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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>1.</b><b> </b><b>Partnership</b><b> </b><b>Organization</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">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.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">As of September 30, 2018, the Partnership owned an approximate 25-26% non-operated working interest in 221 currently producing wells and approximately 247 future development sites in the Sanish field located in Mountrail County, North Dakota (collectively, the “Sanish Field Assets”), which is part of the Bakken shale formation in the Greater Williston Basin. Whiting Petroleum Corporation (“Whiting”) and Oasis Petroleum North America, LLC (“Oasis”), two of the largest producers in the basin, operate substantially all of the Sanish Field Assets.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">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.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership’s fiscal year ends on December 31.</p><br/></div>
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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>2.</b><b> </b><b>Summary</b><b> </b><b>of</b><b> </b><b>Significant</b><b> </b><b>Accounting</b><b> </b><b>Policies</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Basis</i><i> </i><i>of</i><i> </i><i>Presentation</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">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 2017 Annual Report on Form 10-K. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2018.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Use</i><i> </i><i>of</i><i> </i><i>Estimates</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The preparation of financial statements in conformity with United States GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. 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The Class B units and Incentive Distribution Rights, as defined below, are not included in net income per common unit until such time that it is probable Payout (as discussed in Note 8) will occur.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Recently</i><i> </i><i>Adopted</i><i> </i><i>Accounting</i><i> </i><i>Standards</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, <i>Revenue</i><i> </i><i>from</i><i> </i><i>Contracts</i><i> </i><i>with</i><i> </i><i>Customers</i><i> </i><i>(Topic</i><i> </i><i>606)</i>, that 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. 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The Partnership did not record a change to its opening retained earnings as of January 1, 2018, as there was no material change to the timing or pattern of revenue recognition due to the adoption of Topic 606. The Partnership is bound by a joint operating agreement with the operator of each of its producing wells. Under the joint operating agreement, the Partnership’s proportionate share of production is marketed at the discretion of the operators. Virtually all of the Partnership’s contracts’ pricing provisions are tied to a market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, quality of oil, natural gas and natural gas liquids and prevailing supply and demand conditions, so that prices fluctuate to remain competitive with other available suppliers. The Partnership typically satisfies its performance obligations upon transfer of control of its products and records the related revenue in the month production is delivered to the purchaser. Settlement receipts for sales of oil, natural gas and natural gas liquids may not be received for two to three months after the date production is delivered by the operator, and as a result, the Partnership is required to estimate the amount of production delivered by the operator and the price that will be received for the sale of the product. The Partnership records the differences between estimates and the actual amounts received for product sales in the month that payment is received from the operator. Historically, differences between the Partnership’s revenue estimates and actual revenue received have not been significant.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership disaggregates its revenue on the face of the consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Recently</i><i> </i><i>Issued</i><i> </i><i>Accounting</i><i> </i><i>Standards</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In February 2016, the FASB issued ASU No. 2016-02, <i>Leases</i><i> </i><i>(Topic</i><i> </i><i>842)</i>, which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets as right-of-use assets and lease liabilities. The standard is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. The Partnership expects to adopt this standard as of January 1, 2019. Although the Partnership has not yet identified any material impact, the Partnership is still evaluating the impact this standard will have on its consolidated financial statements and related disclosures.</p><br/></div>
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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Basis</i><i> </i><i>of</i><i> </i><i>Presentation</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">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 2017 Annual Report on Form 10-K. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2018.</p></div>
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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Use</i><i> </i><i>of</i><i> </i><i>Estimates</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The preparation of financial statements in conformity with United States GAAP requires management 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.</p></div>
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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Recently</i><i> </i><i>Adopted</i><i> </i><i>Accounting</i><i> </i><i>Standards</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, <i>Revenue</i><i> </i><i>from</i><i> </i><i>Contracts</i><i> </i><i>with</i><i> </i><i>Customers</i><i> </i><i>(Topic</i><i> </i><i>606)</i>, that 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 is effective for annual and interim periods beginning after December 15, 2017. The Partnership adopted this standard on January 1, 2018 using the modified retrospective approach.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Impact</i><i> </i><i>of</i><i> </i><i>Topic</i><i> </i><i>606</i><i> </i><i>Adoption</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In accordance with Topic 606, the Partnership completed a detailed review of its revenue contracts, which represent all of the Partnership’s revenue, including oil, natural gas and natural gas liquids sales, to determine the effect of the new standard for the three and nine months ended September 30, 2018. The Partnership did not record a change to its opening retained earnings as of January 1, 2018, as there was no material change to the timing or pattern of revenue recognition due to the adoption of Topic 606. The Partnership is bound by a joint operating agreement with the operator of each of its producing wells. Under the joint operating agreement, the Partnership’s proportionate share of production is marketed at the discretion of the operators. Virtually all of the Partnership’s contracts’ pricing provisions are tied to a market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, quality of oil, natural gas and natural gas liquids and prevailing supply and demand conditions, so that prices fluctuate to remain competitive with other available suppliers. The Partnership typically satisfies its performance obligations upon transfer of control of its products and records the related revenue in the month production is delivered to the purchaser. Settlement receipts for sales of oil, natural gas and natural gas liquids may not be received for two to three months after the date production is delivered by the operator, and as a result, the Partnership is required to estimate the amount of production delivered by the operator and the price that will be received for the sale of the product. The Partnership records the differences between estimates and the actual amounts received for product sales in the month that payment is received from the operator. Historically, differences between the Partnership’s revenue estimates and actual revenue received have not been significant.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership disaggregates its revenue on the face of the consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Recently</i><i> </i><i>Issued</i><i> </i><i>Accounting</i><i> </i><i>Standards</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In February 2016, the FASB issued ASU No. 2016-02, <i>Leases</i><i> </i><i>(Topic</i><i> </i><i>842)</i>, which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets as right-of-use assets and lease liabilities. The standard is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. The Partnership expects to adopt this standard as of January 1, 2019. Although the Partnership has not yet identified any material impact, the Partnership is still evaluating the impact this standard will have on its consolidated financial statements and related disclosures.</p></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>3.</b><b> </b><b>Oil</b><b> </b><b>and</b><b> </b><b>Natural</b><b> </b><b>Gas</b><b> </b><b>Investments</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">On December 18, 2015, the Partnership completed its purchase (“Acquisition No. 1”) of an approximate 11% non-operated working interest in the Sanish Field Assets for approximately $159.6 million. The Partnership accounted for Acquisition No. 1 as a business combination, and therefore expensed, as incurred, transaction costs associated with this acquisition. These costs included, but were not limited to, due diligence, reserve reports, legal and engineering services and site visits.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">On January 11, 2017, the Partnership completed its purchase (“Acquisition No. 2”) of an additional approximate 11% non-operated working interest in the Sanish Field Assets for approximately $128.5 million. The Partnership accounted for Acquisition No. 2 as a purchase of a group of similar assets, and therefore capitalized transaction costs associated with this acquisition. Total transaction costs incurred for Acquisition No. 2 were approximately $43,000. The Partnership also recorded an asset retirement obligation liability of approximately $0.8 million in conjunction with this acquisition. Acquisition No. 2 increased the Partnership’s non-operated working interest in the Sanish Field Assets to approximately 22-23%.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">On March 31, 2017, the Partnership completed its purchase (“Acquisition No. 3”) of an additional approximate average 10.5% non-operated working interest in 82 of the Partnership’s then 216 existing producing wells and 150 of the Partnership’s then 253 future development locations in the Sanish Field Assets for approximately $52.4 million. The Partnership accounted for Acquisition No. 3 as a purchase of a group of similar assets, and therefore capitalized transaction costs associated with this acquisition. Total transaction costs incurred for Acquisition No. 3 were approximately $80,000. The Partnership also recorded an asset retirement obligation liability of approximately $0.3 million in conjunction with this acquisition. Acquisition No. 3 increased the Partnership’s total non-operated working interest in the Sanish Field Assets to approximately 26-27%.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The following unaudited pro forma financial information for the three- and nine-month periods ended September 30, 2017 has been prepared as if Acquisitions No. 2 and No. 3 of the Sanish Field Assets had occurred on January 1, 2017. The unaudited pro forma financial information was derived from the historical Statements 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 acquisitions of the Sanish Field Assets and related financings occurred on the basis assumed above, nor is such information indicative of the Partnership’s expected future results of operations.</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-974" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-975" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Three Months Ended<br />
September 30, 2017</b></b></b></p>
</td>
<td id="new_id-976" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-977" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-978" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Nine Months Ended<br />
September 30, 2017</b></b></b></p>
</td>
<td id="new_id-979" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-980" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-981" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">(Unaudited)</p>
</td>
<td id="new_id-982" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-983" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-984" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">(Unaudited)</p>
</td>
<td id="new_id-985" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Revenues</p>
</td>
<td id="new_id-986" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-987" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-988" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,717,996</td>
<td id="new_id-989" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-990" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-991" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-992" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">32,413,448</td>
<td id="new_id-993" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Net income</p>
</td>
<td id="new_id-994" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-995" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-996" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">1,517,198</td>
<td id="new_id-997" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-998" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-999" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1000" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">6,210,488</td>
<td id="new_id-1001" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
</table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In October and November 2017, the Partnership elected to participate in the drilling and completion of six new wells. Two wells were completed in March 2018 and are being operated by Whiting. The Partnership has an estimated approximate 29% non-operated working interest in these two wells. The other four wells were completed in April, June and July of 2018 and are operated by Oasis. The Partnership has an estimated approximate 8% non-operated working interest in these four wells. In total, the Partnership’s capital expenditures for the drilling and completion of the six wells discussed above were approximately $7.8 million, including approximately $0.5 million and $6.5 million in the three and nine months ended September 30, 2018, respectively.</p><br/></div>
0.11
159600000
0.11
128500000
43000
800000
0.22
0.23
0.105
82
216
150
253
52400000
80000
300000
0.26
0.27
6
2
0.29
2
0.08
4
7800000
500000
6500000
<div style="font-family: "Times New Roman", Times, serif; font-size: 10pt; ">
The following unaudited pro forma financial information for the three- and nine-month periods ended September 30, 2017 has been prepared as if Acquisitions No. 2 and No. 3 of the Sanish Field Assets had occurred on January 1, 2017. The unaudited pro forma financial information was derived from the historical Statements 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 acquisitions of the Sanish Field Assets and related financings occurred on the basis assumed above, nor is such information indicative of the Partnership’s expected future results of operations.<br /><br /><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-974" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-975" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Three Months Ended<br />
September 30, 2017</b></b></b></p>
</td>
<td id="new_id-976" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-977" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-978" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Nine Months Ended<br />
September 30, 2017</b></b></b></p>
</td>
<td id="new_id-979" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-980" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-981" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">(Unaudited)</p>
</td>
<td id="new_id-982" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-983" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-984" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">(Unaudited)</p>
</td>
<td id="new_id-985" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Revenues</p>
</td>
<td id="new_id-986" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-987" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-988" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,717,996</td>
<td id="new_id-989" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-990" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-991" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-992" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">32,413,448</td>
<td id="new_id-993" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Net income</p>
</td>
<td id="new_id-994" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-995" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-996" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">1,517,198</td>
<td id="new_id-997" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-998" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-999" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1000" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">6,210,488</td>
<td id="new_id-1001" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
</table></div>
9717996
32413448
1517198
6210488
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>4.</b><b> </b><b>Debt</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">On November 21, 2017, the Partnership, as the borrower, entered into a loan agreement (the “Loan Agreement”) with Bank SNB (the “Lender”), which provides for a revolving credit facility (the “Credit Facility”) with an approved initial commitment amount of $20 million (the “Revolver Commitment Amount”), subject to borrowing base restrictions. The commitment amount may be increased up to $75 million with Lender approval. The Partnership paid an origination fee of 0.30% of the Revolver Commitment Amount, or $60,000, and is subject to additional origination fees of 0.30% for any borrowings made in excess of the Revolver Commitment Amount. The Partnership is also required to pay an unused facility fee of 0.50% on the unused portion of the Revolver Commitment Amount, based on the amount of borrowings outstanding during a quarter. The maturity date is November 21, 2019.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The interest rate, subject to certain exceptions, is equal to the London Inter-Bank Offered Rate (LIBOR) plus a margin ranging from 2.50% to 3.50%, depending upon the Partnership’s borrowing base utilization, as calculated under the terms of the Loan Agreement. At September 30, 2018, the borrowing base was $30 million and the interest rate for the Credit Facility was 5.07%.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Credit Facility is available to provide additional liquidity for capital investments and other corporate working capital requirements. Under the terms of the Loan Agreement, the Partnership may make voluntary prepayments, in whole or in part, at any time with no penalty. The Credit Facility is secured by a mortgage and first lien position on at least 80% of the Partnership’s producing wells.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Credit Facility contains mandatory prepayment requirements, customary affirmative and negative covenants and events of default. The financial covenants include:</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">● a maximum leverage ratio</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">● a minimum current ratio</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">● maximum distributions</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership was in compliance with the applicable covenants at September 30, 2018.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">As of September 30, 2018, the outstanding balance on the Credit Facility was $13.8 million, which approximates its fair market value. The Partnership estimated the fair value of its Credit Facility by discounting the future cash flows of the 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.</p><br/></div>
20000000
The commitment amount may be increased up to $75 million
0.0030
60000
0.0030
0.0050
2019-11-21
0.0250
0.0350
30000000
0.0507
The Credit Facility is secured by a mortgage and first lien position on at least 80% of the Partnership’s producing wells.
The Credit Facility contains mandatory prepayment requirements, customary affirmative and negative covenants and events of default. The financial covenants include:● a maximum leverage ratio● a minimum current ratio● maximum distributions
The Partnership was in compliance with the applicable covenants at September 30, 2018.
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>5.</b><b> </b><b>Asset</b><b> </b><b>Retirement</b><b> </b><b>Obligations</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership records an asset retirement obligation (“ARO”) and capitalizes the asset retirement costs in oil and natural gas properties in the period in which the asset retirement obligation is incurred based upon the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells. After recording these amounts, the ARO is accreted to its future estimated value using an assumed cost of funds and the additional capitalized costs are depreciated on a unit-of-production basis. Inherent in the present value calculation are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions of these assumptions impact the present value of the existing asset retirement obligation, a corresponding adjustment is made to the oil and natural gas property balance. The changes in the aggregate ARO are as follows:</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1002" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1003" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>2018</b></b></b></p>
</td>
<td id="new_id-1004" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1005" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1006" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>2017</b></b></b></p>
</td>
<td id="new_id-1007" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Balance as of January 1</p>
</td>
<td id="new_id-1008" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1009" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1010" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">1,226,879</td>
<td id="new_id-1011" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1012" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1013" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1014" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">70,623</td>
<td id="new_id-1015" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Liabilities incurred - Acquisition No. 2</p>
</td>
<td id="new_id-1016" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1017" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1018" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1019" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1020" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1021" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1022" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">781,628</td>
<td id="new_id-1023" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Liabilities incurred - Acquisition No. 3</p>
</td>
<td id="new_id-1024" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1025" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1026" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1027" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1028" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1029" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1030" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">289,827</td>
<td id="new_id-1031" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Revisions</p>
</td>
<td id="new_id-1032" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1033" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1034" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1035" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1036" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1037" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1038" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">28,866</td>
<td id="new_id-1039" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Accretion expense</p>
</td>
<td id="new_id-1040" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1041" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1042" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">50,391</td>
<td id="new_id-1043" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1044" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1045" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1046" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">43,104</td>
<td id="new_id-1047" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Balance as of September 30</p>
</td>
<td id="new_id-1048" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1049" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1050" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">1,277,270</td>
<td id="new_id-1051" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1052" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1053" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1054" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">1,214,048</td>
<td id="new_id-1055" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
</table><br/></div>
<div style="font-family: "Times New Roman", Times, serif; font-size: 10pt; ">
The changes in the aggregate ARO are as follows:<br /><br /><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1002" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1003" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>2018</b></b></b></p>
</td>
<td id="new_id-1004" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1005" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1006" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>2017</b></b></b></p>
</td>
<td id="new_id-1007" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Balance as of January 1</p>
</td>
<td id="new_id-1008" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1009" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1010" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">1,226,879</td>
<td id="new_id-1011" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1012" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1013" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1014" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">70,623</td>
<td id="new_id-1015" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Liabilities incurred - Acquisition No. 2</p>
</td>
<td id="new_id-1016" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1017" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1018" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1019" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1020" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1021" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1022" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">781,628</td>
<td id="new_id-1023" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Liabilities incurred - Acquisition No. 3</p>
</td>
<td id="new_id-1024" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1025" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1026" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1027" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1028" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1029" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1030" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">289,827</td>
<td id="new_id-1031" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Revisions</p>
</td>
<td id="new_id-1032" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1033" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1034" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1035" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1036" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1037" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1038" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">28,866</td>
<td id="new_id-1039" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Accretion expense</p>
</td>
<td id="new_id-1040" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1041" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1042" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">50,391</td>
<td id="new_id-1043" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1044" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1045" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1046" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">43,104</td>
<td id="new_id-1047" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Balance as of September 30</p>
</td>
<td id="new_id-1048" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1049" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1050" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">1,277,270</td>
<td id="new_id-1051" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1052" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1053" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1054" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">1,214,048</td>
<td id="new_id-1055" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
</table></div>
1226879
70623
0
781628
0
289827
0
28866
50391
43104
1277270
1214048
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>6.</b><b> </b><b>Fair</b><b> </b><b>Value</b><b> </b><b>of</b><b> </b><b>Financial</b><b> </b><b>Instruments</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership follows authoritative guidance related to fair value measurement and disclosure, which establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement using market participant assumptions at the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:</p><br/><table border="0" cellpadding="0" cellspacing="0" style="width:100%;text-indent:0;font-family:'Times New Roman', Times, serif;font-size:10pt;">
<tr>
<td style="vertical-align:top;width:5.3%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">●</p>
</td>
<td style="vertical-align:top;width:94.6%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Level 1: Quoted prices in active markets for identical assets</p>
</td>
</tr>
</table><br/><table border="0" cellpadding="0" cellspacing="0" style="width:100%;text-indent:0;font-family:'Times New Roman', Times, serif;font-size:10pt;">
<tr>
<td style="vertical-align:top;width:5.3%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">●</p>
</td>
<td style="vertical-align:top;width:94.6%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Level 2: Significant other observable inputs – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, either directly or indirectly, for substantially the full term of the financial instrument</p>
</td>
</tr>
</table><br/><table border="0" cellpadding="0" cellspacing="0" style="width:100%;text-indent:0;font-family:'Times New Roman', Times, serif;font-size:10pt;">
<tr>
<td style="vertical-align:top;width:5.3%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">●</p>
</td>
<td style="vertical-align:top;width:94.6%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Level 3: Significant unobservable inputs</p>
</td>
</tr>
</table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and the consideration of factors specific to the asset or liability. The Partnership’s policy is to recognize transfers in or out of a fair value hierarchy as of the end of the reporting period for which the event or change in circumstances caused the transfer. The Partnership has consistently applied the valuation techniques discussed above for all periods presented. During the three and nine months ended September 30, 2018 and 2017, there were no transfers in or out of Level 1, Level 2, or Level 3 assets and liabilities measured on a recurring basis.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">As required, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Partnership did not have any financial assets and liabilities that were accounted for at fair value as of September 30, 2017, except for those instruments discussed below in “Fair Value of Other Financial Instruments.” The following table sets forth by level within the fair value hierarchy the Partnership’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018.</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1056" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="10" id="new_id-1057" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Fair Value Measurements at September 30, 2018</b></b></b></p>
</td>
<td id="new_id-1058" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1059" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1060" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Quoted Prices in<br />
Active Markets for Identical Assets<br />
(Level 1)</b></b></b></p>
</td>
<td id="new_id-1061" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1062" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1063" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Significant Other Observable Inputs<br />
(Level 2)</b></b></b></p>
</td>
<td id="new_id-1064" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1065" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1066" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Significant Unobservable Inputs<br />
(Level 3)</b></b></b></p>
</td>
<td id="new_id-1067" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 43%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Commodity derivatives - current assets</p>
</td>
<td id="new_id-1068" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1069" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1070" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1071" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1072" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1073" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1074" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1075" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1076" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1077" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1078" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1079" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Commodity derivatives - current liabilities</p>
</td>
<td id="new_id-1080" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1081" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1082" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td>
<td id="new_id-1083" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1084" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1085" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1086" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(1,437,732</td>
<td id="new_id-1087" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px; white-space: nowrap;">)</td>
<td id="new_id-1088" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1089" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1090" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td>
<td id="new_id-1091" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Total</p>
</td>
<td id="new_id-1092" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1093" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1094" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">-</td>
<td id="new_id-1095" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1096" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1097" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1098" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(1,437,732</td>
<td id="new_id-1099" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
<td id="new_id-1100" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1101" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1102" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">-</td>
<td id="new_id-1103" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
</table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Level 2 instruments presented in the table above consist of Partnership’s costless collar commodity derivative instruments. The fair value of the Partnership’s derivative financial instruments is determined based upon future prices, volatility and time to maturity, among other things. Counterparty statements are utilized to determine the value of the commodity derivative instruments and are reviewed and corroborated using various methodologies and significant observable inputs. The fair value of the commodity derivatives noted above are included in the Partnership’s consolidated balance sheet in Derivative liability at September 30, 2018. See additional detail in Note 7. Risk Management.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><i>Fair</i><i> </i><i>Value</i><i> </i><i>of</i><i> </i><i>Other</i><i> </i><i>Financial</i><i> </i><i>Instruments</i></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The carrying value of the Partnership’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities reflect these items’ cost, which approximates fair value based on the timing of the anticipated cash flows, current market conditions and short-term maturity of these instruments. In addition, see Note 4. Debt for the fair value discussion on the Partnership’s debt.</p><br/></div>
<div style="font-family: "Times New Roman", Times, serif; font-size: 10pt; ">
The following table sets forth by level within the fair value hierarchy the Partnership’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018.<br /><br /><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1056" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="10" id="new_id-1057" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Fair Value Measurements at September 30, 2018</b></b></b></p>
</td>
<td id="new_id-1058" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1059" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1060" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Quoted Prices in<br />
Active Markets for Identical Assets<br />
(Level 1)</b></b></b></p>
</td>
<td id="new_id-1061" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1062" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1063" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Significant Other Observable Inputs<br />
(Level 2)</b></b></b></p>
</td>
<td id="new_id-1064" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1065" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1066" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Significant Unobservable Inputs<br />
(Level 3)</b></b></b></p>
</td>
<td id="new_id-1067" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 43%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Commodity derivatives - current assets</p>
</td>
<td id="new_id-1068" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1069" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1070" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1071" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1072" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1073" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1074" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1075" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1076" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1077" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1078" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
<td id="new_id-1079" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Commodity derivatives - current liabilities</p>
</td>
<td id="new_id-1080" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1081" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1082" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td>
<td id="new_id-1083" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1084" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1085" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1086" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(1,437,732</td>
<td id="new_id-1087" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px; white-space: nowrap;">)</td>
<td id="new_id-1088" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1089" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1090" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td>
<td id="new_id-1091" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Total</p>
</td>
<td id="new_id-1092" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1093" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1094" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">-</td>
<td id="new_id-1095" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1096" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1097" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1098" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(1,437,732</td>
<td id="new_id-1099" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
<td id="new_id-1100" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1101" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1102" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">-</td>
<td id="new_id-1103" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;"> </td>
</tr>
</table></div>
0
0
0
0
1437732
0
0
-1437732
0
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>7.</b><b> </b><b>Risk</b><b> </b><b>Management</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Participation in the oil and gas industry exposes the Partnership to risks associated with potentially volatile changes in energy commodity prices, and therefore, the Partnership’s future earnings are subject to these risks. In December 2017, the Partnership began to utilize derivative contracts to manage the commodity price risk on the Partnership’s future oil production it will produce and sell and to reduce the effect of volatility in commodity price changes to provide a base level of cash flow from operations. All derivative instruments are recorded on the Partnership’s balance sheet as assets or liabilities measured at fair value.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">At September 30, 2018 and December 31, 2017, the Partnership’s costless collar derivative instruments were in a net loss position; therefore, the current Derivative liability on the consolidated balance sheets was approximately $1.4 million and $1.0 million, respectively, which approximated fair value. The Partnership has not designated its derivative instruments as hedges for accounting purposes and has not entered into such instruments for speculative trading purposes. As a result, when derivatives do not qualify or are not designated as a hedge, the changes in the fair value are recognized on the Partnership’s consolidated statements of operations as a gain or loss on derivative instruments. The Partnership recognized a total net loss on its derivative instruments of approximately $40,000 for the three months ended September 30, 2018, which was recorded in the consolidated statements of operations as Loss on derivatives. The loss was comprised of (i) $1.10 million of losses the Partnerships recognized on settled derivatives during the period, offset by (ii) $1.06 million of a mark-to-market gain on derivative instruments outstanding at period end. The Partnership recognized a total net loss on its derivative instruments of approximately $2.9 million for the nine months ended September 30, 2018, which was recorded in the consolidated statements of operations as Loss on derivatives. The loss was comprised of (i) $2.5 million of losses the Partnerships recognized on settled derivatives during the period and (ii) $0.4 million of a mark-to-market loss incurred on derivative instruments outstanding at period end.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership determines the estimated fair value of derivative instruments using a market approach based on several factors, including quoted market prices in active markets and quotes from third parties, among other things. The Partnership also performs an internal valuation to ensure the reasonableness of third-party quotes. In consideration of counterparty credit risk, the Partnership assessed the possibility of whether the counterparty to the derivative would default by failing to make any contractually-required payments. Additionally, the Partnership considers that it is of substantial credit quality and has the financial resources and willingness to meet its potential repayment obligations associated with the derivative transactions. See additional discussion above in Note 6. Fair Value of Financial Instruments.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The following table presents settlements on matured derivative instruments and non-cash losses on open derivative instruments for the periods presented. Settlements on matured derivatives below reflect losses on derivative contracts which matured during the period, calculated as the difference between the contract price and the market settlement price. Non-cash losses below represent the change in fair value of derivative instruments which were held at period-end.</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1104" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1105" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Three Months Ended<br />
September 30, 2018</b></b></b></p>
</td>
<td id="new_id-1106" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1107" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1108" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Nine Months Ended<br />
September 30, 2018</b></b></b></p>
</td>
<td id="new_id-1109" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Settlements on matured derivatives</p>
</td>
<td id="new_id-1110" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1111" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1112" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(1,100,682</td>
<td id="new_id-1113" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
<td id="new_id-1114" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1115" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1116" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(2,532,232</td>
<td id="new_id-1117" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Gain (loss) on mark-to-market of derivatives</p>
</td>
<td id="new_id-1118" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1119" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1120" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">1,061,761</td>
<td id="new_id-1121" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1122" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1123" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1124" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(410,768</td>
<td id="new_id-1125" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Loss on derivatives</p>
</td>
<td id="new_id-1126" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1127" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1128" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(38,921</td>
<td id="new_id-1129" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
<td id="new_id-1130" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1131" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1132" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(2,943,000</td>
<td id="new_id-1133" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
</tr>
</table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership’s derivative contracts are costless collars, which are used to establish floor and ceiling prices on future anticipated oil production. The Partnership did not pay or receive a premium related to the costless collar agreements. The contracts are settled monthly. The following table reflects the open costless collar agreements as of September 30, 2018.</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%; border-bottom: thin solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Settlement Period</b></p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%; border-bottom: thin solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Basis</b></p>
</td>
<td id="new_id-1134" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td colspan="2" id="new_id-1135" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Oil (Barrels)</b></b></b></b></p>
</td>
<td id="new_id-1136" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%; border-bottom: thin solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Floor / Ceiling Prices ($)</b></b></b></p>
</td>
<td id="new_id-1137" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td colspan="2" id="new_id-1138" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Fair Value of Asset / (Liability) at<br />
September 30, 2018</b></b></b></b></p>
</td>
<td id="new_id-1139" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1140" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1141" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1142" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">69,000</td>
<td id="new_id-1143" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">52.00 / 57.05</p>
</td>
<td id="new_id-1144" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1145" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1146" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(1,098,657</td>
<td id="new_id-1147" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1148" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1149" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1150" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1151" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">55.00 / 61.35</p>
</td>
<td id="new_id-1152" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1153" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1154" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(105,620</td>
<td id="new_id-1155" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1156" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1157" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1158" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1159" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">55.00 / 62.25</p>
</td>
<td id="new_id-1160" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1161" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1162" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(97,966</td>
<td id="new_id-1163" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1164" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1165" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1166" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1167" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">56.00 / 65.25</p>
</td>
<td id="new_id-1168" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1169" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1170" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(72,819</td>
<td id="new_id-1171" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1172" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1173" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1174" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1175" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">58.00 / 66.50</p>
</td>
<td id="new_id-1176" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1177" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td>
<td id="new_id-1178" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(62,670</td>
<td id="new_id-1179" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 21%;"> </td>
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 18%;"> </td>
<td id="new_id-1180" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td id="new_id-1181" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td id="new_id-1182" style="text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 18%;"> </td>
<td id="new_id-1183" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 18%;"> </td>
<td id="new_id-1184" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1185" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1186" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(1,437,732</td>
<td id="new_id-1187" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
</tr>
</table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">All of the Partnership’s outstanding derivative instruments are covered by an International Swap Dealers Association Master Agreement (“ISDA”) entered into with the counterparty. The ISDA may provide that as a result of certain circumstances, such as cross-defaults, a counterparty may require all outstanding derivative instruments under an ISDA to be settled immediately. The Partnership has netting arrangements with the counterparty that provide for offsetting payables against receivables from separate derivative instruments.</p><br/></div>
1400000
1000000
<div style="font-family: "Times New Roman", Times, serif; font-size: 10pt; ">
The following table presents settlements on matured derivative instruments and non-cash losses on open derivative instruments for the periods presented. Settlements on matured derivatives below reflect losses on derivative contracts which matured during the period, calculated as the difference between the contract price and the market settlement price. Non-cash losses below represent the change in fair value of derivative instruments which were held at period-end.<br /><br /><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1104" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1105" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Three Months Ended<br />
September 30, 2018</b></b></b></p>
</td>
<td id="new_id-1106" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
<td id="new_id-1107" style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td colspan="2" id="new_id-1108" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Nine Months Ended<br />
September 30, 2018</b></b></b></p>
</td>
<td id="new_id-1109" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Settlements on matured derivatives</p>
</td>
<td id="new_id-1110" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1111" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1112" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(1,100,682</td>
<td id="new_id-1113" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
<td id="new_id-1114" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1115" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1116" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(2,532,232</td>
<td id="new_id-1117" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Gain (loss) on mark-to-market of derivatives</p>
</td>
<td id="new_id-1118" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1119" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1120" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">1,061,761</td>
<td id="new_id-1121" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;"> </td>
<td id="new_id-1122" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1123" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td>
<td id="new_id-1124" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(410,768</td>
<td id="new_id-1125" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: left; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:10pt;">Loss on derivatives</p>
</td>
<td id="new_id-1126" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1127" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1128" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(38,921</td>
<td id="new_id-1129" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
<td id="new_id-1130" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1131" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1132" style="width: 16%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(2,943,000</td>
<td id="new_id-1133" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
</tr>
</table></div>
1100682
2532232
1061761
<div style="font-family: "Times New Roman", Times, serif; font-size: 10pt; ">
The following table reflects the open costless collar agreements as of September 30, 2018.<br /><br /><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px;">
<tr style="vertical-align: bottom;">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%; border-bottom: thin solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Settlement Period</b></p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%; border-bottom: thin solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Basis</b></p>
</td>
<td id="new_id-1134" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td colspan="2" id="new_id-1135" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Oil (Barrels)</b></b></b></b></p>
</td>
<td id="new_id-1136" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%; border-bottom: thin solid rgb(0, 0, 0);">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b>Floor / Ceiling Prices ($)</b></b></b></p>
</td>
<td id="new_id-1137" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td colspan="2" id="new_id-1138" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0); width: 1%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Fair Value of Asset / (Liability) at<br />
September 30, 2018</b></b></b></b></p>
</td>
<td id="new_id-1139" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; width: 1%;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1140" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1141" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1142" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">69,000</td>
<td id="new_id-1143" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">52.00 / 57.05</p>
</td>
<td id="new_id-1144" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1145" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1146" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(1,098,657</td>
<td id="new_id-1147" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1148" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1149" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1150" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1151" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">55.00 / 61.35</p>
</td>
<td id="new_id-1152" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1153" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1154" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(105,620</td>
<td id="new_id-1155" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1156" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1157" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1158" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1159" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">55.00 / 62.25</p>
</td>
<td id="new_id-1160" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1161" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1162" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(97,966</td>
<td id="new_id-1163" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1164" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1165" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1166" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1167" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">56.00 / 65.25</p>
</td>
<td id="new_id-1168" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1169" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
<td id="new_id-1170" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">(72,819</td>
<td id="new_id-1171" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 21%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">10/01/18 - 12/31/18</p>
</td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 1%;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">NYMEX</p>
</td>
<td id="new_id-1172" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1173" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1174" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">9,000</td>
<td id="new_id-1175" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;"> </td>
<td style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; width: 18%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;">58.00 / 66.50</p>
</td>
<td id="new_id-1176" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1177" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td>
<td id="new_id-1178" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(62,670</td>
<td id="new_id-1179" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 1px; white-space: nowrap;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 21%;"> </td>
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 18%;"> </td>
<td id="new_id-1180" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td id="new_id-1181" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td id="new_id-1182" style="text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 18%;"> </td>
<td id="new_id-1183" style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 1%;"> </td>
<td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 18%;"> </td>
<td id="new_id-1184" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td>
<td id="new_id-1185" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
<td id="new_id-1186" style="width: 18%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">(1,437,732</td>
<td id="new_id-1187" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; padding-bottom: 3px; white-space: nowrap;">)</td>
</tr>
</table></div>
NYMEX
69000
52.00
57.05
1098657
NYMEX
9000
55.00
61.35
105620
NYMEX
9000
55.00
62.25
97966
NYMEX
9000
56.00
65.25
72819
NYMEX
9000
58.00
66.50
62670
1437732
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>8.</b><b> </b><b>Capital</b><b> </b><b>Contribution</b><b> </b><b>and</b><b> </b><b>Partners’</b><b> </b><b>Equity</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">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, and the General Partner received Incentive Distribution Rights (defined below).</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership completed its best-efforts offering of common units on April 24, 2017. As of the conclusion of the offering on April 24, 2017, the Partnership had completed the sale of approximately 19.0 million common units for total gross proceeds of $374.2 million and proceeds net of offerings costs of $349.6 million.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Under the agreement with David Lerner Associates, Inc. (the “Dealer Manager”), the Dealer Manager received a total of 6% in selling commissions and a marketing expense allowance based on gross proceeds of the common units sold. The Dealer Manager 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 common units sold based on the performance of the Partnership. Based on the common units sold through the best-efforts offering, the total contingent fee is a maximum of approximately $15.0 million.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Prior to “Payout,” which is defined below, all of the distributions made by the Partnership, if any, will be paid to the holders of common 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 Dealer Manager, until Payout occurs.</p><br/><p style="font-family: "Times New Roman", Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt;">The Partnership Agreement provides that Payout occurs on the day when the aggregate amount distributed with respect to each of the common 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 common units more than the Payout Accrual, the amount the Partnership distributes in excess of the Payout Accrual will reduce the Net Investment Amount.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">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:</p><br/><table border="0" cellpadding="0" cellspacing="0" style="width:100%;text-indent:0;font-family:'Times New Roman', Times, serif;font-size:10pt;">
<tr>
<td style="vertical-align:top;width:5.3%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">●</p>
</td>
<td style="vertical-align:top;width:94.6%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">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 (currently, there are 62,500 Class B units outstanding; therefore, Class B units could receive 21.875%); (iii) to the Dealer Manager, as the Dealer Manager contingent incentive fee paid under the Dealer Manager Agreement, 30%, and (iv) the remaining amount, if any (currently 13.125%), to the Record Holders of outstanding common units, pro rata based on their percentage interest until such time as the Dealer Manager receives the full amount of the Dealer Manager contingent incentive fee under the Dealer Manager Agreement;</p>
</td>
</tr>
</table><br/><table border="0" cellpadding="0" cellspacing="0" style="width:100%;text-indent:0;font-family:'Times New Roman', Times, serif;font-size:10pt;">
<tr>
<td style="vertical-align:top;width:5.3%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">●</p>
</td>
<td style="vertical-align:top;width:94.6%;">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">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 (currently, there are 62,500 Class B units outstanding; therefore, Class B units could receive 21.875%); (iii) the remaining amount to the Record Holders of outstanding common units, pro rata based on their percentage interest (currently 43.125%).</p>
</td>
</tr>
</table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">For the three and nine months ended September 30, 2018, the Partnership paid distributions of $0.413424 and $1.081643 per common unit, or $7.8 million and $20.5 million, respectively. For the three and nine months ended September 30, 2017, the Partnership paid distributions of $0.349041 and $1.047123 per common unit, or $6.6 million and $18.6 million, respectively.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In the fourth quarter of 2017, the General Partner approved an adjustment to the annualized distribution rate to an annualized return of six percent based on a limited partner’s Net Investment Amount of $20.00 per common unit. The six percent distribution rate was effective with the November 29, 2017 distribution. In March 2018, the General Partner approved an increase to the annualized distribution rate back to seven percent based on a limited partner’s Net Investment Amount. The seven percent distribution rate was effective with the April 26, 2018 distribution. The accumulated unpaid distributions, measured as the difference between an annualized return of six percent (starting with the November 29, 2017 distribution) and the restoration of the annualized return of seven percent (starting with the April 26, 2018 distribution), totaled $0.084383 per common unit, or approximately $1.6 million. As of September 30, 2018, the Partnership has paid the $1.6 million in accumulated unpaid distributions.</p><br/></div>
990
0.06
0.04
15000000
The Partnership Agreement provides that Payout occurs on the day when the aggregate amount distributed with respect to each of the common 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 common 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 (currently, there are 62,500 Class B units outstanding; therefore, Class B units could receive 21.875%); (iii) to the Dealer Manager, as the Dealer Manager contingent incentive fee paid under the Dealer Manager Agreement, 30%, and (iv) the remaining amount, if any (currently 13.125%), to the Record Holders of outstanding common units, pro rata based on their percentage interest until such time as the Dealer Manager receives the full amount of the Dealer Manager 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 (currently, there are 62,500 Class B units outstanding; therefore, Class B units could receive 21.875%); (iii) the remaining amount to the Record Holders of outstanding common units, pro rata based on their percentage interest (currently 43.125%).
0.413424
1.081643
7800000
0.349041
1.047123
6600000
0.06
20.00
0.06
0.07
0.07
0.07
0.084383
1600000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>9.</b><b> </b><b>Related</b><b> </b><b>Parties</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">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 oversees and reviews 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.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">For the three and nine months ended September 30, 2018, approximately $58,000 and $188,000 of general and administrative costs were incurred by a member of the General Partner and have been or will be reimbursed by the Partnership. At September 30, 2018, approximately $58,000 was due to a member of the General Partner and is included in Accounts payable and accrued expenses on the consolidated balance sheets. For the three and nine months ended September 30, 2017, approximately $72,000 and $242,000 of general and administrative costs were incurred by a member of the General Partner and have been reimbursed by the Partnership.</p><br/><p style="font-family: "Times New Roman", Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 36pt;">The members of the General Partner are affiliates of Glade M. Knight, Chairman and Chief Executive Officer, David S. McKenney, Chief Financial Officer, Anthony F. Keating, III, Co-Chief Operating Officer and Michael J. Mallick, Co-Chief Operating Officer. Mr. Knight and Mr. McKenney are also the Chief Executive Officer and Chief Financial Officer of Energy Resources 12 GP, LLC, the general partner of Energy Resources 12, L.P. (“ER12”), a limited partnership that also invests in producing and non-producing oil and gas properties on-shore in the United States. On January 31, 2018, the Partnership entered into a cost sharing agreement with ER12 that gives ER12 access to the Partnership’s personnel and administrative resources, including accounting, asset management and other day-to-day management support. The shared day-to-day costs are split evenly between the two partnerships and any direct third-party costs are paid by the party receiving the services. The shared costs are based on actual costs incurred with no mark-up or profit to the Partnership. The agreement may be terminated at any time by either party upon 60 days written notice.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The Partnership leases office space in Oklahoma City, Oklahoma on a month-to-month basis from an affiliate of the General Partner. For the three and nine months ended September 30, 2018 and 2017, the Partnership paid $25,611 and $76,833 to the affiliate of the General Partner.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The office space is shared between the Partnership and ER12; therefore, under the cost sharing agreement, the monthly payment of $8,537 is split between the two partnerships. In addition to the office space, the cost sharing agreement reduces the costs to the Partnership for accounting and asset management services provided through a member of the General Partner noted above. The compensation due to Clifford J. Merritt, President of the General Partner, is also a shared cost between the Partnership and ER12. For the three and nine months ended September 30, 2018, approximately $64,000 and $175,000 of expenses subject to the cost sharing agreement were incurred by the Partnership and have been or will be reimbursed by ER12. At September 30, 2018, the approximately $64,000 due to the Partnership from ER12 is included in Other current assets in the consolidated balance sheets.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In November 2017, ER12 engaged Regional Energy Investors, LP (“REI”) to perform advisory and consulting services, including supporting ER12 through closing and post-closing on ER12’s first purchase of certain oil and gas properties in North Dakota. In June 2018, ER12 re-engaged REI to perform advisory and consulting services, including supporting ER12 through closing, financing and post-closing of ER12’s second purchase of certain oil and gas properties in North Dakota. REI is owned by entities that are controlled by Mr. Keating and Mr. Mallick and has engaged Mr. Merritt to support its operations. With the fees received from ER12 for advisory and consulting services, REI paid certain personnel utilized by the Partnership, including Mr. Merritt, an aggregate total of $500,000.</p><br/></div>
58000
188000
58000
72000
242000
25611
25611
76833
76833
8537
64000
175000
64000
500000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Note</b><b> </b><b>10.</b><b> </b><b>Subsequent</b><b> </b><b>Events</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">In October 2018, the Partnership declared and paid $2.0 million, or $0.107397 per outstanding common unit, in distributions to its holders of common units.</p><br/></div>
2000000
0.107397