New Source Energy Partners, LP (NSLP)
New Source Energy Partners, LP (NSLP) is among the newest in the space and went public less than a year ago. The partnership engages in the acquisition and development of oil and natural gas properties among roughly 89,000 gross acres in the Golden Lane field in east-central Oklahoma and 127 gross proved undeveloped drilling locations. The estimated proved reserves on its properties consist of 14.2 million barrels of oil, and natural gas reserve data are due out with the next set of quarterly financials.
This is a pretty straightforward story. The partnership is a subsidiary of a larger parent company, New Source Energy Corporation, that holds about 35% of the units, and Goldman Sachs (GS) is the second-largest shareholder, with just under 5% of the outstanding units. With a market cap of only $255 million, this is a relatively small enterprise, but one that is growing at nice clip and offers just about the double-digit income I target at a 9.9% yield.
Because this is such a new outfit with a limited track record, I’ve placed it in my Aggressive High-Yield Portfolio as a strong buy at or under $23.50, so position accordingly. If you do purchase shares, do so using limit orders, as the stock has a smaller float; it trades about 50,000 shares per day — far fewer than do the big-cap names that dominate the sector.
NSLP is a name you can feel good about acting on today. Now, here are a few more MLPs (or funds with direct MLP exposure) on my watch list: