The United States 12 Month Oil Fund, LP (“USL”) is a Delaware limited
partnership organized on June 27, 2007. USL maintains its main business office
at 1999 Harrison Street, Suite 1530, Oakland, California 94612. USL 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 USL 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 light, sweet crude
oil delivered to Cushing, Oklahoma, as measured by the daily changes in the
average of the prices of 12 futures contracts for light, sweet crude oil 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 Oil Futures Contracts”),
less USL’s expenses. When calculating the daily movement of the average
price of the 12 contracts, each contract month will be equally weighted. It
is not the intent of USL to be operated in a fashion such that the per share
NAV will equal, in dollar terms, the spot price of light, sweet crude oil or
any particular futures contract based on light, sweet crude oil. It is not the
intent of USL 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
Oil Futures Contracts (as defined below) and Other Oil-Related Investments (as
defined below). USL’s shares began trading on December 6, 2007. USCF is
the general partner of USL and is responsible for the management of USL.
SCF 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
of Wainwright’s shares. Wainwright is a holding company that currently
holds 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, as 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 Gasoline Fund, LP (“UGA”), the United States Diesel-Heating
Oil Fund, LP (“UHN”), the United States Short Oil Fund, LP (“DNO”),
the United States 12 Month Natural Gas Fund, LP (“UNL”), 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,
UGA, UHN, DNO, UNL, 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
(“Exchange Act”). For more information about each of the Related
Public Funds, investors in USL may call 1.800.920.0259 or visit www.unitedstatescommodityfunds.com
or the Securities and Exchange Commission’s (“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 oil prices. An investment in the
shares allows both retail and institutional investors to easily gain this exposure
to the crude oil market in a transparent, cost-effective manner.
The net assets of USL consist primarily of investments in futures contracts
for light, sweet crude oil, other types of crude oil, diesel-heating oil, gasoline,
natural gas, and other petroleum-based fuels that are traded on the NYMEX, ICE
Futures or other U.S. and foreign exchanges (collectively, “Oil Futures
Contracts”) and, to a lesser extent, in order to comply with regulatory
requirements or in view of market conditions, other oil-related investments
such as cash-settled options on Oil Futures Contracts, forward contracts for
oil, cleared swap contracts and non-exchange traded over-the-counter (“OTC”)
transactions that are based on the price of oil, other petroleum-based fuels,
Oil Futures Contracts and indices based on the foregoing (collectively, “Other
Oil-Related Investments”). Market conditions that USCF currently anticipates
could cause USL to invest in Other Oil-Related Investments include those allowing
USL to obtain greater liquidity or to execute transactions with more favorable
pricing. For convenience and unless otherwise specified, Oil Futures Contracts
and Other Oil-Related Investments collectively are referred to as “Oil
Interests” in this annual report on Form 10-K. USL invests substantially
the entire amount of its assets in Oil Futures Contracts while supporting such
investments by holding the amounts of its margin, collateral and other requirements
relating to these obligations in short-term obligations of the United States
of two years or less (“Treasuries”), cash and cash equivalents.
The daily holdings of USL are available on USL’s website at www.unitedstatescommodityfunds.com.
The investment objective of USL is for the daily changes in percentage terms
of its shares’ per share NAV to reflect the daily changes in percentage
terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma,
as measured by the daily changes in the average of the prices of 12 futures
contracts for light, sweet crude oil traded on 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 contracts that are the next month contract to expire (the “Benchmark
Oil Futures Contracts”), less USL’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 USL to be operated in a fashion
such that its per share NAV will equal, in dollar terms, the spot price of light,
sweet crude oil or any particular futures contract based on light, sweet crude
oil. It is not the intent of USL 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. USL may
invest in interests other than the Benchmark Oil Futures Contract to comply
with accountability levels and position limits.
The shares issued by USL may only be purchased by Authorized Participants and
only in blocks of 50,000 shares called Creation Baskets. The amount of the purchase
payment for a Creation Basket is equal to the aggregate NAV of the shares in
the Creation Basket. Similarly, only Authorized Participants may redeem shares
and only in blocks of 50,000 shares called Redemption Baskets. The amount of
the redemption proceeds for a Redemption Basket is equal to the aggregate NAV
of shares in the Redemption Basket. The purchase price for Creation Baskets,
and the redemption price for Redemption Baskets are the actual NAV calculated
at the end of the business day when a request for a purchase or redemption is
received by USL. The NYSE Arca publishes an approximate per share NAV intra-day
based on the prior day’s per share NAV and the current price of the Benchmark
Oil Futures Contracts, but the price of Creation Baskets and Redemption Baskets
is determined based on the actual per share NAV calculated at the end of the
day.
1.06%