United States 12 Month Natural Gas Fund, LP 10-Q for FY2021 Q3

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

10-Q 2021-11-05 For: 2021-09-30

Added on April 11, 2026

About this 10-Q

United States 12 Month Natural Gas Fund, LP filed this 10-Q on November 5, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.61M; up 487.3% from $784.56K a year earlier
Net income: $4.58M; up 494.2% from net income of $771K 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.	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.	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, 2021 (Unaudited) and December 31, 2020		4

Condensed Schedule of Investments (Unaudited) at September 30, 2021		5

Condensed Statements of Operations (Unaudited) for the three and nine months ended September 30, 2021 and 2020		6

Condensed Statements of Changes in Partners’ Capital (Unaudited) for the three and nine months ended September 30, 2021 and 2020		7

Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2021 and 2020		8

Notes to Condensed Financial Statements (Unaudited) for the period ended September 30, 2021		9


	September 30, 2021		December 31, 2020
Assets
Cash and cash equivalents (at cost $13,821,620 and $6,497,522, respectively) (Notes 2 and 5)	$	13,821,620	$	6,497,522
Equity in trading accounts:
Cash and cash equivalents (at cost $- and $845,621, respectively)		—		845,621
Unrealized gain (loss) on open commodity futures contracts		5,232,232		(21,964)
Receivable from General Partner (Note 3)		108,012		60,535
Dividends receivable		149		9
Interest receivable		220		174
Prepaid license fees		1,225		983
Prepaid insurance^*		952		96

Total Assets	$	19,164,410	$	7,382,976

Liabilities and Partners' Capital
Payable due to Broker	$	3,173,686	$	—
General Partner management fees payable (Note 3)		8,840		4,095
Professional fees payable		46,991		25,000
Brokerage commissions payable		391		391
Directors’ fees payable^*		2,749		2,030

Total Liabilities		3,232,657		31,516

Commitments and Contingencies (Notes 3, 4 & 5)

Partners' Capital
General Partners		—		—
Limited Partners		15,931,753		7,351,460
Total Partners' Capital		15,931,753		7,351,460

Total Liabilities and Partners' Capital	$	19,164,410	$	7,382,976

Limited Partners' shares outstanding		1,100,000		950,000
Net asset value per share	$	14.48	$	7.74
Market value per share	$	14.51	$	7.59


				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 2021 contracts, expiring October 2021	$	905,539	28	$	737,221	4.63
NYMEX Natural Gas Futures NG December 2021 contracts, expiring November 2021		947,921	28		729,559	4.58
NYMEX Natural Gas Futures NG January 2022 contracts, expiring December 2021		945,501	28		754,939	4.74
NYMEX Natural Gas Futures NG February 2022 contracts, expiring January 2022		938,810	28		727,470	4.57
NYMEX Natural Gas Futures NG March 2022 contracts, expiring February 2022		966,810	29		633,120	3.97
NYMEX Natural Gas Futures NG April 2022 contracts, expiring March 2022		737,827	28		381,053	2.39
NYMEX Natural Gas Futures NG May 2022 contracts, expiring April 2022		751,184	28		319,536	2.01
NYMEX Natural Gas Futures NG June 2022 contracts, expiring May 2022		808,926	29		309,024	1.94
NYMEX Natural Gas Futures NG July 2022 contracts, expiring June 2022		833,740	28		257,140	1.61
NYMEX Natural Gas Futures NG August 2022 contracts, expiring July 2022		868,130	28		224,710	1.41
NYMEX Natural Gas Futures NG September 2022 contracts, expiring August 2022		935,590	28		151,930	0.95
NYMEX Natural Gas Futures NG October 2022 contracts, expiring September 2022		1,049,980	27		6,530	0.04
Total Open Futures Contracts*	$	10,689,958	337	$	5,232,232	32.84


	Shares/Principal				% of Partners’
	Amount		Market Value		Capital
Cash Equivalents
United States Money Market Funds
Goldman Sachs Financial Square Government Fund - Institutional Shares, 0.03%^#		6,000,000	$	6,000,000	37.66
RBC U.S. Government Money Market Fund - Institutional Shares, 0.03%^#		1,000,000		1,000,000	6.28
Total United States Money Market Funds			$	7,000,000	43.94


	Three months ended		Three months ended		Nine months ended		Nine months ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Income
Gain (loss) on trading of commodity futures contracts:
Realized gain (loss) on closed commodity futures contracts	$	1,113,175	$	(8,164)	$	1,664,875	$	(701,343)
Change in unrealized gain (loss) on open commodity futures contracts		3,493,656		790,225		5,254,196		1,068,773
Dividend income		458		975		1,075		2,559
Interest income^*		424		1,176		1,189		18,050
ETF transaction fees		350		350		2,100		1,050
Total Income (Loss)	$	4,608,063	$	784,562	$	6,923,435	$	389,089

Expenses
General Partner management fees (Note 3)	$	22,183	$	11,676	$	53,702	$	24,068
Professional fees		38,385		14,964		106,049		50,436
Brokerage commissions		631		537		2,181		1,058
Directors' fees and insurance		3,305		188		9,449		575
License fees		444		233		1,074		481
Total Expenses		64,948		27,598		172,455		76,618
Expense waiver (Note 3)		(38,328)		(14,037)		(108,012)		(47,742)
Net Expenses	$	26,620	$	13,561	$	64,443	$	28,876
Net Income (Loss)	$	4,581,443	$	771,001	$	6,858,992	$	360,213
Net Income (Loss) per limited partner share	$	4.50	$	1.02	$	6.74	$	0.14
Net Income (Loss) per weighted average limited partner share	$	4.50	$	1.03	$	6.78	$	0.68
Weighted average limited partner shares outstanding		1,017,391		748,370		1,012,271		532,664


	Limited Partners*
	Three months ended		Three months ended		Nine months ended		Nine months ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Balances at beginning of period	$	9,979,162	$	4,527,182	$	7,351,460	$	3,373,894
Addition of 100,000, 150,000, 450,000 and 350,000 partnership shares, respectively		1,371,148		1,127,830		4,302,559		2,691,906
Redemption of (–), (–), (300,000) and (–) partnership shares, respectively		—		—		(2,581,258)		—
Net income (loss)		4,581,443		771,001		6,858,992		360,213

Balances at end of period	$	15,931,753	$	6,426,013	$	15,931,753	$	6,426,013


At September 30, 2021	Total		Level I		Level II		Level III
Short-Term Investments	$	7,000,000	$	7,000,000	$	—	$	—
Exchange-Traded Futures Contracts
United States Contracts		5,232,232		5,232,232		—		—


At December 31, 2020	Total		Level I		Level II		Level III
Short-Term Investments	$	1,000,000	$	1,000,000	$	—	$	—
Exchange-Traded Futures Contracts
United States Contracts		(21,964)		(21,964)		—		—


	Condensed
	Statements of
	Financial	Fair Value at		Fair Value at
Derivatives not Accounted for as Hedging Instruments	Condition Location	September 30, 2021		December 31, 2020
Futures - Commodity Contracts	Assets	$	5,232,232	$	(21,964)

Correlation Matrix 10 Years	Large Cap US Equities (S&P 500)	US Gov’t Bonds (BEUSG4 Index)	Global Equities (FTSE World Index)	Crude Oil	Heating Oil	Unleaded Gasoline	Natural Gas
Large Cap US Equities (S&P 500)	1.000	(0.313)	0.966	0.446	0.347	0.540	0.107
US Gov’t Bonds (BEUSG4 Index)		1.000	(0.299)	(0.325)	(0.357)	(0.300)	(0.088)
Global Equities (FTSE World Index)			1.000	0.491	0.414	0.573	0.086
Crude Oil				1.000	0.785	0.736	0.013
Heating Oil					1.000	0.673	0.033
Unleaded Gasoline						1.000	0.066
Natural Gas							1.000
Source: Bloomberg, NYMEX

Correlation Matrix 1 Year	Large Cap US Equities (S&P 500)	US Gov’t Bonds (BEUSG4 Index)	Global Equities (FTSE World Index)	Crude Oil	Heating Oil	Unleaded Gasoline	Natural Gas
Large Cap US Equities (S&P 500)	1.000	0.225	0.978	0.530	0.526	0.659	(0.561)
US Gov’t Bonds (BEUSG4 Index)		1.000	0.218	0.045	0.057	(0.022)	(0.116)
Global Equities (FTSE World Index)			1.000	0.606	0.627	0.692	(0.623)
Crude Oil				1.000	0.965	0.851	(0.265)
Heating Oil					1.000	0.831	(0.288)
Unleaded Gasoline						1.000	(0.572)
Natural Gas							1.000
Source: Bloomberg, NYMEX


	Nine months ended			Nine months ended
	September 30, 2021			September 30, 2020
Total commissions accrued to brokers	$	2,181		$	1,058
Total commissions as annualized percentage of average total net assets		0.03	%		0.03	%
Commissions accrued as a result of rebalancing	$	1,525		$	767
Percentage of commissions accrued as a result of rebalancing		69.92	%		72.50	%
Commissions accrued as a result of creation and redemption activity	$	656		$	291
Percentage of commissions accrued as a result of creation and redemption activity		30.08	%		27.50	%


	Nine months ended			Nine months ended
	September 30, 2021			September 30, 2020
Average daily total net assets	$	9,573,258		$	4,286,570
Dividend and interest income earned on Treasuries, cash and/or cash equivalents	$	2,264		$	20,609
Annualized yield based on average daily total net assets		0.03	%		0.64	%
Management fee	$	53,702		$	24,068
Total fees and other expenses excluding management fees	$	118,753		$	52,550
Total amount of the expense waiver	$	108,012		$	47,742
Expenses before the allowance of the expense waiver	$	172,455		$	76,618
Expenses after the allowance of the expense waiver	$	64,443		$	28,876
Total commissions accrued to brokers	$	2,181		$	1,058
Total commissions as annualized percentage of average total net assets		0.03	%		0.03	%
Commissions accrued as a result of rebalancing	$	1,525		$	767
Percentage of commissions accrued as a result of rebalancing		69.92	%		72.50	%
Commissions accrued as a result of creation and redemption activity	$	656		$	291
Percentage of commissions accrued as a result of creation and redemption activity		30.08	%		27.50	%


	Three months ended			Three months ended
	September 30, 2021			September 30, 2020
Average daily total net assets	$	11,734,289		$	6,193,476
Dividend and interest income earned on Treasuries, cash and/or cash equivalents	$	882		$	2,151
Annualized yield based on average daily total net assets		0.03	%		0.14	%
Management fee	$	22,183		$	11,676
Total fees and other expenses excluding management fees	$	42,765		$	15,922
Total amount of the expense waiver	$	38,328		$	14,037
Expenses before the allowance of the expense waiver	$	64,948		$	27,598
Expenses after the allowance of the expense waiver	$	26,620		$	13,561
Total commissions accrued to brokers	$	631		$	537
Total commissions as annualized percentage of average total net assets		0.02	%		0.03	%
Commissions accrued as a result of rebalancing	$	531		$	409
Percentage of commissions accrued as a result of rebalancing		84.15	%		76.16	%
Commissions accrued as a result of creation and redemption activity	$	100		$	128
Percentage of commissions accrued as a result of creation and redemption activity		15.85	%		23.84	%


	Total	Average
	Number of	Price Per
Period	Shares Redeemed	Share
7/1/21 to 7/31/21	—	$	—
8/1/21 to 8/31/21	—	$	—
9/1/21 to 9/30/21	—	$	—
Total	—


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)