Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Although Small, New Source Energy Partners LP Worth A Look

Investors in master limited partnerships (or MLPs) have long had plenty of choices in the midstream space, but E&P MLPs don't get quite as much attention. New Source Energy Partners LP (NSLP) is one of those worth a closer look. Although this is a small partnership almost solely focused on Oklahoma's Hunton formation, New Source Energy Partners has taken advantage of operational knowledge and Oklahoma's forced pooling rules to generate good production growth.

Looking down the line, the partnership's debt capacity and the potential for drop-downs from the sponsor should boost the growth potential. The risk here looks a little above-average, but a current yield of almost 10% and upside through the mid-$20s seems like more than adequate compensation.


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