Cash Shortage Hurting SemGroup

A major Tulsa company is on the brink of bankruptcy.  SemGroup says that's an option.  The News On 6's Emory Bryan reports the company's stock has plunged in response to a shortage of cash.

The company hasn't detailed its problems, but Wall Street analysts blame high fuel prices.  The company, according to analysts, was in a losing position as the price of fuel went up. 

It was a stunning fall for one of Tulsa's most prestigious companies.

SemGroup's stock value dropped by half on Thursday and then by half again on Friday, before a slight rebound.

"Well obviously, Emory, we're quite surprised, this was not something that was anticipated," said Mike Neal with the Tulsa Chamber of Commerce.

SemGroup is the publicly held parent company of several distinct operating units, all involved in energy.

The company provides what's called midstream services, such as moving and storing oil and fuel from the source to where it's needed.

The corporate headquarters in south Tulsa employs most of the 400 person local workforce, but the company employs more than 2,000 people worldwide.

The threat of bankruptcy, according to one analyst, meant SemGroup is trying to bring its lenders to the table.  Should it file for bankruptcy protection, its operations would continue and allow for financial reorganization.

On Friday, the company replaced CEO Tom Kivisto with a finance expert named Terry Ronan, and the stock price improved some after the announcement.

Tulsa Mayor Kathy Taylor said the city is ready to help employees if the company folds.

"We hope we don't get to that point, but if it comes to that we'll certainly be ready to do that," said Tulsa Mayor Kathy Taylor.

SemGroup issued a statement saying it's trying to arrange new financing, but that a bankruptcy style reorganization is possible.

The Tulsa Chamber is waiting and hoping SemGroup can recover.

"We have offered our assistance to their new CEO, to his management team and the employees to assist them in any form or fashion possible," said Mike Neal with the Tulsa Chamber of Commerce.

Stock analysts aren't recommending anyone buy the stock because of the prospect the company will fail.  After reaching a peak of $31 in the last year, the stock closed on Friday at $8.30 a share.

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07/17/2008  Tough Times For Tulsa's SemGroup