The IRS did not comment when asked if it had
temporarily stopped issuing private letter rulings that
companies ask for when setting up MLPs.
The law firm Vinson & Elkins told its clients in recent days the
IRS had "paused" to review the scope of assets that can qualify
as tax-free for MLPs.
MLPs have been hugely popular among investors seeking higher
yields, even though the structures often have corporate
governance standards weaker than those of corporations.
Oil and gas wells in the Mississippi Lime, a rock formation
where SandRidge and other companies including Chesapeake Energy
Corp <CHK.N> operate, produce a large amount of water in the
drilling process that is disposed of underground.
While SandRidge is considering other options for the saltwater
disposal unit that handles about 1 million barrels of water per
day in Oklahoma, Kansas and Texas, the company is looking hard
at an MLP, said Grubert.
"That's the one (an MLP) that seems to be the one that people
can grasp," the executive said, noting that a transaction was
not likely until 2015.
Shares of SandRidge fell 16 cents, or 2.5 percent, to $6.28 in
afternoon New York Stock Exchange trading.
(Reporting by Anna Driver in New
York; edited by Terry Wade and
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