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BP Prudhoe Bay Royalty Trust Message Board

  • judytrader@sbcglobal.net judytrader Dec 1, 2004 2:58 PM Flag

    I Have been waiting for a pullback

    Does anyone know if this will affect their dividend yeild?

    For instance, if oil falls to $35, will they suspend or reduce their dividends?

    If not, I want to buy for the yeild at a low price.

    Thanks and good luck to all.

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    • The royalty payment (div) is base on the prior quarters average WTI ppb with some taxes and costs deducted. An average WTI price of 35 would bring the royalty to about $.75 per unit per quarter.

      For a better understanding of what this royalty is read some of the very old posts. They will open your eyes, I'm sure.

      • 1 Reply to skorskiw
      • Were WTI to go to a baseline of $35/bbl in 2005 and increase with inflation thereafter, cash payments would continue to 2018, then cease. BPT would have no residual value. Total cash received over the remaining life of the Trust would be aproximately $30. Discounted at 6%, present value would be $21.50.

        In other words, a buyer today would have to wait 13 years to get back $0.67 on his dollar. Adding insult to injury, he would be paying taxes on his 'profits' all along, to be recovered only on termination.

        That's not old Diogenes talking, that's the Trust Agreement. Don't argue with me, argue with the Trust Agreement. Written in Stone. Worth a read.

    • Question:
      Does anyone know if this will affect their dividend yeild?

      For instance, if oil falls to $35, will they suspend or reduce their dividends?

      NOW - $35???? When I bought BPT, oil was $22 a barrel. . .and they were still paying out $2.57 a share at at purchase price of $16!. . .yes, falling oil will impact payout, but I think we are pretty safe here. . .remember, it was only last spring that oil was at $35. . .check Yahoo! profile - historic prices, and check dividends. . .

 
BPT
93.05-0.26(-0.28%)Jul 23 4:02 PMEDT

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