- If WTI remains above $80 this quarter, the January distribution is likely to be over $.70, an "annualized yield" around 70% at its current price of about $4.00.
- BPT trades on perceived yield. However, BPT's structure will cause the payments to be much less next year and may cease in 2023 if WTI continues to average near $80.
- Considering these factors, there is likely an opportunity for a short-term trade here, buying now and possibly selling after the January distribution.
- Barring a further material increase in WTI, holding until termination is likely a losing proposition, however.
- But first, a positive comment on BP Prudhoe Bay's greatly improved quarterly distribution press release and a comment on its structure.
For further details see:
BP Prudhoe Bay: It May Be Time For A Short-Term Long Trade