Energy Politics

During a speech at Hart Energy’s A&D Workshop, John Walker of EV Energy Partners warned that MLPs were most likely only going to have $1 billion in acquisitions this year, making only a small dent in the annual deal numbers. After the fascination and rush in 2007 to gain long-lived assets for MLPs, several planned partnerships have been postponed or outright canceled.

I personally had originally speculated that the thing that would kill the MLP would be market oversaturation, with owning an MLP becoming a status symbol for companies that would prompt shareholders to demand to own such an entity purely for braggin rights. The poorly designed MLPs would then fail, poisoning the well for the industry and making MLP into a corporate Scarlet Letter.

But it looks like the market corrected itself before that could happen. The credit crunch seems to have scared away several deals, most citing the uncertain market conditions as the prime cause of canceling IPOs.

–Stephen Payne, Editor, Oil and Gas Investor This Week; spayne@hartenergy.com

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