United States 12 Month Natural Gas Fund, LP 10-Q for FY2022 Q2

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

10-Q 2022-08-05 For: 2022-06-30

Added on April 11, 2026

About this 10-Q

United States 12 Month Natural Gas Fund, LP filed this 10-Q on August 5, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: -$7.38M; compared with $2.2M a year earlier
Net loss: $7.47M; compared with net income of $2.18M 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.	38

Item 4. Controls and Procedures.	39

Part II. OTHER INFORMATION

Item 1. Legal Proceedings.	40

Item 1A. Risk Factors.	42

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	45

Item 3. Defaults Upon Senior Securities.	45

Item 4. Mine Safety Disclosures.	45

Item 5. Other Information.	45

Item 6. Exhibits.	46


Documents		Page

Condensed Statements of Financial Condition at June 30, 2022 (Unaudited) and December 31, 2021		4

Condensed Schedule of Investments (Unaudited) at June 30, 2022		5

Condensed Statements of Operations (Unaudited) for the three and six months ended June 30, 2022 and 2021		6

Condensed Statements of Changes in Partners’ Capital (Unaudited) for the three and six months ended June 30, 2022 and 2021		7

Condensed Statements of Cash Flows (Unaudited) for the six months ended June 30, 2022 and 2021		8

Notes to Condensed Financial Statements (Unaudited) for the period ended June 30, 2022		9


	June 30, 2022		December 31, 2021
Assets
Cash and cash equivalents (at cost $37,704,006 and $14,360,397, respectively) (Notes 2 and 5)	$	37,704,006	$	14,360,397
Equity in trading accounts:
Cash and cash equivalents (at cost $6,187,824 and $1,345,560, respectively)		6,187,824		1,345,560
Unrealized gain (loss) on open commodity futures contracts		(6,818,550)		548,509
Receivable from General Partner (Note 3)		70,199		128,748
Dividends receivable		38,549		272
Interest receivable		6		79
Prepaid professional fees		327		—
Prepaid license fees		6,464		1,025
Prepaid insurance^*		2,481		445
Total Assets	$	37,191,306	$	16,385,035

Liabilities and Partners’ Capital
General Partner management fees payable (Note 3)	$	32,213	$	10,640
Professional fees payable		20,433		58,646
Brokerage commissions payable		391		391
Directors’ fees payable^*		2,801		2,772

Total Liabilities		55,838		72,449

Commitments and Contingencies (Notes 3, 4 & 5)

Partners’ Capital
General Partners		—		—
Limited Partners		37,135,468		16,312,586
Total Partners' Capital		37,135,468		16,312,586

Total Liabilities and Partners’ Capital	$	37,191,306	$	16,385,035

Limited Partners’ shares outstanding		2,100,000		1,400,000
Net asset value per share	$	17.68	$	11.65
Market value per share	$	18.06	$	11.72


				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 August 2022 contracts, expiring July 2022	$	3,983,860	61	$	(675,220)	(1.82)
NYMEX Natural Gas Futures NG September 2022 contracts, expiring August 2022		3,963,260	61		(674,140)	(1.81)
NYMEX Natural Gas Futures NG October 2022 contracts, expiring September 2022		4,066,720	61		(767,230)	(2.07)
NYMEX Natural Gas Futures NG November 2022 contracts, expiring October 2022		4,015,418	61		(648,218)	(1.75)
NYMEX Natural Gas Futures NG December 2022 contracts, expiring November 2022		4,094,569	61		(643,189)	(1.73)
NYMEX Natural Gas Futures NG January 2023 contracts, expiring December 2022		4,138,458	60		(688,458)	(1.85)
NYMEX Natural Gas Futures NG February 2023 contracts, expiring January 2023		4,056,676	61		(663,856)	(1.79)
NYMEX Natural Gas Futures NG March 2023 contracts, expiring February 2023		3,613,173	61		(555,853)	(1.50)
NYMEX Natural Gas Futures NG April 2023 contracts, expiring March 2023		2,772,490	61		(128,140)	(0.34)
NYMEX Natural Gas Futures NG May 2023 contracts, expiring April 2023		2,921,700	61		(324,320)	(0.87)
NYMEX Natural Gas Futures NG June 2023 contracts, expiring May 2023		2,864,165	60		(270,965)	(0.73)
NYMEX Natural Gas Futures NG July 2023 contracts, expiring June 2023		3,454,421	61		(778,961)	(2.10)
Total Open Futures Contracts*	$	43,944,910	730	$	(6,818,550)	(18.36)


	Shares/Principal				% of Partners’
	Amount		Market Value		Capital
Cash Equivalents
United States Money Market Funds
Dreyfus Institutional Preferred Government Money Market Fund - Institutional Shares, 1.41%^#		10,750,000	$	10,750,000	28.95
Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Shares, 1.38%^#		26,800,000		26,800,000	72.17
Total United States Money Market Funds			$	37,550,000	101.12


	Three months ended		Three months ended		Six months ended		Six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Income
Gain (loss) on trading of commodity futures contracts:
Realized gain (loss) on closed commodity futures contracts	$	6,372,072	$	431,603	$	10,102,488	$	551,700
Change in unrealized gain (loss) on open commodity futures contracts		(13,819,013)		1,765,497		(7,367,059)		1,760,540
Dividend income		65,730		496		68,689		617
Interest income^*		15		137		134		765
ETF transaction fees		4,900		700		6,650		1,750
Total Income (Loss)	$	(7,376,296)	$	2,198,433	$	2,810,902	$	2,315,372

Expenses
General Partner management fees (Note 3)	$	78,698	$	16,998	$	123,731	$	31,519
Professional fees		59,116		38,666		80,364		67,664
Brokerage commissions		3,036		763		5,223		1,550
Directors’ fees and insurance		3,619		3,270		6,883		6,144
License fees		1,573		340		2,474		630
Total Expenses		146,042		60,037		218,675		107,507
Expense waiver (Note 3)		(52,406)		(39,639)		(70,199)		(69,684)
Net Expenses	$	93,636	$	20,398	$	148,476	$	37,823
Net Income (Loss)	$	(7,469,932)	$	2,178,035	$	2,662,426	$	2,277,549
Net Income (Loss) per limited partner share	$	(0.23)	$	2.09	$	6.03	$	2.24
Net Income (Loss) per weighted average limited partner share	$	(4.12)	$	2.06	$	1.51	$	2.26
Weighted average limited partner shares outstanding		1,811,538		1,056,667		1,757,459		1,009,669


	Limited Partners*
	Three months ended		Three months ended		Six months ended		Six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Balances at beginning of period	$	23,286,424	$	8,281,204	$	16,312,586	$	7,351,460
Addition of 1,250,000, 100,000, 1,800,000 and 350,000 partnership shares, respectively		30,819,750		892,478		37,717,117		2,931,411
Redemption of (450,000), (150,000), (1,100,000) and (300,000) partnership shares, respectively		(9,500,774)		(1,372,555)		(19,556,661)		(2,581,258)
Net income (loss)		(7,469,932)		2,178,035		2,662,426		2,277,549

Balances at end of period	$	37,135,468	$	9,979,162	$	37,135,468	$	9,979,162


At June 30, 2022	Total		Level I		Level II		Level III
Short-Term Investments	$	37,550,000	$	37,550,000	$	—	$	—
Exchange-Traded Futures Contracts
United States Contracts		(6,818,550)		(6,818,550)		—		—


At December 31, 2021	Total		Level I		Level II		Level III
Short-Term Investments	$	14,000,000	$	14,000,000	$	—	$	—
Exchange-Traded Futures Contracts
United States Contracts		548,509		548,509		—		—


	Condensed
	Statements of
	Financial	Fair Value at		Fair Value at
Derivatives not Accounted for as Hedging Instruments	Condition Location	June 30, 2022		December 31, 2021
Futures - Commodity Contracts	Assets	$	(6,818,550)	$	548,509


	Large Cap US	US Gov’t Bonds	Global Equities		Heating	Unleaded	Natural
Correlation Matrix 10 Years	Equities (S&P 500)	(BEUSG4 Index)	(FTSE World Index)	Crude Oil	Oil	Gasoline	Gas
Large Cap US Equities (S&P 500)	1.000	0.895	0.995	0.652	0.663	0.695	0.552
US Gov't Bonds (BEUSG4 Index)		1.000	0.897	0.520	0.580	0.534	0.539
Global Equities (FTSE World Index)			1.000	0.670	0.683	0.711	0.546
Crude Oil				1.000	0.840	0.842	0.365
Heating Oil					1.000	0.788	0.453
Unleaded Gasoline						1.000	0.439
Natural Gas							1.000
Source: Bloomberg, NYMEX


	Total	Average
	Number of	Price Per
Period	Shares Redeemed	Share
4/1/22 to 4/30/22	300,000	$	20.96
5/1/22 to 5/31/22	—	$	—
6/1/22 to 6/30/22	150,000	$	21.43
Total	450,000


	Six months ended			Six months ended
	June 30, 2022			June 30, 2021
Total commissions accrued to brokers	$	5,223		$	1,550
Total commissions as annualized percentage of average total net assets		0.03	%		0.04	%
Commissions accrued as a result of rebalancing	$	2,180		$	994
Percentage of commissions accrued as a result of rebalancing		41.74	%		64.13	%
Commissions accrued as a result of creation and redemption activity	$	3,043		$	556
Percentage of commissions accrued as a result of creation and redemption activity		58.26	%		35.87	%


	Six months ended			Six months ended
	June 30, 2022			June 30, 2021
Average daily total net assets	$	33,268,514		$	8,474,833
Dividend and interest income earned on Treasuries, cash and/or cash equivalents	$	68,823		$	1,382
Annualized yield based on average daily total net assets		0.42	%		0.03	%
Management fee	$	123,731		$	31,519
Total fees and other expenses excluding management fees	$	94,944		$	75,988
Total amount of the expense waiver	$	70,199		$	69,684
Expenses before the allowance of the expense waiver	$	218,675		$	107,507
Expenses after the allowance of the expense waiver	$	148,476		$	37,823
Total commissions accrued to brokers	$	5,223		$	1,550
Total commissions as annualized percentage of average total net assets		0.03	%		0.04	%
Commissions accrued as a result of rebalancing	$	2,180		$	994
Percentage of commissions accrued as a result of rebalancing		41.74	%		64.13	%
Commissions accrued as a result of creation and redemption activity	$	3,043		$	556
Percentage of commissions accrued as a result of creation and redemption activity		58.26	%		35.87	%


	Three months ended			Three months ended
	June 30, 2022			June 30, 2021
Average daily total net assets	$	42,087,963		$	9,090,990
Dividend and interest income earned on Treasuries, cash and/or cash equivalents	$	65,745		$	633
Annualized yield based on average daily total net assets		0.63	%		0.03	%
Management fee	$	78,698		$	16,998
Total fees and other expenses excluding management fees	$	67,344		$	43,039
Total amount of the expense waiver	$	52,406		$	39,639
Expenses before the allowance of the expense waiver	$	146,042		$	60,037
Expenses after the allowance of the expense waiver	$	93,636		$	20,398
Total commissions accrued to brokers	$	3,036		$	763
Total commissions as annualized percentage of average total net assets		0.03	%		0.03	%
Commissions accrued as a result of rebalancing	$	1,226		$	568
Percentage of commissions accrued as a result of rebalancing		40.38	%		74.44	%
Commissions accrued as a result of creation and redemption activity	$	1,810		$	195
Percentage of commissions accrued as a result of creation and redemption activity		59.62	%		25.56	%


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: August 5, 2022	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