These Enormous Dividends Have Undergone Massive Overhauls in 2014

Source: Flickr/Clinton Steeds.

Oil and gas master limited partnerships pay enormous distributions to their investors. Atlas Resource Partners (NYSE: ARP  ) , for example, pays a gigantic 11.6% distribution to its investors. Meanwhile, Memorial Production Partners' (NASDAQ: MEMP  ) units currently yield 9.8% while Legacy Reserves' (NASDAQ: LGCY  ) current payout is 8.6%. What has been interesting to watch this year is the overhaul these companies have undergone in an effort to maintain and grow these already-enormous payouts.

For example, Atlas Resource Partners recently spent $420 million to buy some very low-decline oil properties in Colorado. While that sum represents a pretty big deal for Atlas Resource Partners, however, what was an even bigger deal was a much smaller natural gas acquisition that added substantial reserves. Meanwhile, Memorial Production Partners also spent a lot of money as it made three deals, including one where it forked over $935 million to pick up some oil properties in Wyoming. Finally, Legacy Reserves went in the other direction after it announced a game-changing strategic alliance where it acquired natural gas reserves.

Each deal represented a slight shift in direction for these high-yielding energy companies. To help investors gain a better understanding of what these shifts mean, I've created the following slideshow. The presentation shows what these companies were like before the deals, as well as how each has changed since the deal. By comparing the before and after snapshots, we can see which companies improved and which might still have work to do. 

The secret to dividend success
Memorial Production Partners, Legacy Reserves, and Atlas Resources Partners all have one thing in common. Each of these three companies is taking advantage of a small IRS "loophole" that is helping them line their investors' pockets with cold, hard cash. To learn more about this income strategy you need to check out our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

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Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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Related Tickers

8/28/2015 4:02 PM
ARP $3.83 Up +0.44 +12.98%
Atlas Resource Par… CAPS Rating: **
LGCY $6.63 Up +0.77 +13.14%
Legacy Reserves LP CAPS Rating: **
MEMP $7.21 Up +0.60 +9.08%
Memorial Productio… CAPS Rating: **