Rose Rock Midstream, L.P. Reports Third Quarter 2013 Results

Rose Rock Midstream, L.P. Reports Third Quarter 2013 Results

                   Increases 2013 Adjusted EBITDA Guidance

Announces Intent to Acquire Additional Interest in White Cliffs Pipeline From
                             SemGroup Corporation

TULSA, Okla., Nov. 11, 2013 (GLOBE NEWSWIRE) -- Rose Rock Midstream^®, L.P.
(NYSE:RRMS) today announced its financial results for the three months ended
September 30, 2013.

Rose Rock Midstream reported third quarter 2013 Adjusted EBITDA of $15.7
million, up 2% from the second quarter 2013 of $15.4 million, and up 65% from
the third quarter 2012 of $9.5 million. Rose Rock's results improved slightly
over the second quarter of 2013 due to an increase in marketing volumes
combined with a one month impact of the Barcas Field Services acquisition,
partly offset by a decrease in pipeline transportation margins.

"Rose Rock Midstream has performed well this year and we are on track to meet
and exceed our 2013 goals. Our distribution payable this week represents a 15%
increase over our distribution paid in November 2012, which is consistent with
our 2013 guidance of 15% year-over-year distribution growth," said Norm
Szydlowski, chief executive officer of Rose Rock Midstream's general partner.
"We continue to execute on our strategic plans including the completion of our
organic growth projects and growth-oriented acquisitions which are reflected
in our increased guidance. As the demand for midstream services continues,
Rose Rock Midstream is well suited to meet those needs with a strong balance
sheet and a highly motivated and experienced workforce."

Adjusted gross margin was $23.8 million for the third quarter 2013, up 19%
from the second quarter 2013 of $20.1 million and 24% above third quarter 2012
Adjusted gross margin of $19.2 million. Adjusted gross margin and Adjusted
EBITDA, which are non-GAAP measures, are reconciled to their most directly
comparable GAAP measures below.

Third quarter 2013 net income totaled $9.4 million, compared to $9.1 million
for the second quarter 2013 and $6.5 million for the third quarter 2012.

Rose Rock Midstream's distributable cash flow for the three months ended
September 30, 2013 was $13.0 million. On October 24, 2013, Rose Rock Midstream
increased the partnership's quarterly cash distribution to $0.45 per unit from
$0.44 per unit, effective for the third quarter 2013, resulting in an
annualized distribution of $1.80 per unit. This is a 2.3% increase over the
second quarter 2013 and marks the seventh consecutive increase in the
quarterly cash distribution to RRMS limited partner unitholders. The
distribution will be paid on November 14, 2013 to all unitholders of record on
November 5, 2013. Distributable cash flow, which is a non-GAAP measure, is
reconciled to its most directly comparable GAAP measure below.

Recent Updates

Rose Rock Midstream announces its intent to pursue an agreement with SemGroup
to acquire 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 Rose Rock will directly own a 67% interest in SemCrude
Pipeline and indirectly own a 34% 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.

Rose Rock Midstream also announces the acquisition of a 12-mile, 12-inch crude
oil pipeline from Noble Energy, Inc. that extends from Platteville, CO to
Tampa, CO for a purchase price of $8.3 million. The pipeline was recently
constructed by Noble Energy and placed into service concurrent with the
acquisition. The pipeline connects Rose Rock Midstream's Platteville, CO crude
oil terminal to the Tampa, CO rail facility. Platteville is the origin point
for White Cliffs Pipeline^®.

2013 Guidance

Management is raising the company's 2013 Adjusted EBITDA guidance to between
$63 and $66 million, up from the previous guidance range of $56 million to $60
million. This increase does not include the proposed acquisition of White
Cliffs Pipeline. The partnership is on target to deploy more than $113 million
in capital expenditures in 2013, and remains on track to achieve a 2013
distribution growth rate of approximately15% year-over-year.

Earnings Conference Call

Rose Rock Midstream will host a joint conference call with SemGroup^®
Corporation (NYSE:SEMG) 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 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 2013 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.
Headquartered in Tulsa, OK, Rose Rock Midstream provides crude oil gathering,
transportation, storage and marketing services with the majority of its assets
strategically located in or connected to the Cushing, Oklahoma crude oil
marketing hub.

Rose Rock 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.rrmidstream.com, our Twitter account and LinkedIn account.

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 completed drop-down transaction between Rose Rock
and SemGroup, 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, the factors
discussed above, 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, *
                                       2013          2012
ASSETS                                               
Current assets                          $294,300    $250,617
Property, plant and equipment, net      313,193       291,530
Equity method investment                77,449        —
Other noncurrent assets, net            37,797        2,579
Total assets                            $ 722,739     $ 544,726
                                                    
LIABILITIES AND PARTNERS' CAPITAL                    
Current liabilities                     $254,491    $231,843
Long-term debt                          85,043        4,562
Total liabilities                       339,534       236,405
                                                    
Total partners' capital                 383,205       308,321
Total liabilities and partners' capital $722,739    $544,726
                                                    
*Derived from audited financial statements


Condensed Consolidated Statements of Income
(in thousands, except per unit amounts, unaudited)
                                                               
                       Three Months Ended               Nine Months Ended
                       September 30,         June 30,   September 30,
                       2013       2012       2013       2013       2012
Revenues, including
revenues from                                                   
affiliates:
Product                 $166,050 $120,358 $148,816 $473,594 $435,814
Service                 15,781     11,196     12,606     40,891     32,932
Other                   —          —          —          —          (59)
Total revenues          181,831    131,554    161,422    514,485    468,687
Expenses, including
expenses from                                                   
affiliates:
Costs of products sold,
exclusive of            157,550    111,790    140,506    446,507    412,847
depreciation and
amortization
Operating               9,248      5,698      5,807      20,473     17,146
General and             3,146      4,081      3,254      9,961      8,830
administrative
Depreciation and        4,130      3,066      3,690      11,327     9,032
amortization
Total expenses          174,074    124,635    153,257    488,268    447,855
Earnings from equity    3,527      —          3,451      10,431     —
method investment
Operating income        11,284     6,919      11,616     36,648     20,832
Other expenses:                                                 
Interest expense        1,873      450        2,494      6,121      1,407
Other expense (income)  —          —          (12)       (12)       72
Total other expenses    1,873      450        2,482      6,109      1,479
Net income              $9,411   $6,469   $9,134   $30,539  $19,353
Net income allocated to $315     $129     $255     $850     $387
general partner
Net income allocated to $6,116   $3,170   $5,208   $18,329  $9,483
common unitholders
Net income allocated to
subordinated            $3,083   $3,170   $3,674   $11,323  $9,483
unitholders
Net income (loss)
allocated to Class A    $(103)   $ —      $(3)     $37      $ —
unitholders
                                                               
Earnings per limited                                            
partner unit:
Common unit (basic)     $0.45    $0.38    $0.44    $1.46    $1.13
Common unit (diluted)   $0.45    $0.38    $0.44    $1.45    $1.13
Subordinated unit       $0.37    $0.38    $0.44    $1.35    $1.13
(basic and diluted)
Class A unit (basic and $(0.08)  $ —      $ —      $0.03    $—
diluted)
Basic weighted average
number of limited                                               
partner units
outstanding:
Common units            13,442     8,390      11,894     12,587     8,390
Subordinated units      8,390      8,390      8,390      8,390      8,390
Class A units           1,250      —          1,250      1,200      —
Diluted weighted
average number of                                               
limited partner units
outstanding:
Common units            13,479     8,409      11,933     12,621     8,404
Subordinated units      8,390      8,390      8,390      8,390      8,390
Class A units           1,250      —          1,250      1,200      —

                                                                
Non-GAAP Reconciliations                                         
                                                                
(in thousands, unaudited)   Three Months Ended             Nine Months Ended
                           September 30,        June 30,  September 30,
                           2013       2012      2013      2013      2012
Reconciliation of operating
income to Adjusted gross                                         
margin:
Operating income            $11,284  $6,919  $11,616 $36,648 $20,832
Add:                                                             
Operating expense           9,248      5,698     5,807     20,473    17,146
General and administrative  3,146      4,081     3,254     9,961     8,830
Depreciation and            4,130      3,066     3,690     11,327    9,032
amortization
Less:                                                            
Earnings from equity method 3,527      —         3,451     10,431    —
investment
Unrealized gain on          464        554       827       1,759     432
derivatives, net
Adjusted gross margin       $23,817  $19,210 $20,089 $66,219 $55,408
                                                                
Reconciliation of net                                            
income to Adjusted EBITDA:
Net income                  $9,411   $6,469  $9,134  $30,539 $19,353
Add:                                                             
Interest expense            1,873      450       2,494     6,121     1,407
Depreciation and            4,130      3,066     3,690     11,327    9,032
amortization
Cash distributions from     4,078      —         4,168     11,138    —
equity method investment
Non-cash equity             223        79        212       578       218
compensation
Loss on disposal of         —          —         —         —         56
long-lived assets
Less:                                                            
Earnings from equity method 3,527      —         3,451     10,431    —
investment
Impact from derivative                                           
instruments:
Total loss on derivatives,  (1,653)    (631)     (233)     (2,430)   (342)
net
Total realized loss (cash   2,117      1,185     1,060     4,189     774
flow) on derivatives, net
Non-cash unrealized gain on 464        554       827       1,759     432
derivatives, net
Adjusted EBITDA             $15,724  $9,510  $15,420 $47,513 $29,634
                                                                
Reconciliation of net cash
provided by (used in)                                            
operating activities to
Adjusted EBITDA:
Net cash provided by (used  $(1,194) $15,446 $13,394 $22,115 $35,525
in) operating activities
Less:                                                            
Changes in assets and       (14,726)   6,296     423       (19,201)  7,037
liabilities
Add:                                                             
Interest expense, excluding
amortization of debt        1,641      360       2,293     5,490     1,146
issuance costs
Distributions in excess of
equity in earnings of       551        —         156       707       —
affiliates
Adjusted EBITDA             $15,724  $9,510  $15,420 $47,513 $29,634
                                                                
                                                                
Non-GAAP Reconciliations                                         
(Continued)
                                                                
(in thousands, unaudited)   Three Months Ended             Nine Months Ended
                           September 30,        June 30,  September 30,
                           2013       2012      2013      2013      2012
Reconciliation of net
income to distributable                                          
cash flow:
Net income                  $9,411   $6,469  $9,134  $30,539 $19,353
Add:                                                             
Interest expense            1,873      450       2,494     6,121     1,407
Depreciation and            4,130      3,066     3,690     11,327    9,032
amortization
EBITDA                      15,414     9,985     15,318    47,987    29,792
Add:                                                             
Loss on disposal of         —          —         —         —         56
long-lived assets
Cash distribution from      4,078      —         4,168     11,138    —
equity method investment
Non-cash equity             223        79        212       578       218
compensation
Less:                                                            
Earnings from equity method 3,527      —         3,451     10,431    —
investment
Unrealized gain on          464        554       827       1,759     432
derivatives, net
Adjusted EBITDA             $15,724  $9,510  $15,420 $47,513 $29,634
Less:                                                            
Cash interest expense       1,641      361       2,293     5,490     1,145
Maintenance capital         1,057      832       511       3,639     2,606
expenditures
Distributable cash flow     $13,026  $8,317  $12,616 $38,384 $25,883
                                                                
Distribution declared       $11,624  $6,720  $9,180  $29,745 $19,647
                            ^(1)
                                                                
Distribution coverage ratio 1.12x      1.24x     1.37x     1.29x     1.32x
                                                                
(1) The distribution declared October 24, 2013 represents $0.45 per unit, or
$1.80 per unit on an annualized basis.
This is a 2.3% increase over the prior quarter.


2013 RRMS Adjusted EBITDA Guidance
Reconciliation
                                                         
(millions, unaudited)                  Updated Guidance    Original Guidance
                                      Low       High      Low       High
Net income                             $36.7   $38.7   $26.7   $32.2
Add: Interest expense                  8.0       9.0       12.3      11.3
Add: Depreciation and amortization     16.0      16.0      13.5      13.0
EBITDA                                 $60.7   $63.7   $52.5   $56.5
Non-Cash Adjustments and Other         2.3       2.3       3.5       3.5
Adjustments
Adjusted EBITDA                        $63.0   $66.0   $56.0   $60.0
                                                                 
                                                                 
Non-Cash and Other Adjustments                                    
Earnings from equity method investment $(14.5) $(15.5) $(14.0) $(16.0)
Cash distributions from equity method  16.0      17.0      17.0      19.0
investment
Non-cash equity compensation           0.8       0.8       0.5       0.5
Non-Cash and Other Adjustments         $2.3    $2.3    $3.5    $3.5

CONTACT: Investor Relations:
         Alisa Perkins
         918-524-8081
         roserockir@rrmidstream.com
        
         Media:
         Kiley Roberson
         918-524-8594
         kroberson@rrmidstream.com

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