ENERGY RESOURCES 12, L.P. Annual Report - How They Did This Year

I’ve put together this guide to help you understand how Energy Resources 12, L.P. performed this year. My goal is to explain the complex filing details in plain English so you can decide if this investment still fits your goals.

1. What does this company do?

Energy Resources 12, L.P. is a "non-operator" oil and gas company. They don’t drill wells themselves. Instead, they own a small slice—averaging about 5.3%—of hundreds of wells in North Dakota’s Bakken shale. They pay a portion of the drilling and maintenance costs, and in return, they receive a share of the oil and gas produced. As of December 31, 2025, the partnership held interests in 312 active wells in the productive Williston Basin.

2. How did they perform this year?

Production slowed down this year. Total output dropped 15.3% to 142,000 barrels of oil equivalent. As older wells naturally produced less and operators drilled fewer new wells, the partnership saw lower output across oil, natural gas, and liquid gas.

Oil prices also hurt the bottom line. The average price received for oil fell 13.2% to $64.25 per barrel. While natural gas prices jumped 60% to $3.15 per Mcf, it wasn't enough to make up for lower production and weaker oil prices. Total revenue fell 14.7% to $9.8 million.

3. The "Good News" vs. The "Hurdles"

• The Win: The company is managing costs well. Operating expenses dropped 4.4% to $2.1 million. Production taxes also fell 28% to $0.6 million because revenue was lower. They are keeping a tight grip on spending as production slows.
• The Hurdle: The partnership relies entirely on third-party operators like Continental Resources and Whiting Petroleum. These companies decide when to drill and how to manage the wells. If they slow down, or if wells underperform, the partnership’s revenue suffers. The partnership cannot control the timing of these costs, which can lead to surprise requests for cash.

4. Financial Health and Your Investment

The company is focused on "Payout," which is the point where you have received your initial investment back plus a 7% annual return.

• Distributions: There are no regular dividends. They paid a one-time return of $1.60 per unit in 2023, but that was a special event, not a recurring payment. With $1.2 million in cash on hand, the company is prioritizing future drilling over payouts.
• Debt: They have a $5.0 million credit line with Bancfirst, with $1.8 million currently borrowed. Because the interest rate floats, higher rates could reduce the cash available for investors.

5. Key Risks

• No Public Market: You cannot easily sell these units. There is no stock market ticker for this investment. You are locked in until the company sells its assets or merges.
• Related Party Deals: The company pays its own management team $450,000 in annual fees. These deals are managed internally, which could impact the total value available for investors.

6. Future Outlook

The company is still active, with 12 new wells planned as of late 2025. This will cost about $1.4 million. Success depends on global oil prices and the performance of outside operators. If oil stays below $65 per barrel, you likely won't reach "Payout" until after 2028.

Final Thought: This investment is currently a long-term play tied to oil prices and the efficiency of third-party operators. Because there is no easy way to sell your units and no guarantee of regular payouts, it is best suited for those who are comfortable with a "wait and see" approach until the partnership reaches its Payout goal.