Despite these challenges, a number of MLPs have entered the water-management space over the past few years, with NGL Energy Partners LP (NYSE: NGL) establishing a foothold in 2012 with its $693 million acquisition of High Sierra Energy Partners LP.
This business, which includes disposal and recycling operations in the Permian Basin, Eagle Ford Shale and the Marcellus Shale, now accounts for 23 percent of the diversified MLP’s operating cash flow.
Earlier this year, Ferrellgas Partners LP (NYSE: FGP) completed the $124.7 million purchase of Sable Environmental Services, a company that handles fluids for operators in the Eagle Ford Shale. This deal marked the publicly traded partnership’s first effort to diversify beyond its legacy propane distribution business.
It’s no accident that NGL Energy Partners and Ferrellgas Partners gravitated to water solutions; the business features similar characteristics to the MLPs’ legacy propane distribution operations and leverages their existing expertise in trucking logistics.
And despite the highly competitive nature of oil-field water management, this business appeals to scrappier publicly traded partnerships for a number of reasons:
Your complete guide to energy investing, from growth stocks to high-yielders.
In October 2012, renowned energy expert Elliott Gue launched the Energy & Income Advisor, a twice-monthly investment advisory that's dedicated to unearthing the most profitable opportunities in the sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.
Elliott and Roger on Oct. 30, 2017
Balanced portfolios of energy stocks for aggressive and conservative investors.
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.