Rose Rock Midstream, L.P. Reports Third Quarter 2012 Results

Rose Rock Midstream, L.P. Reports Third Quarter 2012 Results

Third Quarter Adjusted EBITDA Increased 9% Over Previous Quarter

TULSA, Okla., Nov. 8, 2012 (GLOBE NEWSWIRE) -- Rose Rock Midstream, L.P.
(NYSE:RRMS) today announced its financial results for the three months ended
September 30, 2012.

Rose Rock Midstream reported third quarter 2012 Adjusted EBITDA of $9.5
million, up 9% from second quarter 2012 of $8.7 million, and up 15% from the
third quarter 2011 of $8.3 million. The current period results, compared to
second quarter 2012, increased due to strong marketing results and increased
transportation margins.

Adjusted gross margin was $19.2 million for the third quarter of 2012,
compared to $16.8 million for second quarter 2012 and $15.1 million for the
third quarter of 2011. Adjusted gross margin and Adjusted EBITDA, which are
non-GAAP measures, are defined and reconciled to their most directly
comparable GAAP measures below.

Third quarter 2012 net income totaled $6.5 million, compared to $5.1 million
for the second quarter of 2012 and $3.8 million for the third quarter 2011.

Rose Rock Midstream's distributable cash flow for the three months ended
September 30, 2012 was $8.3 million. On October 24, 2012, Rose Rock Midstream
increased the partnership's quarterly cash distribution to $0.3925 per unit
from $0.3825 per unit, effective for the third quarter of 2012, resulting in
an annualized distribution of $1.57 per unit. This is a 2.6% increase over the
second quarter of 2012 and marks the third increase in the distribution to
RRMS limited partner unitholders. The distribution will be paid on November
14, 2012 to all unitholders of record on November 5, 2012. Distributable cash
flow, which is a non-GAAP measure, is defined and reconciled to its most
directly comparable GAAP measure below.

Management is maintaining the company's 2012 Adjusted EBITDA guidance of
between $38 and $40 million and its capital expenditure guidance of $37
million for 2012.

"We were pleased to report a strong quarter and we have increased
distributions for the third time since the IPO," said Norm Szydlowski, chief
executive officer of Rose Rock Midstream's general partner. "We continue to
execute on our organic growth plans and have key assets in place to meet the
rising need for connectivity and efficiency in the midstream market."

Earnings Conference Call

Rose Rock Midstream will host a joint conference call with SemGroup^®
Corporation (NYSE:SEMG) for investors tomorrow, November 9, 2012, at 11 a.m.
EST. The call can be accessed live over the telephone by dialing 877.359.3652,
or for international callers, 720.545.0014. The pass code for the call is
34165494. Interested parties may also listen to a simultaneous webcast of the
conference call by logging onto Rose Rock Midstream's Investor Relations
website at ir.rrmidstream.com. A replay of the webcast will also be available
for a year following the call at ir.rrmidstream.com on the Calendar of
Events-Past Events page. The third quarter 2012 earnings slide deck will be
posted under Presentations.

About Rose Rock Midstream

Rose Rock Midstream, L.P. (NYSE:RRMS) is a growth-oriented Delaware limited
partnership formed by SemGroup^® Corporation (NYSE:SEMG) to own, operate,
develop and acquire a diversified portfolio of midstream energy assets. Rose
Rock Midstream provides crude oil gathering, transportation, storage and
marketing services. Headquartered in Tulsa, OK, Rose Rock Midstream has
operations in six different states with the majority of its assets
strategically located in or connected to the Cushing, Oklahoma crude oil
marketing hub.

The Rose Rock Midstream logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=14817

Non-GAAP Financial Measures

This Press Release and the accompanying schedules include the non-GAAP
financial measures of Adjusted gross margin, Adjusted EBITDA and distributable
cash flow, which may be used periodically by management when discussing our
financial results with investors and analysts. The accompanying schedules of
this Press Release provide reconciliations of these non-GAAP financial
measures to their most directly comparable financial measures calculated and
presented in accordance with generally accepted accounting principles in the
United States of America (GAAP). Adjusted gross margin, Adjusted EBITDA and
distributable cash flow are presented as management believes they provide
additional information and metrics relative to the performance of our
business.

Operating income (loss) is the GAAP measure most directly comparable to
Adjusted gross margin, net income (loss) and cash provided by (used in)
operating activities are the GAAP measures most directly comparable to
Adjusted EBITDA, and net income (loss) is the GAAP measure most directly
comparable to distributable cash flow. Our non-GAAP financial measures should
not be considered as alternatives to the most directly comparable GAAP
financial measures. These non-GAAP financial measures have important
limitations as analytical tools because they exclude some, but not all, items
that affect the most directly comparable GAAP financial measures. You should
not consider Adjusted gross margin, Adjusted EBITDA or distributable cash flow
in isolation or as substitutes for analysis of our results as reported under
GAAP. Because Adjusted gross margin, Adjusted EBITDA and distributable cash
flow may be defined differently by other companies in our industry, our
definitions of these non-GAAP financial measures may not be comparable to
similarly titled measures of other companies, thereby diminishing their
utility.

Management compensates for the limitation of Adjusted gross margin, Adjusted
EBITDA and distributable cash flow as analytical tools by reviewing the
comparable GAAP measures, understanding the differences between Adjusted gross
margin, Adjusted EBITDA and distributable cash flow, on the one hand, and
operating income (loss), net income (loss) and net cash provided by (used in)
operating activities, on the other hand, and incorporating this knowledge into
its decision-making processes. We believe that investors benefit from having
access to the same financial measures that our management uses in evaluating
our operating results.

Forward-Looking Statements

Certain matters contained in this Press Release include "forward-looking
statements."

All statements, other than statements of historical fact, included in this
Press Release including the prospects of our industry, our anticipated
financial performance, including distributable cash flow, management's plans
and objectives for future operations, business prospects, outcome of
regulatory proceedings, market conditions and other matters, may constitute
forward-looking statements. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot assure
you that these expectations will prove to be correct. These forward-looking
statements are subject to certain known and unknown risks and uncertainties,
as well as assumptions that could cause actual results to differ materially
from those reflected in these forward-looking statements. Factors that might
cause actual results to differ include, but are not limited to, insufficient
cash from operations following the establishment of cash reserves and payment
of fees and expenses to pay the minimum quarterly distribution; any sustained
reduction in demand for crude oil in markets served by our midstream assets;
our ability to obtain new sources of supply of crude oil; competition from
other midstream energy companies; our ability to comply with the covenants
contained in and maintain certain financial ratios required by our credit
facility; our ability to access credit markets; our ability to renew or
replace expiring storage contracts; the loss of or a material nonpayment or
nonperformance by any of our key customers; the overall forward market for
crude oil; the possibility that our hedging activities may result in losses or
may have a negative impact on our financial results; hazards or operating
risks incidental to the gathering, transporting or storing of crude oil; our
failure to comply with new or existing environmental laws or regulations; the
possibility that the construction or acquisition of new assets may not result
in the corresponding anticipated revenue increases; as well as other risk
factors discussed from time to time in each of our documents and reports filed
with the SEC.

Readers are cautioned not to place undue reliance on any forward-looking
statements contained in this Press Release, which reflect management's
opinions only as of the date hereof. Except as required by law, we undertake
no obligation to revise or publicly release the results of any revision to any
forward-looking statements.

Condensed Consolidated Balance Sheets
(in thousands, unaudited)
                                       September 30, December 31,
                                        2012          2011
ASSETS                                               
Current assets                          $249,642    $166,582
Property, plant and equipment, net      285,244       276,246
Other noncurrent assets, net            2,665         2,666
Total assets                            $537,551    $445,494
                                                    
LIABILITIES AND PARTNERS' CAPITAL                    
Current liabilities                     $227,131    $140,553
Long-term debt                          69            87
Total liabilities                       227,200       140,640
                                                    
Total partners' capital                 310,351       304,854
Total liabilities and partners' capital $537,551    $445,494



Condensed Consolidated Statements of Income
(in thousands, except per unit amounts, unaudited)
                                                               
                        Three Months Ended              Nine Months Ended
                        September 30,        June 30,   September 30,
                        2012       2011      2012       2012       2011
Revenues, including
revenues from                                                   
affiliates:
Product                  $120,358 $95,430 $146,070 $435,814 $271,824
Service                  11,196     9,142     11,402     32,932     27,077
Other                    —          44        (54)       (59)       220
Total revenues           131,554    104,616   157,418    468,687    299,121
                                                               
Expenses, including
expenses from                                                   
affiliates:
Costs of products sold,
exclusive of             111,790    90,660    140,549    412,847    252,804
depreciation and
amortization shown below
Operating                5,698      4,530     6,221      17,146     13,695
General and              4,081      2,040     2,046      8,830      6,507
administrative
Depreciation and         3,066      3,122     2,999      9,032      8,505
amortization
Total expenses           124,635    100,352   151,815    447,855    281,511
                                                               
Operating income         6,919      4,264     5,603      20,832     17,610
                                                               
Other expenses:                                                 
Interest expense         450        434       477        1,407      1,405
Other expense (income)   —          —         —          72         (202)
Total other expenses     $450     $434    $477     $1,479   $1,203
Net income               $6,469   $3,830  $5,126   $19,353  $16,407
                                                               
General partners'        $129              $103     $387     
interest in net income
Common partners'         $3,170            $2,511.5 $9,483   
interest in net income
Subordinated
unitholders' interest in $3,170            $2,511.5 $9,483   
net income
Earnings per limited                                            
partner unit:
Common unit (basic and   $0.38             $0.30    $1.13    
diluted)
Subordinated unit (basic $0.38             $0.30    $1.13    
and diluted)
Basic weighted average
number of limited                                               
partner units
outstanding:
Common units             8,390               8,390      8,390      
Subordinated units       8,390               8,390      8,390      
Diluted weighted average
number of limited                                               
partner units
outstanding:
Common units             8,409               8,402      8,404      
Subordinated units       8,390               8,390      8,390      


Non-GAAP Reconciliations
(in thousands, unaudited)
                            Three Months Ended            Nine Months Ended
                            September 30,       June 30,  September 30,
                            2012      2011      2012      2012      2011
Reconciliation of operating
income to adjusted gross                                         
margin:
Operating income             $6,919  $4,264  $5,603  $20,832 $17,610
Add:                                                             
Operating expense            5,698     4,530     6,221     17,146    13,695
General and administrative   4,081     2,040     2,046     8,830     6,507
Depreciation and             3,066     3,122     2,999     9,032     8,505
amortization
Less:                                                            
Unrealized gain (loss) on    554       (1,190)   24        432       334
derivatives, net
Adjusted gross margin        $19,210 $15,146 $16,845 $55,408 $45,983
                                                                
Reconciliation of net income                                     
to Adjusted EBITDA:
Net income                   $6,469  $3,830  $5,126  $19,353 $16,407
Add:                                                             
Interest expense             450       434       477       1,407     1,405
Depreciation and             3,066     3,122     2,999     9,032     8,505
amortization
Non-cash equity compensation 79        —         78        218       —
Loss on impairment or sale   —         —         56        56        12
of assets
Provision for (recovery of)
uncollectible accounts       —         (300)     —         —         (900)
receivable
Less:                                                            
Impact from derivative                                           
instruments:
Total gain (loss) on         (631)     (106)     24        (342)     1,313
derivatives, net
Total realized (gain) loss
(cash flow) on derivatives,  1,185     (1,084)   —         774       (979)
net
Non-cash unrealized gain     554       (1,190)   24        432       334
(loss) on derivatives, net
Adjusted EBITDA              $9,510  $8,276  $8,712  $29,634 $25,095
                                                                
Reconciliation of net cash
provided by (used in)                                            
operating activities to
Adjusted EBITDA:
Net cash provided by         $15,446 $20,913 $20,319 $35,525 $47,637
operating activities
Less:                                                            
Changes in assets and        6,296     13,071    11,998    7,037     23,947
liabilities
Add:                                                             
Interest expense, excluding
amortization of debt         360       434       391       1,146     1,405
issuance costs
Adjusted EBITDA              $9,510  $8,276  $8,712  $29,634 $25,095


Non-GAAP Reconciliations (Continued)
(in thousands, unaudited)
                                                        
                                                        Three Months Ended
                                                         September30, 2012
Reconciliation of net income to distributable cash flow: 
Net income                                               $6,469
Add: Interest expense                                    450
Add: Depreciation and amortization                       3,066
EBITDA                                                   9,985
Add: Non-cash equity compensation                        79
Less:                                                    
Unrealized gain (loss) on derivatives, net               554
Adjusted EBITDA                                          $9,510
Less: Cash interest expense                              361
Less: Maintenance capital expenditures                   832
Distributable cash flow                                  $8,317
                                                        
Distribution declared at October 24, 2012^(1)            $6,720
                                                        
Distribution coverage ratio                              1.2x
                                                        

(1)The distribution declared October 24, 2012 represents $0.3925 per unit, or
$1.57 per unit on an annualized basis. This is a 2.6% increase over the prior
quarter.

2012 Adjusted EBITDA Guidance
                                  Revised-2Q 2012 Original
(in millions, unaudited)           Low     High    Low     High
Net income                         $22.8 $24.7 $17.8 $19.7
Add: Interest expense              2.8     2.8     2.8     2.8
Add: Depreciation and amortization 12.4    12.5    12.4    12.5
Adjusted EBITDA                    $38.0 $40.0 $33.0 $35.0

CONTACT: Investor Relations:
         Alisa Perkins
         918-524-8081
         roserockir@rrmidstream.com
        
         Media:
         Liz Barclay
         918-524-8158
         lbarclay@rrmidstream.com

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