Skip Olinger

Nervous About MLPs

I will reiterate what has been said above, this is not a well thought out piece and lacks facts and statistics to back it up. In short, this was a waist of time to read. By the way, if you actually read the quarterly press releases, many of the MLP's show the reconciliation from net income to EBITDA and then to distributable cash flow. Try a little research sometime.

Follow up to MATT:
Thanks for the insight on NG wells depleting faster than oil wells. I need to research that further.
There are 3 general types of MLP's: E&P and gathering companies tied to the price of commodities (hedging really matters here), pipeline companies that make a toll on throughput and propane distributors (tied to seasonal demand and to some extent their ability to hedge prices). Toll companies should be the safest and least volatile to energy prices. As I understand it, it is harder to shut off a gas well when prices are low than it is an oil well. Therefore, in most markets, a long haul pipeline will still get throughput and thus revenues. In theory this should make their distribution stream more stable. Look, if I could get my portfolio to grow at 10% a year, I'd be a happy man. So looking at Energy Transfer and Enterprise Products, I get temped here.

Best,
Skip