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.
Thanks for the analysis. I find it interesting that this asset was valued at $116/share 1st Qtr'11($9.50 distribution rest of year) $124'12($8.98) and were at ~$82 now with your projection at $8.88 for rest of year.
Well, I gotta be honest, I got in @$34/share and didn't mind at all seeing it fly that high, but knew that when it was $100/share, speculators were playing with it (and they may do it again) but sooner or later, it would have to come tumbling back down.
Heavy analysis Jack, thanks for posting it. I have a tentative plan to hang around for 6 more distributions and then bail mid 2014. 10 years worth of a depleting asset is enough for me and a couple of electrical utilities are looking a bit more stable--and attractive. You can always tell who the retirees are! Good luck! VR