Production numbers suffered in comparison to the third quarter due to volatility associated with newly drilled wells as well as an unexpected equipment failure. But January and February results suggest this small oil and gas producer will meet its output targets for 2013.

And LRR just announced its second consecutive quarterly distribution increase, a modest boost from USD0.4775 per unit per quarter to USD0.48. That’s a good sign this master limited partnership (MLP), which completed its initial public offering on the New York Stock Exchange in November 2011, is confident in its ability to grow output, manage its hedge book and control costs.

A recent follow-up offering of 6 million units has taken the unit price down from a mid-February peak above USD19. The stock traded as high as USD20.84 a little more than a year ago and as low as USD12.34 in June 2012. In mid-November, when the broader market had sold off as well, the MLP hit USD16.05 on a closing basis.

That’s probably the short-term potential downside. The medium-term potential upside is near USD20. Couple that with the USD0.48 quarterly distribution–which will tick higher if management executes–and we’re looking at a solid Big Yield Hunting candidate.

Buy LRR Energy under USD18.