August 13, 2008

Bankrupt SemGroup LP Lays Off 110 Tulsa Workers, 250 Nationwide

By Jerry Shottenkirk

SemGroup LP laid off 110 workers Monday in Tulsa, 250 nationwide, the bankrupt company confirmed.

Spokeswoman Brenda Adrian said the layoffs are effective immediately.

"They were informed in individual meetings," Adrian said of how workers were told of the layoffs.

Adrian said SemGroup must obtain approval of severance-package offerings from the Delaware Bankruptcy Court. She said approval would be requested on Aug. 18.

"It's a two-week severance and one-month outplacement assistance," she said.

Adrian had no information on how much the company hopes to save through the 250-worker layoff.

Before the layoffs, SemGroup had about 2,000 total workers, about 400 in Tulsa.

Adrian said company officials have not revealed any information about future layoffs.

Citing $2.4 billion in oil-future trading losses, SemGroup filed for Chapter 11 bankruptcy reorganization on July 22.

Last week, it received court approval for $150 million in financing to maintain operations.

SemGroup plans to sell off all of its assets as part of the bankruptcy proceeding.

Also on Monday, several companies that released quarterly financial figures outlined the potential impact of the SemGroup bankruptcy on their balance sheets.

Canada-based Crescent Point Energy Trust reported a net loss for the second quarter of (Can.)$353.7 million or $2.83 per share, compared with $117.8 million or $1.17 per share during the same period last year.

Crescent Point reported $142.9 million or $1.13 per share in funds from operations, compared with $78.25 million or 77 cents per share a year ago.

The Canadian energy company also said that its exposure in the SemGroup bankruptcy, listed as $42.5 million based on SemGroup's forecasts of prices and production volumes, is closer to $30 million based on Crescent Point's most recent estimates.

Crescent Point said it is not able to quantify at this point the portion, if any, of the exposure that will be collected.

Hawaii-based Barnwell Industries posted quarterly net earnings of $3.53 million or 42 cents per share, compared with $740,000 or 9 cents per share in the same period last year.

It reported quarterly revenues of $20.35 million, up from $11.81 million during the same quarter last year.

Barnwell reported a $608,000 bad debt reserve against oil and natural gas receivables due to the SemGroup bankruptcy.

Barnwell said it terminated its sales contract with SemGroup's Canadian subsidiary and currently estimates its financial exposure for July oil and natural gas sales processed by SemGroup at about $550,000.

GeoResources, based in Houston, reported net income of $7.8 million or 50 cents per share, compared with a net loss of $1.3 million or 9 cents per share for the same period in 2007. The company said total revenue rose to $28.2 million for the quarter, compared with $8.3 million during the same period last year.

GeoResources said that a SemGroup subsidiary, SemCrude, accounted for a minor portion of its oil sales, estimating its maximum potential losses at about $100,000.

Originally published by Jerry Shottenkirk.

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