Seeking Alpha

Tyler Lewis

View as an RSS Feed
View Tyler Lewis' Comments BY TICKER:
Latest  |  Highest rated
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    If you bought BPT in late February or early March of 2009 when it traded under $60, you would have experienced over 125% capital gains.

    I apologize for saying "two years" when I meant "23 months." I see that this caused confusion. I will have the editors update the article.
    Jan 23 05:05 PM | 2 Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    Read again. First, you take a 25% tax right off the top.

    The TVPB calculation is then multiplied BY THE TVPB.

    So, take the .0868 you got there, and multiply the tvpb (51.7) times it. Then add that to the 25% off the top. It looks like this:

    (51.7 * .25) + (51.7 * .0868) = 17.41

    Confusing, right?
    Jan 23 05:03 PM | 5 Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    If you bought BPT in late February or early March of 2009 when it traded under $60, you would have experienced over 125% capital gains.

    I apologize for saying "two years" when I meant "23 months." I see that this caused confusion.
    Jan 23 04:48 PM | 1 Like Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    Great input. What you are saying is absolutely true. I am simply going off of information available now. Estimating the actual price of future oil and the real reserves attributable to the trust are decisions that investors have to make on their own, because I don't claim to know them. Some people may be willing to accept that risk on BPT, some may not.
    Jan 21 08:05 PM | 5 Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    Thanks for the comments, everyone. I want to address some of the issues brought up.

    First of all, I did not write this to incite a riot and make everyone want to short sell BPT; I simply hope to help investors make more informed decisions.

    I cannot argue with capital appreciation, and for those who are long BPT because of its run up, I applaud your gains. I realize that not everyone who owns this stock plans on holding it forever. This article is to give you a heads up in case you don't know what is inevitable- that this stock will be worth $0 some day. Will it float down gracefully? Or will it drop like a rock one day? Who knows. Just know that if you are long, that is what you are up against. I wish you the best of luck in your timing of the markets.

    To the shorts out there, be careful. The market can be wrong longer than you can be solvent. This I know is true.

    The other issue addressed is the use and extrapolation of the crude curve. To those against these assumptions, I would ask: do you have a better alternative? This is not a commentary on the future price of oil, and I don't claim to know. Oil could be at $200 in 10 years...or it could be at $20...stranger things have happened. For now, the crude curve is the best we have to go off of.

    Let me reiterate, however, that crude would have to be at $225 from NOW UNTIL 2025 just to get your money back. Looking for a 10% IRR? Crude would have to be at $300 from now until 2025.

    I hope that helps.
    Jan 21 07:01 PM | 8 Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    Yeah that's just a sum of all the distributions between now and 2025. That does NOT include dividend reinvestment.
    Jan 21 12:07 PM | 2 Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    Wow, thanks for the reply. I had no idea. That's the kind of stuff you can't know just from reading the 10-k.
    Jan 21 11:31 AM | 6 Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All [View article]
    Thanks for your comment. I modeled PBT out over a year ago, so I need to go back and update my assumptions. I'll run the model and write another article. I will try to do about one royalty trust per week.
    Jan 21 10:27 AM | 10 Likes Like |Link to Comment
COMMENTS STATS
8 Comments
39 Likes