Billionaire Leon Cooperman of Omega Advisors has upped his stake over 88% in a monster dividend paying oil and gas company. Per a recent SEC filing, Cooperman now owns 2.87 million shares, or 7.2% of the outstanding shares, of Atlas Resource Partners, L.P. (NYSE:ARP), which pays a dividend that yields 8.5%. At the end of the third quarter, Cooperman owned only 1.52 million shares.
Keeping it in the family
Cooperman is actually a big fan of all of the Atlas companies, not just Atlas Resource Partners. Cooperman also owns Atlas Energy LP (NYSE:ATLS) and Atlas Pipeline Partners, L.P. (NYSE:APL) . At the end of the third quarter Cooperman had Atlas Energy as his 13th largest 13F holding, or 2.67% of his portfolio, and had Atlas Pipeline as his 6th largest, at 3.42% of his portfolio (check out Cooperman’s entire portfolio).
Atlas as a whole
Atlas Energy is a master limited partnership that owns all the general partner units of Atlas Resource Partners and 44% of the limited partner interests in its upstream subsidiary Atlas Resource Partners. So Atlas Energy is collecting a large part of the dividends paid out by Atlas Resource Partners. Atlas Energy also owns the general partner of its midstream oil and gas subsidiary Atlas Pipeline Partners.
The suite of Atlas companies all pay rather robust dividend yields:
|Atlas Resource Partners||8.53%|
|Atlas Pipeline Partners||7.00%|
The outlook for the oil and gas industry is positive, which indeed bodes well for the industry. U.S. GDP is expected to grow 3.0% in 2013, according to S&P, versus the expected 2.3% in 2012. Also helping the oil and gas outlook is the Energy Information Administration’s estimates that natural gas consumption is expected to rise 0.6% in 2013.
Other major oil and gas companies in the industry includes Range Resources Corp. (NYSE:RRC) and Continental Resources, Inc. (NYSE:CLR). It has been speculated that Chevron, with its robust cash position, could be interested in snatching up more assets or companies, including Range or Continental. Continental has the best position in the highly popular Bakken shale, owning over 900,000 acres.
Check out how Continental stacks up in the Bakken:
Source: Motley Fool
Continental would be a great opportunity for Chevron to further expand its asset base into another highly productive shale play, the Bakken. Range, on the other hand, is a stable oil and gas company in the Marcellus shale, owning over 900,000 acres there. Range Resources’ assets would be a solid addition to the some 480,000 acres in the Marcellus shale that Chevron bought from Atlas Energy in 2011.
Both companies have also been showing strength in their production numbers. Range Resources recently released fourth quarter production numbers that showed production was up 35% for the quarter on a year over year basis, with liquids (oil and natural gas liquids) leading the way, and production for that segment was up 41%. This was the ninth consecutive year of double-digit production growth. Continental Resources also recently reported production results. This oil and gas company showed full year 2012 production up 58% year over year.