SemGroup Troubles Echo Throughout Oil Industry

SemGroup's troubles continue to echo across the oil and gas industry. Three Canadian firms are claiming a financial exposure totaling more than $50 million since SemGroup filed for bankruptcy. News On 6 anchor Scott Thompson reports a simple Google search turns up more than 1,000 news stories about SemGroup and its recent collapse.

Industry analysts are watching the situation to see its impact on gas prices and hoping to understand how such a successful company could make such a dramatic fall from grace.

The News On 6 is told it's business as usual for the more than 400 SemGroup employees at 61st and Yale. Only now they're working under the cloud of bankruptcy, wondering what the future holds for the Tulsa based company.

"Probably the largest catastrophic event that has happened to our industry since the failure of Penn Square Bank," said Mike Terry, Oklahoma Independent Petroleum Association.

Mike Terry works with more than 2,000 independent oil producers across the state. He says the fallout from SemGroup's bankruptcy will grow every day. The company is the second largest purchaser of oil in Oklahoma.

The details that led to bankruptcy court are not easy to find. Court documents show SemGroup kept betting the price of oil would drop when it actually doubled over the last year. Mike Terry explains it this way.

"So they were betting that it was going to go here and it actually went here. So they had to pay the difference and that's called a margin call," said Terry.

The margin calls amounted to more than $2 billion, including $290 million from SemGroup founder Tom Kivisto. Bankruptcy statements claim the former president and CEO was using money loaned to him by SemGroup to make personal trades on the market.

An article in Forbes Magazine reports Kivisto was looking for more funding from several sources over the last six months, including the Bank of Oklahoma, Goldman Sachs, and the Kuwait Investment Authority. On Saturday, Kivisto broke a ten-day silence but only said the reasons for the company's failure will someday see the light of day.

"I trust, however, as the facts and the truths surrounding this chain of events are revealed, the SemGroup employees will regain their trust in what they initially believed," said Tom Kivisto, Former President & CEO.

For people like Mike Terry, the answer to the eight year old company's troubles can be summed up easily.

"I think you have to say that they did try to grow too fast," said Terry.

A federal judge has approved an agreement between a SemGroup subsidiary and two other companies that will allow the construction of a 500-mile pipeline to continue.

A message left with SemGroup on Tuesday was not returned.