Pipeline Owner SemGroup Taps Adviser for Capital Raise Options

(Bloomberg) -- Oil and natural gas pipeline owner SemGroup Corp. is working with an adviser on options to raise capital, according to people familiar with the matter, as much of the public equity market remains effectively closed to the so-called midstream sector.

SemGroup has hired an adviser to look at options that could include project joint ventures, non-core asset sales and preferential equity offerings, said the people, who asked not to be named because the discussions aren’t public.

“SemGroup has routinely engaged advisers on a number of occasions over the last 18 months to assist with a variety of processes as we’ve simplified our asset portfolio, focused on balance sheet strength and executed a clear growth strategy on the Gulf Coast, Mid-Continent and in Canada,” Tom Droege, a spokesman for SemGroup, said in an emailed statement.

Droege declined to comment on specific efforts by Tulsa, Oklahoma-based SemGroup.

SemGroup’s shares rose as much as 3.3 percent Wednesday. They were up 3 percent to $16.32 at 2:56 p.m. in New York trading.

Last month, SemGroup said it was teaming up with KKR & Co. to buy Meritage Midstream ULC from Riverstone Energy Ltd, the latest in a series of private equity deals as pipeline companies struggle to raise money via the capital markets. SemGroup Chief Executive Officer Carlin Conner said in an interview at the time that the company “needed some financial support, partly because the common equity market was closed.”

To contact the reporters on this story: Kiel Porter in New York at kporter17@bloomberg.net;Rachel Adams-Heard in Houston at radamsheard@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, ;Elizabeth Fournier at efournier5@bloomberg.net, ;Alan Goldstein at agoldstein5@bloomberg.net, Michael Hytha, Josh Friedman

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