How many more master limited partnerships (MLPs) can the market absorb? The opportunity may be almost unlimited, according to observers at the IPAA's annual Oil & Gas Investment Symposium in New York. Market sentiment was highly positive after Pioneer Natural Resources announced its intent to file with the SEC by year-end to form two new MLPs. The stock rose 9% on the news. Pioneer will build a $250-million MLP this year around its long-life oil, gas and liquids production in West Texas' Spraberry Trend. The second MLP will incorporate coalbed-methane production from the Raton Basin in southern Colorado. Pioneer will be the general partner and hold majority ownership in each MLP. In the Spraberry, the company plans to drill 300 to 350 wells this year and 400 in 2008. In the Raton, it expects to drill 250 to 300 wells this year. "The resource play is a very good fit with a yield-oriented vehicle," said Garry Tanner, chief operating officer for Enerplus Resources Fund, Calgary, an energy income trust. "We see a lot of advantages to staying in the yield-oriented space" and not converting back to a corporation. For more on this, see the June issue of Oil and Gas Investor. For a subscription, call 713-260-6441.
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