What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-08 compared with 2025-05-09 · 82 added, 51 removed, 387 unchanged (26% of the section changed)

47 unchanged sentences

If UNL and the Related Public Funds exceed these accountability levels for investments in the futures contract for natural gas, the NYMEX and ICE Futures will monitor UNL’s and the Related Public Funds’ exposure and may ask for further information on UNL and the Related Public Funds’ activities, including the total size of all positions, investment and trading strategy, and the extent of liquidity resources of UNL and the Related Public Funds.

If deemed necessary by the NYMEX and/or ICE Futures, UNL and the Related Public Funds could be required to reduce their aggregate contracts

back to the accountability level.

If deemed necessary by the NYMEX and/or ICE Futures, UNL and the Related Public Funds could be required to reduce their aggregate contracts back to the accountability level.

The foregoing accountability levels and position limits are subject to change.

As of March 31, 2025, UNL held 356 Natural Gas Futures NG contracts traded on the NYMEX and did not hold any ICE Natural Gas Futures contracts.

For the three months ended March 31, 2025, UNL did not exceed accountability levels imposed by the NYMEX and ICE Futures, however, the aggregated total of certain of the Related Public Funds did exceed the accountability levels.

As of June 30, 2025, UNL held 304 Natural Gas Futures NG contracts traded on the NYMEX and did not hold any ICE Natural Gas Futures contracts.

For the six months ended June 30, 2025, UNL did not exceed accountability levels imposed by the NYMEX and ICE Futures, however, the aggregated total of certain of the Related Public Funds did exceed the accountability levels.

No action was taken by NYMEX and UNL did not reduce the number of Natural Gas Futures Contracts held as a result.

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UNL “rolls” the near-month futures contracts in its portfolio when the near month futures contract is within two weeks of expiration.

For the three months ended March 31, 2025, UNL did not exceed any position limits imposed by the NYMEX and the ICE Futures.

For the six months ended June 30, 2025, UNL did not exceed any position limits imposed by the NYMEX and the ICE Futures.

Federal Position Limits

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Price Movements

Natural gas futures prices were volatile during the three months ended March 31, 2025.

Natural gas futures prices were volatile during the six months ended June 30, 2025.

The average price of the Benchmark Futures Contracts started the period at $3.622 per million British thermal shares (“MMBtu”).

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The period ended with the Benchmark Futures Contracts at $4.030 per MMBtu, an increase of approximately 11.26% over the period.

UNL’s per share NAV began the period at $8.12 and ended the period at $10.26 on March 31, 2025, an increase of approximately 26.35% over the period.

The Benchmark Futures Contracts prices listed above began with the February 2025 to January 2026 contracts and ended with the May 2025 to April 2026 contracts.

UNL’s per share NAV began the period at $8.12 and ended the period at $8.73 on June 30, 2025, an increase of approximately 7.51% over the period.

The Benchmark Futures Contracts prices listed above began with the February 2025 to January 2026 contracts and ended with the August 2025 to July 2026 contracts.

An increase of approximately 11.26% on the Benchmark Futures Contracts listed above is a hypothetical return only and would not actually be realized by an investor holding Futures Contracts.

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Furthermore, the change in the nominal price of these differing Futures Contracts, measured from the start of the period to the end of the period, does not represent the actual benchmark results that UNL seeks to track, which are more fully described below in the section titled “ Tracking UNL’s Benchmark .”

During the three months ended March 31, 2025, the natural gas futures market experienced states of both mild contango and backwardation.

During the six months ended June 30, 2025, the natural gas futures market experienced states of both mild contango and backwardation.

When the market is in a state of contango, the near month natural gas futures contract is lower than the price of the next month natural gas futures contract, or contracts further away from expiration.

During periods of backwardation the near month natural

gas futures contract is higher than the price of the next month natural gas futures contract, or contracts further away from expiration.

During periods of backwardation the near month natural gas futures contract is higher than the price of the next month natural gas futures contract, or contracts further away from expiration.

For a discussion of the impact of backwardation and contango on total returns, see “Term Structure of Natural Gas Futures Prices and the Impact on Total Returns” below.

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Results of Operations.

As of March 31, 2025, UNL has 1,600,000 shares outstanding.

As of June 30, 2025, UNL had 1,400,000 shares outstanding.

On April 26, 2022, the SEC declared effective the registration statement filed by UNL that registered an unlimited number of shares.

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More shares may have been issued by UNL than are outstanding due to the redemption of shares.

As of March 31, 2025, UNL had the following Authorized Participants:

As of June 30, 2025, UNL had the following Authorized Participants:

Citadel Securities LLC, Citigroup Global Markets, Inc., JP Morgan Securities Inc., Jane Street Capital LLC, Merrill Lynch Professional Clearing Corp., Morgan Stanley & Company Inc., RBC Capital Markets LLC, SG Americas Securities LLC and Virtu Americas LLC.

For the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

For the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

Six months ended

June 30, 2025

June 30, 2024

Average daily total net assets

Dividend and interest income earned on Treasuries, cash and/or cash equivalents

Annualized yield based on average daily total net assets

Management fee

Total fees and other expenses excluding management fees

Total amount of the expense waiver

Expenses before the allowance of the expense waiver

Expenses after the allowance of the expense waiver

Total commissions accrued to brokers

Total commissions as annualized percentage of average total net assets

Portfolio Expenses .

UNL’s expenses consist of investment management fees, brokerage fees and commissions, certain offering costs, licensing fees, registration fees, the fees and expenses of the independent directors of USCF and expenses relating to tax accounting and reporting requirements.

The management fee that UNL pays to USCF is calculated as a percentage of the total net assets of UNL.

The fee is accrued daily and paid monthly.

Average interest rates earned on short-term investments held by UNL, including cash, cash equivalents and Treasuries, were lower during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

As a result, the amount of income earned by UNL as a percentage of average daily total net assets was lower during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

To the degree that the aggregate yield is lower, the net expense ratio, inclusive of income, will be higher.

The decrease in total fees and other expenses excluding management fees for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was due primarily to an decrease in reporting costs and professional fees.

The decrease in total commissions accrued to brokers for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was due primarily to a lower number of Natural Gas Futures Contracts being held and traded.

For the Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

Three months ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Average daily total net assets

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The fee is accrued daily and paid monthly.

Average interest rates earned on short-term investments held by UNL, including cash, cash equivalents and Treasuries, were lower during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

As a result, the amount of income earned by UNL as a percentage of average daily total net assets was lower during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Average interest rates earned on short-term investments held by UNL, including cash, cash equivalents and Treasuries, were lower during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

As a result, the amount of income earned by UNL as a percentage of average daily total net assets was lower during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

To the degree that the aggregate yield is lower, the net expense ratio, inclusive of income, will be higher.

The decrease in total fees and other expenses excluding management fees for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was due primarily to an decrease in reporting costs and professional fees.

The decrease in total commissions accrued to brokers for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was due primarily to a lower number of Natural Gas Futures Contracts being held and traded.

The decrease in total fees and other expenses excluding management fees for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was due primarily to a decrease in reporting costs and professional fees.

The decrease in total commissions accrued to brokers for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was due primarily to a lower number of Natural Gas Futures Contracts being held and traded.

Tracking UNL’s Benchmark

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USCF believes that it is not practical to manage the portfolio to achieve such an investment goal when investing in Futures Contracts and Other Natural Gas-Related Investments.

For the 30-valuation days ended March 31, 2025, the average daily change in the average of the prices of the Benchmark Futures Contracts was 0.362%, while the average daily change in the per share NAV of UNL over the same time period was 0.377%.

The average daily difference was 0.015% (or 1.5 basis points, where 1 basis point equals 1/100 of 1%), meaning that over this time period UNL’s NAV performed within the plus or minus 10% range established as its benchmark tracking goal.

Since the commencement of the offering of UNL’s shares to the public on November 18, 2009 to March 31, 2025, the average daily change in the average price of the Benchmark Futures Contracts was (0.022)%, while the average daily change in the per share NAV of UNL over the same time period was (0.021)%.

For the 30-valuation days ended June 30, 2025, the average daily change in the average of the prices of the Benchmark Futures Contracts was (0.129)%, while the average daily change in the per share NAV of UNL over the same time period was (0.120)%.

The average daily difference was 0.009% (or (0.9)basis points, where 1 basis point equals 1/100 of 1%), meaning that over this time period UNL’s NAV performed was within the plus or minus 10% range established as its benchmark tracking goal.

Since the commencement of the offering of UNL’s shares to the public on November 18, 2009 to June 30, 2025, the average daily change in the average price of the Benchmark Futures Contracts was (0.025)%, while the average daily change in the per share NAV of UNL over the same time period was (0.024)%.

The average daily difference was 0.001% (or (0.1)basis points, where 1 basis point equals 1/100 of 1%), meaning that over this time period UNL’s NAV performed within the plus or minus 10% range established as its benchmark tracking goal.

The following two charts demonstrate the correlation between the changes in UNL’s NAV and the changes in the Benchmark Futures Contracts.

The first chart below shows the daily movement of UNL’s per share NAV versus the daily movement of the Benchmark Futures Contracts for the 30 valuation day period ended March 31, 2025, the last trading day in March.

The second chart below shows the monthly total returns of UNL as compared to the monthly value of the Benchmark Futures Contracts for the five years ended March 31, 2025.

The first chart below shows the daily movement of UNL’s per share NAV versus the daily movement of the Benchmark Futures Contracts for the 30 valuation day period ended June 30, 2025, the last trading day in March.

The second chart below shows the monthly total returns of UNL as compared to the monthly value of the Benchmark Futures Contracts for the five years ended June 30, 2025.

*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

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An alternative tracking measurement of the return performance of UNL versus the return of its Benchmark Futures Contracts can be calculated by comparing the actual return of UNL, measured by changes in its per share NAV, versus the expected changes in its per share NAV under the assumption that UNL’s returns had been exactly the same as the daily changes in the average of the prices of its Benchmark Futures Contracts.

For the three months ended March 31, 2025, the actual total return of UNL as measured by changes in its per share NAV was 26.35%.

This is based on an initial per share NAV of $8.12 as of December 31, 2024 and an ending per share NAV as of March 31, 2025 of $10.26.

For the six months ended June 30, 2025, the actual total return of UNL as measured by changes in its per share NAV was 7.51%.

This is based on an initial per share NAV of $8.12 as of December 31, 2024 and an ending per share NAV as of June 30, 2025 of $8.73.

During this time period, UNL made no distributions to its shareholders.

However, if UNL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Futures Contracts, UNL would have had an estimated per share NAV of $10.19 as of March 31, 2025, for a total return over the relevant time period of 25.43%.

However, if UNL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Futures Contracts, UNL would have had an estimated per share NAV of $8.62 as of June 30, 2025, for a total return over the relevant time period of 6.11%.

The difference between the actual per share NAV total return of UNL of 7.51% and the expected total return based on the Benchmark Futures Contracts of 6.11% was a difference over the time period of 1.40%, which is to say that UNL’s actual total return outperformed its benchmark by that percentage.

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The impact of these expenses, offset by interest and dividend income, and net of positive or negative execution, tends to cause daily changes in the per share NAV of UNL to track slightly lower or higher than daily changes in the price of the Benchmark Futures Contracts.

By comparison, for the three months ended March 31, 2024, the actual total return of UNL as measured by changes in its per share NAV was (9.44)%.

This is based on an initial per share NAV of $8.58 as of December 31, 2023 and an ending per share NAV as of March 31, 2024 of $7.77.

By comparison, for the six months ended June 30, 2024, the actual total return of UNL as measured by changes in its per share NAV was (3.50)%.

This is based on an initial per share NAV of $8.58 as of December 31, 2023 and an ending per share NAV as of June 30, 2024 of $8.28.

During this time period, UNL made no distributions to its shareholders.

However, if UNL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Futures Contracts, UNL would have had an estimated per share NAV of $7.69 as of March 31, 2024, for a total return over the relevant time period of (10.37)%.

However, if UNL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Futures Contracts, UNL would have had an estimated per share NAV of $8.12 as of June 30, 2024, for a total return over the relevant time period of (5.36)%.

The difference between the actual per share NAV total return of UNL of (3.50)% and the expected total return based on the Benchmark Futures Contracts of (5.36)% was a difference over the time period of 1.86%, which is to say that UNL’s actual total return outperformed its benchmark by that percentage.

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In that case, UNL may pay a price that is higher, or lower, than the closing settlement price of the Benchmark Futures Contracts, which could cause the changes in the daily per share NAV of UNL to either be higher or lower to the daily changes in the average of the prices of the Benchmark Futures Contracts.

During the three months ended March 31, 2025, USCF attempted to minimize the effect of these transactions by seeking to execute its purchase or sale of the Benchmark Futures Contracts at, or as close as possible to, the end of the day settlement price.

During the six months ended June 30, 2025, USCF attempted to minimize the effect of these transactions by seeking to execute its purchase or sale of the Benchmark Futures Contracts at, or as close as possible to, the end of the day settlement price.

However, it may not always be possible for UNL to obtain the settlement price and there is no assurance that failure to obtain the closing settlement price in the future will not adversely impact UNL’s attempt to track the Benchmark Futures Contracts.

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At the same time, UNL earns dividend and interest income on its cash, cash equivalents and Treasuries.

UNL is not required to distribute any portion of its income to its shareholders and did not make any distributions to shareholders during the three months ended March 31, 2025.

UNL is not required to distribute any portion of its income to its shareholders and did not make any distributions to shareholders during the six months ended June 30, 2025.

Interest payments, and any other income, were retained within the portfolio and added to UNL’s NAV.

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In that case, the error in tracking the Benchmark Futures Contracts could result in daily changes in the per share NAV of UNL that are either too high, or too low, relative to the daily changes in the average of the prices of the Benchmark Futures Contracts.

During the three months ended March 31, 2025, UNL did not hold any Other Natural Gas-Related Investments.

During the six months ended June 30, 2025, UNL did not hold any Other Natural Gas-Related Investments.

If UNL increases in size, and due to its obligations to comply with market conditions, regulatory limits, and risk mitigation measures imposed by its FCMs, UNL may invest in Other Natural Gas-Related Investments which may have the effect of increasing transaction related expenses and may result in increased tracking error.

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In the future, it is likely that the relationship between the market price of UNL’s shares and changes in the spot prices of natural gas will continue to be impacted by contango and backwardation.

important to note that this comparison ignores the potential costs associated with physically owning and storing natural gas, which could be substantial.

It is important to note that this comparison ignores the potential costs associated with physically owning and storing natural gas, which could be substantial.

If the futures market is in backwardation, e.g., when the price of the near month futures contract is higher than the price of the next month futures contract, the investor would buy a next month futures contract for a lower price than the current near month futures contract.

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The natural gas market spent time in both backwardation and contango during the last ten years.

The chart below shows the results from subtracting the average dollar price of the near 12-month contracts from the near month price for the 10-year period between March 31, 2015 and March 31, 2025.

The chart below shows the results from subtracting the average dollar price of the near 12-month contracts from the near month price for the 10-year period between June 30, 2015 and June 30, 2025.

Investors will note that the natural gas market spent time in both backwardation and contango.

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Natural Gas Market.

During the three months ended March 31, 2025, the average price of the Benchmark Natural Gas Futures Contracts traded in a range between $3.507 and $4.931.

The average price of the Benchmark Natural Gas Futures Contracts increased 27.44% from the end of 2024 through March 31, 2025, finishing the quarter at $4.616.

During the six months ended June 30, 2025, the average price of the Benchmark Natural Gas Futures Contracts traded in a range between $3.507 and $4.931.

The average price of the Benchmark Natural Gas Futures Contracts increased 11.26% from the end of 2024 through June 30, 2025, finishing the quarter at $4.03.

The number of rigs dedicated to natural gas production rose from 102 at the start of the year to 109 by the end of the quarter.

Natural Gas stored in the United States stood at 1,773 billion cubic feet as of March 31, 2025, about 22% lower than the same time last year.

Natural Gas stored in the United States stood at 2,953 billion cubic feet as of June 30, 2025, about 6% lower than the same time last year.

While both domestic demand and U.S.

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production has also continued to increase.

However, a cold winter in the United States led to heavy draws on domestic natural gas inventories, comfortably lowering natural gas inventories below one-year ago and five-year average levels, , boosting prices prices.

The increasing demand for LNG and the spate of new export facilities (both open and under construction) may lift prices, as could potential new demand for natural gas to power AI data centers.

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While Europe accelerated its push for alternative sources of energy, including energy from renewables, it still requires substantial Russian energy.

With a potential resolution to the war in the cards, more Russian supply to Europe could come back online in the near future, easing international price pressure and potentially having a milder effect on U.S.

Of course, many factors impact natural gas prices, and the impact of the Russia-Ukraine war must be balanced with other potential events, such as extreme weather, political unrest, attacks or threats of attack by terrorists, conflicts in the Middle East, or the potential for infectious disease outbreaks like COVID-19 and responses to such an outbreak.

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The correlation is scaled between 1 and -1, where 1 indicates that the two investment options move up or down in price or value together, known as “positive correlation,” and -1 indicates that they move in completely opposite directions, known as “negative correlation.” A correlation of 0 would mean that the movements of the two are neither positively nor negatively correlated, known as “non-correlation.” That is, the investment options sometimes move up and down together and other times move in opposite directions.

For the ten-year time period between March 31, 2015 and March 31, 2025, the table below compares the monthly movements of natural gas prices versus the monthly movements of the prices of several other energy commodities, such as crude oil, diesel-heating oil, and unleaded gasoline, as well as several major non-commodity investment asset classes, such as large cap U.S.

For the ten-year time period between June 30, 2015 and June 30, 2025, the table below compares the monthly movements of natural gas prices versus the monthly movements of the prices of several other energy commodities, such as crude oil, diesel-heating oil, and unleaded gasoline, as well as several major non-commodity investment asset classes, such as large cap U.S.

equities, U.S.

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Natural Gas - 10 Years

US Gov’t Bonds

Global Equities

Correlation Matrix 10 Years

Equities (S&P 600)

(BEUSG4 Index)

(FTSE World Index)

Large Cap US Equities (S&P 500)

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Natural Gas - 1 Year

US Gov’t Bonds

Global Equities

Correlation Matrix 1 Year

Equities (S&P 500)

(BEUSG4 Index)

(FTSE World Index)

Large Cap US Equities (S&P 500)

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Income received from UNL’s investments in money market funds and Treasuries is paid to UNL.

During the three months ended March 31, 2025, UNL’s expenses, pre and post expense waiver, did not exceed the income UNL earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the three months ended March 31, 2025, UNL did not use other assets to pay expenses.

During the six months ended June 30, 2025, UNL’s expenses, pre and post expense waiver, did not exceed the income UNL earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the six months ended June 30, 2025, UNL did not use other assets to pay expenses.

To the extent income exceeds expenses, UNL’s NAV will be positively impacted.

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Such market conditions could prevent UNL from promptly liquidating its positions in Futures Contracts.

During the three months ended March 31, 2025, UNL did not purchase or liquidate any of its positions while daily limits were in effect;

During the six months ended June 30, 2025, UNL did not purchase or liquidate any of its positions while daily limits were in effect;

however, UNL cannot predict whether such an event may occur in the future.

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Quantitative and Qualitative Disclosures About Market Risk” in this quarterly report on Form 10-Q for a discussion of OTC swaps.

As of March 31, 2025, UNL held cash deposits and short-term investments in the amount of $15,009,601 with the custodian and FCMs.

As of June 30, 2025, UNL held cash deposits short-term investments in the amount of $11,860,801 with the custodian and FCMs.

Some or all of these amounts held by a custodian or an FCM, as applicable, may be subject to loss should UNL’s custodian or FCMs, as applicable, cease operations.

Off Balance Sheet Financing

As of March 31, 2025, UNL had no loan guarantee, credit support or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks that service providers undertake in performing services which are in the best interests of UNL.

As of June 30, 2025, UNL had no loan guarantee, credit support or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks that service providers undertake in performing services which are in the best interests of UNL.

While UNL’s exposure under these indemnification provisions cannot be estimated, they are not expected to have a material impact on UNL’s financial position.

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In return for its services, USCF is entitled to a management fee calculated daily and paid monthly as a fixed percentage of UNL’s NAV, which is 0.60% of NAV on its average daily total net assets since May 1, 2024 and previously was 0.75% through April 30, 2024.

USCF agreed to pay the start-up costs associated with the formation of UNL, primarily its legal, accounting and other costs in connection with USCF’s registration with the CFTC as a CPO and the registration and listing of UNL and its shares with the SEC, FINRA and

NYSE Arca (formerly, AMEX), respectively.

However, since UNL’s initial offering of shares, offering costs incurred in connection with registering and listing additional shares of UNL have been directly borne on an ongoing basis by UNL, and not by USCF.

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Either party may terminate these agreements earlier for certain reasons described in the agreements.

As of March 31, 2025, UNL’s portfolio consisted of 356 Natural Gas Futures NG contracts traded on the NYMEX.

As of March 31, 2025, UNL did not hold any Futures Contracts traded on the ICE Futures.

As of June 30, 2025, UNL’s portfolio consisted of 304 Natural Gas Futures NG contracts traded on the NYMEX.

As of June 30, 2025, UNL did not hold any Futures Contracts traded on the ICE Futures.

For a list of UNL’s current holdings, please see UNL’s website at www.uscfinvestments.com.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis