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BP Prudhoe Bay Royalty Trust Message Board

  • roundrobinjack roundrobinjack Mar 26, 2013 6:27 PM Flag

    Preliminary Distribution Estimate, Pt 2

    As a result, of my bullish WTI assumptions I use a forecast of WTI that rises to $98.50 by month end and an average price for Q1 of $94.48 (Note: With less than a week left, this average is not subject to much further fluctuation.) But for the future, I expect higher prices for 2013 as follows: Q2=$102.76, Q3=$104.22, & Q4=$96.99.

    Regarding CPI and its impact on the allowable costs, I continue to expect a minor inflationary cycle over the next decade followed by cyclical decline, but at rates that lag behind the general rise in WTI.

    With regard to Prudhoe Bay production, I expect it to average within a hair of the 90K limit (89,976), and to decline during the rest of 2013, with M&R impact and timing similar to 2012: Q2=80,744, 58,289, & Q4=85,421.

    Allowing for normal seasonal operating expenses, this should result in an April distribution of $2.42. Similarly, distributions based on the rest of 2013 are forecast as follows: July 2013=$2.34, Oct 2013=$1.73, & Jan 2014=$2.39.

    For purposes of my forecasts, I continue to exclude all prior period adjustments and any potential benefit from reduced Alaskan taxes as proposed by AK governor.

    Since the current market price approximates the 6% PV factor I use instead of the SEC's 10%, BPT is a strong hold IMO.

    Sentiment: Hold

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