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SemGroup Corporation Reports Third Quarter 2013 Results

SemGroup Corporation Reports Third Quarter 2013 Results

                   Increases 2013 Adjusted EBITDA Guidance

   Third Quarter Adjusted EBITDA Increased Nearly 20% Over Previous Quarter

TULSA, Okla., Nov. 11, 2013 (GLOBE NEWSWIRE) -- SemGroup^® Corporation
(NYSE:SEMG) today announced its financial results for the three months ended
September 30, 2013.

SemGroup's adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA) was $52.1 million for the third quarter 2013,
compared to $43.6 million for the second quarter 2013 and $32.9 million for
the third quarter 2012, an increase of nearly 20% and an increase of 58%,
respectively. Adjusted EBITDA, which is a non-GAAP measure, is reconciled to
net income (loss) below.

"SemGroup delivered another quarter of solid results, consecutively increasing
financial performance and exceeding our objectives for 2013," said Norm
Szydlowski, president and chief executive officer of SemGroup. "We have
increased our 2013 Adjusted EBITDA guidance, incorporating our strong
performance to date and favorable market conditions. We continue to execute on
our strategic plans focused on infrastructure demands in the midcontinent
liquids fairway, laying the foundation for long-term sustainable growth and
increased shareholder value."

Third Quarter 2013 Adjusted EBITDA Highlights

Compared to the Second Quarter 2013

  *Crude's results improved slightly due to an increase in marketing volumes
    combined with a partial quarter impact of the Barcas Field Services
    acquisition, offset by a decrease in pipeline transportation margins;
  *SemGas increased by $2.4 million largely driven by a 48% increase in
    processing volumes in the Mississippi Lime play;
  *SemCAMS increased by $3.9 million primarily related to the timing of
    maintenance capital recovery fees and lower operational expenses resulting
    in a $2.3 million increase and approximately $1.4 million of higher
    capital fees from volume growth; and
  *SemMaterials Mexico was increased by $1.5 million primarily from a higher
    demand resulting in a 35% increase in volumes.

SemGroup reported revenues for third quarter 2013 of $357.7 million with net
loss attributable to SemGroup of $1.9 million, or a loss of $0.05 per diluted
share, compared to revenues of $324.2 million with a net income attributable
to SemGroup of $3.6 million, or $0.08 per diluted share, for the second
quarter 2013. For the third quarter 2012, revenues totaled $277.9 million with
net loss attributable to SemGroup of $2.8 million, or a loss of $0.07 per
diluted share. Net income for the third quarter 2013 was down from the prior
quarter related to an equity loss of $3.3 million reported for our interest in
NGL Energy Partners and $3.6 million of costs related to acquisitions.

Dividend

The SemGroup board of directors declared a quarterly cash dividend to common
shareholders of $0.21 per share, resulting in an annualized distribution of
$0.84 per share. This represents a 5% increase from the previous quarterly
dividend of $0.20. The dividend will be paid on December 3, 2013 to all common
shareholders of record on November 22, 2013.

2013 Guidance

Management is raising the company's 2013 consolidated Adjusted EBITDA guidance
to between $180 and $190 million, up from the previous guidance range of $165
million to $175 million. The company is on target to deploy approximately $825
million in capital expenditures in 2013.

Recent Updates

SemGroup announces its intent to pursue an agreement with Rose Rock Midstream
to sell an additional 33.3% interest in SemCrude Pipeline, L.L.C., which owns
a 51 percent interest in White Cliffs Pipeline L.L.C. Following the proposed
transaction SemGroup will retain a 33% interest in SemCrude Pipeline and a 17%
interest in White Cliffs Pipeline.

Rose Rock expects that the acquisition will be accretive to distributable cash
flow, on a per-unit basis for the partnership's unit holders. As contemplated,
Rose Rock would fund the proposed transaction with a combination of debt and
units to SemGroup.

The transaction is subject to execution of an agreement between the two
parties, review and recommendation by the conflicts committee of the general
partner of Rose Rock, and the approval of both company's boards of directors.
The agreement is expected to close by year-end.

Earnings Conference Call

SemGroup will host a joint conference call with Rose Rock Midstream^®, L.P.
(NYSE: RRMS) for investors tomorrow, November 12, 2013, at 11 a.m. ET. 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 78050867.
Interested parties may also listen to a simultaneous webcast of the conference
call by logging onto SemGroup's Investor Relations website at
ir.semgroupcorp.com. A replay of the webcast will also be available for a year
following the call at ir.semgroupcorp.com on the Calendar of Events-Past
Events page. The third quarter 2013 earnings slide deck will be posted under
Presentations.

About SemGroup

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
energy.

SemGroup uses its Investor Relations website and social media outlets as
channels of distribution of material company information. Such information is
routinely posted and accessible on our Investor Relations website at
ir.semgroupcorp.com, our Twitter account and LinkedIn account.

Non-GAAP Financial Measures

Adjusted EBITDA is not a generally accepted accounting principles (GAAP)
measure and is not intended to be used in lieu of a GAAP presentation of net
income/loss. Adjusted EBITDA is presented in this Press Release because
SemGroup believes it provides additional information with respect to its
performance. Adjusted EBITDA represents earnings before interest, taxes,
depreciation and amortization, adjusted for selected items that SemGroup
believes impact the comparability of financial results between reporting
periods. Although SemGroup presents selected items that it considers in
evaluating its performance, you should also be aware that the items presented
do not represent all items that affect comparability between the periods
presented. Variations in SemGroup's operating results are also caused by
changes in volumes, prices, exchange rates, mechanical interruptions and
numerous other factors. These types of variances are not separately identified
in this Press Release. Because all companies do not use identical
calculations, SemGroup's presentation of Adjusted EBITDA may be different from
similarly titled measures of other companies, thereby diminishing its utility.
Reconciliations of net income (loss) to Adjusted EBITDA for the periods
presented are included in the tables at the end of this Press Release.

Forward-Looking Statements

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
of 1995.

All statements, other than statements of historical fact, included in this
Press Release including the contemplated drop-down transaction between
SemGroup and Rose Rock, the prospects of our industry, our anticipated
financial performance, our anticipated annual dividend growth rate, NGL Energy
Partners LP (NYSE:NGL) anticipated financial performance, 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, the factors
discussed above; our ability to comply with the covenants contained in and
maintain certain financial ratios required by our credit facilities; NGL's
operations, which we do not control; the ability of our subsidiary, Rose Rock
Midstream L.P. (NYSE:RRMS), to make minimum quarterly distributions; the
possibility that our hedging activities may result in losses or may have a
negative impact on our financial results; 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;
changes in currency exchange rates; and the risks and uncertainties of doing
business outside of the U.S., including political and economic instability and
changes in local governmental laws, regulations and policies, 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, 2013 December 31, 2012 *
ASSETS                                                                     
Current assets                          $ 541,961          $ 520,003         
Property, plant and equipment, net      1,057,116          814,724           
Goodwill and other intangible assets    240,573            17,469            
Equity method investments               518,149            387,802           
Other noncurrent assets, net            32,603             8,181             
Total assets                            $ 2,390,402        $ 1,748,179       
LIABILITIES AND OWNERS' EQUITY                                             
Current liabilities:                                                       
Current portion of long-term debt       $ 26               $ 24              
Other current liabilities               447,610            374,320           
Total current liabilities               447,636            374,344           
Long-term debt, excluding current       540,043            206,062           
portion
Other noncurrent liabilities            149,006            146,245           
Total liabilities                       1,136,685          726,651           
Total owners' equity                    1,253,717          1,021,528         
Total liabilities and owners' equity    $ 2,390,402        $ 1,748,179       
                                                                          
*Derived from audited financial statements

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)

                       Three Months Ended               Nine Months Ended
                       September 30,         June 30,   September 30,
                       2013       2012       2013       2013       2012
Revenues                $357,748 $277,852 $324,244 $969,688 $921,660
Expenses:                                                       
Costs of products sold,
exclusive of
depreciation and        255,554    189,830    212,709    680,632    651,283
amortization shown
below
Operating               52,360     52,367     69,682     162,813    172,750
General and             20,952     16,680     16,898     54,887     53,073
administrative
Depreciation and        16,113     12,081     12,814     41,563     35,687
amortization
Loss (gain) loss on
disposal of long-lived  408       (3,615)   (376)     (130)     (3,496)
assets, net
Total expenses          345,387    267,343    311,727    939,765    909,297
Earnings from equity    7,483      3,116      14,861     39,689     22,903
method investments
Operating income        19,844     13,625     27,378     69,612     35,266
Other expenses, net     13,294     11,701     10,613     51,769     24,904
Income from continuing
operations before       6,550      1,924      16,765     17,843     10,362
income taxes
Income tax expense      3,413      2,091      9,288      (41,305)   985
(benefit)
Income (loss) from      3,137     (167)     7,477     59,148    9,377
continuing operations
Income (loss) from
discontinued            (2)       (265)     35        65        (456)
operations, net of
income taxes ^(1)
Net income (loss)       3,135     (432)     7,512     59,213    8,921
Less: net income
attributable to         5,054      2,336      3,943      14,429     7,915
noncontrolling
interests
Net income (loss)
attributable to         $(1,919) $(2,768) $3,569   $44,784  $1,006
SemGroup Corporation
Net income (loss)
attributable to         $(1,919) $(2,768) $3,569   $44,784  $1,006
SemGroup Corporation
Other comprehensive
income (loss), net of   6,105     12,072    (5,354)   (4,307)   14,930
income taxes
Comprehensive income
(loss) attributable to  $4,186   $9,304   $(1,785) $40,477  $15,936
SemGroup Corporation
Net income (loss) per                                           
common share:
Basic                   $(0.05)  $(0.07)  $0.08    $1.06    $0.02
Diluted                 $(0.05)  $(0.07)  $0.08    $1.05    $0.02
Weighted average shares                                         
(thousands):
Basic                   42,528     41,949     42,211     42,274     41,930
Diluted                 42,528     41,949     42,526     42,544     42,182

(1) SemStream Arizona was sold on December 31, 2012. Prior periods have been
recast to reflect its results asdiscontinued operations.


Reconciliation of net income (loss) to Adjusted EBITDA:
(in thousands, unaudited)
                                                               
                         Three Months Ended             Nine Months Ended
                         September 30,        June 30,  September 30,
                         2013      2012       2013      2013       2012
Net income (loss)         $3,135  $(432)   $7,512  $59,213  $8,921
Add: Interest expense     9,080    1,992     4,495    15,971    7,763
Add: Income tax expense   3,413    2,091     9,288    (41,305)  985
(benefit)
Add: Depreciation and     16,113   12,081    12,814   41,563    35,687
amortization expense
EBITDA                    31,741   15,732    34,109   75,442    53,356
Selected Non-Cash Items
and Other Items Impacting 20,341   17,205    9,526    55,778    37,957
Comparability
Adjusted EBITDA           $52,082 $32,937  $43,635 $131,220 $91,313
                                                               
Selected Non-Cash Items and
Other Items Impacting Comparability
(in thousands, unaudited)
                                                               
                         Three Months Ended             Nine Months Ended
                         September 30,        June 30,  September 30,
                         2013      2012       2013      2013       2012
Loss (gain) on disposal   $408    $(3,615) $(376)  $(130)   $(3,496)
of long-lived assets, net
Loss (income) from
discontinued operations,  2        265       (35)     (65)      456
net of income taxes ^(1)
Foreign currency          (457)    355       (349)    (973)     358
transaction loss (gain)
Remove NGL equity         3,288    6,905     (4,200)  (7,828)   2,150
earnings
NGL cash distribution     4,671    2,090     4,426    13,369    5,063
Mid-America Midstream Gas 3,600    —        —       3,600     —
Services acquisition cost
Employee severance        —       —        9        9         354
expense
Unrealized gain on        (464)    (554)     (827)    (1,759)   (432)
derivative activities
Change in fair value of   4,834    9,544     6,398    37,028    17,083
warrants
Depreciation and
amortization included     2,407    2,546     2,404    7,216     7,630
within equity earnings of
White Cliffs
Defense costs             —       —        —       —        5,899
Recovery of receivables   —       (1,940)   —       —        (1,940)
written off at emergence
Non-cash equity           2,052    1,609     2,076    5,311     4,832
compensation
Selected Non-Cash Items
and Other Items Impacting $20,341 $17,205  $9,526  $55,778  $37,957
Comparability
                                                               
(1) SemStream Arizona was sold on December 31, 2012. Prior periods have been
recast to reflect its results as discontinued operations.
                                                               

2013 Adjusted EBITDA Guidance Reconciliation
                                                                
(in millions, unaudited)    Updated Guidance^(1)      Original Guidance^(1)
                           Low             High     Low            High
Net income                  $72.2         $78.2  $89.8        $93.3
Add: Interest expense       27.0           28.0    19.0          20.0
Add: Income tax benefit     (38.0)         (36.0)  (47.4)        (46.9)
Add: Depreciation and       62.0           63.0    55.0          60.0
amortization
EBITDA                      $123.2        $133.2 $116.4       $126.4
Selected Non-Cash and Other
Items Impacting             56.8            56.8     48.6           48.6
Comparability
Adjusted EBITDA             $180.0        $190.0 $165.0       $175.0
                                                                
                                                                
Selected Non-Cash and Other
Items Impacting                                                  
Comparability
Foreign currency                    $ (1.0)                 $ —    
transaction (gain) loss
Mid-America Midstream Gas           3.6                     —      
Services acquisition cost
Loss (gain) on disposals            (0.2)                   —      
Change in fair value of             37.0                    32.2   
warrants
Depreciation and
amortization included               10.0                    10.1   
within equity earnings
Non-cash equity                     7.4                     6.3    
compensation
Selected Non-Cash and Other
Items Impacting                     $ 56.8                  $ 48.6 
Comparability
                                                                
(1) Guidance is on a cash basis for equity investments in NGL, includes fully
consolidated Rose Rock Midstream
                                                                

CONTACT: Investor Relations:
         Alisa Perkins
         918-524-8081
         investor.relations@semgroupcorp.com
        
         Media:
         Kiley Roberson
         918-524-8594
         kroberson@semgroupcorp.com

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