The upstream MLPs will eventually have a negative impact on upstream asset flow in the U.S., according to Ken Olive, president and chief executive of The Oil & Gas Asset Clearinghouse. Olive spoke recently to more than 250 business-development professionals at A&D-The Workshop, presented by A&D Watch and Oil and Gas Investor. The lower cost of capital available to MLPs for acquisitions, due to the advantage of the tax flow-through structure to investors, is "very compelling," he said. Sale metrics are destined to increase further because of this and rising commodity prices. This friendly acquisition environment will, he said, result in MLPs "aggregating assets" to commit to distributions-in essence, hoarding the best producers. "MLPs are dominating your low-risk, long-life purchases," he said. "Its tough to sell assets whenever you're struggling to meet your distribution demands." For more on this, see the November issue of Oil and Gas Investor. For a subscription, call 713-260-6441.
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