December 9, 2011 [Tulsa World] - Tulsa-based oil terminal and transport company Rose Rock Midstream LP began trading Friday on the New York Stock Exchange, SemGroup Corp. officials said.
The initial public offering of 7 million common units in the master limited partnership will close by Wednesday. SemGroup hopes to raise about $140 million in equity from the IPO.
“Rose Rock will be a separately traded entity,” SemGroup spokeswoman Liz Barclay said.
SemGroup spun off most of its SemCrude terminal, storage and transport assets to form Rose Rock earlier this year.
The assets include SemCrude storage at the Cushing interchange, the Kansas-Oklahoma pipeline system, Bakken Shale truck and storage facilities in North Dakota and a truck unloading facility in Platteville, Colo.
Rose Rock will not include SemGroup’s 526-mile White Cliffs Pipeline, which carries crude oil from the Denver-Julesberg Basin to the Cushing storage terminals. SemGroup will maintain a controlling interest in Rose Rock, and company CEO Norm Szydlowski and Chief Financial Officer Bob Fitzgerald also will head up the partnership.
The spinoff and IPO were announced in August. SemGroup officials said they wanted to use proceeds from to pay down debt.
Plains All-American Pipeline LP, which made a hostile offer for SemGroup at $24 per share in October, urged the Tulsa company to defer the Rose Rock IPO. That company’s CEO, Greg Armstrong, argued that the spinoff would destroy value in the parent SemGroup if completed before a merger. SemGroup rejected Plains’ offer.
Several Tulsa energy companies are going public in upcoming weeks. A Williams Cos. Inc. exploration and production spinoff, WPX Energy Inc., starts trading Jan. 3, while Laredo Petroleum and Mid-Con Energy Partners also plan IPOs in the near future.
