More than 40% of E&P industry leaders believe upstream MLPs are good for the U.S. industry. Approximately 60% believe they are bad for the U.S. oil and gas exploration and production business or are unsure right now. This is according to a brief survey of some two dozen E&P decision-makers listed in the Oil and Gas Finance Sourcebook. Participants include some who are with E&P companies that are MLPs or have announced they are forming MLPs; others are with traditional private and public producers. "MLPs are cheap financing vehicles for E&Ps and less likely to fail than the 1980s MLPs due to suitable assets involved," one executive said. "Even so, somebody will figure a way to screw them up and, in the early 2010s, we'll be back to rolling them up." Another producer says, "I'm not sure if all MLPs on the drawing board today have solid business models that truly reflect the investment expectations of an MLP unit-holder. It seems like a lot of frenzied 'herd mentality' capital is pouring into these IPOs that may get burned in the not-to-distant future." For more on this, see the September issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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