The BP Prudhoe Bay Royalty Trust is a United States

oil An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...

and

natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbon di ...

royalty trust A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining. However, unlike most corporations, its profits are not taxed at the corporate level provided a certain high per ...

based in

New York, New York New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...

. With a market capitalization of US$155 million in early 2020, and an average trading volume of 322,000 shares, BP Prudhoe Bay Royalty Trust is the largest conventional oil and gas trust in the United States. Its assets are in the huge

Prudhoe Bay Oil Field Prudhoe Bay Oil Field is a large oil field on Alaska's North Slope. It is the largest oil field in North America, covering and originally containing approximately of oil.

, the largest oil field in North America, and at the end of 2006 the Trust claimed to have proved reserves of 85.1 million barrels of crude oil. As of the end of 2018 the Trust claimed to have proved reserves of 15.77 million barrels of crude oil. Standard Oil Company and BP Exploration, both now branches of British Petroleum, set up the trust on February 28, 1989. They distribute royalties on a portion of the oil produced from the Prudhoe Bay Oil Field, typically 16.4246% of the first 90,000 barrels of net daily production. In their 2018 Annual Report, the Trust estimated it would continue to make royalty payouts through the year 2022. Royalty trusts typically pay enormous dividends by Wall Street standards, making them popular with investors, particularly during times when the

price of oil The price of oil, or the oil price, generally refers to the spot price of a barrel () of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Re ...

is high, or other market sectors are performing poorly. Investing advice firm

Motley Fool The Motley Fool is a private financial and investing advice company based in Alexandria, Virginia. It was founded in July 1993 by co-chairmen and brothers David Gardner and Tom Gardner, and Erik Rydholm, who has since left the company. The compa ...

listed the trust in the top four dividend payers of the decade from 1997 to 2007, giving a total return on investment during that time of 1,369%. In early 2008, the Trust's quarterly dividend per share was $3.05, which equated to an annual payout of approximately 16%. It pays its dividend quarterly, unlike many of the royalty trusts, which pay monthly. Unanticipated oilfield mishaps can occasionally cause volatility of the stock price, as happened in August 2006, when BP needed to shut down its operations at Prudhoe Bay to replace of corroded lines. The BP Prudhoe Bay Royalty Trust sued BP over its poor maintenance practices and reached a settlement of $29,469,081. The shutdown only affected one dividend payment, which was subsequently made up for with the settlement.

References

External links

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Profile of BP Prudhoe Bay Royalty Trust at Yahoo! Finance

{{Authority control 1989 establishments in New York City BP subsidiaries Companies based in New York City Companies listed on the New York Stock Exchange Energy companies of the United States Royalty trusts Energy in Alaska