The oil and gas industry is divided into three major sectors: upstream, midstream and downstream. The upstream sector is commonly known as the exploration and production (E&P) sector. The upstream sector includes the searching for potential underground or underwater crude oil and natural gas fields, drilling of exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil and/or raw natural gas to the surface.
A master limited partnership (MLP) is organized similar to a limited partnership and it is traded publicly on one of the stock exchanges. MLPs are limited to enterprises that engage in only certain types of businesses. These businesses are primarily engaged in natural resources, such as petroleum and natural gas extraction and transportation. To qualify for MLP status, a partnership must generate at least 90 percent of its income from activities related to the production, processing or transportation of oil, natural gas and coal. MLPs are exempt from corporate income tax at both the state and federal levels and may record a pro-rated share of depreciation on their own tax forms to reduce liability.
A master limited partnership (MLP) is organized similar to a limited partnership and it is traded publicly on one of the stock exchanges. MLPs are limited to enterprises that engage in only certain types of businesses. These businesses are primarily engaged in natural resources, such as petroleum and natural gas extraction and transportation. To qualify for MLP status, a partnership must generate at least 90 percent of its income from activities related to the production, processing or transportation of oil, natural gas and coal. MLPs are exempt from corporate income tax at both the state and federal levels and may record a pro-rated share of depreciation on their own tax forms to reduce liability.
"A century ago oil was just an obscure commodity; today it is almost as vital to human existence as water." |
Exploration and Production MLPs are a group of securities I've become interested in lately for their consistency in their dividend payments. They're also where the majority of profits are made in the oil and gas industry. As a result, I've added a drop down section titled "E&P MLPs" to identify a select few of the companies in this space that I'm interested in investing in.
Below is a list of these companies along with their current yield and projected percentage increase in price based upon their one year projected price target. As you can see, these companies appear to be great investments based solely on their current yield. But by adding in their projected one year price target, an investor can easily see why I'm currently interested in accumulating positions in these companies at these prices.
Below is a list of these companies along with their current yield and projected percentage increase in price based upon their one year projected price target. As you can see, these companies appear to be great investments based solely on their current yield. But by adding in their projected one year price target, an investor can easily see why I'm currently interested in accumulating positions in these companies at these prices.
| Company BBEP EVEP LGCY LINE LRE MEMP MCEP NSLP QRE VNR | Yield 9.88% 9.24% 9.04% 10.00% 11.32% 9.59% 9.16% 9.88% 10.43% 8.34% | Today's Price $19.94 $33.35 $26.10 $28.99 $17.32 $22.95 $22.50 $23.29 $18.70 $29.85 | Target Price $22.09 $41.44 $29.55 $34.38 $18.00 $24.08 $26.57 $25.00 $19.73 $32.46 | % Increase 10.78% 24.25% 13.21% 18.59% 1.03% 4.92% 18.08% 7.34% 5.50% 8.74% |
Hopefully others will find this newly added section of E&P MLPs helpful in providing ideas for further investigation.
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