assets.

BOK wobbly or a house of cards, I don't think so.  SEM was a house of cards.

FWIW, I was yanking your chain on Samson.

[inteller]

well, if you are going to come forward with speculation, at least have a SemGroup Brief or something.

[Conan71]

quote:Originally posted by inteller

well, if you are going to come forward with speculation, at least have a SemGroup Brief or something.

[}:)]

Well, yeah, donating money to stadiums, spreading the love around with the arts, guilt by association.

Interesting factoid: SEM is the owner of a former Enron property out at the Port and probably many other former Enron assets.

[inteller]

quote:Originally posted by Conan71

quote:Originally posted by inteller

well, if you are going to come forward with speculation, at least have a SemGroup Brief or something.

[}:)]

Well, yeah, donating money to stadiums, spreading the love around with the arts, guilt by association.

Interesting factoid: SEM is the owner of a former Enron property out at the Port and probably many other former Enron assets.

they don't call it SemRon for nothing.

hopefully this will get national attention that NOTHING has changed since Enron.

[cannon_fodder]

Lets keep the rumors in check please. There are people that read this that work at BOK or Samson, that don't need stress from some internet rumor that is unfounded.  There are other's that just care about the community that don't need to worry either.

- - -
I've found no Samson rumor.  As a exploration/production company the risk factor is WAY, WAY lower than energy trading/transport.    I call BS on whatever you heard - unless it's naming rights or stepping up philanthropically somehow.
- - -

Per BOk as a deck of cards, I also call BS.  Financial companies are heavily regulated.  This isn't a hedge fund, an investment group, or less regulated company.  It's an FDIC bank.

Go look at their financials.  Barring unheard of bank-fraud they are on firm footings.  It's stock has taken a decent hit lately, but not as bad as it's banking peers.
- - -

Per a qui tam suit, I welcome it.  I'm sorry the city/county may have to incur some expense, but ultimately the liability is passed to the "public servant" found culpable.   I'm not familiar enough with such actions to know if Kaiser or BOk would have any real liability (private enterprise is generally not liable for public officials misdeeds), but even if they are on the hook for the full trebble damages and take a $7mil loss on the loan they are out $30,000,000 tops.

Certainly not enough to rock the boat.  Shed a couple officers who made the deal, sure.  But again, DISCOVERY is a beautiful thing.  Public disclosure can sometimes render people to get mighty honest.
- - -

BACK TO SEMGROUP:

Latest looks like they are sheding most of their assets.  The future of the company is in serious doubt as it exists today.  They COULD remain as an asset manager, trading firm, or other player and try to rebuild.  But it is looking like none of their assets will survive as all units have been brought into the Chapter 11 proceedings.

They will lay off some 250 people, most in Tulsa.  They have funding to keep paying them as they unload assets and try to restructure.  Those leaving will get an average severance of $3,500 or so (about one months take home pay for the average employee).  Executives will get TWO YEARS PAY as a severance.

So basically, the people that are actually responsible for running the company into the ground get FAT and send everyone else on the street.  I know that's how it works and that's the contracts that have to be made to attract "big names" to your company, but it still sucks.

SGLP (publicly traded Tulsa based part) will continue to operate and has avoid bankruptcy.  They are searching for new customers and the outlook is uncertain, but not bleak.  Purportedly their services are in great demand.

http://www.tulsaworld.com/news/article.aspx?articleID=20080724_49_A1_Ardtri493783
(most other sources seem to be pulling from the World on the above)

In court yesterday the prospect (RUMOR) of unauthorized trading was raised. Which would effect the criminality of the downfall as well as creditors rights, but would probably not save the company (unless they could show fraud such that the company was not liable, unlikely):
http://uk.reuters.com/article/oilRpt/idUKN2340298220080723

[cannon_fodder]

The Wall Street Journal has run a piece on SemGroup in todays publication:

SemGroup Loses Bets on Oil
http://online.wsj.com/article/SB121685645708379013.html?mod=googlenews_wsj

VERY clearly talks about how they failed and what the overall effects are/will be.

quote:The Tulsa, Okla., company filed for Chapter 11 bankruptcy protection Tuesday, citing among other financial woes a loss of at least $2.4 billion in crude-oil futures. Changes in its hedging strategies coincided with big moves in oil recently.

The company had taken out short positions, or bets that crude prices would fall, as a hedging strategy for oil it intended to move through a subsidiary's pipelines and sell to refiners, according to an affidavit filed in Delaware bankruptcy court by Terrence Ronan, SemGroup's senior vice president, finance.

Then, when oil prices rose, SemGroup moved to "cover" its short positions by taking out equivalent long positions, or bets that oil prices would rise.

Eventually, SemGroup was unable to put up collateral for its swelling bets and sold its futures account to Barclays Capital on July 16, according to the affidavit.

. . .

One theory making the rounds in the market is that as SemGroup's long positions snowballed, so did the oil rally. SemGroup's rapid exit from the market removed a force for upward momentum when the market, under siege from negative U.S. economic indicators, needed it most.

"In the three days surrounding that transfer" to Barclays, crude futures "plunged $15.89...thus, with SemGroup removed from the market, crude oil has been free to fall," wrote Stephen Schork, editor of the Schork Report, a newsletter tracking the oil market.

Interesting take.  They dug a deep hole and kept trying to "dig up" to get out of it.  At least according to that "rumors" on wall street.

[Conan71]

quote:Originally posted by cannon_fodder

I've found no Samson rumor. As a exploration/production company the risk factor is WAY, WAY lower than energy trading/transport. I call BS on whatever you heard - unless it's naming rights or stepping up philanthropically somehow.

Lighten up Francis, I said I was yanking Inteller's chain about six or seven posts back.

[FOTD]

The latest rumor is three or four execs will be facing stiff jail terms.

Tee Kay (rhymes with Ken Lay) will be in jail for some time.

Taking Tulsa down a notch from third to fourth tier. Shed a tear for Tom Terrific.

And remember, it ain't ova til the lady sez DNova......

[OUGrad05]

So what did Samson do?  Donate a bunch of money to the city?  They're a midsize private firm aren't they?

[Conan71]

quote:Originally posted by FOTD

The latest rumor is three or four execs will be facing stiff jail terms.

Tee Kay (rhymes with Ken Lay) will be in jail for some time.

Taking Tulsa down a notch from third to fourth tier. Shed a tear for Tom Terrific.

And remember, it ain't ova til the lady sez DNova......

I believe there will be quite a bit more investigation before anyone connected to this will be given their due process THEN may face stiff sentencing.  That's the general order our justice system works in.

[Conan71]

quote:Originally posted by OUGrad05

So what did Samson do?  Donate a bunch of money to the city?  They're a midsize private firm aren't they?

Okay, pay attention to previous posts:

THE SAMSON COMMENT WAS AN INNOCUOUS COMMENT TO YANK INTELLER'S CHAIN!

[OUGrad05]

quote:Originally posted by Conan71

quote:Originally posted by OUGrad05

So what did Samson do?  Donate a bunch of money to the city?  They're a midsize private firm aren't they?

Okay, pay attention to previous posts:

THE SAMSON COMMENT WAS AN INNOCUOUS COMMENT TO YANK INTELLER'S CHAIN!

Wakeup on the wrong side of the bed this morning?

[MacGyver]

quote:Originally posted by cannon_fodder

 

As a exploration/production company the risk factor is WAY, WAY lower than energy trading/transport.  

Cannon Fodder,  

That is an interesting perspective.  

When you consider that Transport/Trading is buying and selling known quantities of known product at known prices with the benefit of a smorgasbord of financial tools to mitigate all kinds of exposure whereas Exploration/Production involves spending unknown quantities of money to attempt to reach a specific location in a zone with a terminal geometry that is somewhat unpredictable, to achieve unknown rates of production that will be sold at unknown prices, my take is that risk is clearly greater in production.  

If risk was a concern, I'd rather be in the oil buying business instead of exploration/production.  

I can see that some greedy fools could use those same risk-avoidance tools to ratchet up their return (and risk), but fundamentally, there should be much less risk in trading/gathering.

What's your take?

M

[Double A]

quote:Originally posted by 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.

[]

LOL, post of the month. Sem group is just another victim in a long list of incompetent, corrupt CEO's. Anybody remember Willtell? Bumgarner ran that into the ground, dumped his stock, and left with a golden parachute while being praised as a generous benefactor. This is a Tulsa tradition, it's nothing new.

[deinstein]

quote:Originally posted by kylieosu

Ironically, Kivisto just won ABoT's best business leader award this week:

Business Leader

Tom Kivisto

Tom Kivisto is the CEO, president and co-founder of the Tulsa-based international crude oil service company SemGroup. He was featured in one of our cover stories in May, just after his company sponsored the LPGA Championship. Along with his business acumen and golf patronage, Kivisto is also a modest but avid benefactor of Project Single Parent, the Tulsa Ballet and a host of other endeavors in both charity and art.

Close Calls:

Chet Cadieux

George Kaiser

Elliott Nelson

Classic Urban Tulsa. Flavor of the week. I read Bates and close that junk with the quickness.