A group of coal-mining, upstream and midstream oil and gas companies and shipping companies have one thing in common—they formed master limited partnerships (MLPs) with activities now focused on U.S. unconventional resources, according to speakers at the recently held National Association of Publicly Traded Partnerships in Old Greenwich, Connecticut.

Houston-based Natural Resource Partners LP generates revenue from its ownership and management of mineral-reserve properties such as coal, aggregate and oil and gas reserves. The partnership does not actively engage in mining, but leases its properties to various operators in exchange for royalty payments, thus allowing it to avoid operating costs and direct exposure to environmental, permitting and labor risks.

In 2011, Natural Resource hired an oil and gas team to focus on acquisitions of additional royalty properties and leasing mineral acreage for development. Since December 2011, the company has spent $64 million to acquire 19,200 net acres in the Mississippi Lime oil play in Oklahoma and leases those properties to several active operators who are engaged in oil and gas development through horizontal drilling.

“Our oil and gas royalties currently represent only 4% of our revenues,” said Nick Carter, president and chief operating officer. “But we plan to grow that over the next several years as we further development our properties.”

Elsewhere, Houston-based Linn Energy LLC, the ninth-largest MLP and eleventh-largest domestic independent oil and natural gas company, is focused on unconventionals. Since its initial public offering (IPO) in 2006, Linn has built a large, long-life, diversified reserve base of 4.3 trillion cubic feet equivalent, of which 48% is oil and NGLs and 52% is natural gas.

Its holdings include some 15,000 gross productive oil and natural gas wells in the Salt Creek field in Wyoming (CO2 flood), 600 horizontal locations in the Granite Wash, 400 locations in the Wolfberry, 800 horizontal locations in the Bakken, about 65 horizontal locations in the Cleveland play and 800 locations in the Kansas Hugoton play, among others.

To grow, the company closed four acquisitions totaling $2.3 billion since December 2011, enabled by its $800 million equity raises since December 2011, a $1.8 billion senior-note offering in March 2012 and an increase in its revolving-credit facility commitment from $1.5 billion to $2 billion.

Linn hedged nearly 100% of its expected natural gas production through 2017 and almost 100% of its expected oil production through 2016 at “attractive prices,” said Mark Ellis, president and chief executive.

“There is a lot of competition for acquisitions, but our size and scale allow us to acquire assets through what we call ‘the Bank of Linn,’ so we are not experiencing any slowdown. And while these prolonged weak gas prices are putting pressure on E&P C-corps, we have had an 81% increase in our quarterly distributions since our IPO.”

Today, Linn Energy is excited about its Hogshooter development in Hemphill County, Texas, said Ellis. “We’ve successfully drilled three wells there in the primarily oil-producing Hogshooter play, with average 24-hour initial production rates of about 2,500 bbl. per day of oil, 500 bbl. of NGLs and 3 MMcf per day of gas. We plan to shift a portion of capital from our Granite Wash program to focus on the Hogshooter interval.”

Linn Energy expects to drill or participate in 81 horizontal wells in 2012, including 65 operated wells and 16 non-operated wells, to focus on liquids-rich zones in the Carr, Britt, A and Hogshooter.

Yet, not all MLPs have been immune to the current economic environment. “It’s been a challenging year,” said John Sherman, president and chief executive of Inergy LP, a diversified energy infrastructure, distribution and gas storage company that IPO’d Inergy Midstream LP in December 2011.

In addition to its midstream assets, Inergy is the fourth-largest U.S. retailer of propane—but not for long. In April 2012, the company announced its agreement to sell its retail propane operations to Suburban Propane Partners LP for about $1.8 billion and expects to close that transaction in fourth-quarter 2012.

Going forward, the company plans to derive at least 30% of its revenue from transportation services. At the conference, it announced plans to expand its Marc I pipeline (with a total capital investment of $240 million, for expected completion in September 2012), Watkins Glen NGL system ($65 million, fourth-quarter 2012), U.S. Salt Gas Storage development ($85 million, 2015), Commonwealth Pipeline ($1 billion, second-quarter 2016), West Coast operations ($21 million, June 2012) and its Tres Palacios Header Extension ($30 million, second-half 2012).

“Our core natural gas infrastructure is in the Northeast in the heart of the Marcellus shale and in Texas adjacent to the Eagle Ford shale,” said John Sherman, president and chief executive. “And our NGL assets are uniquely positioned for the infrastructure development of the Marcellus, Utica and Eagle Ford shales.”

Meanwhile, Western Gas Partners LP was formed by Anadarko Petroleum Corp. to monetize its midstream assets while maintaining control of its crucial take-away options, said Donald Sinclair, president and chief executive, who intends to shift the company’s focus from dry-gas plays to wet gas.

“Today, 75% of our assets are in liquids-rich basins and about 26% is in dry-gas basins,” he said. Western Gas holds assets in Texas and the Rocky Mountains, including 15 natural gas gathering systems, eight natural gas treating facilities, nine processing facilities, one natural gas pipeline, two NGL pipelines and one crude oil pipeline.

In the shipping industry, Teekay Corp. formed Teekay GP LLC as a general partnership to form Teekay LNG Partners LP. The company’s revenues are generated by providing floating crude-production, storage and offloading services to major energy companies. Today, it is the world’s largest owner and operator of shuttle tankers with a market-leading position in the North Sea and Brazil

“For the LNG market, the U.S. exports could be a game changer,” said Scott Gayton, finance director. “The U.S. domestic gas price of about $2 to $3 per million Btu, versus Asian prices of about $14 to $18, makes a compelling case for LNG arbitrage trade.”

A potential export capacity of 70 million tons per year would put the U.S. on the list of the top three LNG exporters by the end of the decade, he said. “U.S. exports could significantly alter the LNG trade landscape in the next decade. However, significant obstacles are still to be overcome.”

From coal miners to shippers, the MLP business structure enables low-cost capital, pass-through tax treatment for its unitholders and profitable access to drop-down resources from general partnerships, said the speakers. The big story for these companies is the emerging unconventional plays of North America. For companies with assets appropriate for an MLP structure, it’s a winning combination.

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