EVERFLOW EASTERN PARTNERS LP: Annual Update

I have reviewed the 2025 filings for Everflow Eastern Partners LP. If you are considering this investment, here is a plain-English breakdown of how the business works and what you should know.

1. What do they actually do?

Everflow acts as an energy manager, producing oil and natural gas in the Appalachian Basin (Ohio and Pennsylvania). They manage approximately 675 wells, handling daily extraction, maintenance, and legal requirements. They also own their operational headquarters in Canfield, Ohio.

2. How they performed in 2025

Performance in 2025 reflected a strategic shift between oil and gas production:

• Production: Oil production was 30,000 barrels, compared to 31,000 in 2024. Natural gas production increased by 33.6%, reaching 1.43 million MCF.
• Prices: The company experienced a price shift. They earned $3.28 per MCF for gas (up from $2.15 in 2024), while the price received for oil dropped to $61.57 per barrel (down from $72.37 in 2024).
• Efficiency: Operations became more efficient, with the cost to extract and process energy products dropping from $1.82 to $1.56 per unit—a 14.3% improvement.

3. Major wins and risks

• Concentrated Revenue: A single buyer accounts for 78% of all gas sales. The company’s income is heavily dependent on this specific relationship.
• Environmental Liabilities: The company’s internal valuation shows a negative value of $4.6 million. This is because the projected $15.2 million cost to eventually plug wells and clean up the environment exceeds the projected profit from the remaining oil and gas reserves.
• Operational Strategy: The company is in a "liquidating" phase. There are no plans to drill new wells or explore for new energy; the focus is entirely on extracting value from existing assets.
• Operational Dependencies: The business relies on third-party software for production and financial monitoring, creating a dependency on external systems to maintain reporting and cash distributions.

4. The "Investor Reality Check"

This is not a typical stock. These units do not trade on public exchanges, meaning there is no active market to sell your position.

• Distributions: After skipping payments in 2025, the partnership plans to pay $0.50 per unit in April 2026.
• Liquidity: If you wish to sell, you are limited to the annual "Repurchase Right." The company buys back a small number of units each year at a price they set themselves. In 2025, the buyback price was $1.32 per unit; the estimated price for 2026 is $1.35.
• Conflicts of Interest: The manager, Everflow Management Partners, LLC, oversees multiple energy partnerships. They may share staff and resources across these entities, which means their focus is divided among several different business interests.

Bottom Line: This is a "liquidating" investment designed to wind down operations and return cash until the wells are exhausted. It is not a growth-oriented investment. When evaluating this, consider that the primary long-term risk is that the costs associated with environmental cleanup may eventually surpass the revenue generated by the wells.