Rose Rock Midstream to acquire remaining crude assets

Rose Rock Midstream®, L.P. has entered into an agreement to acquire the remaining crude oil assets of SemGroup® Corporation, which include the Wattenberg Oil Trunkline System and SemGroup's 50% interest in the Glass Mountain Pipeline, for a purchase price of US$325 million consisting of cash and 1.75 million Rose Rock Midstream common LP units. Rose Rock expects the acquisition to close in 1Q15, subject to customary closing conditions.

"We have been working toward this agreement for some time now, and we are pleased to have reached this important milestone for both Rose Rock and SemGroup," said Carlin Conner, President and Chief Executive Officer of SemGroup, which is Rose Rock Midstream's general partner. "The transaction strengthens and diversifies Rose Rock's asset base while immediately increasing distributable cash flow on a per unit basis. In addition, this transaction underscores SemGroup's focus on value creation and advances our efforts to drop down assets to enhance returns and increase dividends for stockholders. We remain committed to dropping down SemGroup's US gas assets in the near future."

The Glass Mountain Pipeline is a 210 mile crude oil pipeline system that comprises two lateral pipelines originating in the Granite Wash and Mississippi Lime Plays. The two pipelines, which have a current capacity of 140 000 bpd, join and then terminate in Cushing, OK.

The Wattenberg Oil Trunkline System is a 75 mile crude oil pipeline in the DJ Basin, which transports production from Noble Energy to the White Cliffs Pipeline. The Wattenberg Oil Trunkline System includes a 38 mile extension that came online on 1 February 2015.

The terms of the acquisition agreement were approved by the Conflicts Committee of the Board of Directors of Rose Rock Midstream's general partner. The Conflicts Committee engaged Simmons & Company International to act as its independent financial advisor and to render a fairness opinion, and Akin Gump Strauss Hauer & Feld, LLP to act as its legal advisor.

Adapted from press release by Rosalie Starling

Published on 10/02/2015

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