Energy Resources 12 Reports $10.90 Per Unit Valuation

The oil and gas partnership disclosed updated asset valuations and methodology, reflecting pricing fluctuations and operational risks.

January 28, 2025

Energy Resources 12 Updates Unit Valuation and Market Projections

Energy Resources 12, L.P. (the Partnership) has released an estimated valuation of its common units at $10.90 per unit as of December 31, 2024, reflecting the latest assessment of its oil and gas assets. The updated estimate is based on a third-party valuation by Pinnacle Energy Services and incorporates financial and operational factors influencing the energy sector.

The Partnership holds a 5.4% non-operated working interest in 447 producing wells primarily located in North Dakota’s Bakken formation. These assets are managed by third-party operators and have an average well age of 7.6 years. The valuation reflects both the current production performance of these assets and broader market conditions affecting oil and gas pricing.

Valuation Methodology and Key Assumptions

The valuation was derived using an income-based approach, aligned with Financial Accounting Standards Board (FASB) guidelines. The methodology involved discounted cash flow models applied to projected reserves and market-based adjustments to reflect development probabilities.

As part of its valuation process, the Partnership estimated its total equity at $120.3 million, with oil and gas properties valued at $121.8 million. Other key balance sheet items included $1.5 million in cash and equivalents, offset by $4.6 million in outstanding debt.

Commodity pricing assumptions played a significant role in determining the unit valuation. Oil prices were forecasted using NYMEX strip pricing, ranging from $69.86 per barrel in early 2025 to $63.07 per barrel in 2029, with a 3% annual increase capped at $85.00 per barrel. Natural gas prices followed a similar pattern, with a flat price assumption of $4.50 per Mcf beyond 2029.

Market Risks and Uncertainties

Despite the valuation update, the Partnership emphasized that the estimated unit value does not guarantee future market pricing or liquidity opportunities for investors. Since the units are not publicly traded on a national exchange, resale values may differ significantly from the estimated valuation.

Key risks highlighted in the filing include:

• Fluctuating commodity prices, which could impact revenue and asset valuations.


• Regulatory uncertainties, including evolving financial reporting standards.


• Operational risks, as third-party operators control production strategies.


• Macroeconomic factors, such as capital market conditions and interest rate changes.

Sensitivity analysis showed that a 1% increase in the discount rate would lower the estimated valuation by $1.21 per unit, while a 1% decrease would raise it by $1.45 per unit. Similarly, a 5% change in oil and gas pricing assumptions could shift the valuation by $1.18 to $1.28 per unit.

Outlook and Future Considerations

The Partnership does not plan to update the valuation until its next annual review, warning that changes in commodity prices and operational costs could materially affect future estimates. While Energy Resources 12 continues to generate cash flow from its Bakken assets, market volatility and regulatory factors remain key challenges for its valuation and financial outlook.