SemGroup Energy's Future Still Questioned

SemGroup Energy Partners is still on shaky ground.  That's what analysts say after Wednesday's conference call.  News On 6 anchor Terry Hood reports some are saying they still have more questions than answers.

Executives for SemGroup Energy Partners spent less than 15 minutes on a Wednesday conference call, hoping to convince investors the company is on firm ground.  Jake Dollarhide was one of many analysts listening in.

"Not a lot surprised me.  They didn't have a lot of answers," said Jake Dollarhide with Longbow Asset Management.

CEO Kevin Foxx told the public that SemGroup Energy Partners is working to distance itself from its parent company, SemGroup LP.

"Although there are certainly significant risks on the road to becoming an independent company, we feel we're off to a solid start and we will continue to work hard towards this goal," said CEO Kevin Foxx.

While Dollarhide agrees the company has made steps in the right direction, he says SemGroup Energy Partners still faces a number of hurdles. The company never filed its second quarter earnings report, the public document that lets investors look at the ledger book.

"If you can't file your quarterly filings and let investors know how you are doing than how can you be a legitimate investment concern?" said Jake Dollarhide with Longbow Asset Management.

SemGroup Energy had previously done more than 80% of its business with its parent company.  Dollarhide wants to know how much of that business has been replaced and what's the timeline for selling off assets?

That last question is very important to investors when you consider that SemGroup Energy is $300 million in debt and only brings in around $100 million in annual revenue.

The answers are hard to come and many worry if the company can make it.

"They're in survival mode. They're differentiating themselves from their parent. They're not SemGroup LP, that's true.  They're not in Chapter 11 bankruptcy, but they're in tough shape," said Jake Dollarhide with Longbow Asset Management.

Dollarhide adds SemGroup Energy Partners does not have any actual employees.  It uses staff from its parent company to do business.  So, if it plans to become its own company, he says, executives have not addressed how they plan to handle that transition.