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BP Prudhoe Bay Royalty Trust Message Board

  • A Yahoo! User Nov 13, 2012 1:31 PM Flag

    unit distribution

    2012 $9.29
    2011 9.39
    2010 9.99
    2009 6.00
    2008 18.25(special distrib)
    2007 8.20

    At $73 per unit, the distrib could be lowered to $7.30/yr and the yield would still be an astonishing 10%. But with the price of oil this qtr avg approx $86-92 so far, it seems unlikely that this might happen....unless oil for the next 6 wks goes down to the mid 70's, then the avg would fall to approx
    $80-82 for the entire qtr. Or, if production is falling faster than known. Therefore, the decline in BPT cannot be based on the oil price but rather an
    increase in taxes for dividend stocks from 15% to 20% to 39.9% plus add'l medicare taxes, etc. However, BPT distributions are already taxed at ordinary rates, so an increase in div taxes should not affect unit holders. If the distr falls to $6.00/yr, as it did in 2009 during the depths of the recession when
    oil dipped to $30 p/b, the yield would still be 8.2% if BPT held its price at $73 p/s. That yield is still remarkable. Any drop below $70, as a result of the fiscal cliff fear, should be viewed as a buying
    opportunity, one would think, unless all goes to hell.



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