EOTT ENERGY PARTNERS LP /Houston, Texas Oil Firm Eyes Stable Businesses To Grow Profit.(THE NEW AMERICA)

Byline: Douglas Austin

Keep the oil and profits flowing. That's the message unit holders of EOTT Energy Partners LP like to hear.

EOTT is a master limited partnership that buys, ships and resells crude oil. It's the middleman earning its keep on razor-thin margins. The job: get the right amount of oil to the right place on time.

To meet this challenge, the firm deploys 8,200 miles of pipeline and gathering systems, along with a fleet of 285 trucks. About 91% of EOTT's volume comes from independent oil producers, with the rest coming from major integrated oil companies.

Keep It Predictable

The firm's general partner is EOTT Energy Corp., a wholly owned subsidiary of Enron Corp. For most firms, investors look at earnings to help evaluate quality. For partnerships, they keep their eye on distributable cash flow paid to unit holders.

The trick with partnerships is to generate stable, predictable cash flow. That hasn't always been a strength at EEOT because its asset mix historically has included a heavy dose of cyclical businesses.