Energy 11's Q3 Net Income Plummets 88% Amidst Revenue Drop

TL;DR

**Energy 11's Q3 results are a red flag, showing a massive profit drop and revenue decline; time to re-evaluate your position.**

AI Summary

Energy 11, L.P. reported a significant decline in net income for the three and nine months ended September 30, 2025, primarily due to lower oil revenues. Net income for the three months ended September 30, 2025, was $1,045,713, a substantial decrease from $8,717,524 in the same period of 2024. Similarly, net income for the nine months ended September 30, 2025, fell to $8,486,469 from $18,997,877 in 2024. Total revenue for the three months decreased from $25,332,927 in 2024 to $15,797,147 in 2025, with oil revenue dropping from $22,406,998 to $12,908,227. For the nine months, total revenue declined from $60,720,863 to $53,200,490. The company's cash and cash equivalents increased significantly to $5,922,389 as of September 30, 2025, from $227,859 at December 31, 2024, partly due to a $5,000,000 payment on its revolving credit facility. Capital expenditures for oil and natural gas properties decreased to $4,819,828 for the nine months ended September 30, 2025, compared to $13,833,990 in the prior year period. The Partnership continues to operate with an approximate 24% non-operated working interest in 309 producing wells in the Sanish field, North Dakota, with Chord Energy Corporation as the primary operator.

Why It Matters

This filing reveals a sharp decline in Energy 11's profitability, which directly impacts investor returns, as evidenced by the reduced net income per common unit from $1.00 to $0.45 year-over-year. The company's reliance on a single operator, Chord Energy Corporation, for 99% of its producing properties in the Sanish Field, North Dakota, introduces significant concentration risk. While the increase in cash and reduction in debt are positive, the substantial drop in oil revenue and overall net income suggests a challenging market environment or operational headwinds that could affect future distributions to limited partners and the company's competitive standing against larger, more diversified energy firms.

Risk Assessment

Risk Level: high — The risk level is high due to the significant 88% decrease in net income for the three months ended September 30, 2025, from $8,717,524 to $1,045,713, and a 55% drop for the nine months from $18,997,877 to $8,486,469. This is coupled with a substantial decline in total revenue from $25,332,927 to $15,797,147 for the quarter, primarily driven by lower oil sales. The heavy reliance on Chord Energy Corporation as the operator for 99% of its producing properties also presents a significant concentration risk.

Analyst Insight

Investors should scrutinize the drivers behind the steep revenue and net income declines, particularly the commodity price environment and operational efficiency of the Sanish Field Assets. Consider if the current distribution levels are sustainable given the reduced profitability and evaluate the long-term viability of a non-operated interest model in a volatile energy market.

Financial Highlights

debt To Equity

0.02

revenue

$15,797,147

operating Margin

6.8%

total Assets

$335,296,549

total Debt

$7,890,398

net Income

$1,045,713

eps

$0.06

gross Margin

5.9%

cash Position

$5,922,389

revenue Growth

-37.6%

Revenue Breakdown

Key Numbers

• $1,045,713 — Net income for Q3 2025 (Decreased from $8,717,524 in Q3 2024, an 88% decline.)
• $8,486,469 — Net income for nine months ended Sep 30, 2025 (Decreased from $18,997,877 in the same period of 2024, a 55% decline.)
• $15,797,147 — Total revenue for Q3 2025 (Decreased from $25,332,927 in Q3 2024.)
• $12,908,227 — Oil revenue for Q3 2025 (Decreased from $22,406,998 in Q3 2024.)
• $5,922,389 — Cash and cash equivalents as of Sep 30, 2025 (Increased from $227,859 at Dec 31, 2024.)
• $5,000,000 — Payments on revolving credit facility (Made during the nine months ended Sep 30, 2025.)
• $4,819,828 — Additions to oil and natural gas properties for nine months ended Sep 30, 2025 (Decreased from $13,833,990 in the prior year period.)
• 18,973,474 — Common units outstanding (Consistent across both periods.)
• $0.06 — Basic and diluted net income per common unit for Q3 2025 (Decreased from $0.46 in Q3 2024.)
• 24% — Non-operated working interest (In 309 producing wells in the Sanish field.)

Key Players & Entities

• Energy 11, L.P. (company) — registrant
• Chord Energy Corporation (company) — operator of Sanish Field Assets
• BancFirst (company) — lender for revolving credit facility
• Energy 11 GP, LLC (company) — General Partner of the Partnership
• Sanish field (location) — primary operating area in Mountrail County, North Dakota
• SEC (regulator) — Securities and Exchange Commission
• Financial Accounting Standards Board (regulator) — issuer of accounting standards
• Chief Executive Officer (person) — Chief Operating Decision Maker (CODM) for the Partnership

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: The Partnership's revenues are heavily reliant on the price of oil and natural gas. A significant decrease in oil revenue by 42.4% in Q3 2025 ($12,908,227 vs $22,406,998) directly impacted net income, highlighting the sensitivity to market price fluctuations.
• Non-Operated Working Interest Dependence [medium — operational]: The Partnership holds a non-operated working interest in the Sanish Field Assets, with Chord Energy Corporation as the primary operator. This dependence means the Partnership has limited control over operational decisions, efficiency, and capital allocation, which could impact production and costs.
• Reduced Capital Expenditures [medium — financial]: Capital expenditures for oil and natural gas properties decreased by 65.2% to $4,819,828 for the nine months ended September 30, 2025, from $13,833,990 in the prior year. This reduction may impact future production and reserve replacement.
• Production Volume Declines [medium — market]: While not explicitly detailed, the substantial drop in oil revenue suggests a potential decrease in production volumes or lower realized prices, impacting overall financial performance. Total revenue for Q3 2025 was $15,797,147, down from $25,332,927 in Q3 2024.
• Decreased Profitability [high — financial]: Net income for Q3 2025 plummeted by 88% to $1,045,713 from $8,717,524 in Q3 2024. For the nine months, net income fell 55% to $8,486,469 from $18,997,877, indicating a severe decline in profitability.
• Environmental Regulations [low — regulatory]: As an oil and gas producer, the Partnership is subject to stringent environmental regulations related to exploration, production, and emissions. Changes in these regulations or increased compliance costs could adversely affect operations and profitability.

Industry Context

The oil and gas industry is characterized by significant price volatility for commodities like oil and natural gas, directly impacting exploration, production, and profitability. Companies often operate with substantial capital expenditures and face ongoing regulatory scrutiny. The North Dakota Bakken region, where Energy 11, L.P. operates, is a key production area, but is subject to competitive pressures from other operators and evolving market dynamics.

Regulatory Implications

Energy 11, L.P. is subject to federal, state, and local regulations governing oil and gas exploration, production, and environmental protection. Compliance with these regulations, including those related to emissions and waste disposal, requires ongoing investment and can lead to penalties if not met. Changes in environmental policies or the imposition of new regulations could increase operating costs and impact future development plans.

What Investors Should Do

1. Monitor commodity prices closely.
2. Assess operator performance and strategy.
3. Evaluate capital expenditure trends.
4. Analyze the sustainability of current cash levels.

Key Dates

• 2025-09-30: Quarterly and Nine-Month Financial Results — Reported significant decline in net income and revenue, primarily due to lower oil revenues. Cash position increased substantially.
• 2024-12-31: Year-End Financial Position — Reported cash and cash equivalents of $227,859, a substantial decrease compared to the Q3 2025 balance.
• 2017-04-24: Completion of Best-Efforts Offering — Raised gross proceeds of $374.2 million, establishing the initial capital base for the Partnership's operations.
• 2013-07-09: Partnership Formation — Initial capitalization of $1,000, marking the beginning of Energy 11, L.P.'s operations.

Glossary

Non-operated working interest

A type of ownership in an oil or gas property where the owner has the right to a share of the production and revenue but does not manage the day-to-day operations of the well or field. (Energy 11, L.P. holds a 24% non-operated working interest in the Sanish Field Assets, meaning it relies on the operator (Chord Energy Corporation) for operational decisions.)

Successful efforts method

An accounting method for oil and gas companies where costs of exploring for and developing oil and gas reserves are capitalized, while exploration costs that do not result in finding reserves are expensed. (This method is used to value the Partnership's oil and natural gas properties on the balance sheet.)

Depreciation, depletion and amortization (DD&A)

Non-cash expenses that represent the reduction in the value of oil and gas properties over time due to extraction (depletion), wear and tear (depreciation), and other factors (amortization). (A significant operating expense for Energy 11, L.P., impacting net income and the carrying value of its assets.)

Asset retirement obligations

The costs associated with the eventual dismantling, removal, or restoration of property, plant, or equipment at the end of its useful life, such as plugging and abandoning wells. (Represents a future liability for the Partnership related to its oil and gas properties.)

Common units outstanding

The total number of common units of limited partnership interest that have been issued and are held by investors. (Used to calculate net income per common unit (EPS) and represents the ownership stake in the Partnership.)

Year-Over-Year Comparison

Energy 11, L.P. has experienced a dramatic downturn in financial performance compared to the prior year. For the three months ended September 30, 2025, net income fell by 88% to $1,045,713 from $8,717,524 in 2024, driven by a 42.4% drop in oil revenue. Total revenue also decreased by 37.6% in Q3 2025. While cash reserves have significantly increased to $5,922,389 from $227,859, this is partly due to a $5,000,000 payment on its revolving credit facility. Capital expenditures have been sharply curtailed, decreasing by 65.2% for the nine-month period, suggesting a more conservative approach to development.

Filing Documents

• eele20250930_10q.htm (10-Q) — 703KB
• ex_860167.htm (EX-31.1) — 13KB
• ex_860168.htm (EX-31.2) — 12KB
• ex_860169.htm (EX-32.1) — 5KB
• ex_860170.htm (EX-32.2) — 5KB
• 0001437749-25-034698.txt ( ) — 2908KB
• eele-20250930.xsd (EX-101.SCH) — 28KB
• eele-20250930_cal.xml (EX-101.CAL) — 19KB
• eele-20250930_def.xml (EX-101.DEF) — 185KB
• eele-20250930_lab.xml (EX-101.LAB) — 188KB
• eele-20250930_pre.xml (EX-101.PRE) — 202KB
• eele20250930_10q_htm.xml (XML) — 228KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Consolidated Balance Sheets – September 30, 2025 and December 31, 2024 3 Consolidated Statements of Operations – Three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Partners ' Equity – Three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows – Nine months ended September 30, 2025 and 2024 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 20 Item 4.

Controls and Procedures

Controls and Procedures 20

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 21 Item 1A.

Risk Factors

Risk Factors 21 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21 Item 3. Defaults upon Senior Securities 21 Item 4. Mine Safety Disclosures 21 Item 5. Other Information 21 Item 6. Exhibits 21

Signatures

Signatures 22 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Energy 11, L.P. Consolidated Balance Sheets September 30, December 31, 2025 2024 (unaudited) Assets Cash and cash equivalents $ 5,922,389 $ 227,859 Accounts receivable 7,559,853 13,152,609 Other current assets, net 161,594 155,581 Total Current Assets 13,643,836 13,536,049 Oil and natural gas properties, successful efforts method, net of accumulated depreciation, depletion and amortization of $ 196,640,479 and $ 175,017,198 , respectively 321,652,713 340,222,534 Other assets - 10,064 Total Assets $ 335,296,549 $ 353,768,647 Liabilities Accounts payable and accrued expenses $ 5,685,975 $ 7,731,188 Total Current Liabilities 5,685,975 7,731,188 Revolving credit facility - 5,000,000 Asset retirement obligations 2,204,423 2,195,629 Total Liabilities 7,890,398 14,926,817 Partners' Equity Limited partners' interest ( 18,973,474 common units issued and outstanding, respectively) 327,407,878 338,843,557 General partner's interest ( 1,727 ) ( 1,727 ) Class B Units ( 62,500 units issued and outstanding, respectively) - - Total Partners' Equity 327,406,151 338,841,830 Total Liabilities and Partners' Equity $ 335,296,549 $ 353,768,647 See notes to consolidated financial statements. 3 Table of Contents Energy 11, L.P. Consolidated Statements of Operations (Unaudited) Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Revenues Oil $ 12,908,227 $ 22,406,998 $ 43,522,900 $ 53,029,563 Natural gas 830,190 505,561 3,511,892 1,716,501 Natural gas liquids 2,058,730 2,420,368 6,165,698 5,974,799 Total revenue 15,797,147 25,332,927 53,200,490 60,720,863 Operating costs and expenses Production expenses 6,196,246 5,743,883 18,210,343 15,862,490 Production taxes 1,103,811 2,071,571 3,682,360 4,838,498 General and administrative expenses 237,769 230

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements September 30, 2025 (Unaudited) Note 1. Partnership Organization Energy 11, L.P. (the "Partnership") is a Delaware limited partnership formed to acquire producing and non-producing oil and natural gas properties onshore in the United States and to develop those properties. The initial capitalization of the Partnership of $ 1,000 occurred on July 9, 2013. The Partnership completed its best-efforts offering on April 24, 2017 with a total of approximately 19.0 million common units sold for gross proceeds of $ 374.2 million and proceeds net of offering costs of $ 349.6 million. As of September 30, 2025 , the Partnership owned an approximate 24 % non-operated working interest in 309 producing wells and future development sites in the Sanish field located in Mountrail County, North Dakota (collectively, the "Sanish Field Assets"). Chord Energy Corporation ("Chord") is one of the largest producers in the basin and operates substantially all of the Sanish Field Assets. 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. The Partnership's fiscal year ends on December 31. 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 generally accepted accounting principles ("GAAP") 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 2024 Annual Report on Form 10 -K. Operating results for the three and nine months ended Sep

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