This Must be MLP Heaven for Some

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For folks that like to buy Master Limited Partnerships it must be like heaven this year.  It is a continuous stream of issues from the energy arena.


While we are not big fans of the energy MLP’s we would buy some at the IPO price if we had access–but seldom do we have first pop at them.  Our purchases would not be ‘buy and hold’ but would be unloading not too long after purchasing.  Understanding that it is difficult for average investors to get in on a decent MLP IPO (and even harder if you start ‘flipping’ issues–likely you won’t get to do that more than once or twice as flippers are not well liked in the IPO arena) we don’t even try.

Last week we had CONE Midstream Partners (ticker:CNNX) came to market at $22 on Thursday–of course it didn’t publicly trade there–it hit $30 during the first day–drifting lower since then to close at $28.72 today.  CNNX plans minimum distributions of .85/annually—about 3% on todays price. While CNNX is a quality issue 3% doesn’t excite us much.  If you want to read their prospectus it is here.


JP Energy Partners (ticker:JPEP) should be coming to market any day now.  The offering will probably be at $21/unit and they will have a minimum initial distribution of $1.30/unit annually (6.2% on the offering price).  JP Energy Partners is a midstream company with a small number of pipelines as well as storage and transportation of crude and refined oil and natural gas liquids.  This could be interesting if it comes out of the gate at a reasonable price.  Their website is here.

Issues that are yet to come (only God knows for sure when) are Shell Midstream Partners,Antero Midstream Partners, Dominion Midstream Partners and Hess Midstream Partners.  Obviously Shell Midstream will be the mac daddy of of MLP IPO’s and will have a never ending stream of possibilties for drop down assets. 

Another to come to market will be Columbia Pipeline Partners which could be a good sized issue as they own 15,000 miles of pipeline and huge amounts of gas storage. Columbia is owned by large utility NiSource which is spliting the pipeline business away from the utility.  It is likely this issue will not happen until mid 2015. (thanks to Larry for the heads up on this one).

Virtually every midstream IPO to come to market this year has given a holder a shot at 15-25% gains within a few weeks–we just wish we were one of those fortunate ones.


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Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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