United States 12 Month Natural Gas Fund, LP 10-Q for FY2023 Q3

United States 12 Month Natural Gas Fund, LP (UNL)

10-Q 2023-11-07 For: 2023-09-30

Added on April 11, 2026

About this 10-Q

United States 12 Month Natural Gas Fund, LP filed this 10-Q on November 7, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: -$881.54K; compared with $8.5M a year earlier
Net loss: $921.47K; compared with net income of $8.41M a year earlier

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Delaware		26-0431733
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Shares of United States 12 Month Natural Gas Fund, LP	UNL	NYSE Arca, Inc.


Large Accelerated Filer	☐	Accelerated Filer	☐

Non-Accelerated Filer	☒	Smaller Reporting Company	☐

Emerging Growth Company	☐


Part I. FINANCIAL INFORMATION	Page

Item I. Condensed Financial Statements.	3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19

Item 3. Quantitative and Qualitative Disclosures About Market Risk.	37

Item 4. Controls and Procedures.	38

Part II. OTHER INFORMATION

Item 1. Legal Proceedings.	39

Item 1A. Risk Factors.	41

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	42

Item 3. Defaults Upon Senior Securities.	42

Item 4. Mine Safety Disclosures.	42

Item 5. Other Information.	42

Item 6. Exhibits.	43


Documents		Page

Condensed Statements of Financial Condition at September 30, 2023 (Unaudited) and December 31, 2022		4

Condensed Schedule of Investments (Unaudited) at September 30, 2023		5

Condensed Statements of Operations (Unaudited) for the three and nine months ended September 30, 2023 and 2022		6

Condensed Statements of Changes in Partners’ Capital (Unaudited) for the three and nine months ended September 30, 2023 and 2022		7

Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2023 and 2022		8

Notes to Condensed Financial Statements (Unaudited) for the period ended September 30, 2023		9


	September 30, 2023		December 31, 2022
Assets
Cash and cash equivalents (at cost $14,269,653 and $22,036,438, respectively) (Notes 2 and 5)	$	14,269,653	$	22,036,438
Equity in trading accounts:
Cash and cash equivalents (at cost $4,986,965 and $11,220,362, respectively)		4,986,965		11,220,362
Unrealized gain (loss) on open commodity futures contracts		(2,552,303)		(8,419,740)
Receivable from General Partner (Note 3)		107,213		163,576
Dividends receivable		60,719		94,005
Interest receivable		10,918		7,826
Prepaid license fees		7,368		6,760
Prepaid insurance^*		5,249		760
Total Assets	$	16,895,782	$	25,109,987

Liabilities and Partners’ Capital
General Partner management fees payable (Note 3)	$	10,814	$	20,071
Professional fees payable		40,339		94,745
Brokerage commissions payable		391		391
Directors’ fees payable^*		2,823		2,846
Total Liabilities		54,367		118,053

Commitments and Contingencies (Notes 3, 4 & 5)

Partners’ Capital
General Partners		—		—
Limited Partners		16,841,415		24,991,934
Total Partners’ Capital		16,841,415		24,991,934

Total Liabilities and Partners’ Capital	$	16,895,782	$	25,109,987

Limited Partners’ shares outstanding		1,550,000		1,450,000
Net asset value per share	$	10.87	$	17.24
Market value per share	$	10.88	$	17.23


				Fair
				Value/Unrealized
				Gain (Loss) on
				Open
			Number of	Commodity		% of Partners’
	Notional Amount		Contracts	Contracts		Capital
Open Commodity Futures Contracts – Long
United States Contracts
NYMEX Natural Gas Futures NG November 2023 contracts, expiring October 2023	$	1,949,205	44	$	(660,445)	(3.92)
NYMEX Natural Gas Futures NG December 2023 contracts, expiring November 2023		1,995,091	43		(570,931)	(3.39)
NYMEX Natural Gas Futures NG January 2024 contracts, expiring December 2023		2,156,033	43		(623,083)	(3.70)
NYMEX Natural Gas Futures NG February 2024 contracts, expiring January 2024		1,797,755	43		(294,045)	(1.74)
NYMEX Natural Gas Futures NG March 2024 contracts, expiring February 2024		1,555,813	43		(171,213)	(1.02)
NYMEX Natural Gas Futures NG April 2024 contracts, expiring March 2024		1,401,055	44		(83,255)	(0.49)
NYMEX Natural Gas Futures NG May 2024 contracts, expiring April 2024		1,357,961	44		(30,921)	(0.18)
NYMEX Natural Gas Futures NG June 2024 contracts, expiring May 2024		1,378,400	43		(23,470)	(0.14)
NYMEX Natural Gas Futures NG July 2024 contracts, expiring June 2024		1,419,332	43		(5,062)	(0.03)
NYMEX Natural Gas Futures NG August 2024 contracts, expiring July 2024		1,446,855	43		(19,685)	(0.12)
NYMEX Natural Gas Futures NG September 2024 contracts, expiring August 2024		1,479,263	43		(61,983)	(0.37)
NYMEX Natural Gas Futures NG October 2024 contracts, expiring September 2024		1,461,180	43		(8,210)	(0.05)
Total Open Futures Contracts*	$	19,397,943	519	$	(2,552,303)	(15.15)


	Shares/Principal				% of Partners’
	Amount		Market Value		Capital
Cash Equivalents
United States Money Market Funds
Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Shares, 5.27%^#		13,700,000	$	13,700,000	81.35
Total United States Money Market Funds			$	13,700,000	81.35


	Three months ended		Three months ended		Nine months ended		Nine months ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Income
Gain (loss) on trading of commodity futures contracts:
Realized gain (loss) on closed commodity futures contracts	$	(3,109,119)	$	4,524,902	$	(15,041,408)	$	14,627,390
Change in unrealized gain (loss) on open commodity futures contracts		2,001,238		3,762,969		5,867,437		(3,604,090)
Dividend income		196,619		186,442		521,281		255,131
Interest income^*		28,321		24,373		69,038		24,507
ETF transaction fees		1,400		1,400		4,200		8,050
Total Income (Loss)	$	(881,541)	$	8,500,086	$	(8,579,452)	$	11,310,988

Expenses
General Partner management fees (Note 3)	$	33,277	$	78,862	$	93,738	$	202,593
Professional fees		49,173		78,984		108,611		159,348
Brokerage commissions		1,193		2,000		4,125		7,223
Directors’ fees and insurance		4,151		3,659		11,350		10,542
License fees		666		1,578		1,875		4,052
Total Expenses		88,460		165,083		219,699		383,758
Expense waiver (Note 3)		(48,528)		(70,448)		(107,213)		(140,647)
Net Expenses	$	39,932	$	94,635	$	112,486	$	243,111
Net Income (Loss)	$	(921,473)	$	8,405,451	$	(8,691,938)	$	11,067,877
Net Income (Loss) per limited partner share	$	(0.64)	$	4.34	$	(6.37)	$	10.37
Net Income (Loss) per weighted average limited partner share	$	(0.59)	$	4.79	$	(6.15)	$	6.30
Weighted average limited partner shares outstanding		1,569,565		1,754,891		1,412,271		1,756,593


	Limited Partners*
	Three months ended		Three months ended		Nine months ended		Nine months ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Balances at beginning of period	$	17,270,293	$	37,135,468	$	24,991,934	$	16,312,586
Addition of 200,000, 150,000, 650,000 and 1,950,000 partnership shares, respectively		2,243,256		3,649,504		7,702,010		41,366,621
Redemption of (150,000), (500,000), (550,000) and (1,600,000) partnership shares, respectively		(1,750,661)		(10,662,128)		(7,160,591)		(30,218,789)
Net income (loss)		(921,473)		8,405,451		(8,691,938)		11,067,877

Balances at end of period	$	16,841,415	$	38,528,295	$	16,841,415	$	38,528,295


At September 30, 2023	Total		Level I		Level II		Level III
Short-Term Investments	$	13,700,000	$	13,700,000	$	—	$	—
Exchange-Traded Futures Contracts
United States Contracts		(2,552,303)		(2,552,303)		—		—


At December 31, 2022	Total		Level I		Level II		Level III
Short-Term Investments	$	22,000,000	$	22,000,000	$	—	$	—
Exchange-Traded Futures Contracts
United States Contracts		(8,419,740)		(8,419,740)		—		—


	Condensed
	Statements of
	Financial	Fair Value at		Fair Value at
Derivatives not Accounted for as Hedging Instruments	Condition Location	September 30, 2023		December 31, 2022
Futures - Commodity Contracts	Assets	$	(2,552,303)	$	(8,419,740)


	Large Cap US Equities	US Gov’t Bonds	Global Equities	Crude	Heating	Unleaded	Natural
Correlation Matrix 10 Years	(S&P 500)	(BEUSG4 Index)	(FTSE World Index)	Oil	Oil	Gasoline	Gas
Large Cap US Equities (S&P 500)	1.000	0.032	0.977	0.367	0.220	0.477	0.150
US Gov’t Bonds (BEUSG4 Index)		1.000	0.035	(0.264)	(0.408)	(0.209)	(0.136)
Global Equities (FTSE World Index)			1.000	0.424	0.271	0.528	0.112
Crude Oil				1.000	0.741	0.750	0.063
Heating Oil					1.000	0.642	0.120
Unleaded Gasoline						1.000	0.095
Natural Gas							1.000
Source: Bloomberg, NYMEX


	Total
	Number of	Average Price Per
Period	Shares Redeemed	Share
7/1/22 to 7/31/22	—	$	—
8/1/22 to 8/31/22	150,000	$	11.67
9/1/22 to 9/30/22	—	$	—
Total	150,000


	Nine months ended		Nine months ended
	September 30, 2023		September 30, 2022
Cash Flows from Operating Activities:
Net income (loss)	$	(8,691,938)	$	11,067,877
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Change in unrealized (gain) loss on open commodity futures contracts		(5,867,437)		3,604,090
(Increase) decrease in receivable from General Partner		56,363		(11,899)
(Increase) decrease in dividends receivable		33,286		(72,544)
(Increase) decrease in interest receivable		(3,092)		(8,367)
(Increase) decrease in prepaid other		(608)		(5,432)
(Increase) decrease in prepaid insurance^*		(4,489)		(1,175)
Increase (decrease) in General Partner management fees payable		(9,257)		15,797
Increase (decrease) in professional fees payable		(54,406)		23,275
Increase (decrease) in directors’ fees payable^*		(23)		52
Net cash provided by (used in) operating activities		(14,541,601)		14,611,674

Cash Flows from Financing Activities:
Addition of partnership shares		7,702,010		41,366,621
Redemption of partnership shares		(7,160,591)		(30,218,789)
Net cash provided by (used in) financing activities		541,419		11,147,832

Net Increase (Decrease) in Cash and Cash Equivalents		(14,000,182)		25,759,506

Total Cash, Cash Equivalents and Equity in Trading Accounts, beginning of period		33,256,800		15,705,957
Total Cash, Cash Equivalents and Equity in Trading Accounts, end of period	$	19,256,618	$	41,465,463

Components of Cash, Cash Equivalents, and Equity in Trading Accounts
Cash and cash equivalents	$	14,269,653	$	32,489,448
Equity in Trading Accounts:
Cash and cash equivalents		4,986,965		8,976,015
Total Cash, Cash Equivalents and Equity in Trading Accounts	$	19,256,618	$	41,465,463


	Nine months ended			Nine months ended
	September 30, 2023			September 30, 2022
Average daily total net assets	$	16,710,457		$	36,115,475
Dividend and interest income earned on Treasuries, cash and/or cash equivalents	$	590,319		$	279,638
Annualized yield based on average daily total net assets		4.72	%		1.04	%
Management fee	$	93,738		$	202,593
Total fees and other expenses excluding management fees	$	125,961		$	181,165
Total amount of the expense waiver	$	107,213		$	140,647
Expenses before the allowance of the expense waiver	$	219,699		$	383,758
Expenses after the allowance of the expense waiver	$	112,486		$	243,111
Total commissions accrued to brokers	$	4,125		$	7,223
Total commissions as annualized percentage of average total net assets		0.03	%		0.03	%


	Three months ended			Three months ended
	September 30, 2023			September 30, 2022
Average daily total net assets	$	17,603,663		$	41,716,560
Dividend and interest income earned on Treasuries, cash and/or cash equivalents	$	224,940		$	210,815
Annualized yield based on average daily total net assets		5.07	%		2.00	%
Management fee	$	33,277		$	78,862
Total fees and other expenses excluding management fees	$	55,183		$	86,221
Total amount of the expense waiver	$	48,528		$	70,448
Expenses before the allowance of the expense waiver	$	88,460		$	165,083
Total commissions accrued to brokers	$	1,193		$	2,000
Total commissions as annualized percentage of average total net assets		0.03	%		0.02	%


Exhibit Number		Description of Document
31.1(1)		Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(1)		Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(1)		Certification by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2(1)		Certification by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase.
101.DEF		XBRL Taxonomy Extension Definition Linkbase.
101.LAB		XBRL Taxonomy Extension Label Linkbase.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


By:	/s/ John P. Love
	John P. Love
	President and Chief Executive Officer
	(Principal executive officer)


By:	/s/ Stuart P. Crumbaugh
	Stuart P. Crumbaugh
	Chief Financial Officer
	(Principal financial and accounting officer)

Date: November 7, 2023	By	/s/ John P. Love
	Name:	John P. Love
	Title:	President and Chief Executive Officer
		United States Commodity Funds LLC,
		General Partner of United States 12 Month Natural Gas Fund, LP