For years, satirical late-night-TV host Stephen Colbert has been running a series on his show called "Better Know a District," which highlights one of the 435 U.S. congressional districts and its representative. While I am no Stephen Colbert, I am brutally inquisitive when it comes to the 5,000-plus listed companies on the U.S. stock exchanges.

That's why I've made it a weekly tradition to examine one seldom-followed company within the Motley Fool CAPS database, and make a CAPScall of outperform or underperform on that company.

For this week's round of "Better Know a Stock," I'd like to take a closer look at Mid-Con Energy Partners (MCEP).

What Mid-Con Energy Partners does
Mid-Con Energy Partners is a master-limited partnership that owns and operates upstream oil and gas fields, with a primary focus on the Mid-Continent region of the United States. The company holds about 55% of its total reserves in Oklahoma, with Colorado making up another substantial portion of its holdings.

In its latest quarter, Mid-Con Energy reported a 48% increase in average oil production, to 1,913 barrel of oil equivalent per day over the prior year, and a whopping 79% increase to adjusted EBITDA. Over the past few weeks, the company has announced the purchase of two oil properties and working interests in the Hugoton Basin region, for a sum of $32.6 million.

Its competitors
The great thing about oil and gas companies is that there's a veritably insatiable demand for energy. On the other hand, every other oil and gas company knows this, so competition among drillers is fierce, and jockeying for new land leases that result in positive gains for Mid-Con can be difficult. In Oklahoma, Mid-Con faces competition from some of the industries' biggest players, such as Chesapeake Energy (CHKA.Q), ExxonMobil's (XOM 1.84%) XTO Energy, and Newfield Exploration (NFX), which held 85,000, 160,000, and 165,000 net acres, respectively, in 2008, according to a Deutsche Bank report. In Colorado, Mid-Con faces leasing competition from Patterson-UTI (PTEN 2.29%), which is one of the regions bigger players.

Perhaps nothing stands in the way of these companies more than a decrease in the average selling price of oil and natural gas. If Chinese growth and European debt worries persist, there's a reasonable chance that oil prices, which have already been retracing, could head even lower. On the other hand, President Obama's pledge to move America toward energy independence means an increased demand for oil and natural gas, and the support of the administration to produce more fuel.

The call
After carefully reviewing the prospects for Mid-Con Energy Partners, I've decided to make a CAPScall of outperform on the company.

To begin with, Mid-Con's general partner, Mid-Con Energy Group, has made very smart and strategic oil and gas purchases that have resulted in higher revenue and oil equivalent production, as well as robust EBITDA. This has all translated into an annualized payout of $1.94 in dividends, equating to a dividend yield of a whopping 10%. Not only is this dividend sustainable but, if the company's share price fails to respond to weak global growth, it could head even higher.

Second, Mid-Con engages in hedging practices that help protect it from the falling price of oil. Current contracts have the future sales price of its oil selling at roughly $20 more than the current spot price through Jan 2013.

Finally, the push toward U.S. energy independence is only going to fuel continued investment in upstream drilling activities. As an MLP that has a reasonably low amount of debt and strong profitability, I feel confident of its ability to make smart oil and gas acquisitions moving forward.

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