weiwentg

Pipeline Partnerships Offer Promise - Barron's

I agree with Graham. EPE and MGG are publicly traded general partners, which receive incentive distributions. MGG's limited partner, MMP, has distributions in the high splits, where half of every dollar of incremental cash flow goes to MGG as incentive distributions. EPE and MGG will be able to grow their dividends very rapidly.

KMP is just a regular MLP, but their asset base is diverse and high quality. I think there is little risk in KMP and that at today's prices, it's a steal.

Quicksilver Gas Partners (KGS) is one higher-risk MLP that I own. Quicksilver (KWK) is a smaller E&P company that operates in the Barnett shale. I believe their growth prospects are tremendous. KGS, their limited partnership, should be able to grow its distributions at a tremendous rate over the next few years. Although Quicksilver has cut its near term production outlook based on problems in the capital markets, they are still producing a growing amount of gas, and KGS isn't directly exposed to commodity price risk.