Mostly held in so-called master limited partnerships, or M.L.P.'s, they looked expensive for a while.
With oil output booming and master limited partnerships starting to sprawl, it now seems a wasteful subsidy.
Because fixed-income investments are viewed as the main competition, analysts cite rising interest rates as the biggest threat to the performance of master limited partnerships.
That's why investors in Linn Energy demand an 8 percent yield compared with just 4.7 percent for Enterprise Products Partners, a $50 billion pipeline master limited partnership.
Linn Energy's $4.3 billion acquisition of Berry Petroleum, including debt, is the first time an oil-producing master limited partnership has swallowed a whole exploration company.
LinnCo will then transfer Berry's assets to Linn in exchange for additional ownership units in its sibling, which is structured as a master limited partnership.
Environmentalists and advocates of renewable energy also say the pipeline industry gets an unfair advantage because of the estimated $2 billion a year in federal tax breaks it receives through use of a corporate structure known as the master limited partnership.
The $300 billion master limited partnership sector, which is allowed to pass profit through to investors before it is taxed, has its foundations in pipeline companies whose steady fees are broadly impervious to the wild swings in commodity prices.
DealBook » The Tax Advantages Behind an Oil Deal | Linn Energy's acquisition of Berry Petroleum is the first time an oil-producing master limited partnership has swallowed a whole exploration company, Christopher Swann of Reuters Breakingviews writes.
I'm talking about publicly traded partnerships and limited liability corporations known as master limited partnerships.
It was originally a master limited partnership but recently converted to a real estate investment trust.
