0001376227--12-312024Q2false0.250.250.250.25191284588478211470.2597466476243666190.250.250.250001376227us-gaap:CommodityContractMemberus-gaap:FutureMemberung:OpenPositionMember2024-01-012024-06-300001376227us-gaap:CommodityContractMemberung:OtcCommoditySwapContractsMemberung:OpenPositionMember2024-01-012024-06-300001376227us-gaap:CommodityContractMemberus-gaap:FutureMemberung:OpenPositionMember2023-01-012023-06-300001376227us-gaap:CommodityContractMemberung:OtcCommoditySwapContractsMemberung:OpenPositionMember2023-01-012023-06-3000013762272024-01-232024-01-230001376227ung:PriorToReverseSplitMember2018-01-042018-01-040001376227us-gaap:LimitedPartnerMember2024-06-300001376227us-gaap:GeneralPartnerMember2024-06-300001376227us-gaap:LimitedPartnerMember2024-03-310001376227us-gaap:LimitedPartnerMember2023-12-310001376227us-gaap:LimitedPartnerMember2023-06-300001376227us-gaap:LimitedPartnerMember2023-03-310001376227us-gaap:LimitedPartnerMember2022-12-3100013762272024-01-012024-12-310001376227ung:UnitedStatesNaturalGasMember2024-01-012024-12-310001376227ung:FundTrustsMember2024-01-012024-12-310001376227us-gaap:LimitedPartnerMember2024-04-012024-06-300001376227us-gaap:LimitedPartnerMember2024-01-012024-06-300001376227us-gaap:LimitedPartnerMember2023-04-012023-06-300001376227us-gaap:LimitedPartnerMember2023-01-012023-06-300001376227ung:UnitedStatesContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignExchangeFutureMember2024-06-300001376227ung:OtcCommoditySwapContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeFutureMember2024-06-300001376227us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMember2024-06-300001376227ung:UnitedStatesContractsMemberus-gaap:ForeignExchangeFutureMember2024-06-300001376227ung:OtcCommoditySwapContractsMemberus-gaap:ForeignExchangeFutureMember2024-06-300001376227us-gaap:ShortTermInvestmentsMember2024-06-300001376227ung:UnitedStatesContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignExchangeFutureMember2023-12-310001376227ung:OtcCommoditySwapContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeFutureMember2023-12-310001376227us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMember2023-12-310001376227ung:UnitedStatesContractsMemberus-gaap:ForeignExchangeFutureMember2023-12-310001376227ung:OtcCommoditySwapContractsMemberus-gaap:ForeignExchangeFutureMember2023-12-310001376227us-gaap:ShortTermInvestmentsMember2023-12-310001376227ung:MorganStanleyInstitutionalLiquidityFundsGovernmentPortfolioInstitutionalSharesFivePointTwoSevenPercentageMember2023-12-310001376227us-gaap:CommodityContractMemberus-gaap:FutureMemberung:ClosedPositionsMember2024-01-012024-06-300001376227us-gaap:CommodityContractMemberung:OtcCommoditySwapContractsMemberung:ClosedPositionsMember2024-01-012024-06-300001376227us-gaap:CommodityContractMemberus-gaap:FutureMemberung:ClosedPositionsMember2023-01-012023-06-300001376227us-gaap:CommodityContractMemberung:OtcCommoditySwapContractsMemberung:ClosedPositionsMember2023-01-012023-06-300001376227us-gaap:SwapMember2024-06-300001376227us-gaap:FutureMember2024-06-300001376227us-gaap:SwapMember2023-06-300001376227us-gaap:FutureMember2023-06-300001376227us-gaap:CommodityContractMemberus-gaap:SwapMember2024-01-012024-06-300001376227us-gaap:CommodityContractMemberus-gaap:FutureMember2024-01-012024-06-300001376227us-gaap:CommodityContractMemberus-gaap:SwapMember2023-01-012023-12-310001376227us-gaap:CommodityContractMemberus-gaap:FutureMember2023-01-012023-12-310001376227ung:MorganStanleyInstitutionalLiquidityFundsGovernmentPortfolioInstitutionalSharesMemberus-gaap:MoneyMarketFundsMember2024-06-3000013762272007-04-182007-04-180001376227ung:UnitedStatesOilFundLimitedPartnershipMember2024-01-012024-06-300001376227ung:UnitedStatesOilFundLimitedPartnershipMember2023-01-012023-06-300001376227ung:GroupFourMemberung:MarketingAgreementMember2022-10-012022-10-010001376227ung:MorganStanleyInstitutionalLiquidityFundsGovernmentPortfolioInstitutionalShares5.22Membercountry:USus-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2024-06-300001376227ung:NymexNaturalGasFutureNgAugust2024ContractsExpiringJuly2024Membercountry:USung:OpenCommodityFuturesContractsLongMember2024-06-300001376227country:USus-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2024-06-300001376227ung:MorganStanleyInstitutionalLiquidityFundsGovernmentPortfolioInstitutionalSharesFivePointTwoSevenPercentageMembercountry:USus-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2023-12-310001376227ung:NymexNaturalGasFutureNgFebruary2024ContractsExpiringJanuary2024Membercountry:USung:OpenCommodityFuturesContractsLongMember2023-12-310001376227country:USus-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2023-12-3100013762272007-04-012007-04-300001376227ung:RedemptionBasketsMember2024-06-300001376227ung:CreationBasketsMember2024-06-3000013762272024-03-310001376227ung:FollowingReverseSplitMember2024-01-2300013762272023-03-3100013762272022-12-3100013762272007-04-180001376227ung:SocieteGeneraleIsdaMember2024-01-012024-06-3000013762272023-01-012023-12-310001376227ung:SocGenSgixcng103282024indexOpenOtcCommoditySwapContractsMemberung:SocieteGeneraleIsdaMember2024-06-300001376227ung:SocieteGeneraleIsdaMember2024-06-300001376227ung:MacquarieMqcp362h12122023indexOpenOtcCommoditySwapContractsMemberung:SocieteGeneraleIsdaMember2023-12-310001376227ung:MacquarieMqcp362h12122023indexOpenOtcCommoditySwapContractsMemberung:MacquarieBankLimitedMember2023-12-310001376227ung:SocGenSgixcng103282024indexOpenOtcCommoditySwapContractsMemberung:SocieteGeneraleIsdaMember2024-01-012024-06-300001376227ung:MacquarieMqcp362h12122023indexOpenOtcCommoditySwapContractsMemberung:SocieteGeneraleIsdaMember2023-01-012023-12-310001376227ung:MacquarieMqcp362h12122023indexOpenOtcCommoditySwapContractsMemberung:MacquarieBankLimitedMember2023-01-012023-12-310001376227srt:MinimumMember2024-06-300001376227srt:MaximumMember2024-06-300001376227ung:FollowingReverseSplitMember2024-01-232024-01-2300013762272018-01-042018-01-040001376227srt:MinimumMember2024-01-012024-06-300001376227srt:MaximumMember2024-01-012024-06-3000013762272023-04-012023-06-3000013762272023-01-012023-06-3000013762272023-06-3000013762272024-06-3000013762272023-12-310001376227ung:PriorToReverseSplitMember2023-12-310001376227ung:FollowingReverseSplitMember2023-12-310001376227ung:PriorToReverseSplitMember2018-01-040001376227ung:FollowingReverseSplitMember2018-01-040001376227ung:GroupFourMemberung:MarketingAgreementMember2024-01-012024-06-300001376227us-gaap:LicensingAgreementsMember2024-01-012024-06-300001376227ung:UnitedStatesNaturalGasMember2024-01-012024-06-300001376227ung:UnitedStatesNaturalGasMember2024-06-3000013762272024-04-012024-06-3000013762272024-08-0500013762272024-01-012024-06-30xbrli:sharesiso4217:USDxbrli:pureiso4217:USDung:itemiso4217:USDxbrli:sharesung:contract

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2024.

or

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from                     to                    .

Commission file number: 001-33096

United States Natural Gas Fund, LP

(Exact name of registrant as specified in its charter)

Delaware

 

20-5576760

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

1850 Mt. Diablo Boulevard, Suite 640

Walnut Creek, California 94596

(Address of principal executive offices) (Zip Code)

(510) 522-9600

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange
on which registered:

Shares of United States Natural Gas Fund, LP

UNG

NYSE Arca, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

 

Accelerated Filer

 

 

 

 

 

Non-Accelerated Filer

 

Smaller Reporting Company

 

 

 

 

 

Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided in Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes No

The registrant had 61,146,103 outstanding shares as of August 5, 2024.

Part I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

Index to Condensed Financial Statements

Documents

    

Page

Condensed Statements of Financial Condition at June 30, 2024 (Unaudited) and December 31, 2023

4

Condensed Schedules of Investments (Unaudited) at June 30, 2024 and December 31, 2023

5

Condensed Statements of Operations (Unaudited) for the three and six months ended June 30, 2024 and 2023

7

Condensed Statements of Changes in Partners’ Capital (Unaudited) for the three and six months ended June 30, 2024 and 2023

8

Condensed Statements of Cash Flows (Unaudited) for the six months ended June 30, 2024 and 2023

9

Notes to Condensed Financial Statements (Unaudited) for the period ended June 30, 2024

10

3

United States Natural Gas Fund, LP

Condensed Statements of Financial Condition

At June 30, 2024 (Unaudited) and December 31, 2023

    

June 30, 2024

    

December 31, 2023

Assets

 

  

 

  

Cash and cash equivalents (at cost $539,728,879 and $678,015,896, respectively) (Notes 2 and 5)

$

539,728,879

$

678,015,896

Equity in trading accounts:

 

 

Cash and cash equivalents (at cost $216,599,908 and $250,808,873, respectively)

 

216,599,908

 

250,808,873

Unrealized gain (loss) on open commodity futures contracts

 

(82,464,760)

 

40,072,461

Unrealized gain (loss) on open OTC commodity swap contracts

(1,265)

14,903,211

Receivable for shares sold

38,260,430

Dividends receivable

 

303,974

 

316,438

Interest receivable

 

2,745,433

 

3,599,258

Prepaid insurance

125,263

41,729

Prepaid registration fees

128,580

ETF transaction fees receivable

 

3,000

 

1,000

Total Assets

$

715,429,442

$

987,758,866

Liabilities and Partners’ Capital

 

  

 

  

Payable due to Broker

$

2,561,763

$

8,268,236

Payable for shares redeemed

4,072,796

General Partner management fees payable (Note 3)

369,563

500,635

Professional fees payable

 

214,179

 

844,175

Brokerage commissions payable

 

171,877

 

171,877

Directors’ fees payable

 

20,026

 

21,121

License fees payable

16,976

25,694

Total Liabilities

 

3,354,384

 

13,904,534

Commitments and Contingencies (Notes 3, 4 & 5)

 

 

  

Partners’ Capital

 

 

  

General Partners

Limited Partners

712,075,058

973,854,332

Total Partners’ Capital

 

712,075,058

 

973,854,332

Total Liabilities and Partners’ Capital

$

715,429,442

$

987,758,866

Limited Partners’ shares outstanding

40,946,103

47,821,147

Net asset value per share

$

17.39

$

20.36

Market value per share

$

17.43

$

20.28

See accompanying notes to condensed financial statements.

4

United States Natural Gas Fund, LP

Condensed Schedule of Investments (Unaudited)

At June 30, 2024

    

    

    

Fair 

    

Value/Unrealized 

Gain (Loss) on 

Open 

Number of 

Commodity 

% of Partners’

Notional Amount

Contracts

Contracts

Capital

Open Commodity Futures Contracts - Long

United States Contracts

 

  

 

  

 

  

 

  

NYMEX Natural Gas Futures NG August 2024 contracts, expiring July 2024*

$

677,729,620

 

22,886

$

(82,464,760)

 

(11.58)

    

Shares/Principal 

    

    

% of Partners’

Amount

Market Value

Capital

Cash Equivalents

 

  

 

  

 

  

United States Money Market Funds

 

  

 

  

 

  

Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Shares, 5.22%#

 

70,950,000

$

70,950,000

 

9.96

Total United States Money Market Funds

 

  

$

70,950,000

 

9.96

Open OTC Commodity Swap Contracts

Unrealized

    

    

    

Fair

    

Gain (Loss)

Value/Open

on

Commodity

Upfront

Commodity

Fund Pays

Payment

Expiration

Notional

Swap

Payments/(Premiums

Swap

Fund Receives from Counterparty

    

Counterparty

    

Counterparty

    

Frequency

    

Date

    

Amount

    

Contracts

    

Received)

    

Contracts(a)

SOC GEN SGIXCNG1 03282024Index(b)

0.40

%  

Societe Generale

monthly

09/27/2024

$

116,907,988

$

116,906,723

$

(1,265)

Total Open OTC Commodity Swap Contracts˄

$

116,907,988

$

116,906,723

$

(1,265)

(a)Reflects the value at reset date of June 30, 2024.

(b)Custom index comprised of a basket of underlying instruments.

*Collateral amounted to $197,809,908 on open commodity futures contracts.

˄Collateral amounted to $18,790,000 on open OTC commodity swap contracts.

#Reflects the 7-day yield at June 30, 2024.

See accompanying notes to condensed financial statements.

5

United States Natural Gas Fund, LP

Schedule of Investments

At December 31, 2023

Fair

Value/Unrealized

Gain (Loss) on

Open

Number of

Commodity

% of Partners’

    

Notional Amount

    

Contracts

    

Contracts

    

Capital

Open Commodity Futures Contracts - Long

 

  

 

  

 

  

 

  

United States Contracts

 

  

 

  

 

  

 

  

NYMEX Natural Gas Futures NG February 2024 contracts, expiring January 2024*

$

695,222,259

 

29,248

$

40,072,461

 

4.11

Shares/Principal

% of Partners’

    

Amount

    

Market Value

    

Capital

Cash Equivalents

 

  

 

  

 

  

United States Money Market Funds

 

  

 

  

 

  

Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Shares, 5.27%#

 

70,950,000

$

70,950,000

 

7.29

Total United States Money Market Funds

$

70,950,000

 

7.29

Open OTC Commodity Swap Contracts

    

    

    

    

    

    

    

    

Unrealized 

Fair 

Gain (Loss) 

Value/Open 

on 

Commodity 

Upfront 

Commodity 

Fund Receives from

Fund Pays 

Payment 

Expiration

Notional 

Swap 

Payments/(Premiums 

Swap 

Counterparty

Counterparty

Counterparty

Frequency

 Date

Amount

Contracts

Received)

Contracts(a)

MACQUARIE MQCP362H 12122023Index(b)

 

0.25

%  

Macquarie Bank Ltd

 

Monthly

 

01/12/2024

$

129,306,126

144,210,360

 

$

14,904,234

SOC GEN SGIXCNG1 09292023Index(b)

 

0.40

Societe Generale

 

Monthly

 

03/29/2024

94,559,204

94,558,181

 

 

(1,023)

Total Open OTC Commodity Swap ContractsÙ

 

  

 

  

$

223,865,330

238,768,541

 

$

14,903,211

(a)Reflects the value at reset date of December 29, 2023.

(b)Custom index comprised of a basket of underlying instruments.

#Reflects the 7-day yield at December 31, 2023.

˄Collateral amounted to $40,660,000 on open OTC commodity swap contracts.

*Collateral amounted to $210,148,873 on open commodity futures contracts.

See accompanying notes to condensed financial statements.

6

United States Natural Gas Fund, LP

Condensed Statements of Operations (Unaudited)

For the three and six months ended June 30, 2024 and 2023

    

Three months ended

    

Three months ended

    

Six months ended

    

Six months ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Income

 

  

  

 

  

  

Gain (loss) on trading of commodity futures and swap contracts:

 

  

  

 

  

  

Realized gain (loss) on closed commodity futures contracts

$

212,717,870

$

(55,298,793)

$

81,395,100

$

(538,592,729)

Realized gain (loss) on close OTC commodity swap contracts

16,800,888

(9,438,418)

50,769,009

(40,961,739)

Change in unrealized gain (loss) on open commodity futures contracts

 

(62,948,054)

 

135,672,261

 

(122,537,221)

 

197,931,782

Change in unrealized gain (loss) on open OTC commodity swap contracts

(434)

29,569,017

(14,904,476)

29,567,012

Dividend income

 

897,701

 

2,748,878

 

1,752,141

 

7,120,255

Interest income

 

9,057,814

 

9,722,729

 

17,977,066

 

14,202,720

ETF transaction fees

 

60,000

 

81,000

 

129,000

 

210,000

Total Income (Loss)

$

176,585,785

$

113,056,674

$

14,580,619

$

(330,522,699)

Expenses

 

  

 

  

 

  

 

  

General Partner management fees (Note 3)

$

1,199,746

1,707,590

$

2,424,682

$

3,014,739

Professional fees

597,788

294,864

1,033,078

614,944

Brokerage commissions

 

610,954

 

783,668

 

1,420,343

 

1,592,417

Directors’ fees and insurance

 

69,128

 

43,187

 

135,092

 

80,571

License fees

 

29,993

 

42,690

 

60,617

 

75,369

Total Expenses

$

2,507,609

2,871,999

$

5,073,812

5,378,040

Net Income (Loss)

$

174,078,176

$

110,184,675

$

9,506,807

$

(335,900,739)

Net Income (Loss) per limited partner share

$

2.65

$

1.81

#

$

(2.97)

$

(27.04)

#

Net Income (Loss) per weighted average limited partner share

$

3.66

$

2.61

#

$

0.20

$

(9.85)

#

Weighted average limited partner shares outstanding

 

47,590,059

 

42,187,081

#

 

46,847,757

 

34,091,589

#

#

On January 23, 2024 there was a 1 - for - 4 reverse share split. The Statements of Operations have been adjusted for the periods shown to reflect the 1 - for - 4 reverse share split on a retroactive basis.

See accompanying notes to condensed financial statements.

7

United States Natural Gas Fund, LP

Condensed Statements of Changes in Partners’ Capital (Unaudited)

For the three and six months ended June 30, 2024 and 2023

Limited Partners*

Three months ended

Three months ended

Six months ended

Six months ended

    

June 30, 2024

    

June 30, 2023

    

June 30, 2024

    

June 30, 2023

Balances at beginning of period

$

830,500,981

$

1,163,415,181

$

973,854,332

$

429,338,476

Addition of 15,900,000, 17,150,000#, 52,525,000 and 63,525,000# partnership shares, respectively

260,549,798

 

444,818,165

 

873,731,717

 

2,141,023,984

Redemption of (31,300,000), (21,100,000)#, (59,400,044) and (35,350,000)# partnership shares, respectively

(553,053,897)

 

(598,098,871)

 

(1,145,017,798)

 

(1,114,142,572)

Net income (loss)

174,078,176

 

110,184,675

 

9,506,807

 

(335,900,739)

 

 

 

Balances at end of period

$

712,075,058

$

1,120,319,150

$

712,075,058

$

1,120,319,150

*

General Partners’ shares outstanding and capital for the periods presented were zero.

#

On January 23, 2024 there was a 1 - for - 4 reverse share split. The Statement of Changes in Partners’ Capital have been adjusted for the periods shown to reflect the 1 - for - 4 reverse share split on a retroactive basis.

See accompanying notes to condensed financial statements.

8

United States Natural Gas Fund, LP

Condensed Statements of Cash Flows (Unaudited)

For the six months ended June 30, 2024 and 2023

    

Six months ended

    

Six months ended

June 30, 2024

June 30, 2023

Cash Flows from Operating Activities:

 

  

 

  

Net income (loss)

$

9,506,807

$

(335,900,738)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

  

Change in unrealized (gain) loss on open commodity futures contracts

122,537,221

(197,931,782)

Change in unrealized (gain) loss on open OTC commodity swap contracts

 

14,904,476

 

(29,567,013)

(Increase) decrease in dividends receivable

12,464

365,944

(Increase) decrease in interest receivable

853,825

(3,045,334)

(Increase) decrease in prepaid insurance

 

(83,534)

 

(116,230)

(Increase) decrease in prepaid registration fees

(128,580)

(Increase) decrease in ETF transaction fees receivable

 

(2,000)

 

(1,000)

Increase (decrease) payable due to custody

Increase (decrease) in payable due to Broker

(5,706,473)

Increase (decrease) in General Partner management fees payable

 

(131,072)

 

313,563

Increase (decrease) in professional fees payable

(629,996)

(561,723)

Increase (decrease) in brokerage commissions payable

11,825

Increase (decrease) in directors’ fees payable

(1,095)

13,978

Increase (decrease) in license fees payable

 

(8,718)

23,943

Net cash provided by (used in) operating activities

141,123,325

(566,394,567)

Cash Flows from Financing Activities:

 

Addition of partnership shares

 

835,471,287

 

2,146,555,386

Redemption of partnership shares

 

(1,149,090,594)

 

(1,105,185,173)

Net cash provided by (used in) financing activities

 

(313,619,307)

 

1,041,370,213

Net Increase (Decrease) in Cash and Cash Equivalents

 

(172,495,982)

 

474,975,646

Total Cash, Cash Equivalents and Equity in Trading Accounts, beginning of period

 

928,824,769

 

559,491,651

Total Cash, Cash Equivalents and Equity in Trading Accounts, end of period

$

756,328,787

$

1,034,467,297

Components of Cash, Cash Equivalents, and Equity in Trading Account:

 

  

 

Cash and cash equivalents

$

539,728,879

$

783,504,674

Equity in Trading Accounts:

 

  

 

Cash and cash equivalents

 

216,599,908

 

250,962,623

Total Cash, Cash Equivalents and Equity in Trading Accounts

$

756,328,787

$

1,034,467,297

See accompanying notes to condensed financial statements.

9

United States Natural Gas Fund, LP

Notes to Condensed Financial Statements (Unaudited)

For the period ended June 30, 2024

NOTE 1 — ORGANIZATION AND BUSINESS

The United States Natural Gas Fund, LP (“UNG”) was organized as a limited partnership under the laws of the state of Delaware on September 11, 2006. UNG is a commodity pool that issues limited partnership interests (“shares”) traded on the NYSE Arca, Inc. (the “NYSE Arca”). Prior to trading on the NYSE Arca, UNG’s shares traded on the American Stock Exchange (the “AMEX”) under the symbol “UNG” since its initial public offering on April 18, 2007. UNG will continue in perpetuity, unless terminated sooner upon the occurrence of one or more events as described in its Fifth Amended and Restated Agreement of Limited Partnership dated as of December 15, 2017 (the “LP Agreement”), which grants full management and control to its general partner, United States Commodity Funds LLC (“USCF”).

The investment objective of UNG is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the daily changes in the price of a specified short-term futures contract called the “Benchmark Futures Contract”, plus interest earned on UNG’s collateral holdings, less UNG’s expenses. The Benchmark Futures Contract is the futures contract on natural gas as traded on the New York Mercantile Exchange (the “NYMEX”) that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire. UNG seeks to achieve its investment objective by investing so that the average daily percentage change in UNG’s NAV for any period of 30 successive valuation days will be within plus/minus ten percent (10)% of the average daily percentage change in the price of the Benchmark Futures Contract over the same period. As a result, investors should be aware that UNG would meet its investment objective even if there are significant deviations between changes in its daily NAV and changes in the daily price of the Benchmark Futures Contract, provided that the average daily percentage change in UNG’s NAV over 30 successive valuation days is within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Futures Contracts over the same period.

UNG seeks to achieve its investment objective by investing primarily in futures contracts for natural gas that are traded on the NYMEX, ICE Futures Europe and ICE Futures U.S. (together, “ICE Futures”) or other U.S. and foreign exchanges (collectively, “Futures Contracts”) and to a lesser extent, in order to comply with regulatory requirements, risk mitigation measures (including those that may be taken by UNG, UNG’s futures commission merchants (“FCMs”), counterparties or other market participants), liquidity requirements, or in view of market conditions, other natural gas-related investments such as cash settled options on Futures Contracts, forward contracts for natural gas, cleared swap contracts, and non-exchange traded (“over-the-counter” or “OTC”) transactions that are based on the price of natural gas, crude oil and other petroleum-based fuels, as well as futures contracts for crude oil, heating oil, gasoline, and other petroleum-based fuels, Futures Contracts and indices based on the foregoing (collectively, “Other Natural Gas-Related Investments”). Market conditions that USCF currently anticipates could cause UNG to invest in Other Natural Gas-Related Investments include, but are not limited to, those allowing UNG to obtain greater liquidity or to execute transactions with more favorable pricing. For convenience and unless otherwise specified, Futures Contracts and Other Natural Gas-Related Investments collectively are referred to as “Natural Gas Interests” in the notes to the financial statements. As of June 30, 2024, UNG held 22,886 Futures Contracts traded on the NYMEX and did not hold any Natural Gas Futures Contracts traded on the ICE Futures US.

USCF believes that market arbitrage opportunities will cause daily changes in UNG’s share price on the NYSE Arca on a percentage basis to closely track daily changes in UNG’s per share NAV on a percentage basis. USCF further believes that the daily changes in prices of the Benchmark Futures Contract have historically tracked the daily changes in the spot prices of natural gas. USCF believes that the net effect of these relationships will be that the daily changes in the price of UNG’s shares on the NYSE Arca on a percentage basis will closely track the daily changes in the spot price of natural gas on a percentage basis, less UNG’s expenses.

Investors should be aware that UNG’s investment objective is not for its NAV or market price of shares to equal, in dollar terms, the spot price of natural gas or any particular futures contract based on natural gas, nor is UNG’s investment objective for the percentage change in its NAV to reflect the percentage change of the price of any particular futures contract as measured over a time period greater than one day. This is because natural market forces called contango and backwardation may impact and have impacted the total return on an investment in UNG’s shares during the past year relative to a hypothetical direct investment in natural gas and, in the future, it is likely that the relationship between the market price of UNG’s shares and the changes in the spot prices of natural gas will continue to be impacted by contango and backwardation. (It is important to note that the disclosure above ignores the potential costs associated with physically owning and storing natural gas, which could be substantial.)

10

UNG commenced investment operations on April 18, 2007 and has a fiscal year ending on December 31. USCF is responsible for the management of UNG. USCF is a member of the National Futures Association (the “NFA”) and became registered as a commodity pool operator with the Commodity Futures Trading Commission (the “CFTC”) effective December 1, 2005 and a swaps firm on August 8, 2013. USCF is also the general partner of the United States Oil Fund, LP (“USO”), the United States 12 Month Oil Fund, LP (“USL”), the United States Gasoline Fund, LP (“UGA”), the United States 12 Month Natural Gas Fund, LP (“UNL”) and the United States Brent Oil Fund, LP (“BNO”).

USCF is also the sponsor of the United States Commodity Index Funds Trust (“USCIFT”), a Delaware statutory trust and each of its series: the United States Commodity Index Fund (“USCI”) and the United States Copper Index Fund (“CPER”).

On January 23, 2024, after the close of trading on the NYSE Arca, UNG effected a 1 - for - 4 reverse share split and post - split shares of UNG began trading on January 24, 2024. As a result of the reverse share split, every four pre - split shares of UNG were automatically exchanged for one post - split share. As of December 31, 2023, prior to the effect of the reverse split, there were 191,284,588 shares of UNG issued and outstanding, representing a per share NAV of $5.09. As of December 31, 2023, after the effect of the reverse share split, the number of issued and outstanding shares of UNG decreased to 47,821,147, not accounting for fractional shares, and the per share NAV increased to $20.36. In connection with the reverse share split, the CUSIP number for UNG’s shares changed to 912318409. UNG’s ticker symbol, “UNG,” remains the same. The financial statements have been adjusted to reflect the effect of the reverse share split on a retroactive basis.

BNO, UGA, UNL, USL, USO, USCI and CPER are referred to collectively herein as the “Related Public Funds.”

UNG issues shares to certain authorized purchasers (“Authorized Participants”) by offering baskets consisting of 100,000 shares (“Creation Baskets”) through ALPS Distributors, Inc., as the marketing agent (the “Marketing Agent”). The purchase price for a Creation Basket is based upon the NAV of a share calculated shortly after the close of the core trading session on the NYSE Arca on the day the order to create the basket is properly received.

Authorized Participants pay UNG a $1,000 transaction fee for each order they place to create one or more Creation Baskets or to redeem one or more baskets (“Redemption Baskets”), consisting of 100,000 shares. Shares may be purchased or sold on a nationally recognized securities exchange in smaller increments than a Creation Basket or Redemption Basket. Shares purchased or sold on a nationally recognized securities exchange are not purchased or sold at the per share NAV of UNG but rather at market prices quoted on such exchange.

In April 2007, UNG initially registered 30,000,000 shares on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”). On April 18, 2007, UNG listed its shares on the AMEX under the ticker symbol “UNG” and switched to trading on the NYSE Arca under the same ticker symbol on November 25, 2008. On that day, UNG established its initial per share NAV by setting the price at $50.00 and issued 200,000 shares in exchange for $10,001,000. UNG also commenced investment operations on April 18, 2007, by purchasing Natural Gas Futures Contracts traded on the NYMEX based on natural gas. UNG had an unlimited number of shares registered and available for issuance. On April 26, 2022, the SEC declared effective a registration statement filed by UNG that registered an unlimited number of shares. As a result, UNG has an unlimited number of shares that can be issued in the form of Creation Baskets.

On January 4, 2018, after the close of trading on the NYSE Arca, UNG effected a 1-for- 4 reverse share split and post-split shares of UNG began trading on January 5, 2018. As a result of the reverse share split, every four pre-split shares of UNG were automatically exchanged for one post-split share. Immediately prior to the reverse split, there were 97,466,476 shares of UNG issued and outstanding, representing a per share NAV of $5.69. Immediately after the reverse share split, the number of issued and outstanding shares of UNG decreased to 24,366,619, not accounting for fractional shares, and the per share NAV increased to $22.76. In connection with the reverse share split, the CUSIP number for UNG’s shares changed to 912318300. UNG’s ticker symbol, “UNG,” did not change.

The accompanying unaudited condensed financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the SEC and, therefore, do not include all information and footnote disclosure required under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The financial information included herein is unaudited; however, such financial information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of USCF, necessary for the fair presentation of the condensed financial statements for the interim period.

11

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The condensed financial statements have been prepared in conformity with U.S. GAAP as detailed in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification. UNG is an investment company for accounting purposes and follows the accounting and reporting guidance in FASB Topic 946.

Revenue Recognition

Commodity futures contracts, swap and forward contracts, physical commodities and related options are recorded on the trade date. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized gains or losses on open contracts are reflected in the condensed statements of financial condition and represent the difference between the original contract amount and the market value (as determined by exchange settlement prices for futures contracts and related options and cash dealer prices at a predetermined time for swap and forward contracts, physical commodities, and their related options) as of the last business day of the year or as of the last date of the condensed financial statements. Changes in the unrealized gains or losses between periods are reflected in the condensed statements of operations. UNG earns income on funds held at the custodian or FCMs at prevailing market rates earned on such investments.

Brokerage Commissions

Brokerage commissions on all open commodity futures contracts are accrued on a full-turn basis.

Income Taxes

UNG is not subject to federal income taxes; each partner reports his/her allocable share of income, gain, loss, deductions or credits on his/her own income tax return.

In accordance with U.S. GAAP, UNG is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes, based on the technical merits of the position. UNG files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states. UNG is not subject to income tax return examinations by major taxing authorities for years before 2019. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in UNG recording a tax liability that reduces net assets. However, UNG’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analysis of and changes to tax laws, regulations and interpretations thereof. UNG recognizes interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income tax fees payable, if assessed. No interest expense or penalties have been recognized as of and for the period ended June 30, 2024.

Creations and Redemptions

Authorized Participants may purchase Creation Baskets or redeem Redemption Baskets only in blocks of 100,000 shares at a price equal to the NAV of the shares calculated shortly after the close of the core trading session on the NYSE Arca on the day the order is placed.

UNG receives or pays the proceeds from shares sold or redeemed within two business days after the trade date of the purchase or redemption. The amounts due from Authorized Participants are reflected in UNG’s condensed statements of financial condition as receivable for shares sold and amounts payable to Authorized Participants upon redemption are reflected as payable for shares redeemed.

Authorized Participants pay UNG a $1,000 transaction fee for each order placed to create one or more Creation Baskets or to redeem one or more Redemption Baskets.

Partnership Capital and Allocation of Partnership Income and Losses

Profit or loss shall be allocated among the partners of UNG in proportion to the weighted-average number of shares each partner holds as of the close of each month. USCF may revise, alter or otherwise modify this method of allocation as described in the LP Agreement.

12

Calculation of Per Share NAV

UNG’s per share NAV is calculated on each NYSE Arca trading day by taking the current market value of its total assets, subtracting any liabilities and dividing that amount by the total number of shares outstanding. UNG uses the closing price for the contracts on the relevant exchange on that day to determine the value of contracts held on such exchange.

Net Income (Loss) Per Share

Net income (loss) per share is the difference between the per share NAV at the beginning of each period and at the end of each period. The weighted average number of shares outstanding was computed for purposes of disclosing net income (loss) per weighted average share. The weighted average shares are equal to the number of shares outstanding at the end of the period, adjusted proportionately for shares added and redeemed based on the amount of time the shares were outstanding during such period. There were no shares held by USCF at June 30, 2024.

Offering Costs

Offering costs incurred in connection with the registration of additional shares after the initial registration of shares are borne by UNG. These costs include registration fees paid to regulatory agencies and all legal, accounting, printing and other expenses associated with such offerings. These costs are accounted for as a deferred charge and thereafter amortized to expense over twelve months on a straight-line basis or a shorter period if warranted.

Cash Equivalents

Cash equivalents include money market funds and overnight deposits or time deposits with original maturity dates of six months or less.

Use of Estimates

The preparation of condensed financial statements in conformity with U.S. GAAP requires USCF to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of the revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions.

Other

On January 23, 2024, after the close of the NYSA Arca, UNG effected a 1-for-4 reverse share split and post-split shares of UNG began trading on January 24, 2024. The unaudited condensed financial information in this annual report on Form 10-K gives effect to the reverse share split and the post-split shares as if they had been completed on January 1, 2024.

The audited financial information and pro forma financial information, as well as the historical financial information as of and for the year ended December 31, 2024, was derived from UNG’s historical financial statements. The financial statements in this annual report on Form 10-K are presented in accordance with Accounting Standards Codification 260 for purposes of presenting the 1-for-4 reverse split on historical basis for all periods reported.

13

NOTE 3 — FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS

USCF Management Fee

Under the LP Agreement, USCF is responsible for investing the assets of UNG in accordance with the objectives and policies of UNG. In addition, USCF has arranged for one or more third parties to provide administrative, custody, accounting, transfer agency and other necessary services to UNG. For these services, UNG is contractually obligated to pay USCF a fee, which is paid monthly, equal to 0.60% per annum of average daily total net assets of $1,000,000,000 or less and 0.50% per annum of average daily total net assets that are greater than $1,000,000,000.

Ongoing Registration Fees and Other Offering Expenses

UNG pays all costs and expenses associated with the ongoing registration of its shares subsequent to the initial offering. These costs include registration or other fees paid to regulatory agencies in connection with the offer and sale of shares, and all legal, accounting, printing and other expenses associated with such offer and sale. For the six months ended June 30, 2024 and 2023, UNG did not incur registration fees and other offering expenses.

Independent Directors’ and Officers’ Expenses

UNG is responsible for paying its portion of the directors’ and officers’ liability insurance for UNG and the Related Public Funds and the fees and expenses of the independent directors who also serve as audit committee members of UNG and the Related Public Funds. UNG shares the fees and expenses on a pro rata basis with each Related Public Fund, as described above, based on the relative assets of each Related Public Fund computed on a daily basis. These fees and expenses for the year ending December 31, 2024 are estimated to be a total of $293,000 for UNG and, in the aggregate for UNG and the Related Public Funds, $945,000.

Licensing Fees

As discussed in Note 4 below, UNG entered into a licensing agreement with the NYMEX on April 10, 2006, as amended on October 20, 2011. Pursuant to the agreement, UNG and the Related Public Funds, other than BNO, USCI and CPER, pay a licensing fee that is equal to 0.015% on all net assets. During the six months ended June 30, 2024 and 2023, UNG incurred $60,617 and $75,369, respectively under this arrangement.

Investor Tax Reporting Cost

The fees and expenses associated with UNG’s audit expenses and tax accounting and reporting requirements are paid by UNG. These costs are estimated to be $2,000,000 for the year ending December 31, 2024. Tax reporting costs fluctuate between years due to the number of shareholders during any given year.

Other Expenses and Fees

In addition to the fees described above, UNG pays all brokerage fees and other expenses in connection with the operation of UNG, excluding costs and expenses paid by USCF as outlined in Note 4 – Contracts and Agreements below.

NOTE 4 — CONTRACTS AND AGREEMENTS

Marketing Agent Agreement

UNG is party to a marketing agent agreement, dated as of April 17, 2007, as amended from time to time, with the Marketing Agent and USCF, whereby the Marketing Agent provides certain marketing services for UNG as outlined in the agreement. The agreement with the Marketing Agent was amended and, commencing October 1, 2022, the fee of the Marketing Agent, which is calculated daily and payable monthly by USCF, is equal to 0.025% of UNG’s total net assets. In no event may the aggregate compensation paid to the Marketing Agent and any affiliate of USCF for distribution-related services exceed 10 percent of the gross proceeds of UNG’s offering.

The above fee does not include website construction and development, which are also borne by USCF.

14

Custody, Transfer Agency and Fund Administration and Accounting Services Agreements

USCF engaged The Bank of New York Mellon, a New York corporation authorized to conduct a banking business (“BNY Mellon”), to provide UNG and each of the Related Public Funds with certain custodial, administrative and accounting, and transfer agency services, pursuant to the following agreements with BNY Mellon dated as of March 20, 2020 (together, the “BNY Mellon Agreements”), which were effective as of April 1, 2020: (i) a Custody Agreement; (ii) a Fund Administration and Accounting Agreement; and (iii) a Transfer Agency and Service Agreement. USCF pays the fees of BNY Mellon for its services under the BNY Mellon Agreements and such fees are determined by the parties from time to time.

Brokerage and Futures Commission Merchant Agreements

UNG entered into a brokerage agreement with RBC Capital Markets LLC (“RBC”) to serve as UNG’s FCM effective October 10, 2013. UNG has engaged each of Marex North America, LLC, formerly RCG Division of Marex Spectron (“MNA”), Marex Capital Markets Inc., formerly E D & F Man Capital Markets Inc. (“MCM”), Macquarie Futures USA LLC (“MFUSA”), and ADM Investor Services Inc. (“ADMIS”) to serve as additional FCMs to UNG effective on May 28, 2020, June 5, 2020, December 3, 2020 and August 8, 2023, respectively. The agreements with UNG’s FCMs require the FCMs to provide services to UNG in connection with the purchase and sale of Futures Contracts and Other Natural Gas-Related Investments that may be purchased and sold by or through the applicable FCM for UNG’s account. In accordance with the FCM agreements, UNG pays each FCM commissions of approximately $7 to $8 per round-turn trade, including applicable exchange, clearing and NFA fees for Futures Contracts and options on Futures Contracts. Such fees include those incurred when purchasing Futures Contracts and options on Futures Contracts when UNG issues shares as a result of a Creation Basket, as well as fees incurred when selling Futures Contracts and options on Futures Contracts when UNG redeems shares as a result of a Redemption Basket. Such fees are also incurred when Futures Contracts and options on Futures Contracts are purchased or redeemed for the purpose of rebalancing the portfolio. UNG also incurs commissions to brokers for the purchase and sale of Futures Contracts, Other Natural Gas-Related Investments or short-term obligations of the United States of two years or less (“Treasuries”).

Six months ended

Six months ended

    

June 30, 2024

    

June 30, 2023

Total commissions accrued to brokers

$

1,420,343

$

1,592,417

Total commissions as annualized percentage of average total net assets

 

0.35

%

0.32

%

The decrease in total commissions accrued to brokers for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, was due primarily to a lower number of natural gas futures contracts being held and traded.

For the six months ended June 30, 2024 and 2023, the monthly average volume of open futures contract notional value was $709,420,171 and $814,526,805, respectively.

Swap Dealer Agreements

UNG entered into ISDA 2002 Master Agreements with each of Macquarie Bank Limited the (“Macquarie ISDA”) and Société Générale (“Société Générale ISDA”) on November 30, 2021 and June 13, 2022, respectively, pursuant to which each of Macquarie Bank Limited and Société Générale has agreed to serve as an over-the-counter (“OTC”) swap counterparty for UNG. The Macquarie ISDA and Societe Generale ISDA each provide UNG with the ability to invest in OTC swaps in furtherance of UNG’s investment objective by providing it with investment flexibility in light of market conditions, liquidity, regulatory requirements, and risk diversification. UNG may enter into OTC swap transactions under each of the Macquarie ISDA and Société Générale ISDA in light of the foregoing. Any OTC swap transactions of UNG that are outstanding under the Macquarie ISDA and the Société Générale ISDA, along with UNG’s other holdings, are posted on UNG’s webpage, www.uscfinvestments.com. In accordance with each of the swap agreements described above, UNG pays each swap dealer a flat fee in a range between 0.20% and 0.30% on the daily notional value of each OTC swap transaction.

NYMEX Licensing Agreement

UNG and the NYMEX entered into a licensing agreement on April 10, 2006, as amended on October 20, 2011, whereby UNG was granted a non-exclusive license to use certain of the NYMEX’s settlement prices and service marks. Under the licensing agreement, UNG and the Related Public Funds, other than BNO, USCI, and CPER, pay the NYMEX an asset-based fee for the license, the terms of which are described in Note 3. UNG expressly disclaims any association with the NYMEX or endorsement of UNG by the NYMEX and acknowledges that “NYMEX” and “New York Mercantile Exchange” are registered trademarks of the NYMEX.

15

NOTE 5 — FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES

UNG may engage in the trading of futures contracts, options on futures contracts, cleared swaps and OTC swaps (collectively, “derivatives”). UNG is exposed to both market risk, which is the risk arising from changes in the market value of the contracts, and credit risk, which is the risk of failure by another party to perform according to the terms of a contract.

UNG may enter into futures contracts, options on futures contracts, cleared swaps, and OTC swaps to gain exposure to changes in the value of an underlying commodity. A futures contract obligates the seller to deliver (and the purchaser to accept) the future delivery of a specified quantity and type of a commodity at a specified time and place. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The contractual obligations of a buyer or seller may generally be satisfied by taking or making physical delivery of the underlying commodity or by making an offsetting sale or purchase of an identical futures contract on the same or linked exchange before the designated date of delivery. Cleared swaps are agreements that are eligible to be cleared by a clearinghouse, e.g., ICE Clear Europe, and provide the efficiencies and benefits that centralized clearing on an exchange offers to traders of futures contracts, including credit risk intermediation and the ability to offset positions initiated with different counterparties. OTC swaps are entered into between two parties in private contracts. In an OTC swap, each party bears credit risk to the other party, i.e., the risk that the other party may not be able to perform its obligations under the OTC swap.

The purchase and sale of futures contracts, options on futures contracts and cleared swaps require margin deposits with an FCM. Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires FCMs to segregate all customer transactions and assets from the FCM’s proprietary transactions and assets. To reduce the credit risk that arises in connection with OTC swaps, UNG will generally enter into an agreement with each counterparty based on the Master Agreement published by the International Swaps and Derivatives Association, Inc., which provides for the netting of its overall exposure to its counterparty. The Master Agreement is negotiated as between the parties and would address, among other things, the exchange of margin between the parties.

Futures contracts, options on futures contracts and cleared swaps involve, to varying degrees, elements of market risk (specifically commodity price risk) and exposure to loss in excess of the amount of variation margin. The face or contract amounts reflect the extent of the total exposure UNG has in the particular classes of instruments. Additional risks associated with the use of futures contracts are an imperfect correlation between movements in the price of the futures contracts and the market value of the underlying securities and the possibility of an illiquid market for a futures contract. Buying and selling options on futures contracts exposes investors to the risks of purchasing or selling futures contracts.

As to OTC swaps, valuing OTC derivatives is less certain than valuing actively traded financial instruments such as exchange-traded futures contracts and securities or cleared swaps, because the price and terms on which such OTC derivatives are entered into or can be terminated are individually negotiated, and those prices and terms may not reflect the best price or terms available from other sources. In addition, while market makers and dealers generally quote indicative prices or terms for entering into or terminating OTC contracts, they typically are not contractually obligated to do so, particularly if they are not a party to the transaction. As a result, it may be difficult to obtain an independent value for an outstanding OTC derivatives transaction.

Significant market volatility has recently occurred in the natural gas markets and the natural gas futures markets. Such volatility is attributable in part to the COVID-19 pandemic, related supply chain disruptions, war, including the Russia-Ukraine war, attacks or threats of attack by terrorists, conflicts in the Middle East, and continuing disputes among natural gas-producing countries. These and other factors could cause continuing or increased volatility in the future, which may affect the value, pricing and liquidity of some investments or other assets, including those held by or invested in by UNG and the impact of which could limit UNG’s ability to have a substantial portion of its assets invested in the Benchmark Futures Contract. In such a circumstance, UNG could, if it determined it appropriate to do so in light of market conditions and regulatory requirements, invest in other Futures Contracts and/or Other Natural-Gas Related Investments, such as OTC swaps.

All of the futures contracts held by UNG through June 30, 2024 were exchange-traded. The risks associated with exchange-traded contracts are generally perceived to be less than those associated with OTC swaps since, in OTC swaps, a party must rely solely on the credit of its respective individual counterparties. However, in the future, if UNG were to enter into non-exchange traded contracts, it would be subject to the credit risk associated with counterparty non-performance. The credit risk from counterparty non-performance associated with such instruments is the net unrealized gain, if any, on the transaction. UNG has credit risk under its futures contracts since the sole counterparty to all domestic and foreign futures contracts is the clearinghouse for the exchange on which the relevant contracts are traded. In addition, UNG bears the risk of financial failure by the clearing broker.

16

UNG’s cash and other property, such as Treasuries, deposited with its FCMs are considered commingled with all other customer funds, subject to such FCM’s segregation requirements. In the event of an FCM’s insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than the total of cash and other property deposited. The insolvency of an FCM could result in the complete loss of UNG’s assets posted with that FCM; however, the majority of UNG’s assets are held in investments in Treasuries, cash and/or cash equivalents with UNG’s custodian and would not be impacted by the insolvency of an FCM. The failure or insolvency of UNG’s custodian, however, could result in a substantial loss of UNG’s assets.

USCF invests a portion of UNG’s cash in money market funds that seek to maintain a stable per share NAV. UNG is exposed to any risk of loss associated with an investment in such money market funds. As of June 30, 2024 and December 31, 2023, UNG held investments in money market funds in the amounts of $70,950,000 and $70,950,000, respectively. UNG also holds cash deposits with its custodian. As of June 30, 2024 and December 31, 2023, UNG held cash deposits and investments in Treasuries in the amounts of $685,378,787 and $857,874,769 respectively, with the custodian and FCMs. Some or all of these amounts may be subject to loss should UNG’s custodian and/or FCMs cease operations.

For derivatives, risks arise from changes in the market value of the contracts. Theoretically, UNG is exposed to market risk equal to the value of futures contracts purchased and unlimited liability on such contracts sold short or that the value of the futures contract could fall below zero. As both a buyer and a seller of options, UNG pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option.

UNG’s policy is to continuously monitor its exposure to market and counterparty risk through the use of a variety of financial, position and credit exposure reporting controls and procedures. In addition, UNG has a policy of requiring review of the credit standing of each broker or counterparty with which it conducts business.

The financial instruments held by UNG are reported in its condensed statements of financial condition at market or fair value, or at carrying amounts that approximate fair value, because of their highly liquid nature and short-term maturity.

For the six months ended June 30, 2024 the monthly average volume of open future and swap contract notional values was $709,420,171 and $117,908,227, respectively. For the six months ended June 30, 2023 the monthly average volume of open future and swap contract notional values was $814,526,805 and $197,203,087, respectively.

NOTE 6 — FINANCIAL HIGHLIGHTS

The following table presents per share performance data and other supplemental financial data for the three and six months ended June 30, 2024 and 2023 for the shareholders. This information has been derived from information presented in the condensed financial statements.

    

Three months ended

    

Three months ended

    

Six months ended

    

Six months ended

    

June 30, 2024

 

June 30, 2023#

June 30, 2024

June 30, 2023#

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Per Share Operating Performance:

 

  

  

 

  

 

  

 

Net asset value, beginning of period

$

14.74

$

28.05

$

20.36

$

56.90

Total income (loss)

 

2.70

 

1.88

 

(2.86)

 

(26.88)

Total expenses

 

(0.05)

 

(0.07)

 

(0.11)

 

(0.16)

Net increase (decrease) in net asset value

 

2.65

 

1.81

 

(2.97)

 

(27.04)

Net asset value, end of period

$

17.39

$

29.86

$

17.39

$

29.86

Total Return

 

17.98

%  

 

6.42

%

 

(14.59)

%  

 

(47.52)

%  

Ratios to Average Net Assets

 

  

 

  

 

  

 

  

Total income (loss)

 

21.95

%  

 

9.90

%

 

1.79

%  

 

(32.62)

%  

Management fees*

 

0.60

%  

 

0.60

%

 

0.60

%  

 

0.60

%  

Total expenses excluding management fees*

 

0.65

%  

 

0.41

%

 

0.65

%  

 

0.47

%  

Net income (loss)

 

21.64

%  

 

9.65

%

 

1.17

%  

 

(33.15)

%  

*

Annualized.

17

#

On January 23, 2024 there was a 1 - for - 4 reverse share split. The Financial Highlights have been adjusted for the periods shown to reflect the 1 – for – 4 reverse share split on a retroactive basis.

Total returns are calculated based on the change in value during the period. An individual shareholder’s total return and ratio may vary from the above total returns and ratios based on the timing of contributions to and withdrawals from UNG. Additionally, only Authorized Participants purchase and redeem shares from the Fund at the NAV per share. Most shareholders will purchase and sell shares in the secondary market at market prices, which may differ from the NAV per share and result in a higher or lower total return.

NOTE 7 — FAIR VALUE OF FINANCIAL INSTRUMENTS

UNG values its investments in accordance with Accounting Standards Codification 820 – Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurement. The changes to past practice resulting from the application of ASC 820 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurement. ASC 820 establishes a fair value hierarchy that distinguishes between: (1) market participant assumptions developed based on market data obtained from sources independent of UNG (observable inputs) and (2) UNG’s own assumptions about market participant assumptions developed based on the best information available under the circumstances (unobservable inputs). The three levels defined by the ASC 820 hierarchy are as follows:

Level I – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level II – Inputs other than quoted prices included within Level I include the following: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

Level III – Unobservable pricing input at the measurement date for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.

In some instances, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest input level that is significant to the fair value measurement in its entirety.

The following table summarizes the valuation of UNG’s securities at June 30, 2024 using the fair value hierarchy:

At June 30, 2024

    

Total

    

Level I

    

Level II

    

Level III

Short-Term Investments

$

70,950,000

$

70,950,000

$

$

Exchange-Traded Futures Contracts

 

  

 

  

 

  

 

  

United States Contracts

 

(82,464,760)

 

(82,464,760)

 

OTC Commodity Swap Contracts

 

(1,265)

 

 

(1,265)

The following table summarizes the valuation of UNG’s securities at December 31, 2023 using the fair value hierarchy:

At December 31, 2023

    

Total

    

Level I

    

Level II

    

Level III

Short-Term Investments

$

70,950,000

$

70,950,000

$

$

Exchange-Traded Futures Contracts

 

 

 

  

 

  

United States Contracts

 

40,072,461

 

40,072,461

 

 

OTC Commodity Swap Contracts

14,903,211

14,903,211

Effective January 1, 2009, UNG adopted the provisions of Accounting Standards Codification 815 — Derivatives and Hedging, which require presentation of qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts and gains and losses on derivatives.

18

Fair Value of Derivative Instruments

    

Condensed

    

    

Statements of

Financial

Fair Value at

Condition

Fair Value at

December 31, 

Derivatives not Accounted for as Hedging Instruments

Location

June 30, 2024

2023

Futures – Commodity Contracts

 

Unrealized gain (loss)on open commodity futures contracts

$

(82,464,760)

$

40,072,461

Swap – Commodity Contracts

Unrealized gain (loss)on open commodity swap contracts

$

(1,265)

$

14,903,211

The Effect of Derivative Instruments on the Condensed Statements of Operations

For the six months ended

For the six months ended

June 30, 2024

June 30, 2023

Realized Gain

Change in

Change in

(Loss) on

Unrealized

Realized Gain

Unrealized

Derivatives not

Derivatives

Gain (Loss) on

(Loss) in

Gain (Loss) on

Accounted for as

Location of Gain (Loss)

Recognized

Derivatives

Derivatives

Derivatives

Hedging

on Derivatives

in

Recognized

Recognized

Recognized

Instruments

    

Recognized in Income

    

Income

    

in Income

    

in Income

    

in Income

Futures - Commodity Contracts

Realized gain (loss) on closed commodity futures contracts

$

81,395,100

$

(538,592,729)

 

Change in unrealized gain (loss) on open commodity futures contracts

$

(122,537,221)

$

197,931,782

OTC Swap - Commodity Contracts

Realized gain (loss) on closed commodity swap contracts

$

50,769,009