The United States 12 Month Natural Gas Fund, LP (“UNL”) is a Delaware
limited partnership organized on June 27, 2007. UNL maintains its main business
office at 1999 Harrison Street, Suite 1530, Oakland, California 94612. UNL is
a commodity pool that issues limited partnership interests (“shares”)
traded on the NYSE Arca, Inc. (the “NYSE Arca”). It operates pursuant
to the terms of the Second Amended and Restated Agreement of Limited Partnership
dated as of March 1, 2013 (as amended from time to time, the “LP Agreement”),
which grants full management control to its general partner, United States Commodity
Funds LLC (“USCF”).
The investment objective of UNL is for the daily changes in percentage terms
of its shares’ per share net asset value (“NAV”) to reflect
the daily changes in percentage terms of the spot price of natural gas delivered
at the Henry Hub, Louisiana, as measured by the daily changes in the average
of the prices of 12 futures contracts on natural gas traded on the New York
Mercantile Exchange (the “NYMEX”), consisting of the near month
contract to expire and the contracts for the following 11 months, for a total
of 12 consecutive months’ contracts, except when the near month contract
is within two weeks of expiration, in which case it will be measured by the
futures contract that is the next month contract to expire and the contracts
for the following 11 consecutive months (the “Benchmark Futures Contracts”),
less UNL’s expenses. When calculating the daily movement of the average
price of the 12 contracts, each contract month is equally weighted. It is not
the intent of UNL to be operated in a fashion such that the per share NAV will
equal, in dollar terms, the spot price of natural gas or any particular futures
contract based on natural gas. It is not the intent of UNL to be operated in
a fashion such that its per share NAV will reflect the percentage change of
the price of any particular futures contract as measured over a time period
greater than one day. USCF believes that it is not practical to manage the portfolio
to achieve such an investment goal when investing in Futures Contracts (as defined
below) and Other Natural Gas-Related Investments (as defined below). UNL’s
shares began trading on November 18, 2009. USCF is the general partner of UNL
and is responsible for the management of UNL.
USCF is a single member limited liability company that was formed in the state
of Delaware on May 10, 2005. USCF maintains its main business office at 1999
Harrison Street, Suite 1530, Oakland, California 94612. USCF is a wholly-owned
subsidiary of Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”).
Mr. Nicholas Gerber (discussed below) controls Wainwright by virtue of his ownership
or control of a majority of Wainwright’s shares. Wainwright is a holding
company that currently holds shares of both USCF, as well as USCF Advisers LLC,
an investment adviser registered under the Investment Advisers Act of 1940,
as amended. USCF Advisers LLC serves as the investment adviser for the Stock
Split Index Fund, a series of the USCF ETF Trust. USCF ETF Trust is registered
under the Investment Company Act of 1940, as amended (the “1940 Act”).
The Board of Trustees for the USCF ETF Trust consists of different independent
trustees than those independent directors who serve on the Board of Directors
of USCF. USCF is a member of the National Futures Association (the “NFA”)
and registered as a commodity pool operator (“CPO”) with the Commodity
Futures Trading Commission (the “CFTC”) on December 1, 2005 and
as a Swaps Firm on August 8, 2013.
USCF also serves as general partner or sponsor of the United States Oil Fund,
LP (“USO”), the United States Natural Gas Fund, LP (“UNG”),
the United States 12 Month Oil Fund, LP (“USL”), the United States
Gasoline Fund, LP (“UGA”), the United States Diesel-Heating Oil
Fund, LP (“UHN”), the United States Short Oil Fund, LP (“DNO”),
the United States Brent Oil Fund, LP (“BNO”), the United States
Commodity Index Fund (“USCI”), the United States Copper Index Fund
(“CPER”) and the United States Agriculture Index Fund (“USAG”).
USO, UNG, USL, UGA, UHN, DNO, BNO, USCI, CPER and USAG are actively operating
funds and all are listed on the NYSE Arca, and referred to collectively herein
as the “Related Public Funds.” The Related Public Funds are subject
to reporting requirements under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). For more information about each of the Related
Public Funds, investors in UNL may call 1.800.920.0259 or visit www.unitedstatescommodityfunds.com
or the U.S. Securities and Exchange Commission’s (the “SEC”)
website at www.sec.gov.
An investment in the shares provides a means for diversifying an investor’s
portfolio or hedging exposure to changes in natural gas prices. An investment
in the shares allows both retail and institutional investors to easily gain
this exposure to the natural gas market in a transparent, cost-effective manner.
The net assets of UNL consist primarily of investments in futures contracts
for natural gas, crude oil, diesel-heating oil, gasoline, and other petroleum-based
fuels that are traded on the NYMEX, ICE Futures or other U.S. and foreign exchanges
(collectively, “Futures Contracts”) and, to a lesser extent, in
order to comply with regulatory requirements or in view of market conditions,
other natural gas-related investments such as cash-settled options on Futures
Contracts, forward contracts for natural gas, cleared swap contracts and non-exchange
traded over-the-counter (“OTC”) transactions that are based on the
price of natural gas, oil and other petroleum-based fuels, Futures Contracts
and indices based on the foregoing (collectively, “Other Natural Gas-Related
Investments”). Market conditions that USCF currently anticipates could
cause UNL to invest in Other Natural Gas-Related Investments include those allowing
UNL to obtain greater liquidity or to execute transactions with more favorable
pricing. For convenience and unless otherwise specified.
By remaining invested as fully as possible in Futures Contracts or Other Natural
Gas-Related Investments, USCF believes that the daily changes in percentage
terms in UNL’s per share NAV will continue to closely track the daily
changes in percentage terms in the average of the prices of the Benchmark Futures
Contracts. USCF believes that certain arbitrage opportunities result in the
price of the shares traded on the NYSE Arca closely tracking the per share NAV
of UNL. Additionally, Futures Contracts traded on the NYMEX have closely tracked
the spot price of natural gas. Based on these expected interrelationships, USCF
believes that the daily changes in the price of UNL’s shares traded on
the NYSE Arca, on a percentage basis, have closely tracked and will continue
to closely track on a daily basis, the daily changes in the spot price of natural
gas, on a percentage basis.