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BP Prudhoe Bay Royalty Trust Reports Operating Results (10-Q)

November 09, 2011 | About:

10qk

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BP Prudhoe Bay Royalty Trust (BPT) filed Quarterly Report for the period ended 2011-09-30.

Bp Prudhoe Bay Royalty Trust has a market cap of $2.36 billion; its shares were traded at around $110.45 with a P/E ratio of 12.6 and P/S ratio of 12.8. The dividend yield of Bp Prudhoe Bay Royalty Trust stocks is 7%. Bp Prudhoe Bay Royalty Trust had an annual average earning growth of 20.9% over the past 10 years.

Highlight of Business Operations:

Royalty revenues are generally received on the fifteenth day of the month following the end of the calendar quarter in which the related Royalty Production occurred (the Quarterly Record Date). The Trustee, to the extent possible, pays all accrued expenses of the Trust on each Quarterly Record Date from the royalty payment received. Revenues and Trust expenses presented in the statement of cash earnings and distributions are recorded on a modified cash basis and, as a result, royalty revenues and distributions shown in such statements for the three and nine-month periods ended September 30, 2011 and 2010, respectively, are attributable to BP Alaskas operations during the three and nine-month periods ended June 30, 2011 and 2010, respectively.

The Quarterly Distributions received by the Trust from BP Alaska in July and January 2011 and January 2010 were adjusted by BP Alaska to compensate for underpayment of royalties due to the Trust with respect to the quarters ended December 31, 2010 and 2009, respectively, and overpayment of royalties due to the Trust with respect to the quarter ended March 31, 2011. See Note 6 of Notes to Financial Statements (Unaudited) in Item 1. Because the statements of cash earnings and distributions of the Trust are prepared on a modified cash basis, royalty revenues for the nine-month periods ended September 30, 2011 and 2010 reflect the amounts of the adjustments with respect to the earlier fiscal periods.

The period-to-period increases in royalty revenues, cash earnings and cash distributions are due to the higher average WTI Prices that prevailed in the second quarter of 2011, compared to the second quarter of 2010. The average increase in WTI Prices, however, was offset by proportionately greater increases in Production Taxes due to the progressivity feature of the Alaska Production Tax Statutes. The decrease in administrative expenses reflects lower overall costs of supplies and services and timing differences in accruals of expenses.

Trust royalty revenues received during the first nine months of the fiscal year are based on Royalty Production during the first and second quarters of the fiscal year and the fourth quarter of the preceding fiscal year. The first of the following two table shows the changes from the nine months ended June 30, 2010 to the nine months ended June 30, 2011 in the factors which determined the Per Barrel Royalties used to calculate the royalty payments received during the nine months ended September 30 of the respective years. The second of the two tables shows the resulting changes in the Trusts revenues and distributions and the changes in the Trusts expenses from the first nine months of 2010 to the first nine months of 2011.

The period-to-period increases in royalty revenues and cash earnings are due to the higher average WTI Prices that prevailed in the nine months ended June 30, 2011, compared to the nine months ended June 30, 2010. Cash distributions in the nine months ended September 30, 2010 include the $29,474,000 settlement received from BP Alaska in December 2009 and paid to Unit holders in January 2010. See Note 5 of Notes to Financial Statements in Item 1. The decrease in administrative expenses reflects lower overall costs of supplies and services and timing differences in accruals of expenses.

Read the The complete Report

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10qk
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