If you review the recent articles and bloggs on BPT. The bloggs now admit that the reason for the drop in BPT is the absurdly faulty assumptions (but well written) that were used to confirm falling income from supposedly drying up oil fields.
The positive facts continue to ring clear in the face of Mr.Cunningham's persistently and repetitive negative articles forecasting doom and gloom.
Fact 1 Income after brief shut down of pipeline for routine maintenance has stabilized and is now rising
Fact 2 Two massive new rigs go into production this spring to raise oil production by an estimated 20%
Fact 3 two additional massive oil fields have recently been confirmed on either side of the current BPT. Thus a bright future for many years!!!!
Fact 4 According to up[ dated info average return on BPT over past 10 years has been 23 % per year!!!
Fact 5 Bearish doom and gloom forecasts forgot to include sales of nat gas and rare condensates thus higher
revenue, that oil prices tend to go up over time, rising additional rig count... to maintain oil flow and revenues, and lastly trying to forecast 2027 yields is ...well... like trying to forecast the weather. However rising world standards of living dictate rising demand for oil... and thus rising demand and income from BPT.
What other utility/monopoly pays 12% that is schedualed to go up...with all the bad hype behind it?
My facts tell me if revs are going up 20% this summer... so is the price. I see fare valuation at 115.
What new negative spin will Mr Cunningham say at that time? Already the market is discounting his credibility.
I will sell some off at 115 only to protect myself from further manipulation. Which is unlikely to be nearly as successful as last year. Since after watching the rising revs!!
What effect will pipeline operations have on BPT ? Current production flowing through the pipeline is @ 550,000 barrels per day, down over 200,000 barrels per day in last 5 years. I understand that when flow reaches between 300,000 and 350,000 barrels per day they have to shut down the pipeline to avoid it freezing up. Whether BPT is capable of profitably producing oil becomes immaterial if they can't ship via pipeling. My thinking is that this "inflection" point will be reached in next 2-4 years unless significant new oil volume can be found.
It's one of the big risks in this investment which most on this board are oblivious to.
I have the same understanding and you are correct - if the pipeline is shut down, then BPT units become essentially worthless.
I don't give much attention to Seeking Alpha's slamming reports on BPT. I will hold this stock and continue to collect the dividends. Oil prices are going nowhere but up and BPT is not over yet and won't be for some time. JMHO.