Timing, they say, is everything. For master limited partnerships focused on the production of oil and natural gas—upstream MLPs—this statement could not be more appropriate. This niche subsector of the energy market is poised for dramatic growth, driven by an exponential expansion of available assets and sustained market demand for yield-based products.

The business structure of MLPs is unique and descends from decades of oil and gas partnerships. As the name suggests, MLPs are partnerships, not corporations. The distinction is important, because the income from a partnership is taxed only ...