The United States Energy Revolution

You've probably have heard about the shale energy boom happening in the United States right now. Thanks to hydraulic fracturing, the United States is producing more natural gas and oil than it ever has before and is closer to becoming energy independent each day. This revolution has supported 2.1 million jobs across all 50 states, created a manufacturing renaissance and contributed nearly $284 billion to the GDP. 

The United States is on a clear path to Energy Independence.

The Energy Information Administration estimates that energy imports and exports come into balance around 2028. From 2035 to 2040, energy exports account for about 23% of total annual U.S. energy production.

This energy revolution has created many investing opportunities. David Lerner Associates is proud to offer Energy 11, LP, a limited partnership investment program available exclusively for David Lerner Associates' clients.

Energy 11, LP

Energy 11, LP was formed in 2013 by Glade Knight and David McKenney of the Virginia-based Apple REIT companies, as well as Anthony Keating and Michael Mallick. 

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

Energy 11, LP was formed to enable investors to invest in oil and gas properties located onshore in the United States. 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;
  • to make distributions to investors;
  • after five to seven years following the termination of this offering, 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; and
  • to enable common unitholders to invest in oil and gas properties in a tax efficient manner.

Energy 11, LP is a Delaware limited partnership formed to acquire and develop oil and gas properties located onshore in the United States. They seek to acquire working interests, leasehold interests, royalty interests, overriding royalty interests, production payments and other interests in producing and non-producing oil and gas properties. Recent developments include:

  • On December 18, 2015, Energy 11, LP acquired an 11% working interest in approximately 215 existing producing wells and approximately 262 future development locations in the Sanish field located in Mountrail County, North Dakota. 
  • In November of 2016, Energy 11, LP acquired an additional 11% working interest in the Sanish field assets for a total of approx. 22-23% total interest in the area.
  • Whiting Petroleum Corporation (NYSE:WLL), a publicly traded oil and gas company, operates the Sanish Field Assets.

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




Energy 11, L.P. has a minimum, initial purchase price of approximately $5,000. David Lerner Associates serves as the exclusive dealer-manager for Energy 11, L.P., the entity that is offering this investment. (NJ RESIDENTS ONLY): To qualify, investors must have a liquid net worth of at least $350,000; OR gross income of at least $85,000 and a liquid net worth of at least $100,000. In addition, investors can have no more than 10% of their liquid net worth invested in non-publicly traded direct investment programs, including Energy 11, L.P. (ALL OTHER STATES): To qualify, investors must have either a liquid net worth of at least $150,000; OR gross income of at least $45,000 along with a liquid net worth of at least $45,000. 

Oil & Gas Industry Risks*
The general partner of Energy 11, L.P. plans to invest its available cash in development of oil and gas properties, and does not intend to cause it to distribute more than the preferred distribution prior to commencing the sale of all or substantially all of their properties, which the general partner does not anticipate will occur until at least five years after the termination of this offering.

  • If oil, natural gas or other hydrocarbon prices remain depressed for a prolonged period, the cash flows from operations will decline and Energy 11, L.P. may have to lower distributions or may not be able to pay distributions at all.
  • If unable to find suitable prospects and properties, Energy 11, L.P.  may not be able to achieve their investment objectives or pay distributions. They may experience delays in locating oil and gas properties to acquire.
  • Properties that Energy 11, L.P.  buys or develops may not produce as projected and they may be unable to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against such liabilities, which could adversely affect cash available for distribution.
  • The hedging activities of Energy 11, L.P.  will expose it to counter-party credit risk and could result in financial losses or could reduce its net income, which may adversely affect its ability to pay cash distributions to holders of common units.
  • Energy 11, L.P.  plans to rely on drilling to fully develop the properties acquired. If drilling is unsuccessful, cash available for distributions and financial condition will be adversely affected.
  • Energy 11, L.P.  may be unable to compete effectively with larger companies and may not be able to implement new technology as efficiently as larger companies, which may adversely affect its ability to generate sufficient revenue and its ability to pay distributions to holders of common units and service debt obligations.
  • The financial condition and results of operations may be materially adversely affected if Energy 11, L.P. incurs costs and liabilities due to a failure to comply with environmental regulations or a release of hazardous substances into the environment.
  • Energy 11, L.P.  is subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting operations.
  • Significant physical effects of climatic change have the potential to damage facilities, disrupt production activities and cause Energy 11, L.P.  to incur significant costs in preparing for, or responding to, those effects.
  • Federal legislation and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays and more widespread or prolonged moratoriums or prohibitions of hydraulic fracturing could, depending on the makeup of our assets, cause the partnership to cease business operations.

Energy 11, L.P. Risk Factors*
An investment in the common units is an illiquid, non-traded investment. Energy 11, L.P.  may be unable to sell its properties, merge or list the common units on a national securities exchange to achieve liquidity within its planned timeline of five(5) to seven(7) years after the termination of this offering, or at all.

  • The Partnership has limited prior operating history, no established financing sources, and this is the first oil and gas program sponsored by the general partner and its affiliates.
  • This offering is a blind pool because the general partner has not identified all of the properties it will acquire with future proceeds of this offering.
  • The distributions to common unit holders may not be sourced from cash generated from operations but from offering proceeds, return of investor capital, or indebtedness, and this will decrease distributions in the future. A portion of cash distributions are expected to be made out of the capital contributions received from purchasers of common units.
  • Energy 11, L.P. cannot guarantee any investment return or the amount or frequency of any distributions it may make or that distributions will be sufficient to pay your tax liability attributable to your ownership of common units.
  • The general partner and the Manager will be subject to conflicts of interest, including that affiliates of the owners of the general partner have made investments in and loans to affiliates of the Manager. The Partnership Agreement limits the general partner's fiduciary duties to Energy 11, L.P.  in connection with these conflicts of interest.
  • Holders of common units have limited voting rights and will not be able to remove the general partner if they are dissatisfied with the manner in which the general partner manages the business. 
  • Energy 11, L.P.  will depend on the Manager to identify investment opportunities and provide Energy 11, L.P. services necessary to operate its business. If the Manager is unable or unwilling to identify opportunities and provide these services, it would result in disruption in business, which could have an adverse effect on our ability to make cash distributions to holders of our common units and service our debt obligations 
  • The Manager, which will manage the business under the Management Agreement, is a newly formed entity with limited operating history. The Management Agreement limits the Manager’s liability to us for monetary damages and the Manager, as a newly formed entity, is not expected to possess significant assets other than the Management Agreement, which would make collection of any monetary damages against the Manager unlikely.
  • The Manager may be subject to conflicts of interest in managing business under the Management Agreement.
  • Under the Management Agreement, the Manager will not be liable to Energy 11, L.P.  for damages unless the Manager is grossly negligent or engages in intentional misconduct, and even if the Manager is determined to have been grossly negligent or engaged in intentional misconduct, the Manager is a newly formed entity with only nominal assets;
  • Affiliates of the Manager will compete with Energy 11, L.P.  in investing in and developing oil and gas properties and they are expected to provide comparable management services to similarly situated unaffiliated oil and gas investment programs.
  • Energy 11, L.P.  will be subject to the operating and other risks of owning and developing oil and gas properties, including environmental and operational risks, risks of reductions in the prices of oil, natural gas and other hydrocarbons produced, risks associated with hedging production, and regulatory risks.
  • Limited Partners of Energy 11 will be subject to tax risks:
    • You may be required to pay taxes on income from Energy 11, L.P.  even if you do not receive any cash distributions.
    • Tax gain or loss on disposition of common units could be more or less than expected.
    • Holders of common units may be subject to state and local taxes and tax return filing requirements in states where they do not live as a result of investing in Energy 11, L.P.  units.
    • Certain federal income tax deductions currently available with respect to oil and natural gas exploration and development may be eliminated as a result of future legislation.
  • Federal legislation and state legislative and regulatory initiatives relating to hydraulic fracturing in areas where Energy 11, L.P.  acquires producing properties could result in increased costs and additional operating restrictions or delays and could reduce the amount of oil and natural gas that is ultimately produced.
  • The status of Energy 11, L.P. as an emerging growth company under the JOBS Act may make it more difficult to raise capital in this offering. 

Sanish Field Assets Acquisition

  • Energy 11, L.P.  will need additional funding post-closing of the acquisition of the Sanish Field Assets in order to retain its full interest therein. Energy 11, L.P.  will have limited control over the activities on properties they do not operate.

*Investors should read the prospectus, starting at page 20, for a more comprehensive and detailed description of the risk factors.