Item 1A. Risk Factors
Item 1A. Risk Factors
In addition to the other information set forth in this report, readers should carefully consider the risks under the heading “Risk Factors” in our 2021 Annual Report on Form 10-K. Except to the extent updated below, there has been no material change in our risk factors from those described in our 2021 Annual Report on Form 10-K. These risks are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially adversely affect our business, financial condition or results of operations.
Rising inflation could result in increased interest rates and recession, both of which may adversely affect our cash generated from operations, results of operations, financial position, and our ability to pay quarterly distributions on our common units.
Over the past year, inflation has continued to rise, reaching recent historical highs. As the Federal Reserve and other central banks take steps to moderate inflation, including by increasing interest rates, the risks of a recession and associated economic slowdown increase.
The federal funds rate has increased from effectively zero in early 2022 to approximately 3% in September 2022. As interest rates increase, the trading price of our common units could decline. Please see "Risk Factors - Distributions to Unitholders: Price of Units and Other Risks - Increases in interest rates may cause the market price of our common units to decline." in our Form 10-K.
An economic slowdown, or the risk of an economic slowdown, contributes to volatility in commodity prices and decreases certainty for our operators. Risk of recession, even if not realized, could result in decreased drilling activity by operators and reduced demand for oil and natural gas. Reduced production or a decrease in the prices we realize could both adversely affect our cash generated from operations and our ability to pay quarterly distributions.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
36
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.