PVR Partners LP (PVR), Natural Resource Partners LP (NRP), Rhino Resource Partners, L.P. (RNO): Is Coal Or Gas Dragging Down This LP?

A few wells can make a big difference
Rhino Resource Partners, L.P. (NYSE:RNO), which is using its coal business to get into the natural gas and oil drilling space too, shows just how important a few wells can be. Although drilling only represents about 2% or so of the partnership’s sales, adding just 10 new wells in the second quarter led to a nearly 300% increase in revenues on that side of the business.

As a relatively small partnership, that type of growth offers more aggressive investors notable upside. And, Rhino Resource Partners, L.P. (NYSE:RNO) is scheduled to open a new mine in the middle of 2014 that already has purchase agreements in place. Rhino Resource Partners, L.P. (NYSE:RNO) is also among the least leveraged coal plays.

While the rest of the year should be relatively weak, 2014 could turn out to be a good one for the company, even if coal doesn’t bounce back. Although the 13% yield is concerning, aggressive income investors should take the time to examine this LP.

Timing is everything
For PVR Partners LP (NYSE:PVR), meanwhile, Rhino Resource Partners, L.P. (NYSE:RNO)’s big revenue jump from just 10 wells should offer some solace. PVR believes the wells that didn’t get hooked up are just delayed, not gone forever. And it is expecting to hit its pipeline volume numbers before the year is out. That’s not likely to happen soon enough to turn 2013 around, but it will lead to a solid start for 2014. Not least of which will be particularly easy comparisons in the first half of the year.

While PVR Partners LP (NYSE:PVR)’s swoon has left it yielding north of 9%, that won’t last long as pipelines get added to its system and results start to improve. Although not strictly a coal play, this is an interesting option for income investors to benefit from a coal turnaround and a notable, but slow growing pipeline business.

For those looking for a coal play with less diversification, however, Natural Resource Partners LP (NYSE:NRP) is a good high-yielding call. Rhino Resource Partners, L.P. (NYSE:RNO), meanwhile, probably has more upside as it grows its drilling business from a small base and within a smaller company.

The article Is Coal Or Gas Dragging Down This LP? originally appeared on Fool.com and is written by Reuben Brewer.

Reuben Brewer has positions Rhino Resource Partners and Natural Resource Partners. The Motley Fool has no position in any of the stocks mentioned.

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