
14.	ACQUISITIONS

Mid-America Midstream Gas Services, L.L.C.

On August 1, 2013, we acquired the equity interest of Mid-America Midstream Gas Services, L.L.C. ("MMGS"), a wholly owned subsidiary of Chesapeake Energy Corporation (NYSE: CHK)("Chesapeake"), which is the owner of gas gathering and processing assets in the Mississippi Lime play for approximately $316.1 million in cash. We incurred approximately $3.6 million in transaction related general and administrative expenses. The transaction was funded through the combination of a portion of the net proceeds from the sale of the Notes and a borrowing under the revolving credit facility under SemGroup's corporate credit agreement. Highlights of the acquisition include the following:


•	200 miles of gathering pipeline;


•	Rose Valley I plant - A 200 mmcf/d (million cubic feet per day) cryogenic processing plant, expected to be in operation in the first quarter of 2014;


•	Rose Valley II plant - A 200 mmcf/d cryogenic processing plant, expected to be in operation in the first quarter of 2016;


•	Approximately 540,000 net acre dedication in the core of the Mississippi Lime play, supported by a recently announced joint venture between Chesapeake and Sinopec International Petroleum Exploration and Production Corporation ("Sinopec"); and


•	A 20-year, 100% fee based, gas gathering and processing agreement with certain affiliates of Chesapeake and Sinopec.

Rose Valley plants I and II will require approximately $125 million of additional capital expenditures for completion as well as additional capital related to future well connections.

We have included MMGS in our condensed consolidated financial statements as of August 1, 2013 in our SemGas segment. During the three months and nine months ended September 30, 2013, our condensed consolidated statements of operations and comprehensive income did not include material amounts of revenue or operating income related to MMGS. The proforma impact to comparative prior year periods, had the acquisition occurred at the beginning of the comparative prior year period, is not significant as the business is in the development stage.

We have received a preliminary independent appraisal of the fair value of the assets acquired in the MMGS acquisition. The estimates of fair value reflected as of September 30, 2013 are subject to change and such changes could be material. We currently expect to complete this process prior to filing our Form 10-K for the year ending December 31, 2013. We have preliminarily estimated the fair value of the assets acquired as follows (in thousands):



Property, plant and equipment	$	123,316
Customer contract intangible	169,244
Goodwill	23,587
Total assets acquired	$	316,147

Goodwill represents the excess of the estimated consideration paid for the acquired business over the fair value of the individual assets acquired. Goodwill primarily represents the value of synergies between the acquired entity and the Company and the opportunity to use the acquired business as a platform for growth. We estimate that all of the goodwill will be deductible for federal income tax purposes and will be amortized on a straight-line basis over 15 years.

Barcas Field Services, LLC

On August 1, 2013, our consolidated subsidiary, Rose Rock, executed a definitive agreement to acquire the assets of Barcas Field Services, LLC ("Barcas"), which owns and operates a crude oil trucking fleet for $50.0 million in cash. The transaction closed on September 1, 2013. Highlights of the acquisition include the following:


•	114 trucks, 120 trailers and miscellaneous equipment; and


•	a long-term take-or-pay customer transportation agreement.

We have included Barcas in our condensed consolidated financial statements as of September 1, 2013 in our Crude segment. During the three months and nine months ended September 30, 2013, our condensed consolidated statements of operations and comprehensive income did not include material amounts of revenue or operating income related to Barcas. The proforma impact to comparative prior year periods, had the acquisition occurred at the beginning of the comparative prior year period, is not significant.

We have received a preliminary independent appraisal of the fair value of the assets acquired in the Barcas acquisition. The estimates of fair value reflected as of September 30, 2013 are subject to change and such changes could be material. We currently expect to complete this process prior to filing our Form 10-K for the year ending December 31, 2013. We have preliminarily estimated the fair value of the assets acquired as follows (in thousands):



Property, plant and equipment	$	16,690
Customer contract intangible	6,018
Goodwill	27,261
Total assets acquired	$	49,969

Goodwill represents the excess of the estimated consideration paid for the acquired business over the fair value of the individual assets acquired. Goodwill primarily represents the value of synergies between the acquired entity and the Company, the opportunity to use the acquired business as a platform for growth, and the acquired assembled workforce. We estimate that all of the goodwill will be deductible for federal income tax purposes and will be amortized on a straight-line basis over 15 years.

NGL Energy

On August 6, 2013, we completed the acquisition of approximately 5.36% of the general partner of NGL Energy, which increases our ownership of NGL Energy's general partner to 11.78%.

Goodwill

The above acquisitions accounted for the majority of the change to our goodwill during the nine months ended September 30, 2013, as follows (in thousands):



Balance at December 31, 2012	$	9,884
Acquisitions	50,848
Currency translation adjustments	(56		)
Balance at September 30, 2013	$	60,676