When Pioneer Resources (NYSE:PXD) spun off it's lucrative pipeline business, creating the Master Limited Partnership (MLP) Pioneer Southwest Energy Partners (NYSE:PSE), I was one of the lucky investors who was able to participate in the offering.

Of course I didn't get all the shares I had indicated for so we bought the rest in the secondary market (the IPO was priced at $19 and we were able to buy the rest around $19.25). We were told the initial pay out yield would be around 9% or higher, and having been a former shareholder of PXD we were favorably predisposed to this company's reputation.

Now at least five and perhaps six brokerage firms started PSE with their highest rating citing its attractive valuation, high quality assets, lack of debt, and its affiliation with sponsor Pioneer Natural Resources. Since then the shares have shot up over 6%, recently reaching a new high.

Pioneer Southwest is a Master Limited Partneship (MLP) formed by oil and gas explorer Pioneer Natural Resources to own producing oil and gas properties in West Texas and to acquire oil and gas assets in its area of operations.

"Pioneer Southwest is a high quality upstream MLP with a visible growth profile, strong sponsor, and stable base of low decline crude oil reserves located in the Permian Basin," Wachovia analyst Michael Blum said in a research note.

Citigroup analyst Richard Roy said, "While the trading of Pioneer Southwest Energy Partners units is being impacted by the malaise in the sector, the partnership is not suffering from integration, overhang and leverage issues relative to its peers.

"As a result, given the benefit of hedging, strong underlying fundamentals, and favorable long term acquisition economics, we believe the valuation is attractive at current levels."

Roy added Pioneer Southwest to his "Top Picks" list.

UBS analyst Ronald Barone said, "We view Pioneer Southwest's affiliation with Pioneer Natural Resources as a key benefit, particularly since Pioneer Natural Resources controls estimated proven reserves of 558 mmboe (million barrels of oil equivalent) in Pioneer Southwest's core area."

Barone also said Pioneer Southwest should enjoy flexible financing options, aided by its initially debt-free capital structure. This would create an advantage for the company as it competes for upstream asset acquisitions.

Pioneer Southwest is a Master Limited Partneship (MLP) formed by oil and gas explorer Pioneer Natural Resources to own producing oil and gas properties in West Texas and to acquire oil and gas assets in its area of operations.

"Pioneer Southwest is a high quality upstream MLP with a visible growth profile, strong sponsor, and stable base of low decline crude oil reserves located in the Permian Basin," Wachovia analyst Michael Blum said in a research note.