SemGroup Energy Partners, L.P. Reports Pre- and Post-IPO Third-Quarter 2007 Results



    TULSA, OKLA., November 13 /CNW/ - SemGroup Energy Partners, L.P.
("SemGroup Energy Partners" or the "Partnership") (NASDAQ:  SGLP) today reported
its financial results for the quarter ended September 30, 2007. These results
include the results of the Partnership's predecessor (the "Predecessor")
through July 19, 2007 (the "Pre-IPO Period") and the results of operations
from July 20, 2007 to September 30, 2007 (the "Post-IPO Period"), which
corresponds to the Partnership's entering into the Throughput Agreement with
SemGroup, L.P., the Partnership's parent company, in connection with the
Partnership's initial public offering ("IPO"). Unless stated otherwise, the
results discussed in this release are for the full quarter, including both the
Pre-IPO Period and the Post-IPO Period. Results for 2006 are for the
Predecessor. The Predecessor did not record any revenue associated with the
gathering and transportation and terminalling and storage services provided on
an intercompany basis, but did recognize the costs of providing such services.

    The Partnership reported Post-IPO Period net income of $5.9 million, or
$0.24 per basic and diluted common unit and $0.19 per basic and diluted
subordinated unit. For the three months ended September 30, 2007, the
Partnership reported net income of $4.3 million compared with a net loss of
$9.0 million for the three months ended September 30, 2006. The Partnership's
total revenue was $25.3 million for the three months ended September 30, 2007
compared with $7.5 million for the three months ended September 30, 2006.

    "The post-IPO results for SemGroup Energy Partners' third quarter
exceeded the expectations outlined in our prospectus," stated Kevin Foxx,
SemGroup Energy Partners' president and chief executive officer. "We are
especially pleased with the activity recorded by our gathering and
transportation services business segment which enjoyed strong demand
throughout the third quarter. This demand is primarily due to revenues
generated under the Throughput Agreement with our parent company."

    Earnings before interest, taxes, depreciation and amortization, or
EBITDA, was $10.2 million for the Post-IPO Period. Distributable cash flow for
the Post-IPO Period was $8.5 million.

    On October 25, 2007, the Partnership declared a prorated quarterly cash
distribution of $0.24 per unit, or $1.25 per unit on an annualized basis, for
the third quarter of 2007. The distribution is payable on November 14, 2007,
on all outstanding common and subordinated units to holders of record as of
the close of business on November 1, 2007. This is the first distribution
declared by the Partnership and corresponds to the minimum quarterly
distribution of $0.3125 per unit, prorated for the partial quarter following
the closing of the Partnership's IPO on July 23, 2007.

    Conference Call

    SemGroup Energy Partners will host a conference call for investors and
analysts on November 14, 2007, at 10 a.m. CST (11 a.m. EST) to discuss third
quarter earnings. The conference call can be accessed through the Investors
section of SemGroup Energy Partners' Web site at http://www.SGLP.com or by
telephone at 800-374-0113. International locations may dial-in by calling
706-758-9607. Please dial in five to 10 minutes prior to the scheduled start
time. The audio replay of this conference call will be available on the Web
site for at least 30 days, and a recording will be available by phone for 14
days. To hear the replay, call 800-642-1687 in the United States or call
706-645-9291 from international locations. The pass code for both is 22066958.

    Use of Non-GAAP Financial Measures

    This press release includes non-GAAP financial measures of EBITDA and
distributable cash flow. This press release provides reconciliations of these
non-GAAP financial measures to their most directly comparable financial
measure calculated and presented in accordance with generally accepted
accounting principles in the United States of America ("GAAP"). SemGroup
Energy Partners' non-GAAP financial measures should not be considered as
alternatives to GAAP measures such as net income, operating income, net cash
flows provided by operating activities or any other GAAP measure of liquidity
or financial performance.

    SemGroup Energy Partners defines EBITDA as net income or loss before
interest, income taxes, depreciation and amortization. The Partnership defines
distributable cash flow as EBITDA plus non-cash equity-based compensation
expense less cash interest expense and sustaining capital expenditures. EBITDA
and distributable cash flow are presented because the Partnership believes
they provide additional information with respect to the expected performance
of the Partnership's fundamental business, as well as its ability to meet
future debt service, capital expenditures and working capital requirements.
The Partnership believes this information may be helpful to your understanding
of its financial results.

    The following table presents a reconciliation of EBITDA and distributable
cash flow to net income or loss for the periods shown:

    
                        SEMGROUP ENERGY PARTNERS, L.P.
                            DISTRIBUTABLE CASH FLOW
                           (unaudited, in thousands)


                                               Three
                                                Months  July 1,  July 20,
                                                Ended   2007 to   2007 to
                                              September July 19, September
                                                 30,                30,
                                                 2007     2007      2007
                                              --------- -------- ---------

    Net income (loss)                          $ 4,317  $(1,623)  $ 5,940

    Add:   Interest                              2,424      125     2,299
           Income taxes                             62        -        62
           Depreciation and amortization         2,394      508     1,886

    EBITDA                                       9,197     (990)   10,187

    Add:   Non-cash equity-based compensation
            expense                                532        -       532

    Less:  Cash interest expense                (1,980)    (199)   (1,781)
           Sustaining capital expenditures        (733)    (253)     (480)


                                              --------- -------- ---------
    Distributable cash flow                    $ 7,016  $(1,442)  $ 8,458
                                              --------- -------- ---------



                                               Nine    January
                                               Months      1,    July 20,
                                               Ended    2007 to   2007 to
                                             September July 19,  September
                                                30,                 30,
                                               2007      2007       2007
                                             --------- --------- ---------

    Net income (loss)                        $(20,178) $(26,118)  $ 5,940

    Add:   Interest                             3,369     1,070     2,299
           Income taxes                            62         -        62
           Depreciation and amortization        6,781     4,895     1,886

    EBITDA                                     (9,966)  (20,153)   10,187

    Add:   Non-cash equity-based
            compensation expense                  532         -       532

    Less:  Cash interest expense               (3,541)   (1,760)   (1,781)
           Sustaining capital expenditures     (2,217)   (1,737)     (480)


                                             --------- --------- ---------
    Distributable cash flow                  $(15,192) $(23,650)  $ 8,458
                                             --------- --------- ---------
    

    About SemGroup Energy Partners, L.P.

    SemGroup Energy Partners owns and operates a diversified portfolio of
complementary midstream energy assets. SemGroup Energy Partners provides crude
oil gathering and transportation and terminalling and storage services
primarily in its core operating areas in Oklahoma, Kansas and Texas. A
subsidiary of SemGroup, L.P. is the general partner of SemGroup Energy
Partners. SemGroup Energy Partners owns and operates terminalling and storage
facilities with approximately 6.7 million barrels of storage capacity,
including approximately 4.8 million barrels of storage capacity located at the
Cushing Interchange, two pipeline systems consisting of approximately 1,150
miles of pipeline, and tanker trucks used to gather oil at remote wellhead
locations generally not covered by pipeline and gathering systems. The
Partnership is based in Tulsa, Oklahoma. For more information, visit the
Partnership's Web site www.SGLP.com.

    For e-mail alerts click here:

    http://www.b2i.us/irpass.asp?BzID=1505&to=ea&s=0

    Forward-Looking Statements

    Certain statements in this release are "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, and are
intended to qualify for the safe harbors from liability provided therein. All
statements, other than statements of historical facts, included in this
release that address activities, events or developments that the Partnership
expects, believes or anticipates will or may occur in the future are
forward-looking statements. These forward-looking statements rely on a number
of assumptions concerning future events and are subject to a number of
uncertainties, factors and risks, many of which are outside SemGroup Energy
Partners' control, which could cause results to differ materially from those
expected by management of SemGroup Energy Partners.

    Such risks and uncertainties include, but are not limited to, our
dependence upon SemGroup, L.P. for a substantial majority of our revenues; our
exposure to the credit risk of SemGroup, L.P. and third-party customers; a
decrease in the demand for crude oil in the areas served by our storage
facilities and pipelines; a decrease in the production of crude oil from the
oil fields served by our pipelines; the availability of, and our ability to
consummate, acquisition opportunities; our debt levels and restrictions in our
credit facility; general economic, market or business conditions; and other
factors and uncertainties inherent in the crude oil gathering, transportation,
terminalling and storage business. These and other applicable uncertainties,
factors and risks are described more fully in the Partnership's prospectus
relating to its initial public offering and other reports filed with the
Securities and Exchange Commission. SemGroup Energy Partners undertakes no
obligation to update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise.

    Results of Operations

    The following table summarizes the financial results for the three and
nine months ended September 30, 2006 and 2007:

    
                        SEMGROUP ENERGY PARTNERS, L.P.
                           STATEMENT OF OPERATIONS
               (unaudited, in thousands, except per unit data)

                                    Three Months Ended  Nine Months Ended
                                      September 30,       September 30,
                                    ------------------ -------------------
                                       2006     2007     2006      2007
                                    --------- -------- --------- ---------
    Service revenue
     Third party revenue             $ 7,250  $ 4,872  $ 19,861  $ 23,847
     Related party revenue               240   20,408       570    20,531
                                    --------- -------- --------- ---------

     Total revenue                     7,490   25,280    20,431    44,378
                                    --------- -------- --------- ---------

    Expenses:
     Operating                        13,263   15,952    38,239    50,110
     General and administrative        2,663    2,525     8,158    11,015
                                    --------- -------- --------- ---------

     Total expenses                   15,926   18,477    46,397    61,125
                                    --------- -------- --------- ---------

    Operating loss                    (8,436)   6,803   (25,966)  (16,747)
                                    --------- -------- --------- ---------

    Other expenses:
     Interest expense                    540    2,424     1,581     3,369

                                    --------- -------- --------- ---------
    Income before income taxes        (8,976)   4,379   (27,547)  (20,116)
                                    --------- -------- --------- ---------

    Income tax expense                     -       62         -        62
                                    --------- -------- --------- ---------


    Net income (loss)                $(8,976) $ 4,317  $(27,547) $(20,178)
                                    --------- -------- --------- ---------
    Less:

        Net loss attributable to
         SemGroup Energy Partners
         Predecessor                          $(1,623)           $(26,118)
        General partner interest in
         net income                               119                 119

                                              --------           ---------
    Net income allocable to limited
     and subordinated partners                $ 5,821            $  5,821
                                              --------           ---------

    Basic and diluted net income per
     common unit                              $  0.24            $   0.24
    Basic and diluted net income per
     subordinated unit                        $  0.19            $   0.19

    Weighted average common units
     outstanding - basic                         14.4                14.4
    Weighted average subordinated
     units outstanding - basic                   12.6                12.6
    Weighted average common units
     outstanding - diluted                       14.5                14.5
    Weighted average subordinated
     units outstanding - diluted                 12.6                12.6
    




For further information:

For further information: SGLP Investor Relations Contact: Brian Cropper,
918-524-SGLP (7457) Toll Free Phone: 866-490-SGLP (7457) Email:
investor@semgroupenergypartners.com or SemGroup Media Contact: Susan
Dornblaser, 918-524-8365 Email: sdornblaser@semgrouplp.com

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SEMGROUP ENERGY PARTNERS, L.P.

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