Energy 11 LP & Energy Resources 12 LP Investigation

Energy 11 LP & Energy Resources 12 LP – David Lerner Associates Oil & Gas Investments

Are you concerned about your investment in Energy 11 LP or Energy Resources 12 LP offered by David Lerner Associates? If so, the securities attorneys at The White Law Group may be able to help you.

High Risk Energy Investment

According to the prospectus, Energy 11 LP was made available exclusively at David Lerner Associates and is no longer open to investors.

The limited partnership was reportedly formed in 2013.

The offering period for purchasing units of Energy 11, LP reportedly began on January 22, 2015 and concluded on April 24, 2017. At the conclusion of the offering period, David Lerner Associates had reportedly raised $374,322,962, according to its website.

Energy 11 LP was reportedly formed to enable investors to invest in oil and gas properties located onshore in the United States. The fund claims its primary objectives are to acquire producing and non-producing oil and gas properties with development potential, and to enhance the value of those properties through drilling and other development activities.

The fund reportedly plans to after five to seven years to engage in a “liquidity transaction” in which they will sell properties and distribute the net sales proceeds to investors, merge with another entity or list common units on a national securities exchange, according to the prospectus.

Deep Decline in  Share Value

According to an 8-K filing on January 25, 2021, the Partnership is providing an estimated per common unit value of the Partnership’s common units as of December 31, 2020 of $7.23 per common unit and the original offering price was $19 and $20 per unit. Unfortunately for investors this indicates more than a 50% decrease in value.

Due to COVID-19’s impact on  the global economy, there was a steep decline in demand for oil and natural gas during the first quarter of 2020, and demand has not fully recovered to pre-COVID-19 levels.

According to a letter to investors, the company said that the impact of COVID-19 to the Partnership’s revenues and cash flow from operations has been significant.

Energy Resources 12 LP

Energy Resources 12 LP, a Delaware limited partnership, was formed in 2016, with basically the same objectives as Energy 11.

According to SEC filings, on February 1, 2018, Energy Resources 12 closed on the purchase of certain Bakken Assets, including a minority working interest in approximately 204 existing producing wells and approximately 547 future development locations, primarily in McKenzie, Dunn, McLean and Mountrail counties in North Dakota.

Recovery of Investment Losses

The problem with oil & gas limited partnerships such as Energy 11 LP and Energy Resources 12 is that they typically involve a high degree of risk especially since the energy market has seen huge losses since 2014.

Further, illiquidity is problematic. Investors may be waiting for quite a while before they can cash in on their investment, and when they do it may be at a loss.

Broker dealers that sell oil and gas limited partnerships are required to perform adequate due diligence on all investment recommendations to ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

Brokers typically earn high sales commission and due diligence fees with these types of investments. If investors are not experienced they may not realize that the brokers may focus on the income potential and tax benefits while downplaying the risks.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses in a FINRA arbitration claim.

If you are concerned about your investment in Energy 11 LP or Energy Resources 12 LP the securities attorneys at The White Law Group may be able to help you to recover your losses.  Please contact The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. The firm represents investors throughout the country in claims against their brokerage firm.