SemGroup Corporation to Acquire Mississippi Lime Midstream Assets From
Chesapeake Energy Corporation for $300 Million
Assets Include 400 mmcfd of Processing Capacity in Core Producing Area
Acquisition Increases Future Drop Down Asset Inventory to Rose Rock Midstream
TULSA, Okla., May 1, 2013 (GLOBE NEWSWIRE) -- SemGroup^® Corporation
(NYSE:SEMG) today announced that it has executed a definitive agreement to
acquire the equity interests of Mid-America Midstream Gas Services, L.L.C., a
wholly owned subsidiary of Chesapeake Energy Corporation (NYSE:CHK), which is
the owner of gas gathering and processing assets in the Mississippi Lime play
for $300 million in cash. The transaction is expected to close by the third
quarter of 2013 and is subject to certain regulatory approvals and closing
*200 miles of gathering pipeline;
*Rose Valley I plant: 200 mmcfd cryogenic processing plant, expected to be
operational first quarter 2014;
*Rose Valley II plant: 200 mmcfd cryogenic processing plant, expected to be
operational first quarter 2016;
*Approximately 540,000 net acre dedication in the core of the Mississippi
Lime play, supported by a recently announced joint venture between
Chesapeake Energy Corporation and Sinopec International Petroleum
Exploration and Production Corporation; and
*Chesapeake Energy Corporation has committed to a 20-year, 100% fee-based,
gas gathering and processing agreement.
"We are very excited about the acquisition of these key assets. These assets
are positioned for exceptional growth and will significantly increase our
strategic position in the Mississippi Lime play," said Norm Szydlowski,
president and chief executive officer of SemGroup. "This purchase expands our
scale in highly attractive, liquids-rich areas with strong producer activity
and organic growth opportunities, while adding to our future inventory of drop
down assets for Rose Rock Midstream."
Rose Valley plants I and II require approximately $125 million of additional
capital expenditures for completion, as well as additional capital related to
future well connects. Combined with our existing facilities, SemGroup will
have a total processing capacity of 600 mmcfd in Northern Oklahoma and with
approximately 655,000 net acre dedications within the core of the Mississippi
Lime play, opportunity to further grow as production increases.
SemGroup will fund the acquisition under existing committed credit facilities.
LCT Capital, LLC and Citi acted as financial advisors to SemGroup.
The company will be hosting its first quarter earnings call May 9, 2013.
Interested parties are invited to listen to the call with management regarding
the acquisition and first quarter 2013 results at 11:00 AM Eastern by dialing
877.359.3652 (International 720.545.0014), passcode 34090290 or by logging on
to the webcast at ir.semgroupcorp.com.
Based in Tulsa, OK, SemGroup^® Corporation (NYSE:SEMG) is a publicly traded
midstream service company providing the energy industry the means to move
products from the wellhead to the wholesale marketplace. SemGroup provides
diversified services for end-users and consumers of crude oil, natural gas,
natural gas liquids, refined products and asphalt. Services include
purchasing, selling, processing, transporting, terminalling and storing
SemGroup®, is a registered trademark of SemGroup Corporation
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 states with the majority of its assets strategically located
in or connected to the Cushing, Oklahoma crude oil marketing hub.
Certain matters contained in this Press Release include "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. We make these forward-looking statements in reliance on the safe
harbor protections provided under the Private Securities Litigation Reform Act
All statements, other than statements of historical fact, included in this
Press Release, including the prospects of our industry, our anticipated
financial performance, management's plans and objectives for future
operations, business prospects, 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, our ability to comply with the covenants contained in and maintain certain
financial ratios required by our credit facilities;any sustained reduction in
demand for the petroleum products we gather, transport, process and store; our
ability to obtain new sources of supply of petroleum products; our failure to
comply with new or existing environmental laws or regulations or cross border
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
CONTACT: Investor Relations:
Mary Catherine Ward
SemGroup Corporation logo
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