Best Oil Companies To Invest In Right Now

Probably shouldn’t have triple-mortgaged the house in Dongguan in order to redo the condo in Tianjin with bamboo flooring.

If it sounds vaguely familiar, it’s what too many Americans experienced in 2008. Now it’s China’s turn. The housing market there is in turmoil, reminiscient of the subprime issues faced in this country, according to Mark Mobius.

While China's housing market problems are similar in scale to those faced during the U.S. subprime mortgage bubble, it won't lead to another Lehman Brothers-style crash, Mobius, the emerging-market fund manager at Franklin Templeton, told CNBC on Monday.

“The similarities could not be denied,” Mobius said, but since Chinese banks are owned by the government, they will not be allowed to fail.

The network notes investor fears have been heightened after a credit crunch last week led to a spike in yields on interbank loans. Some analysts have pointed out the credit crunch was spiked by the Chinese central bank's tightening of liquidity, rather than a loss in confidence among banks.

Top Industrial Disributor Stocks To Own Right Now: Enbridge Inc(ENB)

Enbridge Inc. engages in the transportation and distribution of crude oil and natural gas primarily in Canada and the United States. Its Liquids Pipelines segment operates common carrier and contract crude oil, natural gas liquids (NGLs), and refined products pipelines and terminals. The company?s Gas Distribution segment distributes natural gas to residential, commercial, and industrial customers primarily in central and eastern Ontario, northern New York State, Quebec, and New Brunswick. Enbridge?s Gas Pipelines, Processing and Energy Services segment invests in natural gas pipelines, processing and green energy projects, and commodity marketing businesses, as well as performs commodity storage, transport, and supply management services. Its Sponsored Investments segment transports crude oil and other liquid hydrocarbons through common carrier and feeder pipelines, as well as transports, gathers, processes, and markets natural gas and NGLs; operates a crude oil and liqui ds pipeline and gathering system; and owns a 50% interest in the Canadian portion of Alliance Pipeline and partial interests in various green energy investments. The company was formerly known as IPL Energy Inc. and changed its name to Enbridge Inc. in October 1998. Enbridge Inc. was founded in 1949 and is headquartered in Calgary, Canada.

Advisors' Opinion:

• [By Aimee Duffy]

  The Seaway pipeline, the joint venture between�Enterprise Products Partners (NYSE: EPD  ) and Enbridge (NYSE: ENB  ) , has taken on a life of its own, as speculators are trying to gain access to the last bit of capacity to sell the space on a secondary market. In this video, Fool.com contributor Aimee Duffy explains what is going on and why this pipeline matters so much to oil producers and investors alike.

• [By Tyler Crowe]

  Today, many newly discovered unconventional sources are very light, sweet, and easy to refine. Since our Gulf Coast refineries are still geared toward heavy, sour crudes, we will continue to import that grade to use in these facilities. In fact, one type of crude oil that is strikingly similar to�Venezuelan�and Mexican crudes is Canadian oil sands. Canadian oil sands are in�desperate�need of refineries capable of treating this heavy mix, and Gulf of Mexico refineries are just the type of refinery these crudes need. This is the driving force for Canadian pipeline companies TransCanada (NYSE: TRP  ) and Enbridge (NYSE: ENB  ) expanding their takeaway capacity to the Gulf through the Keystone XL and the Trunkline conversion, respectively.

• [By Aimee Duffy]

  BP (NYSE: BP  ) just announced it is getting out of the wind power game, and in fact big oil's green energy initiatives are pretty negligible at this point. It could be disheartening state of affairs, but luckily pipeline companies are stepping in and picking up the slack. In this video, Fool.com contributor Aimee Duffy explores Enbridge's (NYSE: ENB  ) recent deal to buy into a wind project in Alberta, and reviews the alternative energy efforts already under way in the North American midstream industry.

Best Oil Companies To Invest In Right Now: MPLX LP (MPLX)

MPLX LP, incorporated on March 27, 2012, is a fee-based limited partnership formed by Marathon Petroleum Corporation to own, operate, develop and acquire crude oil, refined product and other hydrocarbon-based product pipelines and other midstream assets. The Company�� assets consist of a 51% indirect interest in a network of common carrier crude oil and product pipeline systems and associated storage assets in the Midwest and Gulf Coast regions of the United States.

The Company generates revenue by charging tariffs for transporting crude oil, refined products and other hydrocarbon-based products through its pipelines and at its barge dock and fees for storing crude oil and products at its storage facilities. The Company is also the operator of additional crude oil and product pipelines owned by Marathon Petroleum Corporation and its subsidiaries (MPC) and third parties, for which it is paid operating fees.

The Company�� assets consist of a 51% partner interest in Pipe Line Holdings, an entity which owns a 100.0% interest in Marathon Pipe Line LLC (MPL) and Ohio River Pipe Line LLC (ORPL), which in turn own: a network of pipeline systems, which includes approximately 962 miles of common carrier crude oil pipelines and approximately 1,819 miles of common carrier product pipelines extending across nine states. This network includes approximately 153 miles of common carrier crude oil and product pipelines, which it operates under long-term leases with third parties; a barge dock located on the Mississippi River near Wood River, Illinois, and crude oil and product tank farms located in Patoka, Wood River and Martinsville, Illinois and Lebanon, Indiana; and a 100.0% interest in a butane cavern located in Neal, West Virginia, which serves MPC�� Catlettsburg, Kentucky refinery.

Crude Oil Pipeline Systems

The Company�� crude oil pipeline systems and related assets are positioned to support crude oil supply options for MPC�� Midwest refineries, whic! h receive imported and domestic crude oil through a range of sources. Imported and domestic crude oil is transported to supply hubs in Wood River and Patoka, Illinois from a range of regions, including Cushing, Oklahoma on the Ozark pipeline system; Western Canada, Wyoming and North Dakota on the Keystone, Platte, Mustang and Enbridge pipeline systems, and the Gulf Coast on the Capline crude oil pipeline system.

The Company�� Patoka to Lima crude system is comprised of approximately 76 miles of 20-inch pipeline extending from Patoka, Illinois to Martinsville, Illinois, and approximately 226 miles of 22-inch pipeline extending from Martinsville to Lima, Ohio. This system also includes associated breakout tankage. Crude oil delivered on this system to MPC�� tank farm in Lima can then be shipped to MPC�� Canton, Ohio refinery through MPC�� Lima to Canton pipeline, to MPC�� Detroit refinery through MPC�� undivided joint interest portion of the Maumee pipeline, and its Samaria to Detroit pipeline, or to other third-party refineries owned by BP, Husky Energy, and PBF Energy in Lima and Toledo, Ohio.

The Company�� Catlettsburg and Robinson crude system is consisted of the pipelines: Patoka to Robinson and Patoka to Catlettsburg. Its Patoka to Robinson pipeline consists of approximately 78 miles of 20-inch pipeline, which delivers crude oil from Patoka, Illinois to MPC�� Robinson, Illinois refinery. Its Patoka to Catlettsburg pipeline consists of approximately 140 miles of 20-inch pipeline extending from Patoka, Illinois to Owensboro, Kentucky, and approximately 266 miles of 24-inch pipeline extending from Owensboro to MPC�� Catlettsburg, Kentucky refinery. Crude oil can enter this pipeline at Patoka, and into the Owensboro to Catlettsburg portion of the pipelines at Lebanon Junction, Kentucky, from the third-party Mid-Valley system.

The Company�� Detroit crude system is consisted of Samaria to Detroit and Romulus to Detroit. Its Samaria to Detroit pi! peline co! nsists of approximately 44 miles of 16-inch pipeline that delivers crude oil from Samaria, Michigan to MPC�� Detroit, Michigan refinery. This pipeline includes a tank farm and crude oil truck offloading facility located at Samaria.

The Company�� Romulus to Detroit pipeline consists of approximately 17 miles of 16-inch pipeline extending from Romulus, Michigan to MPC�� Detroit, Michigan refinery. Its Wood River to Patoka crude system is consisted of two pipelines: Wood River to Patoka and Roxanna to Patoka. Its Wood River to Patoka pipeline consists of approximately 57 miles of 22-inch pipeline, which delivers crude oil received in Wood River, Illinois from the third-party Platte and Ozark pipeline systems to Patoka, Illinois.

The Company�� Roxanna to Patoka pipeline consists of approximately 58 miles of 12-inch pipeline, which transports crude oil received in Roxanna, Illinois from the Ozark pipeline system to its tank farm in Patoka, Illinois.

Product Pipeline Systems

The Company�� product pipeline systems are positioned to transport products from five of MPC�� refineries to MPC�� marketing operations, as well as those of third parties. These pipeline systems also supply feedstocks to MPC�� Midwest refineries. These product pipeline systems are integrated with MPC�� expansive network of refined product marketing terminals, which support MPC�� integrated midstream business.

The Company�� Gulf Coast product pipeline systems include Garyville products system and Texas City products system. The Company�� Garyville products system is consisted of approximately 70 miles of 20-inch pipeline, which delivers refined products from MPC�� Garyville, Louisiana refinery to either the Plantation Pipeline in Baton Rouge, Louisiana or the MPC Zachary breakout tank farm in Zachary, Louisiana, and approximately two miles of 36-inch pipeline that delivers refined products from the MPC tank farm to Colonial Pipeline in Zachary.

The Company�� Texas City products system is comprised of approximately 39 miles of 16-inch pipeline that delivers refined products from refineries owned by MPC, BP and Valero in Texas City, Texas to MPC�� Pasadena breakout tank farm and third-party terminals in Pasadena, Texas. The system also includes approximately three miles of 30- and 36-inch pipeline that delivers refined products from MPC�� Pasadena breakout tank farm to the third-party TEPPCO and Centennial pipeline systems.

The Company�� Midwest product pipeline systems include Ohio River Pipe Line (ORPL) products system, Robinson products system and Louisville Airport products system. The Company�� ORPL products system is consisted of Kenova to Columbus, Canton to East Sparta, East Sparta to Heath, East Sparta to Midland, Heath to Dayton, and Heath to Findlay.

The Company�� Kenova to Columbus pipeline consists of approximately 150 miles of 14-inch pipeline that delivers refined products from MPC�� Catlettsburg refinery to MPC�� Columbus, Ohio area terminals. Its Canton to East Sparta pipeline consists of two parallel pipelines, which connect MPC�� Canton, Ohio refinery with its East Sparta, Ohio breakout tankage and station. The first pipeline consists of approximately 8.5 miles of six-inch pipeline that delivers products (distillates) from Canton to East Sparta. The second pipeline consists of approximately 8.5 miles of six-inch bi-directional pipeline, which can deliver products (gasoline) from Canton to East Sparta or light petroleum-based feedstocks from East Sparta to Canton.

The Company�� East Sparta to Heath pipeline consists of approximately 81 miles of eight-inch pipeline that delivers products from its East Sparta, Ohio breakout tankage and station to MPC�� terminal in Heath, Ohio. The Company�� East Sparta to Midland pipeline consists of approximately 62 miles of eight-inch bi-directional pipeline, which can deliver products and light petroleum-based feedstocks betwe! en its br! eak-out tankage and station in East Sparta, Ohio and MPC�� terminal in Midland, Pennsylvania. MPC�� Midland terminal has a marketing load rack and is able to connect to other Pittsburgh, Pennsylvania-area terminals through a pipeline owned by Buckeye Pipe Line Company, L.P. and a river loading/unloading dock for products and petroleum feedstocks. This pipeline can also transport products to MPC�� terminals in Steubenville and Youngstown, Ohio through a connection at West Point, Ohio with a pipeline owned by MPC.

The Company�� Heath to Dayton pipeline consists of approximately 108 miles of six-inch pipeline, which delivers products from MPC�� terminals in Heath, Ohio and Columbus, Ohio to terminals owned by CITGO and Sunoco Logistics Partners, L.P. in Dayton, Ohio. This pipeline is bi-directional between Heath and Columbus for product deliveries. Its Heath to Findlay consists of approximately 100 miles of eight- and 10-inch pipeline, which delivers products from MPC�� terminal in Heath, Ohio to MPC�� pipeline break-out tankage and terminal in Findlay, Ohio. Robinson products system is consisted of Robinson to Lima, Robinson to Louisville, Robinson to Mt. Vernon, Wood River to Clermont, Dieterich to Martinsville and Wabash Pipeline System.

The Company�� Robinson to Lima pipeline consists of approximately 250 miles of 10-inch pipeline, which delivers products from MPC�� Robinson, Illinois refinery to MPC terminals in Indianapolis, Indiana, as well as to MPC terminals in Muncie, Indiana and Lima, Ohio. Its Robinson to Louisville pipeline consists of approximately 129 miles of 16-inch pipeline, which delivers products from MPC�� Robinson, Illinois refinery to two MPC and multiple third-party terminals in Louisville, Kentucky. In addition, these products can supply MPC and Valero terminals in Lexington, Kentucky through the Louisville to Lexington pipeline system owned by MPC and Valero.

The Company�� Robinson to Mt. Vernon pipeline consists of ap! proximate! ly 79 miles of 10-inch pipeline that delivers products from MPC�� Robinson, Illinois refinery to a MPC terminal located on the Ohio River in Mt. Vernon, Indiana. It leases this pipeline from a third party under a long-term lease. The Company�� Wood River to Clermont pipeline consists of approximately 153 miles of 10-inch pipeline extending from MPC�� terminal in Wood River, Illinois to Martinsville, Illinois, and approximately 156 miles of 10-inch pipeline extending from Martinsville, Illinois to Clermont, Indiana. This pipeline also includes approximately 9.5 miles of pipelines utilized for the local movement of products in and around Wood River, Illinois, and Clermont, Indiana.

The Company�� Dieterich to Martinsville pipeline consists of approximately 40 miles of 10-inch pipeline, which delivers products from the termination point of Centennial Pipeline to Martinsville, Illinois. From Martinsville, these products (including refinery feedstocks) can be distributed to MPC�� Robinson, Illinois refinery or to other destinations through our other pipeline systems. Its Wabash Pipeline System consists of three interconnected pipeline pipelines: approximately 130 miles of 12-inch pipeline extending from MPC�� terminal in Wood River, Illinois to Champaign, Illinois (the West leg); approximately 86 miles of 12-inch pipeline extending from MPC�� Robinson, Illinois refinery to Champaign (the East leg), and approximately 140 miles of 12- and 16-inch pipeline extending from the junction with the East and West legs in Champaign to MPC�� terminals in Griffith, Indiana and Hammond, Indiana. This pipeline system delivers products to MPC�� tanks at Martinsville, Champaign, Griffith and Hammond. This pipeline system also delivers products to tanks owned by Meier Oil Company at Ashkum, Illinois. The Wabash Pipeline System connects to other pipeline systems in the Chicago area through a portion of the system located beyond MPC�� Griffith terminal. The Company�� Louisville airport product! s system ! consists of approximately 14 miles of eight- and six-inch pipeline, which delivers jet fuel from MPC�� Louisville, Kentucky refined product terminals to customers at the Louisville International Airport.

Other Major Midstream Assets

The Company�� butane cavern is located in Neal, West Virginia, across the Big Sandy River from MPC�� Catlettsburg, Kentucky refinery. This storage cavern has approximately 1.0 million barrels of storage capacity and is connected to MPC�� Catlettsburg refinery. Rail access to the storage cavern is also available through connections with the refinery.

The Company�� barge dock is located on the Mississippi River in Wood River, Illinois and is used both for crude oil barge loading and products barge unloading. The barge dock is connected to its Wood River tank farm by approximately two miles of 14-inch pipeline, which transfers crude oil from the tank farm to the dock, and two 10-inch pipelines, which are each approximately two miles long and transfer products and feedstocks from the dock to the tank farm. This dock generates revenue through a FERC tariff, which is collected for the transfer and loading/unloading of crude oil and products. It also owns tank farms located in Patoka, Martinsville and Wood River, Illinois and Lebanon, Indiana, which it uses for storing both crude oil and products. These storage assets are integral to the operation of its pipeline systems in those areas.

Advisors' Opinion:

• [By Robert Rapier]

  Two things PSXP has going for it are that it has no debt, and is likely to be able to grow future distributions. But there are other midstream MLPs that have little or no debt and are also in position to grow distributions, but with a higher yield than PSXP. Marathon Petroleum’s (NYSE: MPC) midstream affiliate MPLX (NYSE: MPLX) also has essentially no debt, but a slightly higher yield of 2.9 percent.

• [By Aimee Duffy]

  Phillips 66 (NYSE: PSX  ) and its master limited partnership Phillips 66 Partners (NYSE: PSXP  ) have made the headlines recently, because of how high PSXP climbed during its first day of trading. It isn't the first refiner to find success with an MLP spinoff -- Marathon Petroleum's (NYSE: MPC  ) spinoff�MPLX (NYSE: MPLX  ) is up more than 16% year to date -- and it doesn't look as if it will be the last. In this video, Fool.com contributor Aimee Duffy looks at Valero's (NYSE: VLO  ) recent affirmation of its plan to convert its logistics assets into an MLP.

Best Oil Companies To Invest In Right Now: Transdigm Group Incorporated(TDG)

TransDigm Group Incorporated designs, produces, and supplies engineered aircraft components for use on commercial and military aircraft principally in the United States. The company?s products include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, pumps and valves, power conditioning devices, AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, cockpit displays, aircraft audio systems, lavatory components, engineered interior surfaces, and lighting and control technology. Its customers comprise distributors of aerospace components; commercial airlines, including national and regional airlines; commercial transport and regional and business aircraft original equipment manufacturers (OEMs); various armed forces of the United States and foreign governments; defense OEMs; system suppliers; and various other industrial customers. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.

Advisors' Opinion:

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on TransDigm Group (NYSE: TDG  ) , whose recent revenue and earnings are plotted below.

• [By Eric Volkman]

  TransDigm (NYSE: TDG  ) is rewarding its shareholders mightily with an extraordinary payout. The company has declared a special dividend of $22.00 per share, which will be paid on July 25 to shareholders of record as of July 15.

Best Oil Companies To Invest In Right Now: Northern Tier Energy LP (NTI)

Northern Tier Energy LP, formerly Northern Tier Energy, Inc., incorporated in October 21, 2011, is an independent downstream energy company with refining, retail, and pipeline operations that serves the PADD II region of the United States. The Company operates its assets in two business segments: the refining business and the retail business. The Company owns three pipelines. The Company's operations will be conducted through, and its operating assets will be owned by, its wholly owned subsidiary, Northern Tier Energy LLC, and its subsidiaries. Effective November 12, 2013, Western Refining Inc acquired a 38.681% interest in Northern Tier Energy LP.

Refining Business

The Company�� refining business primarily consists of a 74,000 barrels per calendar day (84,500 barrels per stream day) refinery located in St. Paul Park, Minnesota. Its location allows it to distribute its refined products throughout the midwestern United States. The Company�� refinery produces a slate of refined products, including gasoline, diesel, jet fuel and asphalt, which are then marketed to resellers and consumers primarily in the PADD II region. It also owns various storage and transportation assets, including a light products terminal, a heavy products terminal, storage tanks, rail loading/unloading facilities and a Mississippi river dock. The Company�� refining business also includes its 17% interest in the Minnesota Pipe Line Company, which owns and operates the Minnesota Pipeline, a 455,000 barrels per calendar day crude oil pipeline system that transports crude oil (primarily from Western Canada and North Dakota) for approximately 300 miles from the Enbridge pipeline hub at Clearbrook, Minnesota to its refinery.

As of March 31, 2012, the Company's storage assets included 84 hydrocarbon storage tanks with a total capacity of 3.7 million barrels (156 million gallons), 0.8 million barrels of crude oil storage and 2.9 million barrels of feedstock and product storage. The Company�� r! efinery supplies all of the gasoline and diesel sold in its company-operated and franchised convenience stores, as well as all of the gasoline and diesel sold in 90 independently owned and operated Marathon branded stores in its marketing area. The Minnesota Pipe Line Company owns the Minnesota Pipeline, a crude oil pipeline system in Minnesota that transports crude oil to the St. Paul area. The Minnesota Pipeline system has multiple lines that run approximately 300 miles from Clearbrook in Clearwater County, Minnesota to Dakota County, Minnesota, transporting crude oil received through the Enbridge pipeline connections at Clearbrook from Western Canada and North Dakota to our refinery and Koch Industries�� Flint Hills Resources refinery in Minnesota.

Retail Business

As of March 31, 2012, the Company�� retail business operated 166 convenience stores under the SuperAmerica brand and also supported 67 franchised convenience stores, which are also operated under the SuperAmerica brand. These convenience stores are located primarily in Minnesota and Wisconsin and sell various grades of gasoline and diesel, tobacco products and immediately consumable items, such as non-alcoholic beverages, beer, prepared food and a range of snacks and prepackaged items. It also owns and operates SuperMom�� Bakery, which prepares and distributes baked goods and other prepared food items for sale in its company-operated and franchised convenience stores and other third party locations.

The Company has a retail-marketing network of 233 convenience stores, as of March 31, 2012, located throughout Minnesota, Wisconsin and South Dakota, of which it operates 166 stores and support 67 franchised stores. All of its company-operated and franchised convenience stores are operated under the SuperAmerica brand. It also owns and operates SuperMom�� Bakery, which prepares and distributes baked goods and other prepared items for sale in its retail outlets and for other third parties. Its refine! ry suppli! es all of the gasoline and diesel sold in its company-operated and franchised convenience stores. The Company has retail customers, which primarily include retail end-users, motorists and commercial drivers. It had a retail-marketing network of 233 convenience stores, as of March 31, 2012, located throughout Minnesota, Wisconsin and South Dakota, of which it operated 166 stores and support 67 franchised stores.

The Company competes with Koch Industries��Flint Hills Resources Refinery, Holiday, Kwik Trip and Wal-Mart.

Advisors' Opinion:

• [By Mick Weinstein]

  ��Northern Tier Energy (NTI) �as a Bakken Shale proxy.

• [By Robert Rapier]

  Northern Tier Energy (NYSE: NTI) will report earnings this week. The partnership closed last week down less than 1 percent, but interested investors should find a cheaper entry point this week as earnings will undoubtedly be disappointing.

• [By Aimee Duffy]

  2. Northern Tier Energy (NYSE: NTI  ) -- 20.4% yield
  Like CVR Refining, Northern Tier is also a downstream MLP. It operates a former Marathon Petroleum refinery in St. Paul, Minn., as well as 166 SuperAmerica-branded gas station convenience stores, and SuperMom's bakery, which provides goods to the convenience stores.

• [By Luke Jacobi]

  JC Penney Company (NYSE: JCP) tumbled 4.63 percent to $12.36. JC Penney is in talks to raise more money, Bloomberg reported.
  Northern Tier Energy LP (NYSE: NTI) fell 5.27 percent to $18.51 after the company reported an operational issue with crude unit.

Best Oil Companies To Invest In Right Now: Kinder Morgan Inc (KMI)

Kinder Morgan, Inc. (KMI), incorporated on August 23, 2006, owns and manages a diversified portfolio of energy transportation and storage assets. The Company operates in five business segments: Products Pipelines-KPM, Natural Gas Pipelines-KMP, CO2-KMP, Terminals-KMP and Kinder Morgan Canada-KMP. The Company through Kinder Morgan Energy Partners, L.P. (KMP) operates or owns an interest in approximately 37,000 miles of pipelines and approximately 180 terminals. These pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide and other products, and its terminals store petroleum products and chemicals, and handle such products as ethanol, coal, petroleum coke and steel. The Company is a provider of carbon dioxide (CO2), for enhanced oil recovery projects in North America. On December 15, 2011, KMP acquired a refined petroleum products terminal located on a 14-acre site in Lorton, Virginia from Motiva Enterprises, LLC. On May 25, 2012, KMI acquired El Paso Corporation. In August 2012, Kinder Morgan Energy Partners, L.P. acquired Tennessee Gas Pipeline (TGP) and a 50% interest in El Paso Natural Gas (EPNG) pipeline from KMI.

NGPL PipeCo LLC consists of its 20% interest in NGPL PipeCo LLC, the owner of Natural Gas Pipeline Company of America LLC and certain affiliates (collectively NGPL), an interstate natural gas pipeline and storage system, which it operates. On November 30, 2011, KMP acquired certain natural gas treating assets from SouthTex Treaters, Inc. On July 1, 2011, KMP acquired from Petrohawk Energy Corporation both the remaining 50% ownership interest in KinderHawk Field Services LLC that KMP did not already own and a 25% equity ownership interest in EagleHawk Field Services LLC. As of December 31, 2011, its interests in KMP and its affiliates consisted of the general partner interest, which the Company holds through its ownership of the general partner of KMP and which entitles the Company to receive incentive distributions; 21.7 million of the 238.0 mi! llion outstanding KMP units, representing an approximately 6.4% limited partner interest, and14.1 million of KMP�� 98.5 million outstanding i-units, representing an approximately 4.2% limited partner interest, through its ownership of 14.1 million Kinder Morgan Management, LLC (KMR) . The Company�� subsidiaries include Kinder Morgan Kansas, Inc. (KMK) and Kinder Morgan Energy Partners, L.P. (KMP).

Products Pipelines-KMP

The segment consists of KMP�� refined petroleum products and natural gas liquids pipelines and their associated terminals, Southeast terminals, and its transmix processing facilities. Products Pipelines-KMP, which consists of approximately 8,400 miles of refined petroleum products pipelines that deliver gasoline, diesel fuel, jet fuel and natural gas liquids to various markets; plus approximately 60 associated product terminals and petroleum pipeline transmix processing facilities serving customers across the United States.

KMP�� West Coast Products Pipelines include the SFPP, L.P. operations (often referred to in this report as the Pacific operations), the Calnev pipeline operations, and the West Coast Terminals operations. The assets include interstate common carrier pipelines regulated by the FERC, intrastate pipelines in the state of California regulated by the California Public Utilities Commission, and certain non rate-regulated operations and terminal facilities. The Pacific operations serve six western states with approximately 2,500 miles of refined petroleum products pipelines and related terminal facilities that provide refined products to population centers in the United States, including California; Las Vegas and Reno, Nevada, and the Phoenix-Tucson, Arizona corridor. During the fiscal year ended February 22, 2012 (fiscal 2011), the Pacific operations��mainline pipeline system transported approximately 1,071,400 barrels per day of refined products, with the product mix being approximately 59% gasoline, 24% diesel fuel, and 17! % jet fue! l.

The Calnev pipeline system consists of two parallel 248-mile, 14-inch and eight-inch diameter pipelines that run from KMP�� facilities at Colton, California to Las Vegas, Nevada. The pipeline serves the Mojave Desert through deliveries to a terminal at Barstow, California and two railroad yards. It also serves Nellis Air Force Base, located in Las Vegas, and also includes approximately 55 miles of pipeline serving Edwards Air Force Base in California. During fiscal 2011, the Calnev pipeline system transported approximately 118,800 barrels per day of refined products, with the product mix being approximately 41% gasoline, 33% diesel fuel, and 26% jet fuel.

KMP owns approximately 51% of Plantation Pipe Line Company, the sole owner of the approximately 3,100-mile refined petroleum products Plantation pipeline system serving the southeastern United States. KMP operates the system pursuant to agreements with Plantation and its wholly-owned subsidiary, Plantation Services LLC. The Plantation pipeline system originates in Louisiana and terminates in the Washington, District of Columbia area. It connects to approximately 130 shipper delivery terminals throughout eight states and serves as a common carrier of refined petroleum products to various metropolitan areas, including Birmingham, Alabama; Atlanta, Georgia; Charlotte, North Carolina, and the Washington, District of Columbia area. An affiliate of ExxonMobil Corporation owns the remaining approximately 49% ownership interest, and ExxonMobil has historically been one of the shippers on the Plantation system both in terms of volumes and revenues. In fiscal 2011, Plantation delivered approximately 518,000 barrels per day of refined petroleum products, with the product mix being approximately 67% gasoline, 20% diesel fuel, and 13% jet fuel.

KMP owns 50% of Cypress Interstate Pipeline LLC, the sole owner of the Cypress pipeline system. KMP operates the system pursuant to a long-term agreement. The Cypress pipeline is a! n interst! ate common carrier natural gas liquids pipeline originating at storage facilities in Mont Belvieu, Texas and extending 104 miles east to a connection with Westlake Chemical Corporation, a petrochemical producer in the Lake Charles, Louisiana area. Mont Belvieu, located approximately 20 miles east of Houston, is a hub for natural gas liquids gathering, transportation, fractionation and storage in the United States. The Cypress pipeline system has a capacity of approximately 55,000 barrels per day for natural gas liquids. In fiscal 2011, the system transported approximately 45,000 barrels per day.

KMP�� Southeast terminal operations consist of 27 liquid petroleum products terminals located along the Plantation/Colonial pipeline corridor in the Southeastern United States. The marketing activities of the Southeast terminal operations are focused on the Southeastern United States from Mississippi through Virginia, including Tennessee. The primary function involves the receipt of petroleum products from common carrier pipelines, short-term storage in terminal tankage, and subsequent loading onto tank trucks. Combined, the Southeast terminals have a total storage capacity of approximately 9.1 million barrels. In fiscal 2011, these terminals transferred approximately 353,000 barrels of refined products per day and together handled 9.2 million barrels of ethanol.

KMP�� Transmix operations include the processing of petroleum pipeline transmix, a blend of dissimilar refined petroleum products that have become co-mingled in the pipeline transportation process. During pipeline transportation, different products are transported through the pipelines abutting each other, and generate a volume of different mixed products called transmix. KMP processes and separates pipeline transmix into pipeline-quality gasoline and light distillate products at six separate processing facilities located in Colton, California; Richmond, Virginia; Dorsey Junction, Maryland; Indianola, Pennsylvania; Wood Riv! er, Illin! ois; and Greensboro, North Carolina. Combined, KMP�� transmix facilities processed approximately 10.6 million barrels of transmix in 2011.

Natural Gas Pipelines-KMP

Natural Gas Pipelines-KMP, which consists of approximately 16,200 miles of natural gas transmission pipelines and gathering lines, plus natural gas storage, treating and processing facilities, through which natural gas is gathered, transported, stored, treated, processed and sold. The Natural Gas Pipelines-KMP business segment contains both interstate and intrastate pipelines. Its primary businesses consist of natural gas sales, transportation, storage, gathering, processing and treating. Within this segment, KMP owns approximately 16,200 miles of natural gas pipelines and associated storage and supply lines that are strategically located at the center of the North American pipeline grid. KMP�� transportation network provides access to the gas supply areas in the western United States, Texas and the Midwest, as well as consumer markets.

KMP�� subsidiary, Kinder Morgan Treating, L.P., owns and operates (or leases to producers for operation) treating plants that remove impurities (such as carbon dioxide and hydrogen sulfide) and hydrocarbon liquids from natural gas before it is delivered into gathering systems and transmission pipelines to ensure that it meets pipeline quality specifications. Additionally, its subsidiary KM Treating Production LLC designs, constructs, and sells custom and stock natural gas treating plants. Combined, KMP�� rental fleet of treating assets include approximately 213 natural gas amine-treating plants, approximately 56 hydrocarbon dew point control plants, and more than 140 mechanical refrigeration units that are used to remove impurities and hydrocarbon liquids from natural gas streams prior to entering transmission pipelines.

KinderHawk Field Services LLC gathers and treats natural gas in the Haynesville shale gas formation located in northwest Louisiana.! Its asse! ts consist of more than 450 miles of natural gas gathering pipeline in service, with average throughput of approximately 1.1 billion cubic feet per day of natural gas. Additionally, the system�� natural gas amine treating plants have a capacity of approximately 2,600 gallons per minute. During 2011, KinderHawk executed firm gathering and treating agreements with a third-party producer for the long-term of five sections. KinderHawk also holds additional third-party gas gathering and treating commitments. In total, these contracts provide for the dedication of 36 sections, from four shippers, for 3 to 10 years. EagleHawk Field Services LLC provides natural gas gathering and treating services in the Eagle Ford shale formation in South Texas.

KMP owns a 40% interest in Endeavor Gathering LLC, which provides natural gas gathering service to GMX Resources��exploration and production activities in its Cotton Valley Sands and Haynesville/Bossier Shale horizontal well developments located in East Texas. GMX Resources, Inc. operates and owns the remaining 60% ownership interest in Endeavor Gathering LLC. Endeavor�� gathering system consists of over 100 miles of gathering lines and 25,000 horsepower of compressors that collect and compress natural gas from GMX Resources��operated natural gas production from wells located in its core area. The natural gas gathering system has takeaway capacity of approximately 115 million cubic feet per day. KMP owns a 50% equity interest in Eagle Ford Gathering LLC, which provides natural gas gathering, transportation and processing services to natural gas producers in the Eagle Ford shale gas formation in south Texas.

KMP�� Natural Gas Pipelines��upstream operations consist of its Casper and Douglas, Wyoming natural gas processing operations and its 49% ownership interest in the Red Cedar Gas Gathering Company. KMP owns and operates its Casper and Douglas, Wyoming natural gas processing plants, and combined, these plants have the capacity ! to proces! s up to 185 million cubic feet per day of natural gas depending on raw gas quality. Casper and Douglas are the natural gas processing plants, which provide straddle processing of natural gas flowing into KMP�� Kinder Morgan Interstate Gas Transmission LLC pipeline system. KMP also owns the operations of a carbon dioxide/sulfur treating facility located in the West Frenchie Draw field of the Wind River Basin of Wyoming, and includes this facility as part of its Casper and Douglas operations. The West Frenchie Draw treating facility has a capacity of 50 million cubic feet per day of natural gas.

KMP owns a 49% interest in the Red Cedar Gathering Company (Red Cedar). Red Cedar owns and operates natural gas gathering, compression and treating facilities in the Ignacio Blanco Field in La Plata County, Colorado. The remaining 51% interest in Red Cedar is owned by the Southern Ute Indian Tribe. Red Cedar�� natural gas gathering system consists of approximately 750 miles of gathering pipeline connecting more than 900 producing wells, 104,600 horsepower of compression at 22 field compressor stations and three carbon dioxide treating plants. The capacity and throughput of the Red Cedar gathering system is approximately 600 million cubic feet per day of natural gas.

KMP�� subsidiary, TransColorado Gas Transmission Company LLC (TransColorado), owns a 300-mile interstate natural gas pipeline that extends from approximately 20 miles southwest of Meeker, Colorado to the Blanco Hub near Bloomfield, New Mexico. KMP operates and owns 50% of the 1,679-mile Rockies Express natural gas pipeline system, a natural gas pipelines constructed in North America. The Rockies Express system consists of three pipeline segments: a 327-mile pipeline that extends from the Meeker Hub in northwest Colorado, across southern Wyoming to the Cheyenne Hub in Weld County, Colorado, a 713-mile pipeline from the Cheyenne Hub to an interconnect in Audrain County, Missouri and a 639-mile pipeline from Audrain Count! y, Missou! ri to Clarington, Ohio. KMP�� ownership is through its 50% equity interest in Rockies Express Pipeline LLC, the sole owner of the Rockies Express pipeline system. Sempra Pipelines & Storage, a unit of Sempra Energy, and ConocoPhillips each own 25% of Rockies Express Pipeline LLC.

The Rockies Express pipeline system is powered by 18 compressor stations totaling approximately 427,000 horsepower. The system is capable of transporting two billion cubic feet per day of natural gas from Meeker, Colorado to the Cheyenne Market Hub in northeastern Colorado and 1.8 billion cubic feet per day from the Cheyenne Hub to the Clarington Hub in Monroe County in eastern Ohio. Capacity on the Rockies Express system is contracted under 10 year firm service agreements with producers from the Rocky Mountain supply basin. These agreements provide the pipeline with fixed monthly reservation revenues for the primary term of such contracts through 2019, with the exception of one agreement representing approximately 10% of the pipeline capacity that grants a shipper the one-time option to terminate effective late 2014. With its connections to numerous other pipeline systems along its route, the Rockies Express system has access to almost all of the gas supply basins in Wyoming, Colorado and eastern Utah. Rockies Express is capable of delivering gas to multiple markets along its pipeline system, primarily through interconnects with other interstate pipeline companies and direct connects to local distribution companies.

KMP�� Central interstate natural gas pipeline group, which operates primarily in the Mid-Continent region of the United States, consists of four natural gas pipeline systems: Trailblazer Pipeline, Kinder Morgan Louisiana Pipeline, KMP�� 50% ownership interest in the Midcontinent Express Pipeline and KMP�� 50% ownership interest in the Fayetteville Express Pipeline. KMP�� subsidiary, Trailblazer Pipeline Company LLC (Trailblazer), owns the 436-mile Trailblazer natural gas pipelin! e system.! The Trailblazer pipeline system originates at an interconnection with Wyoming Interstate Company Ltd.�� pipeline system near Rockport, Colorado and runs through southeastern Wyoming to a terminus near Beatrice, Nebraska where it interconnects with NGPL�� and Northern Natural Gas Company�� pipeline systems. NGPL manages, maintains and operates the Trailblazer system for KMP, for which it is reimbursed at cost. Trailblazer offers its customers firm and interruptible transportation, and in 2011, it transported an average of approximately 717 million cubic feet per day of natural gas.

KMP�� subsidiary, Kinder Morgan Louisiana Pipeline LLC owns the Kinder Morgan Louisiana natural gas pipeline system. KMP owns a 50% interest in Midcontinent Express Pipeline LLC, the sole owner of the approximate 500-mile Midcontinent Express natural gas pipeline system. KMP also operates the Midcontinent Express pipeline system. Regency Midcontinent Express LLC owns the remaining 50% ownership interest. The Midcontinent Express pipeline system originates near Bennington, Oklahoma and extends eastward through Texas, Louisiana, and Mississippi, and terminates at an interconnection with the Transco Pipeline near Butler, Alabama. It interconnects with numerous pipeline systems and provides an important infrastructure link in the pipeline system moving natural gas supply from newly developed areas in Oklahoma and Texas into the United States��eastern markets. The pipeline system is comprised of approximately 30-miles of 30-inch diameter pipe, 275-miles of 42-inch diameter pipe and 197-miles of 36-inch diameter pipe. Midcontinent Express also has four compressor stations and one booster station totaling approximately 144,500 horsepower. It has two rate zones: Zone 1 (which has a capacity of 1.8 billion cubic feet per day) beginning at Bennington and extending to an interconnect with Columbia Gulf Transmission near Delhi, in Madison Parish Louisiana and Zone 2 (which has a capacity of 1.2 billion cubic feet ! per day) ! beginning at Delhi and terminating at an interconnection with Transco Pipeline near the town of Butler in Choctaw County, Alabama. Capacity on the Midcontinent Express system is 99% contracted under long-term firm service agreements that expire between 2012 and 2021. The ity of volume is contracted to producers moving supply from the Barnett shale and Oklahoma supply basins.

CO2-KMP

The CO2-KMP business segment consists of Kinder Morgan CO2 Company, L.P. and its consolidated affiliates, (collectively referred to KMCO2). The CO2-KMP business segment produces, transports, and markets carbon dioxide for use in enhanced oil recovery projects as a flooding medium for recovering crude oil from mature oil fields. CO2-KMP, which produces, markets and transports, through approximately 2,000 miles of pipelines, carbon dioxide to oil fields that use carbon dioxide to increase production of oil; owns interests in and/or operates eight oil fields in West Texas; and owns and operates a 450-mile crude oil pipeline system in West Texas

KMCO2 holds ownership interests in oil-producing fields located in the Permian Basin of West Texas, including an approximate 97% working interest in the SACROC unit; an approximate 50% working interest in the Yates unit; an approximate 21% net profits interest in the H.T. Boyd unit; an approximate 65% working interest in the Claytonville unit; an approximate 99% working interest in the Katz Strawn unit, and lesser interests in the Sharon Ridge unit, the Reinecke unit and the MidCross unit.

KMCO2 operates and owns an approximate 65% gross working interest in the Claytonville oil field unit and operates and owns an approximate 99% working interest in the Katz Strawn unit, both located in the Permian Basin area of West Texas. The Claytonville unit is located approximately 30 miles east of the SACROC unit, in Fisher County, Texas. The unit produced approximately 200 gross barrels of oil per day during 2011 (100 net barrels to KMCO2! per day)! . During 2011, the Katz Strawn unit produced approximately 500 barrels of oil per day (400 net barrels to KMCO2 per day). In 2011, the average purchased carbon dioxide injection rate at the Katz Strawn unit was 46 million cubic feet per day.

KMCO2 operates and owns an approximate 22% working interest plus an additional 28% net profits interest in the Snyder gasoline plant. KMCO2 also operates and owns a 51% ownership interest in the Diamond M gas plant and a 100% ownership interest in the North Snyder plant, all of which are located in the Permian Basin of West Texas. The Snyder gasoline plant processes natural gas produced from the SACROC unit and neighboring carbon dioxide projects, specifically the Sharon Ridge and Cogdell units, all of which are located in the Permian Basin area of West Texas. The Diamond M and the North Snyder plants contract with the Snyder plant to process natural gas. Production of natural gas liquids at the Snyder gasoline plant during 2011 averaged approximately 16,600 gross barrels per day (8,300 net barrels to KMCO2 per day excluding the value associated to KMCO2�� 28% net profits interest).

KMCO2 owns approximately 45% of, and operates, the McElmo Dome unit in Colorado, which contains more than 6.6 trillion cubic feet of recoverable carbon dioxide. It also owns approximately 87% of, and operates, the Doe Canyon Deep unit in Colorado, which contains more than 870 billion cubic feet of carbon dioxide. For both units combined, compression capacity exceeds 1.4 billion cubic feet per day of carbon dioxide and during 2011, the two units produced approximately 1.25 billion cubic feet per day of carbon dioxide. KMCO2 also owns approximately 11% of the Bravo Dome unit in New Mexico. The Bravo Dome unit contains more than 800 billion cubic feet of recoverable carbon dioxide and produced approximately 300 million cubic feet of carbon dioxide per day in 2011. As a result of KMP�� 50% ownership interest in Cortez Pipeline Company, it owns a 50% equity inter! est in an! d operates the approximate 500-mile Cortez pipeline. The pipeline carries carbon dioxide from the McElmo Dome and Doe Canyon source fields near Cortez, Colorado to the Denver City, Texas hub. The Cortez pipeline transports over 1.2 billion cubic feet of carbon dioxide per day. The tariffs charged by the Cortez pipeline are not regulated, but are based on a consent decree.

KMCO2 also owns a 13% undivided interest in the 218-mile, Bravo pipeline, which delivers carbon dioxide from the Bravo Dome source field in northeast New Mexico to the Denver City hub and has a capacity of more than 350 million cubic feet per day. Tariffs on the Bravo pipeline are not regulated. Occidental Petroleum (81%) and XTO Energy (6%) hold the remaining ownership interests in the Bravo pipeline. In addition, KMCO2 owns approximately 98% of the Canyon Reef Carriers pipeline and approximately 69% of the Pecos pipeline. The Canyon Reef Carriers pipeline extends 139 miles from McCamey, Texas, to the SACROC unit in the Permian Basin. The pipeline has a capacity of approximately 270 million cubic feet per day and makes deliveries to the SACROC, Sharon Ridge, Cogdell and Reinecke units. The Pecos pipeline is a 25-mile pipeline that runs from McCamey to Iraan, Texas. It has a capacity of approximately 120 million cubic feet per day and makes deliveries to the Yates unit. The tariffs charged on the Canyon Reef Carriers and Pecos pipelines are not regulated.

Terminals-KMP

The Terminals-KMP business segment includes the operations of KMP�� petroleum, chemical and other liquids terminal facilities (other than those included in the Products Pipelines-KMP business segment) and all of its coal, petroleum coke, fertilizer, steel, ores and other dry-bulk material services facilities, including all transload, engineering, conveying and other in-plant services. Combined, the segment is composed of approximately 115 owned or operated liquids and bulk terminal facilities and approximately 35 rail transloadin! g and mat! erials handling facilities. The terminals are located throughout the United States and in portions of Canada.

KMP�� liquids terminals operations primarily store refined petroleum products, petrochemicals, ethanol, industrial chemicals and vegetable oil products in aboveground storage tanks and transfer products to and from pipelines, vessels, tank trucks, tank barges, and tank railcars. Combined, KMP�� approximately 25 liquids terminals facilities possess liquids storage capacity of approximately 60.2 million barrels, and in 2011, these terminals handled approximately 616 million barrels of liquids products, including petroleum products, ethanol and chemicals. KMP�� bulk terminal operations primarily involve dry-bulk material handling services. KMP also provides conveyor manufacturing and installation, engineering and design services, and in-plant services covering material handling, conveying, maintenance and repair, truck-railcar-marine transloading, railcar switching and miscellaneous marine services. KMP owns or operates approximately 90 dry-bulk terminals in the United States and Canada, and combined, its dry-bulk and material transloading facilities handled approximately 100.6 million tons of coal, petroleum coke, fertilizers, steel, ores and other dry-bulk materials in 2011.

Kinder Morgan Canada-KMP

The Kinder Morgan Canada-KMP business segment includes the Trans Mountain pipeline system, KMP�� ownership of a one-third interest in the Express pipeline system, and the 25-mile Jet Fuel pipeline system. The Trans Mountain pipeline system originates at Edmonton, Alberta and transports crude oil and refined petroleum products to destinations in the interior and on the west coast of British Columbia. Trans Mountain�� pipeline is 715 miles in length. KMP also owns a connecting pipeline that delivers crude oil to refineries in the state of Washington. The capacity of the line at Edmonton ranges from 300,000 barrels per day when heavy crude represents 20% ! of the to! tal throughput (which is a historically normal heavy crude percentage), to 400,000 barrels per day with no heavy crude. Trans Mountain is the sole pipeline carrying crude oil and refined petroleum products from Alberta to the west coast.

In 2011, Trans Mountain delivered an average of 274,000 barrels per day. The crude oil and refined petroleum products transported through Trans Mountain�� pipeline system originates in Alberta and British Columbia. The refined and partially refined petroleum products transported to Kamloops, British Columbia and Vancouver originates from oil refineries located in Edmonton. Petroleum products delivered through Trans Mountain�� pipeline system are used in markets in British Columbia, Washington State and elsewhere offshore. Trans Mountain also operates a 5.3 mile spur line from its Sumas Pump Station to the United States.-Canada international border where it connects with KMP�� approximate 63-mile, 16-inch to 20-inch diameter Puget Sound pipeline system. The Puget Sound pipeline system in the state of Washington has a sustainable throughput capacity of approximately 135,000 barrels per day when heavy crude represents approximately 25% of throughput, and it connects to four refineries located in northwestern Washington State. The volumes of crude oil shipped to the state of Washington fluctuate in response to the price levels of Canadian crude oil in relation to crude oil produced in Alaska and other offshore sources.

NGPL PipeCo LLC

The Company owns a 20% interest in NGPL PipeCo LLC and account for its interest as an equity method investment. The Company continues to operate NGPL PipeCo LLC�� assets pursuant to an operations and reimbursement agreement effective through February 15, 2023. NGPL PipeCo LLC owns a interstate gas pipeline and storage system consisting primarily of two interconnected natural gas transmission pipelines terminating in the Chicago, Illinois metropolitan area. NGPL�� Amarillo Line originates in th! e West Te! xas and New Mexico producing areas and is comprised of approximately 4,400 miles of mainline and various small-diameter pipelines. Its other pipeline, the Gulf Coast Line, originates in the Gulf Coast areas of Texas and Louisiana and consists of approximately 4,100 miles of mainline and various small-diameter pipelines. These two main pipelines are connected at points in Texas and Oklahoma by NGPL�� approximately 800-mile Amarillo/Gulf Coast pipeline.

NGPL is a natural gas storage operator with approximately 600 billion cubic feet of total natural gas storage capacity, approximately 278 billion cubic feet of working gas capacity and over 4.3 billion cubic feet per day of peak deliverability from its storage facilities, which are located in supply areas and near the markets it serves. NGPL owns and operates 13 underground storage reservoirs in eight field locations in four states. These storage assets complement its pipeline facilities and allow it to optimize pipeline deliveries and meet peak delivery requirements in its principal markets.

Advisors' Opinion:

• [By Jayson Derrick]

  Kinder Morgan (NYSE: KMI) is seeking a court order to stop residents in Vancouver from blocking work for its Trans Mountain expansion. Shares gained 0.42 percent, closing at $38.70.

• [By Dimitra DeFotis]

  And along comes an upstart research firm recommending a Sell. Today�Kinder Morgan�(KMI)�and�Kinder Morgan Energy Partners�(KMP)�shares are up about 1% apiece.

Best Oil Companies To Invest In Right Now: SandRidge Permian Trust (PER)

SandRidge Permian Trust (the Trust) is a trust formed by SandRidge Energy, Inc. (SandRidge) to own royalty interests in 509 developed oil and natural gas wells located in Andrews County, Texas (the Producing Wells), and 888 oil and natural gas development wells to be drilled (the Development Wells) within an Area of Mutual Interest (AMI). The AMI consists of the Grayburg/San Andres formation in the Permian Basin in Andrews County, Texas. As of December 31, 2010, SandRidge held approximately 16,700 gross acres (15,900 net acres) in the AMI.The Underlying Properties consist of the working interest owned by SandRidge in the Permian Basin in Andrews County, Texas arising under leases and farmout agreements related to properties from which the PDP Royalty Interest and the Development Royalty Interest will be conveyed.

The royalty interest in the Producing Wells (PDP Royalty Interest) entitles the trust to receive 80% of the proceeds from the sale of production of oil, natural gas and natural gas liquids attributable to SandRidge's net revenue interest in the Producing Wells. The royalty interest in the Development Wells the (Development Royalty Interest) entitles the trust to receive 70% of the proceeds from the sale of oil, natural gas and natural gas liquids production attributable to SandRidge's net revenue interest in the Development Wells. As of March 31, 2011, after giving effect to the conveyance of the PDP Royalty Interest and the Development Royalty Interest to the trus, the total reserves estimated to be attributable to the trust were 21.8 million barrels of oil equivalent (MMBoe). This amount includes 5.8 MMBoe attributable to the PDP Royalty Interest and 16.0 MMBoe attributable to the Development Royalty Interest. The reserves consist of 96% liquids (87% oil and 9% natural gas liquids) and 4% natural gas.

SandRidge is an independent oil and natural gas company concentrating on development and production activities related to the exploitation of its significant holdings! in West Texas and the Mid-Continent area of Oklahoma and Kansas. SandRidge operates all of the Producing Wells. SandRidge owns a majority working interest in substantially all of the locations, on which it focuses to drill the Development Wells, and focuses to operate such wells. SandRidge Exploration and Production, LLC (SandRidge E&P) is a wholly owned subsidiary of SandRidge.

The Underlying Properties are located in the greater Fuhrman-Mascho field area, a region in Andrews County, Texas that primarily produces oil from the Grayburg/San Andres formation within the Permian Basin. SandRidge operates three drilling rigs within the AMI and, as of March 31, 2011, had drilled 101 wells. Within the AMI, SandRidge operates 509 wells and has 888 proven undeveloped locations as of March 31, 2011. These 888 proven locations are a combination of 5-acre, 10-acre and 20-acre infill spacing locations. As of March 31, 2011, average daily production from the Underlying Properties was approximately 3,400 barrel of oil equivalent per day (Boe/d).

Permian Basin

The Permian Basin extends throughout southwest Texas and southeast New Mexico over an area approximately 250 miles wide and 300 miles long. It is an oil producing basin in the United States. As of December 31, 2010, SandRidge operated approximately 2,600 gross producing wells in the Permian Basin, with an average working interest of 94%. In March 2011, SandRidge's average daily net production in the Permian Basin was approximately 29,600 Boe/d. SandRidge was operating 16 rigs in the basin as of March 31, 2011. SandRidge drilled 484 wells in this area during the year ended December 31, 2010.

Fuhrman-Mascho Field

The Fuhrman-Mascho field is located near the center of the Central Basin Platform in the Permian Basin. The field produces from the Grayburg/San Andres formation from average depths of approximately 4,000 to 5,000 feet. The Fuhrman-Mascho field is a producing field in the Permian Basin and! it has p! roduced approximately 142 MMBoe as of December 31, 2010. During 2010, SandRidge operated eight drilling rigs in the area and has drilled 307 wells as of March 31, 2011.

Advisors' Opinion:

• [By Matt DiLallo]

  The problem here is that SandRidge has been�dependent�on asset sales and its running out of assets to sell. In addition to the Permian sale, SandRidge has now taken three royalty trusts public. One consisting of Permian Basin assets, SandRidge Permian Trust (NYSE: PER  ) and two consisting of Mississippian assets, SandRidge Mississippian Trust I (NYSE: SDT  ) and SandRidge Mississippian Trust II (NYSE: SDR  ) . While SandRidge still owns a portion of each trust, it likely will continue to sell off its ownership stake in each trust as well as other assets it still owns. At some point SandRidge will need to live within its oil and gas cash flows, otherwise, its not worth owning.�