UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q




x
            Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act
      of 1934 for the quarterly period ended September 30,
  2009.


OR


o
              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: 001-34535




United
States 12 Month Natural Gas Fund, LP


(Exact
name of registrant as specified in its charter)




Delaware
              
              26-0431733(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)




1320
Harbor Bay Parkway, Suite 145


Alameda,
California 94502


(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)




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.




o
Yes    x No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted 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 and post such files).


o
Yes    o No





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




Large
      accelerated filer   o
                Accelerated
      filer   oNon-accelerated
      filer   x
                Smaller
      reporting company   o(Do
      not check if a smaller reporting
company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


o
Yes    x No









UNITED
STATES 12 MONTH NATURAL GAS FUND, LP


Table
of Contents





PagePart
      I. FINANCIAL INFORMATIONItem
      1.  Condensed Financial Statements.
                  
                  1Item
      2. Management’s Discussion and Analysis of Financial Condition and
      Results of Operations.
                  
                  9Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk.
                  
                  21Item
      4. Controls and Procedures.
                  
                  22Part
      II. OTHER INFORMATIONItem
      1. Legal Proceedings.
                  
                  23Item
      1A. Risk Factors.
                  
                  23Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.
                  
                  23Item
      3. Defaults Upon Senior Securities.
                  
                  23Item
      4. Submission of Matters to a Vote of Security Holders.
                  
                  23Item
      5. Other Information.
                  
                  23Item
      6. Exhibits.
                  
                  23









Part I.FINANCIAL
INFORMATION





Item
1. Condensed Financial Statements.





United
States 12 Month Natural Gas Fund, LP


Condensed
Statements of Financial Condition


At
September 30, 2009 (Unaudited) and December 31, 2008





September 30, 2009
                  
                  
                  December 31, 2008AssetsCash
                  
                  $
                  1,000
                  
                  
                  $
                  1,000Partners’
      CapitalGeneral
      Partner
                  
                  $
                  20
                  
                  
                  $
                  20Limited
      Partner
                  
                  
                  980
                  
                  
                  
                  980Total
      Partners' Capital
                  
                  $
                  1,000
                  
                  
                  $
                  1,000





See
accompanying notes to condensed financial statements.




1




United
States 12 Month Natural Gas Fund, LP


Notes
to Condensed Financial Statements


For
the period ended September 30, 2009 (Unaudited)




NOTE 1 - ORGANIZATION AND
BUSINESS





The
United States 12 Month Natural Gas Fund, LP (“US12NG”) was organized as a
limited partnership under the laws of the state of Delaware on June 27,
2007.  US12NG is a commodity pool that issues limited partnership
units (“units”) that may be purchased and sold on the NYSE Arca, Inc. (the “NYSE
Arca”). US12NG will continue in perpetuity, unless terminated sooner upon the
occurrence of one or more events as described in its Amended and Restated
Agreement of Limited Partnership dated as of October 30, 2009 (the “LP
Agreement”). The investment objective of US12NG is to have the changes in
percentage terms of its units’ net asset value to reflect the changes in
percentage terms of the spot price of natural gas delivered at the Henry
Hub, Louisiana, as measured by the changes in the average of the prices of 12
futures contracts on natural gas traded on the New York Mercantile Exchange
(the “NYMEX”), consisting of the near month contract to expire and the
contracts for the following 11 months for a total of 12 consecutive months’
contracts, except when the near month contract is within two weeks of
expiration, in which case it will be measured by the futures contracts that are
the next month contract to expire and the contracts for the following 11
consecutive months, less US12NG’s expenses. US12NG will accomplish its
objective through investments in futures contracts for natural gas, crude oil,
heating oil, gasoline and other petroleum-based fuels that are traded on the
NYMEX, ICE Futures or other U.S. and foreign exchanges (collectively, “Futures
Contracts”) and other natural gas-related investments such as cash-settled
options on Futures Contracts, forward contracts for natural gas, cleared swap
contracts and over-the-counter transactions that are based on the price of
natural gas, crude oil and other petroleum-based fuels, Futures Contracts and
indices based on the foregoing  (collectively, “Other Natural
Gas-Related Investments”). As of September 30, 2009, US12NG did not hold
any Futures Contracts since it had not yet commenced operations.





US12NG
commenced investment operations on November 18, 2009 and has a fiscal year
ending on December 31. United States Commodity Funds LLC (formerly known as
Victoria Bay Asset Management, LLC) (the “General Partner”) is responsible
for the management of US12NG. The General Partner is a member of the National
Futures Association (the “NFA”) and became a commodity pool operator
registered with the Commodity Futures Trading Commission effective December 1,
2005. The General Partner is also the general partner of the United States
Oil Fund, LP (“USOF”), the United States Natural Gas Fund, LP (“USNG”), the
United States 12 Month Oil Fund, LP (“US12OF”), the United States Gasoline Fund,
LP (“UGA”) and the United States Heating Oil Fund, LP (“USHO”), which listed
their limited partnership units on the American Stock Exchange (the “AMEX”)
under the ticker symbols “USO” on April 10, 2006, “UNG” on April 18, 2007,
“USL” on December 6, 2007, “UGA” on February 26, 2008 and “UHN” on April 9,
2008, respectively. As a result of the acquisition of the AMEX by NYSE Euronext,
each of USOF’s, USNG’s, US12OF’s, UGA’s and USHO’s units commenced trading on
the NYSE Arca on November 25, 2008. The General Partner is also the general
partner of the United States Short Oil Fund, LP (“USSO”), which listed its
limited partnership units on the NYSE Arca on September 24, 2009 under the
ticker symbol “DNO”. The General Partner has also filed a registration statement
to register units of the United States Brent Oil Fund, LP.





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




US12NG issues
units to certain authorized purchasers (“Authorized Purchasers”) by offering
baskets consisting of 100,000 units (“Creation Baskets”) through ALPS
Distributors, Inc. (the “Marketing Agent”). The purchase price for a Creation
Basket is based upon the net asset value of a unit 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. In addition, Authorized
Purchasers pay US12NG a $1,000 fee for each order to create one
or more Creation Baskets or redeem one or more baskets consisting of 100,000
units (“Redemption Baskets”). Units may be purchased or sold on a
nationally recognized securities exchange in smaller increments than a Creation
Basket or Redemption Basket. Units purchased or sold on a nationally recognized
securities exchange are not purchased or sold at the net asset value of US12NG
but rather at market prices quoted on such exchange.




2




In
November 2009, US12NG initially registered 30,000,000 units on Form S-1 with the
SEC. On November 18, 2009, US12NG listed its units on the NYSE Arca under the
ticker symbol “UNL”. On that day, US12NG established its initial net asset value
by setting the price at $50.00 per unit and issued 100,000 units in
exchange for $5,000,000.  US12NG also commenced investment operations
on November 18, 2009 by purchasing Futures Contracts traded on the NYMEX based
on natural gas.




At
September 30, 2009, US12NG had not generated any revenues since it had not yet
commenced operations.





NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Revenue
Recognition





Commodity
futures contracts, forward contracts, physical commodities, and related options
will be recorded on the trade date. All such transactions will be recorded on
the identified cost basis and marked to market daily. Unrealized gains or losses
on open contracts will be reflected in the condensed statement of financial
condition and in 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 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 will be
reflected in the condensed statement of operations. US12NG will earn
interest on its assets denominated in U.S. dollars on deposit with the futures
commission merchant at the 90-day Treasury bill rate. In addition, US12NG
will earn interest on funds held at the custodian at prevailing market
rates earned on such investments.





Brokerage
Commissions





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




Income
Taxes





US12NG 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.




Additions
and Redemptions





Authorized
Purchasers may purchase Creation Baskets or redeem Redemption Baskets only in
blocks of 100,000 units equal to the net asset value of the units calculated
shortly after the close of the core trading session on the NYSE Arca on the day
the order is placed.





US12NG
receives or pays the proceeds from units sold or redeemed within three business
days after the trade date of the purchase or redemption. The amounts due from
Authorized Purchasers will be reflected in US12NG’s condensed
statement of financial condition as receivable for units sold, and amounts
payable to Authorized Purchasers upon redemption will be reflected as payable
for units redeemed.





Partnership
Capital and Allocation of Partnership Income and Losses





Profit or
loss shall be allocated among the partners of US12NG in proportion to the number
of units each partner holds as of the close of each month. The General Partner
may revise, alter or otherwise modify this method of allocation as described in
the LP Agreement.





Calculation
of Net Asset Value





US12NG’s
net asset value will be calculated on each NYSE Arca trading day by taking the
current market value of its total assets, subtracting any liabilities and
dividing the amount by the total number of units issued and outstanding. US12NG
will use the closing price for the contracts on the relevant exchange on that
day to determine the value of contracts held on such exchange.




3




Net
Income (Loss) per Unit





Net
income (loss) per unit is the difference between the net asset value per
unit at the beginning of each period and at the end of each period. The
weighted average number of units outstanding was computed for purposes of
disclosing net income (loss) per weighted average unit. The weighted average
units are equal to the number of units outstanding at the end of the period,
adjusted proportionately for units redeemed based on the amount of time the
units were outstanding during such period. There were no units held by the
General Partner at September 30, 2009.





Offering
Costs





Offering
costs incurred in connection with the registration of additional units after the
initial registration of units will be borne by US12NG. These costs include
registration fees paid to regulatory agencies and all legal, accounting,
printing and other expenses associated with such offerings. These costs will be
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 three months or less.





Use
of Estimates





The
preparation of condensed financial statements in conformity with accounting
principles generally accepted in the United States of America requires US12NG’s
management 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 could
differ from those estimates and assumptions.




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





General
Partner Management Fee





Under
the LP Agreement, the General Partner is responsible for investing the
assets of US12NG in accordance with the objectives and policies of US12NG. In
addition, the General Partner has arranged for one or more third parties to
provide administrative, custody, accounting, transfer agency and other necessary
services to US12NG. For these services, US12NG is contractually obligated to pay
the General Partner a fee, which is paid monthly, equal to 0.75% per annum on
average daily net assets.




Ongoing
Registration Fees and Other Offering Expenses





US12NG
pays all costs and expenses associated with the
ongoing registration of its units subsequent to the initial offering.
These costs include registration or other fees paid to regulatory agencies in
connection with the offer and sale of units, and all legal, accounting, printing
and other expenses associated with such offer and sale. For the nine
months ended September 30, 2009, US12NG incurred no registration fees or
other offering expenses.




Directors’
Fees




US12NG is
responsible for paying its portion of the directors’ and officers’ liability
insurance of the General Partner and the fees and expenses of the independent
directors of the General Partner who are also the General Partner’s audit
committee members. US12NG shares these fees with USOF, USNG, US12OF, UGA,
USHO and USSO based on the relative assets of each fund, computed on a daily
basis. These fees for the calendar year 2009 are estimated to be a total of
$477,000 for all funds.




4




Licensing
Fees





As
discussed in Note 4, US12NG entered into a licensing agreement with the
NYMEX on December 4, 2007. Pursuant to the agreement, US12NG and the affiliated
funds managed by the General Partner pay a licensing fee that is equal to 0.04%
for the first $1,000,000,000 of combined assets of the funds and 0.02% for
combined assets above $1,000,000,000.  During the nine months ended
September 30, 2009, US12NG did not incur any fees under this
arrangement.





Investor
Tax Reporting Cost





The fees
and expenses associated with US12NG’s audit expenses and tax accounting and
reporting requirements, with the exception of certain initial implementation
service fees and base service fees which are borne by the General Partner, are
paid by US12NG.





Other
Expenses and Fees and Expense Waivers




In
addition to the fees described above, US12NG pays all brokerage fees, taxes
and other expenses in connection with the operation of US12NG, excluding costs
and expenses paid by the General Partner as outlined in Note 4. The General
Partner, though under no obligation to do so, agreed to pay certain expenses, to
the extent that such expenses exceed 0.15% (15 basis points) of US12NG’s NAV, on
an annualized basis, through at least December 31, 2009. The General Partner has
no obligation to continue such payment into subsequent periods.





NOTE
4 - CONTRACTS AND AGREEMENTS





US12NG is
party to a marketing agent agreement, dated as of October 30, 2009,
with the Marketing Agent and the General Partner, whereby the Marketing
Agent provides certain marketing services for US12NG as outlined in the
agreement. The fee of the Marketing Agent, which is borne by the General
Partner, is equal to 0.06% on US12NG’s assets up to $3 billion; and 0.04% on
US12NG’s assets in excess of $3 billion.





The above
fee does not include the following expenses, which are also borne by the General
Partner: the cost of placing advertisements in various periodicals; web
construction and development; or the printing and production of various
marketing materials.





US12NG is
also party to a custodian agreement, dated as of November 3, 2009, with Brown
Brothers Harriman & Co. (“BBH&Co.”) and the General Partner, whereby
BBH&Co. holds investments on behalf of US12NG. The General Partner pays
the fees of the custodian, which are determined by the parties from time to
time. In addition, US12NG is party to an administrative agency agreement, dated
as of November 3, 2009, with the General Partner and BBH&Co., whereby
BBH&Co. acts as the administrative agent, transfer agent and registrar for
US12NG. The General Partner also pays the fees of BBH&Co. for its
services under this agreement and such fees are determined by the parties from
time to time.





Currently,
the General Partner pays BBH&Co. for its services, in the foregoing
capacities, a minimum amount of $75,000 annually for its custody, fund
accounting and fund administration services rendered to US12NG and each of the
affiliated funds managed by the General Partner, as well as a $20,000 annual fee
for its transfer agency services. In addition, the General Partner pays
BBH&Co. an asset-based charge of (a) 0.06% for the first $500 million of
US12NG’s, USOF’s, USNG’s, US12OF’s, UGA’s, USHO’s and USSO’s combined net
assets, (b) 0.0465% for US12NG’s, USOF’s, USNG’s, US12OF’s, UGA’s, USHO’s and
USSO’s combined net assets greater than $500 million but less than $1 billion,
and (c) 0.035% once US12NG’s, USOF’s, USNG’s, US12OF’s, UGA’s, USHO’s and USSO’s
combined net assets exceed $1 billion. The annual minimum amount will not apply
if the asset-based charge for all accounts in the aggregate exceeds $75,000. The
General Partner also pays transaction fees ranging from $7.00 to $15.00 per
transaction.





US12NG
has entered into a brokerage agreement with UBS Securities LLC (“UBS
Securities”). The agreement requires UBS Securities to provide services to
US12NG 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 UBS Securities for US12NG’s account. The agreement provides that UBS
Securities charge US12NG commissions of approximately $7 to $8 per round-turn
trade, plus applicable exchange and NFA fees for Futures Contracts and
options on Futures Contracts.




5




US12NG
expects to invest primarily in Futures Contracts, a significant portion of which
will be on United States exchanges including the NYMEX. On December 4, 2007,
US12NG and the NYMEX entered into a licensing agreement whereby US12NG was
granted a non-exclusive license to use certain of the NYMEX’s settlement prices
and service marks. The agreement has an effective date of December 4, 2007.
Under the licensing agreement, US12NG and the affiliated funds managed by
the General Partner pay the NYMEX an asset-based fee for the license, the terms
of which are described in Note 3.





US12NG
expressly disclaims any association with the NYMEX or endorsement of US12NG by
the NYMEX and acknowledges that “NYMEX” and “New York Mercantile Exchange” are
registered trademarks of the NYMEX.





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





US12NG intends
to engage in the trading of futures contracts, options on futures contracts
and cleared swap contracts (collectively, “derivatives”). US12NG will be 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.





US12NG
may enter into futures contracts, options on futures contracts and cleared swap
contracts to gain exposure to changes in the value of an underlying commodity.
Some futures contracts may call for physical delivery of the asset, while others
are settled in cash. 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. 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.





The
purchase and sale of futures contracts, options on futures contracts and cleared
swap contracts require margin deposits with a futures commission merchant.
Additional deposits may be necessary for any loss on contract value. The
Commodity Exchange Act requires a futures commission merchant to segregate all
customer transactions and assets from the futures commission merchant’s
proprietary activities.





Futures
contracts and cleared swap contracts 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 US12NG 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.





Initially,
all of the futures contracts traded by US12NG are expected to be
exchange-traded. The risks associated with exchange-traded contracts are
generally perceived to be less than those associated with over-the-counter
transactions since, in over-the-counter transactions, US12NG must rely solely on
the credit of its respective individual counterparties. However, in the future,
if US12NG 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. US12NG will also incur credit risk since the
sole counterparty to all domestic and foreign futures contracts is the
exchange on which the relevant contracts are traded. In addition, US12NG bears
the risk of financial failure by the clearing broker.





US12NG’s
cash and other property, such as U.S. Treasuries, deposited with a futures
commission merchant are considered commingled with all other customer funds
subject to the futures commission merchant’s segregation requirements. In the
event of a futures commission merchant’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 a futures commission merchant could result in the
complete loss of US12NG’s assets posted with that futures commission merchant;
however, the vast majority of US12NG’s assets are expected to be held in
Treasuries, cash and/or cash equivalents with US12NG’s custodian and would not
be impacted by the insolvency of a futures commission merchant. Also, the
failure or insolvency of US12NG’s custodian could result in a substantial loss
of US12NG’s assets.




6




US12NG
intends to invest a portion of its cash in money market funds that seek to
maintain a stable net asset value. US12NG will be exposed to any risk of loss
associated with an investment in these money market funds.





For
derivatives, risks arise from changes in the market value of the contracts.
Theoretically, US12NG will be exposed to a market risk equal to the value
of futures contracts purchased and unlimited liability on such contracts sold
short. As both a buyer and a seller of options, US12NG 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.





US12NG’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, US12NG has a policy of
requiring review of the credit standing of each broker or counterparty with
which it conducts business.





The
financial instruments that will be held by US12NG are reported
in its condensed statement 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.





NOTE 6
– FAIR VALUE OF FINANCIAL INSTRUMENTS




Effective
January 1, 2008, US12NG adopted 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 US12NG
(observable inputs) and (2) US12NG’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 that are observable
for the asset or liability, either directly or indirectly. Level II assets
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 in 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.




NOTE
7 – RECENTLY ADOPTED ACCOUNTING STANDARDS




In March
2008, the Financial Accounting Standards Board released Accounting Standards
Codification 815 – Derivatives and Hedging, (“ASC 815”).  ASC 815
requires qualitative disclosures about objectives and strategies for using
derivatives, quantitative disclosures about fair value amounts of, and gains and
losses on, derivative instruments, and disclosures about credit-risk-related
contingent features in derivative agreements. US12NG adopted ASC 815 on
January 1, 2009.




7




NOTE 8 – SUBSEQUENT
EVENTS





US12NG
has performed an evaluation of subsequent events through December 23, 2009,
which is the date the financial statements were issued. This evaluation did not
result in any subsequent events that necessitated disclosures and/or
adjustments.




8




Item 2.  Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.




The
following discussion should be read in conjunction with the condensed financial
statements and the notes thereto of the United States 12 Month Natural Gas Fund,
LP (“US12NG”) included elsewhere in this quarterly report on Form
10-Q.




Forward-Looking
Information





This
quarterly report on Form 10-Q, including this “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” contains
forward-looking statements regarding the plans and objectives of management for
future operations. This information may involve known and unknown risks,
uncertainties and other factors that may cause US12NG’s actual results,
performance or achievements to be materially different from future results,
performance or achievements expressed or implied by any forward-looking
statements. Forward-looking statements, which involve assumptions and
describe US12NG’s future plans, strategies and expectations, are generally
identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend” or “project,” the negative of
these words, other variations on these words or comparable terminology. These
forward-looking statements are based on assumptions that may be incorrect, and
US12NG cannot assure investors that the projections included in these
forward-looking statements will come to pass. US12NG’s actual results could
differ materially from those expressed or implied by the forward-looking
statements as a result of various factors.




US12NG
has based the forward-looking statements included in this quarterly report on
Form 10-Q on information available to it on the date of this quarterly
report on Form 10-Q, and US12NG assumes no obligation to update any such
forward-looking statements. Although US12NG undertakes no obligation to revise
or update any forward-looking statements, whether as a result of new
information, future events or otherwise, investors are advised to consult any
additional disclosures that US12NG may make directly to them or through
reports that US12NG in the future files with the U.S. Securities and
Exchange Commission (the “SEC”), including annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K.





Introduction





US12NG, a
Delaware limited partnership, is a commodity pool that issues units that may be
purchased and sold on the NYSE Arca, Inc. (the “NYSE Arca”). The investment
objective of US12NG is to have the changes in percentage terms of its units’ net
asset value (“NAV”) reflect the changes in percentage terms of the spot price of
natural gasdelivered at the
Henry Hub, Louisiana, as measured by the changes in the average of the
prices of 12 futures contracts on natural gastraded on the New
York Mercantile Exchange (the “NYMEX”), consisting of the near month contract to
expire and the contracts for the following 11 months for a total of 12
consecutive months’ contracts, 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 and the contracts for the following 11
consecutive months (the “Benchmark Futures Contract”), less US12NG’s
expenses.





US12NG
will seek to achieve its investment objective by investing in a combination of
natural gas futures contracts and other natural gas-related investments such
that changes in its NAV, measured in percentage terms, will closely track the
changes in the Benchmark Futures Contracts, also measured in percentage
terms. US12NG’s general partner believes the Benchmark Futures Contracts
historically have exhibited a close correlation with the spot price of
natural gas. It is not the intent of US12NG to be operated in a fashion such
that its NAV will equal, in dollar terms, the spot price of natural gas or any
particular futures contract based on natural gas. Management believes that it is
not practical to manage the portfolio to achieve such an investment goal when
investing in listed natural gas futures contracts.  US12NG may invest
in interests other than the Benchmark Futures Contracts to comply with
accountability levels and position limits.





On any
valuation day, the Benchmark Futures Contracts are the near month futures
contract for natural gas traded on the NYMEX and the contracts for the
following 11 months for a total of 12 consecutive months’ contracts unless the
near month contract will expire within two weeks of the valuation day, in which
case the Benchmark Futures Contracts are the next month contract for natural gas
traded on the NYMEX and the contracts for the following 11 consecutive months.
“Near month contract” means the next contract traded on the NYMEX due to expire.
“Next month contract” means the first contract traded on the NYMEX due to expire
after the near month contract.




9




US12NG
may also invest in futures contracts for natural gas, crude oil, heating
oil, gasoline and other petroleum-based fuels that are traded on the NYMEX, ICE
Futures or other U.S. and foreign exchanges (collectively, “Futures Contracts”)
and other natural gas-related investments such as cash-settled options on
Futures Contracts, forward contracts for natural gas, cleared swap contracts,
and over-the-counter transactions that are based on the price of natural gas,
crude oil and other petroleum-based fuels, Futures Contracts and indices based
on the foregoing (collectively, “Other Natural Gas-Related Investments”). For
convenience and unless otherwise specified, Futures Contracts and Other Natural
Gas-Related Investments collectively are referred to as “Natural Gas Interests”
in this quarterly report on Form 10-Q.





The
regulation of Natural Gas Interests in the United States is a rapidly changing
area of law and is subject to ongoing modification by governmental and judicial
action.  As stated in the section “What are the Risk Factors Involved
with an Investment in US12NG?” of US12NG’s registration statement as filed with
the SEC, regulation of the commodity interests and energy markets is extensive
and constantly changing; future regulatory developments in the commodity
interests and energy markets are impossible to predict but may significantly and
adversely affect US12NG.





Currently,
a number of proposals to alter the regulation of Natural Gas Interests are being
considered by federal regulators and legislators. These proposals include the
imposition of hard position limits on energy-based commodity futures contracts,
the extension of position and accountability limits to futures contracts on
non-U.S. exchanges previously exempt from such limits, and the forced use of
clearinghouse mechanisms for all over-the-counter transactions.  An
additional proposal would aggregate and limit all positions in energy futures
held by a single entity, whether such positions exist on U.S. futures exchanges,
non-U.S. futures exchanges, or in over-the-counter contracts.  If any
of the aforementioned proposals is implemented, US12NG’s ability to meet its
investment objective may be negatively impacted.





The
general partner of US12NG, United States Commodity Funds LLC (formerly, Victoria
Bay Asset Management, LLC) (the “General Partner”), which is registered as
a commodity pool operator (“CPO”) with the U.S. Commodity Futures Trading
Commission (the “CFTC”), is authorized by the Amended and Restated
Agreement of Limited Partnership of US12NG (the “LP Agreement”) to manage
US12NG. The General Partner is authorized by US12NG in its sole judgment to
employ and establish the terms of employment for, and termination of, commodity
trading advisors or futures commission merchants.





Valuation
of Futures Contracts and the Computation of the NAV





The NAV
of US12NG units is calculated once each NYSE Arca trading day. The NAV for a
particular trading day is released after 4:00 p.m. New York time. Trading
during the core trading session on the NYSE Arca typically closes at
4:00 p.m. New York time. US12NG’s administrator uses the NYMEX closing
price (determined at the earlier of the close of the NYMEX or 2:30 p.m. New
York time) for the contracts held on the NYMEX, but calculates or determines the
value of all other US12NG investments, including ICE Futures contracts or other
futures contracts, as of the earlier of the close of the New York
Stock Exchange or 4:00 p.m. New York time.




Results
of Operations and the Natural Gas Market





Results of
Operations. During the nine months ended September 30, 2009, US12NG
had not yet commenced investment activities nor issued units.  In
addition, US12NG did not purchase or own any Futures Contracts or Other Natural
Gas-Related Investments during the nine months ended September 30, 2009, nor
were there any receipts or disbursements of cash from US12NG during this
reporting period. Also, US12NG did not receive any revenue or capital gains
(losses), or incur any expenses during this reporting period.





Expenses
incurred during the nine months ended September 30, 2009 in connection with
organizing US12NG and the initial offering costs of the units were borne by the
General Partner, and are not subject to reimbursement by
US12NG.





Portfolio Expenses. US12NG’s
expenses consist of investment management fees, brokerage
fees and commissions, certain offering costs, licensing fees and the fees
and expenses of the independent directors of the General Partner.  The
management fee that US12NG pays to the General Partner is calculated as a
percentage of the total net assets of US12NG.  US12NG pays the
General Partner a management fee of 0.75% of its average net assets. The
fee is accrued daily.




10




In
addition to the management fee, US12NG pays all brokerage fees, taxes and other
expenses, including certain tax reporting costs, licensing fees for the use of
intellectual property, ongoing registration or other fees paid to the
SEC, the Financial Industry Regulatory Authority (“FINRA”) and any
other regulatory agency in connection with offers and sales of its units
subsequent to the initial offering and all legal, accounting, printing and other
expenses associated therewith.




US12NG is
responsible for paying its portion of the directors’ and officers’ liability
insurance of the General Partner and the fees and expenses of the independent
directors of the General Partner who are also the General Partner’s audit
committee members. US12NG shares these fees with the United States Oil
Fund, LP (“USOF”), the United States Natural Gas Fund, LP (“USNG”), the
United States 12 Month Oil Fund, LP (“US12OF”), the United States Gasoline Fund,
LP (“UGA”), the United States Heating Oil Fund, LP (“USHO”) and the United
States Short Oil Fund, LP (“USSO”) based on the relative assets of each fund
computed on a daily basis. These fees for calendar year 2009 are estimated to be
a total of $477,000 for all funds.





US12NG
will also incur 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”).





Interest
Income.  US12NG will seek to invest its assets such that it
holds Futures Contracts and Other Natural Gas-Related Investments in an
amount equal to the total net assets of its portfolio. Typically, such
investments do not require US12NG to pay the full amount of the contract value
at the time of purchase, but rather require US12NG to post an amount as a margin
deposit against the eventual settlement of the contract. As a result, US12NG
will retain an amount that is approximately equal to its total net assets, which
US12NG will invest in Treasuries, cash and/or cash equivalents. This
includes both the amount on deposit with the futures commission merchant as
margin, as well as unrestricted cash and cash equivalents held with US12NG’s
custodian bank. The Treasuries, cash and/or cash equivalents earn interest that
accrues on a daily basis.




Tracking
US12NG’s Benchmark





US12NG
seeks to manage its portfolio such that changes in its average daily NAV, on a
percentage basis, closely track the changes in the average of the daily prices
of the Benchmark Futures Contracts, also on a percentage basis. Specifically,
US12NG seeks to manage the portfolio such that over any rolling period of 30
valuation days, the average daily change in the NAV is within a range of 90% to
110% (0.9 to 1.1) of the average daily change in the price of the
Benchmark Futures Contracts. As an example, if the average daily movement
of the average of the prices of the Benchmark Futures Contracts for a
particular 30-day time period was 0.5% per day, US12NG management would attempt
to manage the portfolio such that the average daily movement of the NAV during
that same time period fell between 0.45% and 0.55% (i.e., between 0.9 and 1.1 of
the benchmark’s results). US12NG’s portfolio management goals do not include
trying to make the nominal price of US12NG’s NAV equal to the average of the
nominal prices of the current Benchmark Futures Contracts or the spot price
for natural gas. Management believes that it is not practical to manage the
portfolio to achieve such an investment goal when investing in listed Futures
Contracts.





An
alternative tracking measurement of the return performance of US12NG versus the
return of its Benchmark Futures Contracts can be calculated by comparing
the actual return of US12NG, measured by changes in its NAV, versus the
expected changes in its
NAV under the assumption that US12NG’s returns had been exactly the same as the
daily changes in its Benchmark Futures Contracts.





There are
currently three factors that have impacted or are most likely to impact
US12NG’s ability to accurately track its Benchmark Futures
Contracts.




11




First,
US12NG may buy or sell its holdings in the then current Benchmark Futures
Contracts at a price other than the closing settlement price of that contract on
the day during which US12NG executes the trade. In that case, US12NG may pay a
price that is higher, or lower, than that of the Benchmark Futures
Contracts, which could cause the changes in the daily NAV of US12NG to
either be too high or too low relative to the changes in the Benchmark Futures
Contracts. Management will attempt 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 US12NG to obtain the closing
settlement price and there is no assurance that failure to obtain the closing
settlement price in the future will not adversely impact US12NG’s attempt to
track the Benchmark Futures Contracts over time.





Second,
US12NG will earn interest on its cash, cash equivalents and Treasury
holdings. US12NG is not required to distribute any portion of its income to its
unitholders. Interest payments, and any other income, will be retained within
the portfolio and added to US12NG’s NAV. When this income exceeds the level of
US12NG’s expenses for its management fee, brokerage commissions and other
expenses (including ongoing registration fees, licensing fees and the fees
and expenses of the independent directors of the General Partner),
US12NG will realize a net yield that will tend to cause daily changes in
the NAV of US12NG to track slightly higher than daily changes in the average of
the prices of the Benchmark Futures Contracts.




Third,
US12NG may hold Other Natural Gas-Related Investments in its portfolio that
may fail to closely track the Benchmark Futures Contracts’ total return
movements. In that case, the error in tracking the changes in the average of the
Benchmark Futures Contracts could result in daily changes in the NAV of US12NG
that are either too high, or too low, relative to the daily changes in the
average of the Benchmark Futures Contracts.





Term Structure of Natural Gas
Futures Prices and the Impact on Total Returns.Several factors determine
the total return from investing in a futures contract position. One factor that
impacts the total return that will result from investing in near month
natural gas futures contracts and “rolling” those contracts forward each month
is the price relationship between the current near month contract and the next
month contract. For example, if the price of the near month contract is higher
than the next month contract (a situation referred to as “backwardation” in the
futures market), then absent any other change there is a tendency for the price
of a next month contract to rise in value as it becomes the near month contract
and approaches expiration. Conversely, if the price of a near month contract is
lower than the next month contract (a situation referred to as “contango” in the
futures market), then absent any other change there is a tendency for the price
of a next month contract to decline in value as it becomes the near month
contract and approaches expiration.




As an
example, assume that the price of natural gas for immediate delivery (the “spot”
price), was $7 per 10,000 million British thermal units (“MMBtu”), and the value
of a position in the near month futures contract was also $7. Over time, the
price of 10,000 MMBtu of natural gas will fluctuate based on a number of
market factors, including demand for natural gas relative to its supply. The
value of the near month contract will likewise fluctuate in reaction to a
number of market factors. If investors seek to maintain their position in a near
month contract and not take delivery of the natural gas, every month they must
sell their current near month contract as it approaches expiration and invest in
the next month contract.





If the
futures market is in backwardation, e.g., when the expected price
of natural gas in the future would be less, the investor would be buying a next
month contract for a lower price than the current near month contract.
Hypothetically, and assuming no other changes to either prevailing natural gas
prices or the price relationship between the spot price, the near month contract
and the next month contract (and ignoring the impact of commission costs and the
interest earned on Treasuries, cash and/or cash equivalents), the value of the
next month contract would rise as it approaches expiration and becomes the new
near month contract. In this example, the value of the $7 investment would tend
to rise faster than the spot price of natural gas, or fall slower. As a result,
it would be possible in this hypothetical example for the price of spot natural
gas to have risen to $9 after some period of time, while the value of the
investment in the futures contract would have risen to $10, assuming
backwardation is large enough or enough time has elapsed. Similarly, the spot
price of natural gas could have fallen to $5 while the value of an investment in
the futures contract could have fallen to only $6. Over time, if backwardation
remained constant, the difference would continue to increase.




12




If the
futures market is in contango, the investor would be buying a next month
contract for a higher price than the current near month contract.
Hypothetically, and assuming no other changes to either prevailing natural gas
prices or the price relationship between the spot price, the near month contract
and the next month contract (and ignoring the impact of commission costs and the
interest earned on cash), the value of the next month contract would fall as it
approaches expiration and becomes the new near month contract. In this example,
it would mean that the value of the $7 investment would tend to rise slower than
the spot price of natural gas, or fall faster. As a result, it would be possible
in this hypothetical example for the spot price of natural gas to have
risen to $9 after some period of time, while the value of the investment in the
futures contract will have risen to only $8, assuming contango is large enough
or enough time has elapsed. Similarly, the spot price of natural gas could have
fallen to $6 while the value of an investment in the futures contract could have
fallen to $7. Over time, if contango remained constant, the difference would
continue to increase.




The chart
below compares the price of the near month contract to the price of the next
month contract over the last 10 years (1999-2008) for natural gas. When the
price of the near month contract is higher than the price of the next month
contract, the market would be described as being in backwardation. When the
price of the near month contract is lower than the price of the next month
contract, the market would be described as being in contango. Although the
prices of the near month contract and the price of the next month contract do
tend to move up or down together, it can be seen that at times the near month
prices are clearly higher than the price of the next month contract
(backwardation), and other times they are below the price of the next month
contract (contango). In addition, investors can observe that natural gas prices,
both near month and next month, often display a seasonal pattern in which the
price of natural gas tends to rise in the early winter months and decline in the
summer months. This mirrors the physical demand for natural gas, which typically
peaks in the winter.










*PAST PERFORMANCE IS NOT NECESSARILY
INDICATIVE OF FUTURE RESULTS





Another
way to view backwardation and contango data over time is to subtract the dollar
price of the next month natural gas Futures Contract from the dollar price of
the near month natural gas Futures Contract. If the resulting number is a
positive number, then the near month price is higher than the price of the next
month and the market could be described as being in backwardation. If the
resulting number is a negative number, then the near month price is lower than
the price of the next month and the market could be described as being in
contango. The chart below shows the results from subtracting the next month
price from the price of the near month contract for the 10 year period between
1999 and 2008. Investors will note that the natural gas market spent time
in both backwardation and contango. Investors will further note that the markets
display a seasonal pattern that corresponds to the seasonal demand patterns for
natural gas described above. That is, in many, but not all, cases the price of
the next month is higher than the near month as the winter months approach, as
the price of natural gas for delivery in those winter months rises on
expectations of demand. At the same time, the price of the near month, when that
month is just before the onset of
winter, does not rise as far or as fast as the price of a next month contract
whose delivery falls during the winter season.




13







*PAST PERFORMANCE IS NOT NECESSARILY
INDICATIVE OF FUTURE RESULTS





An
investment in a portfolio that involved owning only the near month contract
would likely produce a different result than an investment in a portfolio that
owned an equal number of each of the near 12 months’ worth of contracts.
Generally speaking, when the natural gas futures market is in backwardation, the
near month only portfolio would tend to have a higher total return than the 12
month portfolio. Conversely, if the natural gas futures market was in contango,
the portfolio containing 12 months’ worth of contracts would tend to outperform
the near month only portfolio. The chart below shows the annual results of
owning a portfolio consisting of the near month contract and a portfolio
containing the near 12 months’ worth of contracts for natural gas. In addition,
the chart shows the annual change in the spot price of natural gas. In this
example, each month, the near month only portfolio would sell the near month
contract at expiration and buy the next month contract. The portfolio holding an
equal number of the near 12 months’ worth of contracts would sell the near month
contract at expiration and replace it with the contract that becomes the new
twelfth month contract.


14


Total
Returns of Owning and Rolling the Near Month Natural Gas Futures Contract
(“NG1”),


the
Near 12 Month Natural Gas Futures Contracts (“NG12”),


and
the Annual Change in the Spot Price of Natural Gas*


(10
years ending 12/31/08)











*
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS





As seen
in the chart above, there have been periods of both positive and negative annual
total returns for both hypothetical portfolios over the last 10 years. In
addition, there have been periods during which the near month only approach had
higher returns, and periods where the 12 month approach had higher total
returns. The above chart does not represent the performance history of US12NG or
any affiliated funds.





Historically,
the natural gas futures markets have experienced periods of contango and
backwardation. Because natural gas demand is seasonal, it is possible for the
price of Futures Contracts for delivery within one or two months to rapidly move
from backwardation into contango and back again within a relatively short period
of time of less than one year.





The
General Partner believes that holding futures contracts whose expiration dates
are spread out over a 12 month period of time will cause the total return of
such a portfolio to vary compared to a portfolio that holds only a single
month’s contract (such as the near month contract). In particular, the General
Partner believes that the total return of a portfolio holding contracts with a
range of expiration months will be impacted differently by the price
relationship between different contract months of the same commodity future
compared to the total return of a portfolio consisting of the near month
contract. The General Partner believes that based on historical evidence a
portfolio that held futures contracts with a range of expiration dates spread
out over a 12 month period of time would typically be impacted less by the
positive effect of backwardation, and less by the negative effect of contango,
compared to a portfolio that held contracts of a single near month. As a result,
absent the impact of any other factors, a portfolio of 12 different monthly
contracts would tend to have a lower total return than a near month only
portfolio in a backwardation market and a higher total return in a contango
market. However there can be no assurance that such historical relationships
would provide the same or similar results in the future.





Periods
of contango or backwardation do not materially impact US12NG’s investment
objective of having the percentage changes in its per unit NAV track the
percentage changes in the average of the prices of the Benchmark Futures
Contracts. It is impossible to predict with any degree of certainty whether
backwardation or contango will occur in the future. It is likely that both
conditions will occur during different periods and, because of the seasonal
nature of natural gas demand, both may occur within a single year’s
time.


15





Natural Gas Market. During
the nine months ended September 30, 2009, natural gas prices in the United
States were impacted by several factors. At the beginning of the first quarter
of 2009, the amount of natural gas in storage was at higher than average levels
versus the previous five years. During the entire first half of 2009, the
seasonally adjusted inventory levels of stored natural gas remained well above
five-year averages. In addition, a combination of slowing U.S. economic growth
and increased natural gas production all contributed to a very significant
decline in natural gas prices during the first half of 2009, with prices
reaching a low of $2.508 on September 3, 2009 and ending the third quarter of
2009 with a price of $4.481.





Natural Gas Price Movements in
Comparison to other Energy Commodities and Investment Categories. The
General Partner believes that investors frequently measure the degree to which
prices or total returns of one investment or asset class move up or down in
value in concert with another investment or asset class. Statistically, such a
measure is usually done by measuring the correlation of the price movements of
the two different investments or asset classes over some period of time. 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 indicating 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 or 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 1998 and 2008, the chart 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, heating oil, and unleaded
gasoline, as well as several major non-commodity investment asset classes, such
as large cap U.S. equities, U.S. government bonds and global equities. It can be
seen that over this particular time period, the movement of natural gas on a
monthly basis was not strongly correlated, positively or negatively, with the
movements of large cap U.S. equities, U.S. government bonds or global equities.
However, movements in natural gas had a positive correlation to movements in
heating oil. Finally, natural gas had a positive, but very weak, correlation
with crude oil and unleaded gasoline.





10
      Year CorrelationMatrix
                                                1998-2008
                                              
                                              Large
      Cap
                                                U.S.
                                                Equities
                                                (S&P
      500)
                                              
                                              
                                              U.S.
      Govt.
                                                Bonds
                                                (EFFAS
                                                U.S.
                                                Government
                                                Bond
      Index)
                                              
                                              
                                              Global
                                                Equities
                                                (FTSE
                                                World
                                                Index)
                                              
                                              
                                              Unleaded
                                                Gasoline
                                              
                                              
                                              Crude
                                                Oil
                                              
                                              
                                              Heating
                                                Oil
                                              
                                              
                                              Natural
                                                GasLarge
      Cap U.S. Equities (S&P 500)
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              -0.223
                                              
                                              
                                              
                                              0.936
                                              
                                              
                                              
                                              0.266
                                              
                                              
                                              
                                              0.063
                                              
                                              
                                              
                                              0.003
                                              
                                              
                                              
                                              0.045U.S.
      Govt. Bonds (EFFAS U.S. Government Bond Index)
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              -0.214
                                              
                                              
                                              
                                              -0.134
                                              
                                              
                                              
                                              -0.027
                                              
                                              
                                              
                                              0.037
                                              
                                              
                                              
                                              0.054Global
      Equities (FTSE World Index)
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.384
                                              
                                              
                                              
                                              0.155
                                              
                                              
                                              
                                              0.084
                                              
                                              
                                              
                                              0.072Unleaded
      Gasoline
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.747
                                              
                                              
                                              
                                              0.663
                                              
                                              
                                              
                                              0.254Crude
      Oil
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.738
                                              
                                              
                                              
                                              0.292Heating
      Oil
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.394Natural
      Gas
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000source:
      Bloomberg, NYMEX





PAST PERFORMANCE IS NOT NECESSARILY
INDICATIVE OF FUTURE RESULTS


16




The chart
below covers a more recent, but much shorter, range of dates than the above
chart. Over the one year period ended September 30, 2009, natural gas had a
slightly weaker positive correlation with crude oil, heating oil and unleaded
gasoline than it had displayed over the ten year period ended December 31, 2008.
The correlation between natural gas and U.S. government bonds, which had been
essentially non-correlated over the ten year period ended December 31, 2008,
appeared to remain non-correlated over this shorter time period.Correlations compared to
global equities and U.S. large-cap equities appeared to be weakly correlated
over this shorter time period. This may have been as a result of the drop in
both industrial production in the U.S., as well as natural gas demand as a
result of the slowing economy.





Correlation
      Matrix –
                                                12
      months ended
                                                September
      30, 2009
                                              
                                              Large
      Cap
                                                U.S.
                                                Equities
                                                (S&P
      500)
                                              
                                              
                                              U.S.
      Govt.
                                                Bonds
                                                (EFFAS
                                                U.S.
                                                Government
                                                Bond
      Index)
                                              
                                              
                                              Global
                                                Equities
                                                (FTSE
                                                World
                                                Index)
                                              
                                              
                                              Crude
      Oil
                                              
                                              
                                              Heating
                                                Oil
                                              
                                              
                                              Unleaded
                                                Gasoline
                                              
                                              
                                              Natural
                                                GasLarge
      Cap U.S. Equities (S&P 500)
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.088
                                              
                                              
                                              
                                              0.988
                                              
                                              
                                              
                                              0.706
                                              
                                              
                                              
                                              0.694
                                              
                                              
                                              
                                              0.522
                                              
                                              
                                              
                                              0.205U.S.
      Govt. Bonds (EFFAS U.S. Government Bond Index)
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.102
                                              
                                              
                                              
                                              -0.313
                                              
                                              
                                              
                                              -0.303
                                              
                                              
                                              
                                              -0.423
                                              
                                              
                                              
                                              0.082Global
      Equities (FTSE World Index)
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.705
                                              
                                              
                                              
                                              0.697
                                              
                                              
                                              
                                              0.552
                                              
                                              
                                              
                                              0.205Crude
      Oil
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.810
                                              
                                              
                                              
                                              0.768
                                              
                                              
                                              
                                              0.193Heating
      Oil
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              0.865
                                              
                                              
                                              
                                              0.252Unleaded
      Gasoline
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000
                                              
                                              
                                              
                                              -0.089Natural
      Gas
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              1.000source:
      Bloomberg, NYMEX





PAST PERFORMANCE IS NOT NECESSARILY
INDICATIVE OF FUTURE RESULTS





Investors
are cautioned that the historical price relationships between natural gas and
various other energy commodities, as well as other investment asset classes, as
measured by correlation may not be reliable predictors of future price movements
and correlation results. The results pictured above would have been different if
a different range of dates had been selected. The General Partner believes that
natural gas has historically not demonstrated a strong correlation with equities
or bonds over long periods of time. However, the General Partner also believes
that in the future it is possible that natural gas could have long term
correlation results that indicate prices of natural gas more closely track the
movements of equities or bonds. In addition, the General Partner believes that,
when measured over time periods shorter than ten years, there will always be
some periods where the correlation of natural gas to equities and bonds will be
either more strongly positively correlated or more strongly negatively
correlated than the long term historical results suggest.





The correlations between
natural gas, crude oil, heating oil and gasoline are relevant because the
General Partner endeavors to invest US12NG’s assets in Futures Contracts and
Other Natural Gas-Related Investments so that daily changes in percentage terms
in US12NG’s NAV correlate as closely as possible with daily changes in
percentage terms in the average of the prices of the Benchmark Futures
Contracts. If certain other fuel-based commodity futures contracts do not
closely correlate with the natural gas Futures Contracts, then their use could
lead to greater tracking error. As noted, the General Partner also believes that
the changes in percentage terms in the average of the prices of the Benchmark
Futures Contracts will closely correlate with changes in percentage terms in the
spot price of natural gas.


17




Critical
Accounting Policies





Preparation
of the condensed financial statements and related disclosures in compliance with
accounting principles generally accepted in the United States of America
requires the application of appropriate accounting rules and guidance, as well
as the use of estimates. US12NG’s application of these policies involves
judgments and actual results may differ from the estimates used.




The
General Partner has evaluated the nature and types of estimates that
it makes in preparing US12NG’s condensed financial statements and related
disclosures and has determined that the valuation of its investments which
are not traded on a United States or internationally recognized futures exchange
(such as forward contracts and over-the-counter contracts) involves a critical
accounting policy. The values which are used by US12NG for its forward contracts
are provided by its commodity broker who uses market prices when available,
while over-the-counter contracts are valued based on the present value of
estimated future cash flows that would be received from or paid to a third party
in settlement of these derivative contracts prior to their delivery date and
valued on a daily basis. In addition, US12NG estimates interest income on a
daily basis using prevailing interest rates earned on its cash and cash
equivalents. These estimates are adjusted to the actual amount received on a
monthly basis and the difference, if any, is not considered
material.




Liquidity
and Capital Resources





US12NG
has not made, and does not anticipate making, use of borrowings or other lines
of credit to meet its obligations. US12NG has met, and it is anticipated that
US12NG will continue to meet, its liquidity needs in the normal course of
business from the proceeds of the sale of its investments or from the
Treasuries, cash and/or cash equivalents that it intends to hold at all times.
US12NG’s liquidity needs include: redeeming units, providing margin deposits for
its existing Futures Contracts or the purchase of additional Futures Contracts
and posting collateral for its over-the-counter contracts and payment of its
expenses, summarized below under “Contractual Obligations.”





US12NG
will generate cash primarily from (i) the sale of baskets consisting of 100,000
units (“Creation Baskets”) and (ii) interest earned on Treasuries, cash
and/or cash equivalents. US12NG will allocate substantially all of its net
assets to trading in Natural Gas Interests. US12NG will invest in Natural Gas
Interests to the fullest extent possible without being leveraged or unable to
satisfy its current or potential margin or collateral obligations with respect
to its investments in Futures Contracts and Other Natural Gas-Related
Investments. A significant portion of the NAV will be held in cash and cash
equivalents that will be used as margin and as collateral for US12NG’s
trading in Natural Gas Interests. The balance of the net assets will be held in
US12NG’s account at its custodian bank. Interest earned on US12NG’s
interest-bearing funds will be paid to US12NG.





US12NG’s
investment in Natural Gas Interests may be subject to periods of illiquidity
because of market conditions, regulatory considerations and other reasons. For
example, most commodity exchanges limit the fluctuations in futures
contracts prices during a single day by regulations referred to as “daily
limits.” During a single day, no trades may be executed at prices beyond the
daily limit. Once the price of a futures contract has increased or decreased by
an amount equal to the daily limit, positions in the contracts can neither be
taken nor liquidated unless the traders are willing to effect trades at or
within the specified daily limit. Such market conditions could prevent US12NG
from promptly liquidating its positions in Futures
Contracts.





Prior to
the initial offering of US12NG, all payments with respect to US12NG’s expenses
were paid by the General Partner.  US12NG does not have an obligation
or intention to refund such payments by the General Partner.  The
General Partner is under no obligation to pay US12NG’s current or future
expenses. US12NG will be responsible for expenses incurred subsequent to the
initial offering of units relating to (i) management fees, (ii) brokerage
fees and commissions, (iii) licensing fees for the use of intellectual
property, (iv) ongoing registration expenses in connection with offers and
sales of its units subsequent to the initial offering, (v) taxes and other
expenses, including certain tax reporting costs, (vi) fees and expenses of the
independent directors of the General Partner and (vii) other extraordinary
expenses not in the ordinary course of business, while the General Partner will
be responsible for expenses relating to the fees of US12NG’s marketing agent,
administrator and custodian and registration expenses relating to the initial
offering of units. If the General Partner and US12NG are unsuccessful in
raising sufficient funds to cover these respective expenses or in locating any
other source of funding, US12NG will terminate and investors may lose all or
part of their investment.


18




Market
Risk





Trading
in Futures Contracts and Other Natural Gas-Related Investments, such as
forwards, will involve US12NG entering into contractual commitments to purchase
or sell natural gas at a specified date in the future. The aggregate market
value of the contracts will significantly exceed US12NG’s future cash
requirements since US12NG intends to close out its open positions prior to
settlement. As a result, US12NG should only be subject to the risk of loss
arising from the change in value of the contracts. US12NG considers the “fair
value” of its derivative instruments to be the unrealized gain or loss on the
contracts. The market risk associated with US12NG’s commitments to purchase
natural gas will be limited to the market value of the contacts held. However,
should US12NG enter into a contractual commitment to sell natural gas, it would
be required to make delivery of the natural gas at the contract price,
repurchase the contract at prevailing prices or settle in cash. Since there are
no limits on the future price of natural gas, the market risk to US12NG could be
unlimited.





US12NG’s
exposure to market risk will depend on a number of factors including the markets
for natural gas, the volatility of interest rates and foreign exchange rates,
the liquidity of the Futures Contracts and Other Natural Gas-Related Investments
markets and the relationships among the contracts held by US12NG. The limited
experience that US12NG has had in utilizing its model to trade in Natural Gas
Interests in a manner intended to track the changes in the spot price of natural
gas, as well as drastic market occurrences, could ultimately lead to the loss of
all or substantially all of an investor’s capital.




Credit
Risk





When
US12NG enters into Futures Contracts and Other Natural Gas-Related Investments,
it will be exposed to the credit risk that its counterparty will not be able to
meet its obligations. The counterparty for the Futures Contracts traded on the
NYMEX and on most other foreign futures exchanges is the clearinghouse
associated with the particular exchange. In general, clearinghouses are backed
by their members who may be required to share in the financial burden resulting
from the nonperformance of one of their members that should significantly reduce
credit risk. Some foreign exchanges are not backed by their clearinghouse
members but may be backed by a consortium of banks or other financial
institutions. There can be no assurance that any counterparty, clearinghouse, or
their financial backers will satisfy their obligations to US12NG.





The
General Partner will attempt to manage the credit risk of US12NG by following
various trading limitations and policies. In particular, US12NG intends to post
margin and/or hold liquid assets that will be approximately equal to the market
value of its obligations to counterparties under the Futures Contracts and Other
Natural Gas-Related Investments it holds. The General Partner will implement
procedures that will include, but will not be limited to, executing and clearing
trades only with creditworthy parties and/or requiring the posting of collateral
or margin by such parties for the benefit of US12NG to limit its credit
exposure.





UBS
Securities LLC, US12NG’s commodity broker, or any other broker that may be
retained by US12NG in the future, when acting as US12NG’s futures commission
merchant in accepting orders to purchase or sell Futures Contracts on United
States exchanges, is required by CFTC regulations to separately
account for and segregate as belonging to US12NG, all assets of US12NG relating
to domestic Futures Contracts trading. These futures commission merchants are
not allowed to commingle US12NG’s assets with its other assets. In addition, the
CFTC requires commodity brokers to hold in a secure account US12NG’s assets
related to foreign Futures Contracts trading.





In the
future, US12NG may purchase over-the-counter contracts. See “Item 3.
Quantitative and Qualitative Disclosures About Market Risk” of this quarterly
report on Form 10-Q for a discussion of over-the-counter
contracts.


19





Off
Balance Sheet Financing





As of
September 30, 2009, US12NG has 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 US12NG. While US12NG’s exposure
under these indemnification provisions cannot be estimated, they are not
expected to have a material impact on US12NG’s financial position.





Redemption
Basket Obligation





In order
to meet its investment objective and pay its contractual obligations described
below, US12NG requires liquidity to redeem units, which redemptions must be
in blocks of 100,000 units called “Redemption Baskets.” US12NG intends to
satisfy this obligation by paying from the cash or cash equivalents it holds or
through the sale of its Treasuries in an amount proportionate to the number of
units being redeemed.




Contractual
Obligations





US12NG’s
primary contractual obligations are with the General Partner. In return for its
services, the General Partner is entitled to a management fee calculated monthly
as a fixed percentage of US12NG’s NAV, currently 0.75% of US12NG’s NAV on its
average daily net assets.




The
General Partner agreed to pay the start-up costs associated with the
formation of US12NG, primarily its legal, accounting and other costs in
connection with the General Partner’s registration and listing of US12NG and its
units with the SEC, FINRA and the NYSE Arca, respectively. However,
following US12NG’s initial offering of units, offering costs incurred in
connection with registering and listing additional units of US12NG will be
directly borne on an ongoing basis by US12NG, and not by the General
Partner.





The
General Partner pays the fees of US12NG’s marketing agent, ALPS
Distributors, Inc., and the fees of the custodian and transfer agent, Brown
Brothers Harriman & Co. (“BBH&Co.”), as well as BBH&Co.’s fees for
performing administrative services, including those in connection with the
preparation of US12NG’s condensed financial statements and its SEC and CFTC
reports. The General Partner and US12NG have also entered into a
licensing agreement with the NYMEX pursuant to which US12NG and the affiliated
funds managed by the General Partner pay a licensing fee to the NYMEX. US12NG
will also pay the fees and expenses associated with its tax accounting and
reporting requirements with the exception of certain initial implementation
service fees and base service fees which are paid by the General Partner. The
General Partner, though under no obligation to do so, agreed to pay certain
costs for tax reporting and audit expenses normally borne by US12NG to the
extent that such expenses exceeded 0.15% (15 basis points) of US12NG’s NAV, on
an annualized basis, through at least December 31, 2009. The General Partner has
no obligation to continue such payment into subsequent periods.





In
addition to the General Partner’s management fee, US12NG will pay its brokerage
fees (including fees to a futures commission merchant), over-the-counter dealer
spreads, any licensing fees for the use of intellectual property, and,
subsequent to the initial offering, registration and other fees paid to the SEC,
FINRA, or other regulatory agencies in connection with the offer and sale of
units, as well as legal, printing, accounting and other expenses associated
therewith, and extraordinary expenses. The latter are expenses not incurred in
the ordinary course of US12NG’s business, including expenses relating to the
indemnification of any person against liabilities and obligations to the extent
permitted by law and under the LP Agreement, the bringing or defending of
actions in law or in equity or otherwise conducting litigation and incurring
legal expenses and the settlement of claims and litigation. Commission payments
to a futures commission merchant are on a contract-by-contract, or round turn,
basis. US12NG will also pay a portion of the fees and expenses of the
independent directors of the General Partner. See Note 3 to the Notes to
Condensed Financial Statements (Unaudited).





The
parties cannot anticipate the amount of payments that will be required under
these arrangements for future periods, as US12NG’s NAVs and trading levels to
meet its investment objectives will not be known until a future date. These
agreements are effective for a specific term agreed upon by the parties with an
option to renew, or, in some cases, are in effect for the duration of US12NG’s
existence. Either party may terminate these agreements earlier for certain
reasons described in the agreements.


20




Item 3.  Quantitative
and Qualitative Disclosures About Market Risk.





Over-the-Counter
Derivatives




In the
future, US12NG may purchase over-the-counter contracts. Unlike most of the
exchange-traded Futures Contracts or exchange-traded options on such futures,
each party to an over-the-counter contract bears the credit risk that the other
party may not be able to perform its obligations under its
contract.





Some
natural gas-based derivatives transactions contain fairly generic terms and
conditions and are available from a wide range of participants. Other natural
gas-based derivatives have highly customized terms and conditions and are not as
widely available. Many of these over-the-counter contracts are cash-settled
forwards for the future delivery of natural gas- or petroleum-based fuels that
have terms similar to the Futures Contracts. Others take the form of
“swaps” in which the two parties exchange cash flows based on pre-determined
formulas tied to the spot price of natural gas, forward natural gas
prices or natural gas futures prices. For example, US12NG may enter into
over-the-counter derivative contracts whose value will be tied to changes in the
difference between the spot price of natural gas, the price of Futures
Contracts traded on the NYMEX and the prices of other Futures Contracts in
which US12NG may invest.




To
protect itself from the credit risk that arises in connection with such
contracts, US12NG may enter into agreements with each counterparty that provide
for the netting of its overall exposure to such counterparty, such as the
agreements published by the International Swaps and Derivatives Association,
Inc. US12NG also may require that the counterparty be highly rated and/or
provide collateral or other credit support to address US12NG’s exposure to the
counterparty. In addition, it is also possible for US12NG and its counterparty
to agree to clear their agreement through an established futures clearinghouse
such as those connected to the NYMEX or the ICE Futures. In that event, US12NG
would no longer have credit risk of its original counterparty, as the
clearinghouse would now be US12NG’s counterparty. US12NG would still retain any
price risk associated with its transaction.





The
creditworthiness of each potential counterparty will be assessed by the General
Partner. The General Partner will assess or review, as appropriate, the
creditworthiness of each potential or existing counterparty to an
over-the-counter contract pursuant to guidelines approved by the General
Partner’s board of directors (the “Board”). Furthermore, the General Partner on
behalf of US12NG will only enter into over-the-counter contracts with
counterparties who are, or are affiliates of, (a) banks regulated by a United
States federal bank regulator, (b) broker-dealers regulated by the SEC, (c)
insurance companies domiciled in the United States, and (d) producers, users or
traders of energy, whether or not regulated by the CFTC. Any entity acting as a
counterparty shall be regulated in either the United States or the United
Kingdom unless otherwise approved by the Board after consultation with its legal
counsel. Existing counterparties are also reviewed periodically by the General
Partner.





US12NG
anticipates that the use of Other Natural Gas-Related Investments together with
its investments in Futures Contracts will produce price and total return results
that closely track the investment goals of US12NG. However, there can be no
assurance of this. Over-the-counter contracts may result in higher
transaction-related expenses than the brokerage commissions paid in connection
with the purchase of Futures Contracts, which may impact US12NG’s ability to
successfully track the changes in the average of the prices of the Benchmark
Futures Contracts.





US12NG
may employ spreads or straddles in its trading to mitigate the differences in
its investment portfolio and its goal of tracking the price of the
Benchmark Futures Contracts. US12NG would use a spread when it chooses to
take simultaneous long and short positions in futures written on the same
underlying asset, but with different delivery months. The effect of holding such
combined positions is to adjust the sensitivity of US12NG to changes in the
price relationship between futures contracts which will expire sooner and those
that will expire later. US12NG would use such a spread if the General Partner
felt that taking such long and short positions, when combined with the rest of
its holdings, would more closely track the investment goals of US12NG, or if the
General Partner felt it would lead to an overall lower cost of trading to
achieve a given level of economic exposure to movements in natural gas prices.
US12NG would enter into a straddle when it chooses to take an option position
consisting of a long (or short) position in both a call option and put option.
The economic effect of holding certain combinations of put options and call
options can be very similar to that of owning the underlying futures contracts.
US12NG would make use of such a straddle approach if, in the opinion of the
General Partner, the resulting combination would more closely track the
investment goals of US12NG or if it would lead to an overall lower cost of
trading to achieve a given level of economic exposure to movements in natural
gas prices.


21




During
the nine months ended September 30, 2009, US12NG had not yet commenced
operations and, therefore, did not employ any hedging methods such as those
described above. Therefore, during the nine months ended September 30, 2009,
US12NG was not exposed to counterparty risk.





Item 4.  Controls and
Procedures.




Disclosure
Controls and Procedures




US12NG
maintains disclosure controls and procedures that are designed to ensure that
material information required to be disclosed in US12NG’s periodic reports
filed or submitted under the Securities Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported within the time period specified in
the SEC’s rules and forms.




The duly
appointed officers of the General Partner, including its chief executive
officer and chief financial officer, who perform functions equivalent
to those of a principal executive officer and principal financial officer of
US12NG if US12NG had any officers, have evaluated the effectiveness of US12NG’s
disclosure controls and procedures and have concluded that the disclosure
controls and procedures of US12NG have been effective as of the end of the
period covered by this quarterly report on Form
10-Q.





Change
in Internal Control Over Financial Reporting




There
were no changes in US12NG’s internal control over financial reporting during
US12NG’s last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, US12NG’s internal control over financial
reporting.


22


Part II. OTHER INFORMATION





Item
1.  Legal Proceedings.





Not
applicable.





Item
1A.  Risk Factors.





There has
not been a material change from the risk factors previously disclosed in
US12NG's Registration Statement which was declared effective by the SEC on
November 12, 2009.





Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds.





Not applicable.





Item
3.  Defaults Upon Senior Securities.





Not applicable.





Item
4.  Submission of Matters to a Vote of Security
Holders.





Not
applicable.





Item 5.  Other
Information.




Monthly
Account Statements




Pursuant
to the requirement under Rule 4.22 under the Commodity Exchange Act, each month
US12NG publishes an account statement for its unitholders, which includes a
Statement of Income (Loss) and a Statement of Changes in NAV. The account
statement is furnished to the SEC on a current report on Form 8-K pursuant to
Section 13 or 15(d) of the Exchange Act and posted each month on US12NG’s
website at www.unitedstates12monthnaturalgasfund.com.





Item 6. Exhibits.





Listed
below are the exhibits which are filed as part of this quarterly report on Form
10-Q (according to the number assigned to them in Item 601 of Regulation
S-K):





ExhibitNumber
              
              Description of Document31.1*
              
              Certification
      by Principal Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2*
              
              Certification
      by Principal Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1*
              
              Certification
      by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
      Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2*
              
              Certification
      by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
      Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.99.1*
              
              Customer
      Agreement for Futures
Contracts.





*           Filed
herewith


23


SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





United
States 12 Month Natural Gas Fund, LP (Registrant)


By:
United States Commodity Funds LLC, its general partner





By:
              /s/ Nicholas D. GerberNicholas
      D. GerberChief
      Executive OfficerDate:  December
      23, 2009By:
              /s/ Howard MahHoward
      MahChief
      Financial OfficerDate:  December
      23, 2009




24