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BP Prudhoe Bay Royalty Trust (BPT)


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20.45+0.05 (+0.25%)
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  • Guy, it is a relatively safe bet that BP's share of production will stabilize at the 80-90 bpd average over the say next 10 years. The not so safe bet is whether WTI price will increase enough to make up for the mandatory operational charges over the next years. These two bets at current WTI prices and share prices (both low historically) AND the corresponding distributions make BPT an acceptable risk compared to the other trading opportunities out there. BPT is surely not your long term investment choice but then aren't we all dead in the long term?.
  • WTI to $52 bucks; gut feeling $56 during summer. Oil is cheaper than milk per gallon.
  • BPT is at $20. If WTI oil rises to $62.50 tomorrow morning (unlikely), then long term BPT investors will break even before the trust stops paying out in 2022. If WTI rises gradually to $62.50 by 2020, it will still stop payouts by 2022 and overall losses will be considerable. Of course, if the WTI simply remains stable, cash flow will be less than half the current price and payouts stop in 2020. I took a look at BPT last year for yield and to play a moderate oil increase; reading the 10 K convinced me not to buy. So I am interested in finding out why others are buying and if there is a flaw in my thinking.
    1) Are folks simply going for the high yield? I can see the attraction of getting a short term yield of 23% and perhaps the risk of a drop in stock price can be avoided by watching the price like a hawk and bailing out at the first sign of trouble.
    2) Are folks buying BPT because they believe oil is headed sharply higher? I am not sure if BPT is the best vehicle to play oil but am interested in other opinions. BPT does not seem to me a good "collect the dividend and wait" stock since it could easily dissolve before the oil price shoots up, but what do you all think?
    3) Do people not believe that BPT is headed for disaster at the current WTI price? The 10K seems clear to me, but I am no finance wonk. What do BP bulls think about this and why?
    Regards
  • WTI to $51 bucks; gut feeling $56 during summer. Oil is cheaper than milk per gallon
  • Looking strongly like a 20% distribution this quarter
  • BP COUNTDOWN: It has been a great day for BPT! The WTI which is the main variable affecting both returns and duration of the trust is up $1.39 (3.03%) at 47.27 and BPT is up 45 cents at 19.45. Earlier today, when the WTI peaked at $47.70, I ran the numbers on BPT's future. Assuming a stable WTI at $47.70:
    BPT will see declining annual dividend payouts: 2017: $3.47 per share
    2018: $2.00
    2019: $0.14 (=3.5 cents per quarter!)
    2020 No Payments
    2021 No Payments
    2020 BPT trust dissolves

    Bottom line: the recent rise in the WTI will briefly increase BPT's hefty yield, but does not make it a good longterm (3 year investment). The share price can be expected to decline to virtually zero by 2020, wiping out the $5.61 in total dividend payments. (19.45 - 5.61 = a loss of $13.84 if the stock is held).
    A rising WTI would help BPT, but not as much as it would help other oil companies due to the rising costs built into the BPT trust. And BPT needs a lot of help from the WTI for investors to just break even.
    Information on how to do BPT Trust calculations is on pages 6-8 of the March 2017 10 K. It is wise for you to do your own calculations and make your own assessment. Do not just take my (or anyone else's) word on BPT's future.
    Disclosure: Short BPT. (sadly, it was my favorite stock in the preceding decade)
  • Predict July dividend around $0.90 cents = 18.2% annualized
  • Mr. Guy, We know all that and then some, it's in the K Report(s). What we don't know is the future and how the investors will react to the pertinent developments. We also get the fact that you are short/put. Those on the opposite side of your positions are long/call. The only SURE winners are the intermediaries.
  • It's gonna be a good day and probably a good week for oil and bpt.
  • 18.7% yield for 2nd quarter if distribution is 90 cents
  • I am selling my last 100 shares and most of my XLE this morning.

    My reasons:
    a. Rig count will increase again today and will continue to increase for at least the next 1 - 2 months.
    b. EIA will report increases in storage every week for the entire month of May in the face of the season of peak demand because all of the wells that have been drilled this year have to come on line to pay for themselves, they cannot sit idle.
    c. Act the end of the month, OPEC will make an another announcement, and no matter what it is it will some like blah, blah, blah. Because the USA has finally wrestled control of the oil market from OPEC. And that for now, big oil wants the price down.

    2. In January, I was calculating, optimistically that I could get a $6 distribution for this year (and that $5 was certain) and that was pretty good return for my average buy in cost of $18. I think the Q2 distribution now could be 1/2 of the Q1 distribution and that Q3 might even be nothing.

    3. Ron, I appreciate your conspiracy theory that the USA is driving the price down to hurt these bad countries, and it certainly beats any theory that I have, but I cant buy it. It never gets too far from money for these big boys. I suppose that my explanation is that because Saudi want to publicize next year and need a higher price to do so, big oil has decided to show them who is in charge.

    If any one takes the time to read my posts thank you, its obvious I will never be a SA author.

    Peace out.
  • 10-Q that came out a couple days ago showed earnings per share up, for 12 months ending 2017Q1 EPS is 2.44, up from 2.04 (for 12 months ending 2016Q4). Must be reason for stock jump today.
  • Just discovered this yesterday. Been looking at the chart. What happened to hammer it down in February/March? It fell all the way to $15! I'd hate to buy it here and have it retest that low!
  • Of course, 22% yield is great if it lasts for awhile. A year ago the dividend was about 7 cents! Not saying "don't buy"; but I think it is prudent to wait till we are closer to next xdiv.
  • I was going to sell 1/3 of my position this morning, but when I actually processed my order I sold more than 95% of my position, holding on to just 100 shares. My reasons:

    1. It had been my belief that the superconglomerate oil companies wanted the WTI price to rise. (BP in there 2016 annual report states that there break even price is $52). I felt that they would eventually get there way.
    2. It sure doesn't look like that is the case at this point. I can't figure it out, the only thing that drives these companies is $.
    3. The anticipated "summer driving season " is now upon us. This season is looking a lot like 2015, when in the face of higher demand, the inventory rise substantially. I can clearly remember it can't go below 70, 60, 50, 40...
    4. OPEC wants the price back up. But like all the gloom and doom articles about BPT, no one listens to what they have to say.
    5. After 1/3 of the quarter, the average WTI price is off by 7 %, compared to Q1. I mean the price BPT uses, daily price and Friday price used for Sat and Sun.
    6. It sure looks to me that the distribution will significantly be reduced.
    7. I read that in the gulf of Mexico production is now profitable with state of the art equipment at $40. I am no expert. anyone can say anything on the internet and that seems really low, but if True, probably $30 is a lot closer than $50.
  • WHERE ESLE CAN YOU MAKE 22% ......LIKE HERE
  • what the heck happened to gasoline demand? Funny thing is nobody knows.
  • It has always been my opinion that the large US and multinational energy companies, BP for example, wanted the WTI price to rise back up. I am now starting to think that they do not want a higher WTI price. This is not making any sense to me. BP is barely profitable at this point, another two year dive in price can not be good for them. It is my opinion that it is XOM,BP, Shelll, etc. who really control the price, OPEC does what Big oil wants, whether they know it or not.
  • Short sellers watch your shorts as well as your shirts on your backs, you may lose them; must be painful to be short and watch the stock going the other way. Any comments from the SA jerk?
  • Future brightening for BPT with oil well fracking to begin in Alaska. Fracking will increase the production of oil by years