Energy Resources 12 Production, Revenue Plunge in 2025

TL;DR

**Energy Resources 12's 2025 results are a red flag, with plummeting production and distributions signaling tough times ahead for this non-operated Bakken player.**

AI Summary

Energy Resources 12, L.P. reported a significant decline in production and revenue for the fiscal year ended December 31, 2025. Total sold production decreased by 15.3% to 639,059 BOE from 754,855 BOE in 2024, primarily driven by a 21.9% drop in oil production to 329,265 barrels. The average combined sales price per BOE also fell by 14.7% to $40.80 from $47.85 in 2024, largely due to a 13.2% decrease in average oil sales price to $64.25 per barrel. Despite these declines, natural gas average sales price increased by 60.0% to $2.32 per Mcf. Total production costs per BOE decreased by 7.7% to $25.17, with production taxes seeing a 28.0% reduction. The Partnership declared and paid distributions of $0.641082 per common unit, totaling $7.1 million in 2025, a substantial decrease from $1.282163 per common unit, or $14.1 million, in 2024. Proved reserves as of December 31, 2025, were 8,788 MBOE with a standardized measure of $61.404 million.

Why It Matters

This filing reveals a challenging year for Energy Resources 12, L.P., marked by significant production and revenue declines, which directly impacts investor returns through reduced distributions. The partnership's reliance on third-party operators in the volatile Bakken shale formation, coupled with lower oil prices and increased global supply, highlights competitive pressures in the energy sector. For employees and customers, sustained declines could signal future operational adjustments. The broader market will watch how non-operated working interest models perform amidst fluctuating commodity prices and geopolitical risks, especially given the partnership's stated objective of a liquidity transaction within five to seven years of its 2019 offering.

Risk Assessment

Risk Level: high — The risk level is high due to significant declines in production (15.3% total BOE, 21.9% oil) and average sales prices (14.7% combined per BOE) in 2025. The partnership's non-operated model means it relies heavily on third-party operators, exposing it to risks beyond its direct control, such as drilling program intentions and marketing effectiveness, as explicitly stated in the 'Forward Looking Statements' section.

Analyst Insight

Investors should carefully evaluate Energy Resources 12's ability to achieve its stated liquidity event given the substantial declines in production and distributions. Consider the partnership's exposure to volatile oil prices and its non-operated model, and assess if the current distribution yield justifies the inherent commodity and operational risks.

Financial Highlights

revenue

$329,265 barrels

revenue Growth

-15.3%

Key Numbers

• $40.80 — Combined average sales price per BOE (decreased by 14.7% from $47.85 in 2024)
• 639,059 BOE — Total sold production (decreased by 15.3% from 754,855 BOE in 2024)
• 329,265 barrels — Oil production (decreased by 21.9% from 421,815 barrels in 2024)
• $64.25 — Average oil sales price per Bbl (decreased by 13.2% from $74.02 in 2024)
• $2.32 — Average natural gas sales price per Mcf (increased by 60.0% from $1.45 in 2024)
• $0.641082 — Distributions per common unit (decreased from $1.282163 in 2024)
• 8,788 MBOE — Total Proved Reserves (as of December 31, 2025)
• $25.17 — Total production costs per BOE (decreased by 7.7% from $27.28 in 2024)
• 452 — Producing wells (non-operated working interest as of December 31, 2025)
• 11,031,579 — Common units outstanding (as of March 25, 2026)

Key Players & Entities

• Energy Resources 12, L.P. (company) — registrant
• Energy Resources 12 GP, LLC (company) — General Partner of the Partnership
• David Lerner Associates, Inc. (company) — dealer manager for the best-efforts offering
• SEC (regulator) — Securities and Exchange Commission
• OPEC+ (company) — Organization of the Petroleum Exporting Countries and certain non-member oil-producing countries
• North Dakota (regulator) — state where Bakken Assets are located and taxes are withheld
• $218.0 million (dollar_amount) — gross proceeds from common unit offering
• $86.4 million (dollar_amount) — capital drilling and completion costs incurred through December 31, 2025
• $7.1 million (dollar_amount) — distributions paid in 2025
• $61.404 million (dollar_amount) — standardized measure of discounted future net cash flows as of December 31, 2025

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: The Partnership's revenues are highly dependent on the prices of oil and natural gas. A significant decline in average oil sales price by 13.2% to $64.25 per barrel in 2025, and a 14.7% decrease in combined average sales price per BOE to $40.80, negatively impacted financial results. Continued price volatility could further reduce profitability and cash flows.
• Production Decline [high — operational]: Total sold production decreased by 15.3% to 639,059 BOE in 2025, primarily due to a 21.9% drop in oil production. This decline in output directly reduces revenue and can strain the ability to cover fixed costs, impacting overall financial performance.
• Reduced Distributions [medium — financial]: Distributions to common unitholders were cut by 50% to $0.641082 per common unit in 2025, totaling $7.1 million, down from $14.1 million in 2024. This reflects the challenging operating environment and reduced profitability, which may deter income-focused investors.
• Reliance on Third-Party Operators [medium — operational]: The Partnership's Bakken Assets are operated by third-party operators. Any operational inefficiencies, disputes, or changes in strategy by these operators could negatively impact the Partnership's production, costs, and overall financial performance.
• Environmental Regulations [medium — regulatory]: The oil and gas industry is subject to extensive environmental regulations. Changes in these regulations, or increased compliance costs, could materially affect the Partnership's operations and financial condition.

Industry Context

The oil and gas industry is characterized by significant capital intensity, commodity price volatility, and evolving regulatory landscapes. Companies like Energy Resources 12, L.P. operate in a competitive environment, with success often tied to efficient exploration, development, and production, as well as effective management of price risks. The current environment shows a mixed picture with declining oil prices impacting revenue but a strong increase in natural gas prices offering some offset.

Regulatory Implications

The Partnership operates under a complex web of federal, state, and local regulations governing environmental protection, drilling, production, and safety. Compliance with these regulations, including potential changes or new mandates related to emissions or resource management, can impose significant costs and operational constraints.

What Investors Should Do

1. Monitor commodity price trends closely.
2. Evaluate the sustainability of production levels.
3. Assess the impact of reduced distributions.
4. Understand the role of third-party operators.

Key Dates

• 2018-02-01: First Bakken Assets Purchase — Initiated the Partnership's primary investment in oil and natural gas properties for $87.5 million.
• 2018-08-31: Second Bakken Assets Purchase — Further expanded the Partnership's Bakken Assets for $82.5 million, solidifying its operational base.
• 2019-10-01: Best-Efforts Offering Completion — Raised approximately $218.0 million in gross proceeds, providing capital for asset acquisition and development.
• 2025-12-31: Fiscal Year End — Reported significant declines in production and revenue, with total sold production down 15.3% and average sales price down 14.7%.

Glossary

BOE

Barrels of Oil Equivalent. A standard unit used to measure and compare quantities of different hydrocarbon liquids and gases. (Used to report total production and sales volumes, allowing for a consolidated view of oil and natural gas output.)

Working Interest

The interest of a mineral owner or lessee in the oil and gas in place, including the right to operate and develop the minerals. (The Partnership holds a non-operated working interest in its Bakken Assets, meaning it shares in costs and revenues but does not control operations.)

Proved Reserves

Estimates of crude oil, natural gas, and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. (Indicates the estimated quantity of recoverable resources, a key metric for the long-term value and sustainability of an oil and gas company.)

Standardized Measure

A financial measure that presents the future net cash flows from proved oil and gas reserves, discounted at an annual rate of 10 percent. (Provides a standardized valuation of the Partnership's proved reserves, allowing for comparison with industry peers.)

Mcf

Thousand Cubic Feet. A unit of volume for natural gas. (Used to measure and report natural gas production and sales volumes.)

Year-Over-Year Comparison

In fiscal year 2025, Energy Resources 12, L.P. experienced a significant downturn compared to 2024. Total sold production fell by 15.3%, and the average combined sales price per BOE decreased by 14.7%, leading to lower revenues. While production costs per BOE saw a reduction of 7.7%, this was insufficient to offset the revenue decline. Consequently, distributions per common unit were halved, reflecting the challenging operating and market conditions.

Key Financial Figures

• $1,000 — al capitalization of the Partnership of $1,000 occurred on December 30, 2016. The Part
• $218.0 million — common units sold for gross proceeds of $218.0 million and proceeds net of offering costs of $
• $204.3 million — n and proceeds net of offering costs of $204.3 million. As of December 31, 2025, the Partners
• $87.5 m — first purchase in the Bakken Assets for $87.5 million, subject to customary adjustments
• $82.5 m — econd purchase in the Bakken Assets for $82.5 million, subject to customary adjustments
• $86.4 million — p has incurred a total of approximately $86.4 million in capital drilling and completion cost
• $8 million — e Partnership anticipates approximately $8 million of capital expenditures will be incurre
• $8.7 m — ive Fees are a maximum of approximately $8.7 million, subject to Payout (defined below
• $20.00 — pect to each of the common units equals $20.00 plus the Payout Accrual. The Partnershi
• $1.60 — d paid a special distribution to return $1.60 per common unit of capital to holders o
• $0.09 — otal withholding taxes of approximately $0.09 per common unit to the state of North D
• $1.71 — cribed above by an approximate total of $1.71 per common unit. All distributions mad
• $0.641082 — ship declared and paid distributions of $0.641082 per common unit, or $7.1 million. For t
• $7.1 million — utions of $0.641082 per common unit, or $7.1 million. For the year ended December 31, 2024,
• $1.282163 — ship declared and paid distributions of $1.282163 per common unit, or $14.1 million. Oil

Filing Documents

• eres20251231_10k.htm (10-K) — 1270KB
• ex_934490.htm (EX-10.4) — 33KB
• ex_874504.htm (EX-21.1) — 2KB
• ex_874505.htm (EX-31.1) — 13KB
• ex_874506.htm (EX-31.2) — 12KB
• ex_874507.htm (EX-32.1) — 6KB
• ex_874508.htm (EX-32.2) — 6KB
• ex_874509.htm (EX-99.1) — 54KB
• ex99-1_001.jpg (GRAPHIC) — 3KB
• 0001437749-26-009727.txt ( ) — 5111KB
• eres-20251231.xsd (EX-101.SCH) — 41KB
• eres-20251231_cal.xml (EX-101.CAL) — 24KB
• eres-20251231_def.xml (EX-101.DEF) — 275KB
• eres-20251231_lab.xml (EX-101.LAB) — 266KB
• eres-20251231_pre.xml (EX-101.PRE) — 300KB
• eres20251231_10k_htm.xml (XML) — 593KB

Business

Item 1. Business 5

Risk Factors

Item 1A. Risk Factors 19

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 33

Cybersecurity

Item 1C. Cybersecurity 33

Properties

Item 2. Properties 33

Legal Proceedings

Item 3. Legal Proceedings 33

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 33 Part II

Market for Registrant ' s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant ' s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 34

[Reserved]

Item 6. [Reserved] 37

Management ' s Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 37

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 46

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 47

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 65

Controls and Procedures

Item 9A. Controls and Procedures 65

Other Information

Item 9B. Other Information 65

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 65 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 66

Executive Compensation

Item 11. Executive Compensation 68

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 68

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 70

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 71 Part IV

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 72

Form 10-K Summary

Item 16. Form 10-K Summary 73

Signatures

Signatures 74 Table of Contents Part I

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS Certain statements within this report may constitute forward-looking statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. You can identify these statements by the use of words such as "may," "will," "could," "anticipate," "believe," "estimate," "expect," "intend," "predict," "continue," "further," "seek," "plan" or "project" and variations of these words or comparable words or phrases of similar meaning. These forward-looking statements include such things as: any impact of the ongoing Iranian-Israeli-American and Russian-Ukrainian conflicts or any other Middle Eastern conflicts on the global energy markets; intentions of the Partnership's operators with regard to their drilling programs; references to future success in the Partnership's drilling and marketing activities; the Partnership's business strategy; estimated future capital expenditures; estimated future distributions; sales of the Partnership's properties and other liquidity events; competitive strengths and goals; and other similar matters. These forward-looking statements reflect the Partnership's current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside the Partnership's control that may cause actual results to differ materially from those projected. Such factors include, but are not limited to, those described under "Risk Factors" and the following: that the Partnership's development of its oil and natural gas properties may not be successful or that its operations on such properties may not be successful; general economic, market, or business conditions; changes in laws or regulations; the risk that the wells in which the Partnership acquired an interest are productiv

Business

Item 1. Business Overview Energy Resources 12, 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 December 30, 2016. The Partnership completed its best-efforts offering in October 2019 with a total of approximately 11.0 million common units sold for gross proceeds of $218.0 million and proceeds net of offering costs of $204.3 million. As of December 31, 2025, the Partnership owned an approximate 5.3% non-operated working interest in 452 producing wells, predominantly in McKenzie, Dunn, McLean and Mountrail counties of North Dakota (collectively, the "Bakken Assets"), and possible future development locations in the Bakken Assets. The Bakken Assets, which are a part of the Bakken shale formation in the Greater Williston Basin, are operated by third-party operators on behalf of the Partnership and other working interest owners. The general partner of the Partnership is Energy Resources 12 GP, LLC (the "General Partner"). Business Objective The Partnership's primary investment objectives are to (i) acquire producing and non-producing oil and natural gas properties with development potential to be operated by third-party operators on-shore in the United States, and to enhance the value of the properties through drilling and other development activities, (ii) make distributions to the holders of the common units, (iii) engage in a liquidity transaction after five to seven years, in which all properties are sold and the sales proceeds are distributed to the partners, merge with another entity, or list the common units on a national securities exchange, and (iv) permit holders of common units to invest in oil and natural gas properties in a tax efficient basis. The proceeds from the sale of the common units primarily have been used to acquire the Bakken

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