BPT was heading to right valuation; until today when some dumb idiots started buying this stock at high valuation. BPT is worth no more than $60/sh @ $96 oil, $50#$%$ $90/oil and only $33#$%$ $75 oil. Oil can got to $200/sh but at that price there are much better investment than BPT. Anybody who bought today has 90% probability of losing money
rajoilprasad: Perhaps when you have a few additional moments, you'd share with us your in depth analysis leading to your BPT valuations. For example, what is you valuation methodology, and what are your assumptions regarding future oil prices, inflation rates and production decline rates? Thanks in advance.
The calculation has been published at seeking alpha site; where the author gets a PV10 value of $54#$%$ end of 2011 at $90/bbl oil price; alomst $7/sh of dividend has already been paid; subtract that and you get less than $50/sh values as of today; Another catch is; if oil price gets higher and BP decides to increase production then BPT shareholders are penalized because they get roylty on fist 90,000/day prod only; so high oil price is bad for royalty owners and ofcourse low price is worst. Be careful; I am in oil business and I have better knowledge than most people who own these shares
i am waiting for you to sell to me at $50; Read the contract do the calculation at various price senario; cost pretty much fixed; hence only variable to consider is oil price. $90/sh price will require oil price to be over $130/bbl. It may happen but i dont invest based on 130 oil