Dorchester Hugoton Announces an Intended Deal

The founding general partner of DHULZ has apparently found a younger person he can trust to use the partnership's assets as part of a base in a larger entity that will attempt to develop a growing income stream free of UBTI (unrelated business taxable income).  We need to study the proposed transaction before we draw a firm conclusion.  Nonetheless we can say that DHULZ already enjoys favorable market recognition with a McDep Ratio of 1.14.   A conservative investor looking for high income might choose to cash in, pay the tax and invest the proceeds in something like Hugoton Royalty Trust at a McDep Ratio of 0.78.  Yet, an optimistic investor might look at the favorable recognition enjoyed by the only other master limited partnership in our coverage, Teppco Partners, at a McDep Ratio of 1.47 and hope that DHULZ might do particularly well in the proposed new entity.

Excerpt from August 6, 2001; Meter Reader: Power Glut or Opportunity?