☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2016 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______ |
Delaware
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46-3070515
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(State or other jurisdiction
of incorporation or organization)
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(IRS Employer
Identification No.)
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120 W 3rd Street, Suite 220
Fort Worth, Texas
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76102
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☑
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(Do not check if a smaller
reporting company)
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Page Number
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PART I. FINANCIAL INFORMATION
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Item 1.
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3
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4
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5
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6
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Item 2.
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11
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Item 3.
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16
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Item 4.
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16
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PART II. OTHER INFORMATION
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Item 1.
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17
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Item 1A.
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Risk Factors | 17 | |
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Item 2.
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17
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Item 3.
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19
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Item 4.
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19
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Item 5.
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19
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Item 6.
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19
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20
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June 30,
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December 31,
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|||||||
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2016
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2015
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||||||
Assets
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||||||||
Cash and cash equivalents
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$
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3,527,683
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$
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3,287,054
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||||
Accounts Receivable:
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||||||||
Oil, natural gas and natural gas liquids revenues
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3,323,421
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1,417,751
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||||||
Acquisition post-closing receivable
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-
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1,556,530
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||||||
Other current assets
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334,086
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-
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||||||
Total Current Assets
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7,185,190
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6,261,335
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||||||
Oil and natural gas properties, successful efforts method, net of accumulated depreciation,
depletion and amortization; June 30, 2016, $5,475,838; December 31, 2015, $391,624
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155,451,078
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158,895,191
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||||||
Total Assets
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$
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162,636,268
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$
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165,156,526
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||||
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||||||||
Liabilities and Partners' Equity
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||||||||
Note payable
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$
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50,787,107
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$
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81,684,758
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||||
Contingent consideration
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-
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4,743,752
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||||||
Accounts payable and accrued expenses
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3,729,290
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3,449,442
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||||||
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||||||||
Total Current Liabilities
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54,516,397
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89,877,952
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||||||
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||||||||
Limited partners' interest (6,714,383 common units and 4,486,625 units issued and outstanding at June 30, 2016 and December 31, 2015, respectively)
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108,121,598
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75,280,301
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||||||
General partners' interest
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(1,727
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)
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(1,727
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)
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||||
Class B Units (62,500 and 100,000 units issued and outstanding at June 30, 2016 and December 31, 2015, respectively)
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-
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-
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||||||
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Total Partners' Equity
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108,119,871
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75,278,574
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Total Liabilities and Partners' Equity
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$
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162,636,268
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$
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165,156,526
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Three Months
Ended
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Three Months
Ended
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Six Months
Ended |
Six Months
Ended |
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June 30, 2016
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June 30, 2015
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June 30, 2016
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June 30, 2015
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Revenue
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||||||||||||||||
Oil, natural gas and natural gas liquids revenues
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$
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5,532,113
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$
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-
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$
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9,851,210
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$
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-
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Operating costs and expenses
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Lease operating expenses
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889,399
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-
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1,901,906
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-
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Gathering and processing expenses
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257,323
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-
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599,936
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-
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Production taxes
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523,159
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-
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937,720
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-
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Management fees
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-
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-
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886,306
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-
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||||||||||||
General and administrative expenses
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317,126
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104,216
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703,557
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159,351
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Depreciation, depletion and amortization
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2,420,440
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-
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5,093,262
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Total operating costs and expenses
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4,407,447
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104,216
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10,122,687
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159,351
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Operating income (loss)
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1,124,666
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(104,216
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)
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(271,477
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)
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(159,351
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)
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Interest expense, net
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(1,984,049
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)
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-
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(4,180,362
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)
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-
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Net loss
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$
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(859,383
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)
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$
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(104,216
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)
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$
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(4,451,839
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)
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$
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(159,351
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)
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Basic and diluted net loss per common unit
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$
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(0.14
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)
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$ |
-
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$
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(0.81
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)
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$ |
-
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Weighted average common units outstanding - basic and diluted
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5,995,051
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-
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5,464,063
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-
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Six Months Ended
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Six Months Ended
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June 30, 2016
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June 30, 2015
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Cash flow from operating activities:
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Net loss
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$
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(4,451,839
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)
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$
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(159,351
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)
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Adjustments to reconcile net loss to cash from operating activities:
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Depreciation, depletion and amortization
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5,093,262
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-
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Non-cash fair value adjusted amortization
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2,455,936
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-
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Changes in operating assets and liabilities:
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Accounts receivable oil, natural gas and natural gas liquids
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(2,609,476
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)
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-
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Other current assets
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(84,086
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)
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-
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Accounts payable and accrued expenses
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804,013
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159,351
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Net cash flow provided by operating activities
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1,207,810
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-
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Cash flow from investing activities
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Additions to oil, natural gas and natural gas liquid properties
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(1,021,539
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)
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-
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Net cash flow used in investing activities
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(1,021,539
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)
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-
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Cash flow from financing activities
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Cash paid for deferred loan costs
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(250,000
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)
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-
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Net proceeds related to issuance of units
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40,864,941
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-
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Distributions paid to limited partners
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(3,642,750
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-
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Payments on debt
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(36,917,833
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-
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Net cash flow provided by financing activities
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54,358
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-
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Increase in cash and cash equivalents
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240,629
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-
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Cash and cash equivalents, beginning of period
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3,287,054
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94
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Cash and cash equivalents, end of period
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$
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3,527,683
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$
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94
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Interest paid
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$
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1,683,868
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$
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-
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Supplemental non-cash information:
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Accrued deferred offering costs and other assets
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$
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-
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$
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131,454
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Increase in note payable, payment of contingent consideration
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5,000,000
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-
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Decrease in note payable, settlement of pre-close activity
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1,082,167
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-
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Three Months ended
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Six Months ended
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June 30, 2015
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June 30, 2015
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||||||
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(Unaudited)
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(Unaudited)
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Revenues
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$
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7,862,874
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$
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14,207,000
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Net income
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$
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1,790,541
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$
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1,995,537
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· | Identifying and evaluating oil and natural gas properties for acquisition, development, integration, sale or monetization; |
· | Conducting (or overseeing one of its affiliated companies or third-parties to conduct) drilling, completion, production, marketing and hedging operations as the operator of the Partnership's oil and natural gas properties; |
· | Overseeing the drilling, completion, production, marketing and hedging operations of our oil and natural gas properties operated by other persons or entities; |
· | Identifying and evaluating financing alternatives for acquisitions of producing oil and natural gas properties; and |
· | Managing the financial, accounting and other back office support functions associated with the drilling, completion, production, marketing and hedging of the Partnership's oil and natural gas properties. |
· | First, (i) to the Record Holders of the Incentive Distribution Rights, 35%; (ii) to the Record Holders of the Outstanding Class B units, pro rata based on the number of Class B units owned, 35% multiplied by a fraction, the numerator of which is the number of Class B units outstanding and the denominator of which is 100,000; (iii) to the Managing Dealer, as the Managing Dealer contingent incentive fee paid under the Dealer Manager Agreement, 30%, and (iv) the remaining amount, if any, to the Record Holders of outstanding units, pro rata based on their percentage interest until such time as the Managing Dealer receives the full amount of the Managing Dealer contingent incentive fee under the Dealer Manager Agreement; |
· | Thereafter, (i) to the Record Holders of the Incentive Distribution Rights, 35%; (ii) to the Record Holders of the Outstanding Class B units, pro rata based on the number of Class B units owned, 35% multiplied by a fraction, the numerator of which is the number of Class B units outstanding and the denominator of which is 100,000; (iii) the remaining amount to the Record Holders of outstanding units, pro rata based on their percentage interest. |
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•
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investment objectives and our ability to make investments in a timely manner on acceptable terms;
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•
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references to future success in the Partnership's property acquisition, drilling and marketing activities;
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•
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our use of proceeds of the public offering and our business strategy;
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•
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estimated future capital expenditures;
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•
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sales of the Partnership's properties and other liquidity events;
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•
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competitive strengths and goals; and
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•
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other similar matters.
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•
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that our strategy of acquiring oil and gas properties on attractive terms and developing those properties may not be successful or, even if we successfully acquire properties, that our operations on such properties may not be successful;
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•
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general economic, market, or business conditions;
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•
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changes in laws or regulations;
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•
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the risk that the wells in which we acquire an interest are productive, but do not produce enough revenue to return the investment made;
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•
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the risk that the wells we drill do not find hydrocarbons in commercial quantities or, even if commercial quantities are encountered, that actual production is lower than expected on the productive life of wells is shorter than expected;
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•
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current credit market conditions and our ability to obtain long-term financing for our property acquisitions and drilling activities in a timely manner and on terms that are consistent with what we project when we invest in a property;
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•
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uncertainties concerning the price of oil and natural gas, which may decrease and remain low for prolonged periods; and
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•
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the risk that any hedging policy we employ to reduce the effects of changes in the prices of our production will not be effective.
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· | First, (i) to the Record Holders of the Incentive Distribution Rights, 35%; (ii) to the Record Holders of the Outstanding Class B units, pro rata based on the number of Class B units owned, 35% multiplied by a fraction, the numerator of which is the number of Class B units outstanding and the denominator of which is 100,000; (iii) to the Dealer Manager, as the Managing Dealer contingent incentive fee paid under the Dealer Manager Agreement, 30%, and (iv) the remaining amount, if any, to the Record Holders of outstanding units, pro rata based on their percentage interest until such time as the Managing Dealer receives the full amount of the Managing Dealer contingent incentive fee under the Dealer Manager Agreement; |
· | Thereafter, (i) to the Record Holders of the Incentive Distribution Rights, 35%; (ii) to the Record Holders of the Outstanding Class B units, pro rata based on the number of Class B units owned, 35% multiplied by a fraction, the numerator of which is the number of Class B units outstanding and the denominator of which is 100,000; (iii) the remaining amount to the Record Holders of outstanding units, pro rata based on their percentage interest. |
Units Registered
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|||||||||||||||||||
5,263,158
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Units
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$
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19.00
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per unit
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$
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100,000,002
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|||||||||||||
95,000,000
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Units
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$
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20.00
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per unit
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1,900,000,000
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||||||||||||||
Totals:
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100,263,158
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Units
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$
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2,000,000,002
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|||||||||||||||
Units Sold
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|||||||||||||||||||
5,263,158
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Units
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$
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19.00
|
per unit
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$
|
100,000,002
|
|||||||||||||
1,451,225
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Units
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$
|
20.00
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per unit
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29,024,500
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||||||||||||||
Totals:
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6,714,383
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Units
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$
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129,024,502
|
|||||||||||||||
Expenses of Issuance and Distribution of Units
|
|||||||||||||||||||
1.
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Underwriting commissions
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$
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7,741,470
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||||||||||||||||
2.
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Expenses of underwriters
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-
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|||||||||||||||||
3.
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Direct or indirect payments to directors or officers of the Partnership or their associates, or to affiliates of the Partnership
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-
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|||||||||||||||||
4.
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Fees and expenses of third parties
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2,060,385
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|||||||||||||||||
Total Expenses of Issuance and Distribution of Common Shares
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9,801,855
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||||||||||||||||||
Net Proceeds to the Partnership
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$
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119,222,647
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|||||||||||||||||
1.
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Purchase of oil, gas and natural gas liquids properties (net of debt, proceeds and repayment including interest and acquisition costs)
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$
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111,691,464
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||||||||||||||||
2.
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Deposits and other costs associated with potential oil, natural gas and natural gas liquids acquisitions
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-
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|||||||||||||||||
3.
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Repayment of other indebtedness, including interest expense paid
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-
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|||||||||||||||||
4.
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Investment and working capital
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2,616,703
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|||||||||||||||||
5.
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Fees and expenses of third parties
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-
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|||||||||||||||||
6.
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Other
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-
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|||||||||||||||||
7.
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Distributions
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4,914,480
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|||||||||||||||||
Total Application of Net Proceeds to the Partnership
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$
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119,222,647
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Exhibit No.
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Description
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10.7
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Termination of Management Services Agreement by and among E11 Management, LLC, E11 Incentive Holdings, LLC, Energy 11, L.P., and Energy 11 Operating Company, LLC dated August 19, 2015 (incorporated by reference to the Registrant's Form 8-K filed April 7, 2016)
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31.1
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31.2
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32.1
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32.2
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101
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The following materials from Energy 11, L.P.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows, and (iv) related notes to these financial statements, tagged as blocks of text and in detail*
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Energy 11, L.P. (the “registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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|
b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 5, 2016
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By:
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/s/ Glade M. Knight
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Name:
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Glade M. Knight
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Title:
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General Partner, Chief Executive Officer
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|
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(Principal Executive Officer)
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1.
|
I have reviewed this Quarterly Report on Form 10-Q of Energy 11, L.P. (the “registrant”);
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 5, 2016
|
By:
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/s/ David McKenney
|
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Name:
|
David McKenney
|
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Title:
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General Partner, Chief Financial Officer (Principal Financial and Accounting Officer)
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|
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(1)
|
The Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Partnership as of and for the periods covered in this report.
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|
|
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Date: August 5, 2016
|
By:
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/s/ Glade M. Knight
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Name:
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Glade M. Knight
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Title:
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General Partner, Chief Executive Officer (Principal Executive Officer)
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(1)
|
The Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Partnership as of and for the periods covered in this report.
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|
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Date: August 5, 2016
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By:
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/s/ David McKenney
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Name:
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David McKenney
|
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Title:
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General Partner, Chief Financial Officer (Principal Financial and Accounting Officer)
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Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jul. 31, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Energy 11, L.P. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 7,500,683 | |
Amendment Flag | false | |
Entity Central Index Key | 0001581552 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Oil and natural gas properties, accumulated depreciation, depletion and amortization (in Dollars) | $ 5,475,838 | $ 391,624 |
Limited partners' interest, common units issued | 6,714,383 | 4,486,625 |
Limited partners' interest, common units outstanding | 6,714,383 | 4,486,625 |
Class B Units, units issued | 62,500 | 100,000 |
Class B Units, units outstanding | 62,500 | 100,000 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Revenue | ||||
Oil, natural gas and natural gas liquids revenues | $ 5,532,113 | $ 0 | $ 9,851,210 | $ 0 |
Operating costs and expenses | ||||
Lease operating expenses | 889,399 | 0 | 1,901,906 | 0 |
Gathering and processing expenses | 257,323 | 0 | 599,936 | 0 |
Production taxes | 523,159 | 0 | 937,720 | 0 |
Management fees | 0 | 0 | 886,306 | 0 |
General and administrative expenses | 317,126 | 104,216 | 703,557 | 159,351 |
Depreciation, depletion and amortization | 2,420,440 | 0 | 5,093,262 | 0 |
Total operating costs and expenses | 4,407,447 | 104,216 | 10,122,687 | 159,351 |
Operating income (loss) | 1,124,666 | (104,216) | (271,477) | (159,351) |
Interest expense, net | (1,984,049) | 0 | (4,180,362) | 0 |
Net loss | $ (859,383) | $ (104,216) | $ (4,451,839) | $ (159,351) |
Basic and diluted net loss per common unit (in Dollars per share) | $ (0.14) | $ 0 | $ (0.81) | $ 0 |
Weighted average common units outstanding - basic and diluted (in Shares) | 5,995,051 | 0 | 5,464,063 | 0 |
Partnership Organization |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1. Partnership Organization Energy 11, L.P. (the "Partnership") was formed as a Delaware limited partnership. The initial capitalization of the Partnership of $1,000 occurred on July 9, 2013. The Partnership is offering common units of limited partner interest (the "units") on a best-efforts basis with the intention of raising up to $2,000,000,000 of capital, consisting of 100,263,158 units. The Partnership's offering was declared effective by the Securities and Exchange Commission ("SEC") on January 22, 2015. As of August 19, 2015, the Partnership completed the sale of the minimum offering of 1,315,790 units. The subscribers were admitted as Limited Partners of the Partnership at the initial closing and the Partnership has been admitting additional Limited Partners monthly since that time. The Partnership's primary investment objectives are to (i) acquire producing and non-producing oil and gas properties with development potential, and to enhance the value of the properties through drilling and other development activities, (ii) make distributions to the holders of the units, (iii) engage in a liquidity transaction after five – seven years, in which all properties are sold and the sales proceeds are distributed to the partners, merge with another entity, or list the units on a national securities exchange, and (iv) permit holders of units to invest in oil and gas properties in a tax efficient basis. The proceeds from the sale of the units primarily will be used to acquire producing and non-producing oil and natural gas properties onshore in the United States and to develop those properties. The general partner of the Partnership is Energy 11 GP, LLC (the "General Partner"). The General Partner manages and controls the business affairs of the Partnership. David Lerner Associates, Inc. (the "Managing Dealer"), is the dealer manager for the offering of the units. The Partnership's fiscal year ends on December 31. |
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with the instructions for Article 10 of SEC Regulation S-X. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financial statements should be read in conjunction with the Partnership's audited consolidated financial statements included in its 2015 Annual Report on Form 10-K. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2016. Offering Costs The Partnership is raising capital through an on-going best-efforts offering of units by David Lerner Associates, Inc., the managing underwriter, which receives a selling commission and a marketing expense allowance based on proceeds of the units sold. Additionally, the Partnership has incurred other offering costs including legal, accounting and reporting services. These offering costs are recorded by the Partnership as a reduction of partners' equity. As of June 30, 2016, the Partnership had sold 6.7 million units for gross proceeds of $129.0 million and proceeds net of offering costs of $119.2 million. Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires the Partnership to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Loss Per Common Unit Basic loss per common unit is computed as net loss divided by the weighted average number of common units outstanding during the period. Diluted loss per unit is calculated after giving effect to all potential common units that were dilutive and outstanding for the period. There were no units with a dilutive effect for the three and six months ended June 30, 2016 and 2015. As a result, basic and diluted outstanding units were the same. The Class B Units and Incentive Distribution Rights, as defined below, are not included in loss per common unit until such time that it is probable Payout (as discussed in Note 6) would occur. Recent Accounting Standards In April and May 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-10, ASU 2016-11 and ASU 2016-12. Each update clarifies specific topics originally described in ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09, released in May 2014, amends the former revenue recognition guidance and provides a revised comprehensive revenue recognition model with customers that contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. ASU 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. However, the FASB deferred the effective date by one year in August 2015. The Partnership is currently evaluating the impact, if any, of ASU 2014-09 as well as the related subsequent pronouncements released during the current quarter. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation, which simplifies several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the guidance is effective for reporting periods beginning after December 15, 2016, and it is not expected to have a material impact on the Partnership's consolidated financial statements. |
Oil and Gas Investments |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Oil and Gas Property [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Oil and Gas Properties [Text Block] | Note 3. Oil and Gas Investments On December 18, 2015, the Partnership completed its purchase of an approximate 11% working interest in approximately 215 existing producing wells and approximately 262 future development locations in the Sanish field located in Mountrail County, North Dakota (the "Sanish Field Assets") for approximately $159.1 million, subject to post-closing adjustments. During the six months ended June 30, 2016, the Partnership and the sellers ("Sellers") adjusted the purchase price for the settlement of operating activity that occurred prior to the closing date. The net impact of the purchase price adjustment was an increase to the purchase price of the asset of approximately $0.5 million. The Partnership has expensed, as incurred, transaction costs associated with the acquisition of the Sanish Field Assets. These costs included but were not limited to due diligence, reserve reports, legal and engineering services and site visits. The Partnership did not incur any transaction costs in the three and six months ended June 30, 2016 and 2015. The Partnership is a non-operator of the Sanish Field Assets. Whiting Petroleum Corporation ("Whiting"), one of the largest producers in this basin, acts as the operator. The following unaudited pro forma financial information for the three- and six-month periods ended June 30, 2015 has been prepared as if the acquisition of the Sanish Field Assets had occurred on January 1, 2015. The unaudited pro forma financial information was derived from the historical Statement of Operations of the Partnership and the historical information provided by the Sellers. The unaudited pro forma financial information does not purport to be indicative of the results of operations that would have occurred had the acquisition of the Sanish Field Assets and related financing occurred on the basis assumed above, nor is such information indicative of the Partnership's expected future results of operations.
|
Note Payable |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 4. Note Payable As part of the financing for the purchase of the Sanish Field Assets, on December 18, 2015, the Partnership executed a note in favor of the Sellers ("Seller Note") of the assets in the original principal amount of $97.5 million. The note bears interest at 5% per annum and is payable in full no later than September 30, 2016 ("Maturity Date"). The Partnership's right to extend the Maturity Date to March 31, 2017 is subject to the satisfaction of the following conditions: (i) the Partnership must deliver to Seller written notice of the election to extend the Maturity Date no later than September 1, 2016, (ii) the Partnership must pay to Seller an extension fee equal to 0.5% of the outstanding principal balance outstanding at September 30, 2016, (iii) during the extension period and until the note is paid in full, in cash, the interest rate on the outstanding principal amount of the note will bear interest at the fixed rate of 7.0% per annum, (iv) the outstanding principal amount of the note as of September 1, 2016 shall not be in excess of $60 million, and (v) both at the time of the delivery of the extension notice and as of September 30, 2016, no event of default shall exist under the note or any collateral document. There is no penalty for prepayment of the note. Payment of the note is secured by a mortgage and liens on all of the Sanish Field Assets in customary form. In accordance with the Seller Note, because the Partnership had not fully repaid all amounts outstanding under the note on or before June 30, 2016, the Partnership paid a deferred origination fee equal to $250,000 during the three months ended June 30, 2016. The deferred origination fee is included in "Other current assets" on the consolidated balance sheets and will be amortized through the Maturity Date. Interest is due monthly on the last day of each month while the note remains outstanding. In addition to interest payments on the outstanding principal balance of the note, the Partnership must make mandatory principal payments monthly. Prior to reducing the note balance below $60.0 million, the Partnership was required to make principal payments in an amount equal to 75% of the net proceeds the Partnership received from the sale of its equity securities. After reducing the outstanding principal balance below $60.0 million, the Partnership is required to make principal payments in an amount equal to 50% of the net proceeds the Partnership receives from the sale of its equity securities until the note is paid in full. In addition, if the Partnership sells any of the property that is collateral for the note, the Partnership must make a mandatory principal payment equal to 100% of the net proceeds of such sale until the principal amount of the note is paid in full. Pursuant to the First Amendment of the Interest Purchase Agreement, the Partnership was given the one-time right (exercisable between June 15, 2016 through June 30, 2016) to elect to satisfy the contingent payment in full by paying to Sellers $5.0 million at the time of election or by increasing the amount of the Seller Note by $5.0 million. On June 23, 2016, the Partnership exercised this right by increasing the amount of the Partnership's note with the Sellers by $5.0 million. If the Partnership had not exercised the one-time right, the contingent payment would have ranged from $0 to $95 million depending on the average of the monthly NYMEX:CL strip prices as of December 31, 2017 for future contracts during the delivery period beginning December 31, 2017 and ending December 31, 2022. As of June 30, 2016 and December 31, 2015, the outstanding balance on the note was $52.0 million and $85.0 million, respectively. As of June 30, 2016 and December 31, 2015, the carrying value of the note, which approximates its fair market value, was $50.8 million and $81.7 million, respectively. The carrying value of all of the other financial instruments of the Partnership approximate fair value due to their short-term nature. The Partnership estimates the fair value of its notes payable by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity of a debt obligation with similar credit terms and credit characteristics, which are Level 3 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity. |
Management Agreement |
6 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||
Contractors [Abstract] | ||||||||||||||||
Long-term Contracts or Programs Disclosure [Text Block] | Note 5. Management Agreement At the initial closing of the sale of its common units on August 19, 2015, the Partnership entered into a Management Services Agreement (the "Management Agreement") with E11 Management, LLC, (the "Former Manager"), and E11 Incentive Holdings, LLC, an affiliate of the Former Manager ("Incentive Holdings"), whereby the Former Manager agreed to provide management and operating services regarding substantially all aspects of the Partnership's business. The Former Manager was formed by Aubrey K. McClendon and he served as its Chief Executive Officer. Under the Management Agreement, the Former Manager agreed to provide management and other services to the Partnership including, but not limited to, the following:
Pursuant to the Management Agreement, the Partnership agreed to pay the Former Manager a monthly fee. Upon entering into the Management Agreement, the Partnership issued 100,000 Class B units to Incentive Holdings. The Class B units entitle the holder to receive a portion of distributions made after Payout, as described in Note 6 below. The Management Agreement was terminable by the Partnership if, among other reasons, Mr. McClendon, the Former Manager's key employee, ceased to be employed by the Former Manager and the Partnership did not approve of a proposed replacement of such key employee. On March 2, 2016, Mr. McClendon was killed in a car accident. Following Mr. McClendon's death and subsequent correspondence between the Former Manager and the Partnership, on April 5, 2016, the Partnership elected not to approve a replacement key employee for Mr. McClendon and exercised its right to terminate the Management Agreement. Accordingly, the fees under the Management Agreement were no longer accrued as of the effective date of termination. Also, upon termination of the Management Agreement and in accordance with the terms therewith, 37.5% of the Class B units owned by Incentive Holdings were canceled. As of June 30, 2016, the Class B units owned by Incentive Holdings totaled 62,500. Substantially all of the Partnership's properties are currently being operated by Whiting, an independent third party. Since the Partnership only owns a non-operating interest in the Sanish Field Assets, most of the services that the Former Manager had been contracted to perform are being performed by Whiting, as operator of those properties. Consequently, the Partnership does not anticipate that the termination of the Management Agreement will have an adverse effect on its operations. For the three and six months ended June 30, 2016, the Partnership incurred fees and reimbursable costs of approximately $0 and $0.9 million, respectively, under the Management Agreement. |
Capital Contribution and Partners' Equity |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2016 | |||||
Partners' Capital Notes [Abstract] | |||||
Partners' Capital Notes Disclosure [Text Block] | Note 6. Capital Contribution and Partners' Equity At inception the General Partner and organizational limited partner made initial capital contributions totaling $1,000 to the Partnership. Upon closing of the minimum offering the organizational limited partner withdrew its initial capital contribution of $990, the General Partner received Incentive Distribution Rights (defined below), and has been and will be reimbursed for its documented third party out-of-pocket expenses incurred in organizing the Partnership and offering the units. As of August 19, 2015, the Partnership completed its minimum offering of 1,315,790 common units at $19.00 per common unit. In March 2016, the Partnership completed the sale of 5,263,158 common units at $19.00 per common unit. All subsequent shares of common units are being sold at $20.00 per common unit. As of June 30, 2016, the Partnership had completed the sale of 6,714,383 common units for total gross proceeds of $129.0 million and proceeds net of offering costs including selling commissions and marketing expenses of $119.2 million. The Partnership intends to continue to raise capital through its best-efforts offering by the Managing Dealer at $20.00 per common unit. Under the agreement with the Managing Dealer, the Managing Dealer receives a total of 6% in selling commissions and a marketing expense allowance based on gross proceeds of the units sold. The Managing Dealer will also be paid a contingent incentive fee, which is a cash payment of up to an amount equal to 4% of gross proceeds of the units sold based on the performance of the Partnership. Based on the units sold through June 30, 2016, the total contingent fee is approximately $5.2 million. Prior to "Payout," which is defined below, all of the distributions made by the Partnership, if any, will be paid to the holders of units. Accordingly, the Partnership will not make any distributions with respect to the Incentive Distribution Rights or with respect to Class B units and will not make the contingent, incentive payments to the Managing Dealer, until Payout occurs. The Partnership Agreement provides that Payout occurs on the day when the aggregate amount distributed with respect to each of the units equals $20.00 plus the Payout Accrual. The Partnership Agreement defines "Payout Accrual" as 7% per annum simple interest accrued monthly until paid on the Net Investment Amount outstanding from time to time. The Partnership Agreement defines Net Investment Amount initially as $20.00 per unit, regardless of the amount paid for the unit. If at any time the Partnership distributes to holders of units more than the Payout Accrual, the amount the Partnership distributes in excess of the Payout Accrual will reduce the Net Investment Amount. All distributions made by the Partnership after Payout, which may include all or a portion of the proceeds of the sale of all or substantially all of the Partnership's assets, will be made as follows:
The Partnership may issue up to 37,500 additional Class B units, the amount of Class B units canceled in conjunction with the termination of the Management Agreement discussed above in Note 5. All items of income, gain, loss and deduction will be allocated to each Partner's capital account in a manner generally consistent with the distribution procedures outlined above. For the three months ended June 30, 2016, the Partnership paid distributions of $0.349041 per unit or $2.1 million. For the six months ended June 30, 2016, the Partnership paid distributions of $0.675068 per unit or $3.6 million. |
Related Parties |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 7. Related Parties The Partnership has, and is expected to continue to engage in, significant transactions with related parties. These transactions cannot be construed to be at arm's length and the results of the Partnership's operations may be different than if conducted with non-related parties. The General Partner's Board of Directors will oversee and review the Partnership's related party relationships and is required to approve any significant modifications to any existing related party transactions, as well as any new significant related party transactions. On December 18, 2015, the General Partner appointed Clifford J. Merritt as its President. Prior to being appointed President, Mr. Merritt provided consulting services to the General Partner. For the three and six months ended June 30, 2016, the Partnership paid Mr. Merritt $77,099 and $154,198, respectively. For the three months ended June 30, 2016 and 2015, approximately $105,000 and $104,000 of general and administrative costs were incurred by a member of the General Partner and have been or will be reimbursed by the Partnership. For the six months ended June 30, 2016 and 2015, approximately $117,000 and $159,000 of general and administrative costs were incurred by the General Partner and have been or will be reimbursed by the Partnership. At June 30, 2016, approximately $105,000 was due to a member of the General Partner. |
Subsequent Events |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 8. Subsequent Events In July 2016, the Partnership declared and paid $0.9 million, or $0.134247 per outstanding common unit, in distributions to its holders of common units. In July 2016, the Partnership closed on the issuance of approximately 786,300 units through its ongoing best-efforts offering, representing gross proceeds to the Partnership of approximately $15.7 million and proceeds net of selling and marketing costs of approximately $14.8 million. |
Accounting Policies, by Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with the instructions for Article 10 of SEC Regulation S-X. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financial statements should be read in conjunction with the Partnership's audited consolidated financial statements included in its 2015 Annual Report on Form 10-K. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2016.
|
Deferred Charges, Policy [Policy Text Block] | Offering Costs The Partnership is raising capital through an on-going best-efforts offering of units by David Lerner Associates, Inc., the managing underwriter, which receives a selling commission and a marketing expense allowance based on proceeds of the units sold. Additionally, the Partnership has incurred other offering costs including legal, accounting and reporting services. These offering costs are recorded by the Partnership as a reduction of partners' equity. As of June 30, 2016, the Partnership had sold 6.7 million units for gross proceeds of $129.0 million and proceeds net of offering costs of $119.2 million.
|
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires the Partnership to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
|
Earnings Per Share, Policy [Policy Text Block] | Loss Per Common Unit Basic loss per common unit is computed as net loss divided by the weighted average number of common units outstanding during the period. Diluted loss per unit is calculated after giving effect to all potential common units that were dilutive and outstanding for the period. There were no units with a dilutive effect for the three and six months ended June 30, 2016 and 2015. As a result, basic and diluted outstanding units were the same. The Class B Units and Incentive Distribution Rights, as defined below, are not included in loss per common unit until such time that it is probable Payout (as discussed in Note 6) would occur.
|
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Standards In April and May 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-10, ASU 2016-11 and ASU 2016-12. Each update clarifies specific topics originally described in ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09, released in May 2014, amends the former revenue recognition guidance and provides a revised comprehensive revenue recognition model with customers that contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. ASU 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. However, the FASB deferred the effective date by one year in August 2015. The Partnership is currently evaluating the impact, if any, of ASU 2014-09 as well as the related subsequent pronouncements released during the current quarter. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation, which simplifies several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the guidance is effective for reporting periods beginning after December 15, 2016, and it is not expected to have a material impact on the Partnership's consolidated financial statements.
|
Oil and Gas Investments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Oil and Gas Property [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | The following unaudited pro forma financial information for the three- and six-month periods ended June 30, 2015 has been prepared as if the acquisition of the Sanish Field Assets had occurred on January 1, 2015. The unaudited pro forma financial information was derived from the historical Statement of Operations of the Partnership and the historical information provided by the Sellers. The unaudited pro forma financial information does not purport to be indicative of the results of operations that would have occurred had the acquisition of the Sanish Field Assets and related financing occurred on the basis assumed above, nor is such information indicative of the Partnership's expected future results of operations.
|
Partnership Organization (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jul. 09, 2013 |
Jun. 30, 2016 |
|
Partnership Organization (Details) [Line Items] | ||
Limited Liability Company or Limited Partnership, Business, Formation State | Delaware | |
Partners' Capital Account, Contributions | $ 1,000 | |
Subsidiary of Limited Liability Company or Limited Partnership, Business Purpose | (i) acquire producing and non-producing oil and gas properties with development potential, and to enhance the value of the properties through drilling and other development activities, (ii) make distributions to the holders of the units, (iii) engage in a liquidity transaction after five – seven years, in which all properties are sold and the sales proceeds are distributed to the partners, merge with another entity, or list the units on a national securities exchange, and (iv) permit holders of units to invest in oil and gas properties in a tax efficient basis. The proceeds from the sale of the units primarily will be used to acquire producing and non-producing oil and natural gas properties onshore in the United States and to develop those properties | |
Best-Efforts Offering [Member] | ||
Partnership Organization (Details) [Line Items] | ||
Total amount of Unit offering | $ 2,000,000,000 | |
Total amount of Units offered | 100,263,158 | |
Minimum Unit Offering | 1,315,790 |
Summary of Significant Accounting Policies (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 18 Months Ended | |||
---|---|---|---|---|---|---|
Mar. 04, 2016 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
|
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Proceeds, Net of Offering Costs, from Issuance of Common Limited Partners Units (in Dollars) | $ 40,864,941 | $ 0 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 0 | ||
Best-Efforts Offering [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Partners' Capital Account, Units, Sale of Units | 5,263,158 | 6,714,383 | ||||
Proceeds from Issuance of Common Limited Partners Units (in Dollars) | $ 129,000,000 | |||||
Proceeds, Net of Offering Costs, from Issuance of Common Limited Partners Units (in Dollars) | $ 119,200,000 |
Oil and Gas Investments (Details) - Sanish Field Located in Mountrail County, North Dakota [Member] - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Dec. 18, 2015 |
Jun. 30, 2016 |
|
Oil and Gas Investments (Details) [Line Items] | ||
Working Interest | 11.00% | |
Productive Oil Wells, Number of Wells, Net | 215 | |
Oil Wells, Future Development Locations | 262 | |
Business Combination, Consideration Transferred (in Dollars) | $ 159.1 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred (in Dollars) | $ 0.5 |
Oil and Gas Investments (Details) - Business Acquisition, Pro Forma Information - USD ($) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2015 |
Jun. 30, 2015 |
|
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenues | $ 7,862,874 | $ 14,207,000 |
Net income | $ 1,790,541 | $ 1,995,537 |
Note Payable (Details) - Notes Payable, Other Payables [Member] - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Note Payable (Details) [Line Items] | ||
Debt Instrument, Face Amount | $ 97,500,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |
Debt Instrument, Maturity Date | Sep. 30, 2016 | |
Debt Instrument, Maturity Date, Description | The Partnership's right to extend the Maturity Date to March 31, 2017 is subject to the satisfaction of the following conditions: (i) the Partnership must deliver to Seller written notice of the election to extend the Maturity Date no later than September 1, 2016, (ii) the Partnership must pay to Seller an extension fee equal to 0.5% of the outstanding principal balance outstanding at September 30, 2016, (iii) during the extension period and until the note is paid in full, in cash, the interest rate on the outstanding principal amount of the note will bear interest at the fixed rate of 7.0% per annum, (iv) the outstanding principal amount of the note as of September 1, 2016 shall not be in excess of $60 million, and (v) both at the time of the delivery of the extension notice and as of September 30, 2016, no event of default shall exist under the note or any collateral document. There is no penalty for prepayment of the note. | |
Debt Instrument, Collateral | Payment of the note is secured by a mortgage and liens on all of the Sanish Field Assets in customary form. | |
Debt Instrument, Description | In accordance with the Seller Note, because the Partnership had not fully repaid all amounts outstanding under the note on or before June 30, 2016, the Partnership paid a deferred origination fee equal to $250,000 during the three months ended June 30, 2016. | |
Debt Instrument, Fee Amount | $ 250,000 | |
Debt Instrument, Payment Terms | Interest is due monthly on the last day of each month while the note remains outstanding. In addition to interest payments on the outstanding principal balance of the note, the Partnership must make mandatory principal payments monthly. Prior to reducing the note balance below $60.0 million, the Partnership was required to make principal payments in an amount equal to 75% of the net proceeds the Partnership received from the sale of its equity securities. After reducing the outstanding principal balance below $60.0 million, the Partnership is required to make principal payments in an amount equal to 50% of the net proceeds the Partnership receives from the sale of its equity securities until the note is paid in full. In addition, if the Partnership sells any of the property that is collateral for the note, the Partnership must make a mandatory principal payment equal to 100% of the net proceeds of such sale until the principal amount of the note is paid in full. | |
Debt Instrument, Increase (Decrease) for Period, Description | Pursuant to the First Amendment of the Interest Purchase Agreement, the Partnership was given the one-time right (exercisable between June 15, 2016 through June 30, 2016) to elect to satisfy the contingent payment in full by paying to Sellers $5.0 million at the time of election or by increasing the amount of the Seller Note by $5.0 million. On June 23, 2016, the Partnership exercised this right by increasing the amount of the Partnership's note with the Sellers by $5.0 million. If the Partnership had not exercised the one-time right, the contingent payment would have ranged from $0 to $95 million depending on the average of the monthly NYMEX:CL strip prices as of December 31, 2017 for future contracts during the delivery period beginning December 31, 2017 and ending December 31, 2022. | |
Debt Instrument, Increase (Decrease), Net | $ 5,000,000 | |
Debt Instrument, Outstanding Balance | 52,000,000 | $ 85,000,000 |
Notes Payable | $ 50,800,000 | $ 81,700,000 |
Management Agreement (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Apr. 05, 2016 |
Jun. 30, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Management Agreement (Details) [Line Items] | ||||
Owned Property, Reimbursable Management Costs | $ 0 | $ 900,000 | ||
E11 Incentive Holdings [Member] | ||||
Management Agreement (Details) [Line Items] | ||||
Class B Units Issued to Manager | 100,000 | |||
Management Termination Description | The Management Agreement was terminable by the Partnership if, among other reasons, Mr. McClendon, the Former Manager's key employee, ceased to be employed by the Former Manager and the Partnership did not approve of a proposed replacement of such key employee. On March 2, 2016, Mr. McClendon was killed in a car accident. Following Mr. McClendon's death and subsequent correspondence between the Former Manager and the Partnership, on April 5, 2016, the Partnership elected not to approve a replacement key employee for Mr. McClendon and exercised its right to terminate the Management Agreement. Accordingly, the fees under the Management Agreement were no longer accrued as of the effective date of termination. Also, upon termination of the Management Agreement and in accordance with the terms therewith, 37.5% of the Class B units owned by Incentive Holdings were canceled. As of June 30, 2016, the Class B units owned by Incentive Holdings totaled 62,500.Substantially all of the Partnership's properties are currently being operated by Whiting, an independent third party. Since the Partnership only owns a non-operating interest in the Sanish Field Assets, most of the services that the Former Manager had been contracted to perform are being performed by Whiting, as operator of those properties. Consequently, the Partnership does not anticipate that the termination of the Management Agreement will have an adverse effect on its operations. | |||
Percentage of Manager Shares Canceled upon Termination of Agreement | 37.50% | |||
Capital Units held by Manager affiliate | 62,500 | 62,500 |
Capital Contribution and Partners' Equity (Details) - USD ($) |
3 Months Ended | 4 Months Ended | 6 Months Ended | 14 Months Ended | 18 Months Ended | |||
---|---|---|---|---|---|---|---|---|
Mar. 04, 2016 |
Jul. 09, 2013 |
Jun. 30, 2016 |
Jun. 30, 2016 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Mar. 04, 2016 |
Jun. 30, 2016 |
|
Capital Contribution and Partners' Equity (Details) [Line Items] | ||||||||
Partners' Capital Account, Contributions | $ 1,000 | |||||||
Distributions to organizational limited partner | $ 990 | |||||||
Managing Dealer, Selling Commissions, Percentage | 6.00% | |||||||
Managing Dealer, Maximum Contingent Incentive Fee on Gross Proceeds, Percentage | 4.00% | |||||||
Maximum Contingent Offering Costs, Selling Commissions and Marketing Expenses | $ 5,200,000 | $ 5,200,000 | $ 5,200,000 | $ 5,200,000 | ||||
Key Provisions of Operating or Partnership Agreement, Description | The Partnership Agreement provides that Payout occurs on the day when the aggregate amount distributed with respect to each of the units equals $20.00 plus the Payout Accrual. The Partnership Agreement defines "Payout Accrual" as 7% per annum simple interest accrued monthly until paid on the Net Investment Amount outstanding from time to time. The Partnership Agreement defines Net Investment Amount initially as $20.00 per unit, regardless of the amount paid for the unit. If at any time the Partnership distributes to holders of units more than the Payout Accrual, the amount the Partnership distributes in excess of the Payout Accrual will reduce the Net Investment Amount.All distributions made by the Partnership after Payout, which may include all or a portion of the proceeds of the sale of all or substantially all of the Partnership's assets, will be made as follows:· First, (i) to the Record Holders of the Incentive Distribution Rights, 35%; (ii) to the Record Holders of the Outstanding Class B units, pro rata based on the number of Class B units owned, 35% multiplied by a fraction, the numerator of which is the number of Class B units outstanding and the denominator of which is 100,000; (iii) to the Managing Dealer, as the Managing Dealer contingent incentive fee paid under the Dealer Manager Agreement, 30%, and (iv) the remaining amount, if any, to the Record Holders of outstanding units, pro rata based on their percentage interest until such time as the Managing Dealer receives the full amount of the Managing Dealer contingent incentive fee under the Dealer Manager Agreement;· Thereafter, (i) to the Record Holders of the Incentive Distribution Rights, 35%; (ii) to the Record Holders of the Outstanding Class B units, pro rata based on the number of Class B units owned, 35% multiplied by a fraction, the numerator of which is the number of Class B units outstanding and the denominator of which is 100,000; (iii) the remaining amount to the Record Holders of outstanding units, pro rata based on their percentage interest.The Partnership may issue up to 37,500 additional Class B units, the amount of Class B units canceled in conjunction with the termination of the Management Agreement discussed above in Note 5.All items of income, gain, loss and deduction will be allocated to each Partner's capital account in a manner generally consistent with the distribution procedures outlined above. | |||||||
Distribution Made to Limited Partner, Distributions Paid, Per Unit (in Dollars per share) | $ 0.349041 | $ 0.675068 | ||||||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 2,100,000 | $ 3,642,750 | $ 0 | |||||
Best-Efforts Offering [Member] | ||||||||
Capital Contribution and Partners' Equity (Details) [Line Items] | ||||||||
Minimum Unit Offering (in Shares) | 1,315,790 | |||||||
Partners Capital Account, Units Sold, Price Per Unit | $ 19.00 | $ 20.00 | $ 19.00 | |||||
Partners' Capital Account, Units, Sale of Units (in Shares) | 5,263,158 | 6,714,383 | ||||||
Proceeds from Issuance of Common Limited Partners Units | $ 129,000,000 | |||||||
Proceeds, Net of Selling Commissions and Marketing Expenses, from Issuance of Common Limited Partners Units | $ 119,200,000 | |||||||
Partners' Capital Account, Description of Units Sold | The Partnership intends to continue to raise capital through its best-efforts offering by the Managing Dealer at $20.00 per common unit. |
Related Parties (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
General Partner [Member] | ||||
Related Parties (Details) [Line Items] | ||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | $ 105,000 | $ 104,000 | $ 117,000 | $ 159,000 |
Due to Related Parties, Current | 105,000 | 105,000 | ||
Consulting Services Provided to General Partner [Member] | President [Member] | ||||
Related Parties (Details) [Line Items] | ||||
Costs and Expenses, Related Party | $ 77,099 | $ 154,198 |
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