BP Prudhoe Bay Optional Value Reveals Upside

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About: BP Prudhoe Bay Royalty Trust (BPT)
by: BullMinded
This article is exclusive for subscribers.
BullMinded
Event-driven, special situations, arbitrage
Summary

At the current WTI price ($62-$65), total expected payouts are only about 30% of the current share price ($7-$8).

This leads many analysts to conclude that BPT is overvalued.

If you add the optional value, however, it turns out that BPT is actually significantly undervalued.

Many articles written about BP Prudhoe Bay Royalty Trust (NYSE:BPT) calculate the total expected payouts, based on a certain WTI price. This can be calculated with a high degree of certainty, because the