Rose Rock draws $133.5 million revolving loans for SemCrude purchase

By Susanna Moon

Chicago, Jan. 14 - Rose Rock Midstream, LP tapped about $133.5 million from its credit facility Friday with Royal Bank of Scotland plc, as administrative agent and collateral agent, to fund the acquisition of membership interests in SemCrude Pipeline, LLC, according to an 8-K filing by SemGroup Corp. with the Securities and Exchange Commission.

Also on Friday, the company exercised the accordion on its revolving credit facility, increasing commitments to $385 million from $150 million.

As noted before, the company said it amended the credit terms on Sept. 26 to lift the borrowing capacity under the revolver to up to $400 million, subject to lender commitments.

SemGroup entered into a contribution agreement with Rose Rock Midstream on Jan. 8.

Under the terms, Rose Rock acquired a 33.33% interest in SemCrude Pipeline for $273.9 million, according to a press release.

"We are excited to announce our first drop-down transaction for Rose Rock Midstream, which will be immediately accretive to the partnership's common unit holders," Norm Szydlowski, president and chief executive officer of Rose Rock Midstream, said in the release.

"This acquisition supports our strategic plan and is complementary to our existing crude-based business. The White Cliffs Pipeline is a very strategic asset and the only pipeline that directly transports crude oil from the DJ Basin to Cushing, Okla."

SemGroup will maintain its 2% general partner interest in Rose Rock Midstream.

As reported on Oct. 2, Rose Rock Midstream, a limited partnership formed by SemGroup, amended its credit agreement dated Nov. 10, 2011 with Royal Bank of Scotland to permit the investment in equity interests of SemCrude Pipeline.

SemGroup is a midstream service company. Rose Rock is engaged in the business of crude oil gathering, transportation, storage and marketing in Colorado, Kansas, Montana, North Dakota, Oklahoma and Texas. Both companies are based in Tulsa, Okla.

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