AAA Energy Opportunities Fund LLC - FORM 10-Q

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - AAA Energy Opportunities Fund LLC	Financial_Report.xls
EX-31.1 - EX-31.1 - AAA Energy Opportunities Fund LLC	a14-19841_1ex31d1.htm
EX-32.1 - EX-32.1 - AAA Energy Opportunities Fund LLC	a14-19841_1ex32d1.htm
EX-32.2 - EX-32.2 - AAA Energy Opportunities Fund LLC	a14-19841_1ex32d2.htm
EX-31.2 - EX-31.2 - AAA Energy Opportunities Fund LLC	a14-19841_1ex31d2.htm

Table of Contents

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, 2014

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 000-54670

AAA ENERGY OPPORTUNITIES FUND LLC

(Exact name of registrant as specified in its charter)

Delaware		38-3849454
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

c/o UBS Alternatives LLC

1285 Avenue of the Americas, 20th Floor

New York, New York 10019

(Address of principal executive offices) (Zip Code)

(212) 713-3234

(Registrant’s telephone number, including area code)

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

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 the chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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. (Check one):

Large accelerated filer o		Accelerated filer o

Non-accelerated filer x		Smaller reporting company o

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

As of October 31, 2014, 122,562.292 Limited Liability Company Redeemable Units were outstanding.

Table of Contents

AAA ENERGY OPPORTUNITIES FUND LLC

Form 10-Q

Index

				Page
				Number

PART I — Financial Information:
		Item 1.	Financial Statements:

			Statements of Financial Condition at September 30, 2014 (unaudited) and December 31, 2013	3

			Statements of Operations and Changes in Members’ Capital for the three and nine months ended September 30, 2014 and 2013 (unaudited)	4

			Notes to Financial Statements, including the Financial Statements of Sydling AAA Master Fund LLC (unaudited)	5 — 16

		Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16 — 18

		Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19 — 20

		Item 4.	Controls and Procedures	20

PART II — Other Information				21 — 23

Exhibits
	Exhibit 31.1 — Certification

	Exhibit 31.2 — Certification

	Exhibit 32.1 — Certification

	Exhibit 32.2 — Certification

	Exhibit 101.INS — XBRL Instance Document

	Exhibit 101.SCH — XBRL Taxonomy Extension Schema Document.

	Exhibit 101.CAL — XBRL Taxonomy Extension Calculation Linkbase Document.

	Exhibit 101.LAB — XBRL Taxonomy Extension Label Linkbase Document.

	Exhibit 101.PRE — XBRL Taxonomy Extension Presentation Linkbase Document.

	Exhibit 101.DEF — XBRL Taxonomy Extension Definition Document.

Table of Contents

PART I

Item 1. Financial Statements

AAA Energy Opportunities Fund LLC

Statements of Financial Condition

	(Unaudited)
	September 30, 2014		December 31, 2013
ASSETS

Investment in Sydling AAA Master Fund LLC, at fair value (cost $120,358,077 and $173,959,066, respectively)	$	102,741,638	$	155,211,763
Cash	310,306		227,966
Receivable from Sydling AAA Master Fund LLC	6,036,676		7,049,457
Total Assets	$	109,088,620	$	162,489,186

LIABILITIES

Subscriptions received in advance	$	125,000	$	25,000
Redemptions payable	5,824,666		6,779,022
Accrued expenses:
Advisory fees	135,934		202,827
Administrative fees	45,312		67,609
Professional fees and other expenses	216,070		202,965
Total Liabilities	6,346,982		7,277,423

MEMBERS’ CAPITAL

Member Designee (25.000 Redeemable Units)	19,068		20,624
Special Member (253.781 Redeemable Units)	193,561		209,363
Non-Managing Members (134,427.709 and 187,862.421 Redeemable Units)	102,529,009		154,981,776

Total Members’ Capital	102,741,638		155,211,763
Total Liabilities and Members’ Capital	$	109,088,620	$	162,489,186
Members’ Capital per Redeemable Unit (based on 134,706.490 and 188,141.202 Redeemable Units)	$	762.71	$	824.97

See accompanying notes to financial statements.

Table of Contents

AAA Energy Opportunities Fund LLC

Statements of Operations and Changes in Members’ Capital

(Unaudited)

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013

INVESTMENT INCOME

Interest allocated from Sydling AAA Master Fund LLC	$	2,913		$	8,415		$	24,834		$	56,368

EXPENSES

Expenses allocated from Sydling AAA Master Fund LLC	1,177,460			2,025,054			3,806,613			6,807,259
Advisory fees	430,320			784,994			1,492,686			2,598,728
Administrative fees	143,440			261,665			497,562			866,243
Professional fees and other expenses	92,292			103,126			271,458			309,375
Total Expenses	1,843,512			3,174,839			6,068,319			10,581,605

NET INVESTMENT (LOSS)	(1,840,599		)	(3,166,424		)	(6,043,485		)	(10,525,237		)

TRADING RESULTS

Net realized gain/(loss) allocated from Sydling AAA Master Fund LLC	4,093,493			(10,957,419		)	6,420,190			(25,947,403		)
Net change in unrealized appreciation/(depreciation) allocated from Sydling AAA Master Fund LLC	(6,243,139		)	3,389,569			(10,345,708		)	1,714,202
Total Trading Results	(2,149,646		)	(7,567,850		)	(3,925,518		)	(24,233,201		)

Net (loss)	(3,990,245		)	(10,734,274		)	(9,969,003		)	(34,758,438		)

Subscriptions — Non-managing Members	835,000			6,038,449			2,012,000			35,956,760
Redemptions — Non-managing Members	(17,402,572		)	(24,409,038		)	(44,513,122		)	(69,381,215		)

Net (decrease) in Members’ Capital	(20,557,817		)	(29,104,863		)	(52,470,125		)	(68,182,893		)

Members’ Capital, beginning of period	$	123,299,455		$	221,392,549		$	155,211,763		$	260,470,579

Members’ Capital, end of period	$	102,741,638		$	192,287,686		$	102,741,638		$	192,287,686

Net (loss) per Redeemable Unit	$	(26.78	)	$	(42.67	)	$	(62.26	)	$	(130.61	)

Weighted average Redeemable Units outstanding	143,323.693			241,924.202			167,225.750			263,119.918

See accompanying notes to financial statements.

Table of Contents

AAA Energy Opportunities Fund LLC

Notes to Financial Statements

September 30, 2014

(Unaudited)

1. General

AAA Energy Opportunities Fund LLC (the “Fund”) is a Delaware limited liability company formed on August 10, 2011. Trading operations of the Fund commenced on December 1, 2011. The Fund’s investment objective is to achieve capital appreciation through speculative trading, directly or indirectly, in commodity interests generally including, commodity futures and commodity option contracts on United States exchanges and certain foreign exchanges and swaps. The Fund intends to trade only energy and energy-related products but is authorized to trade commodity futures, swap and option contracts of any kind. The Fund privately and continually offers redeemable units of limited liability company interest in the Fund (“Redeemable Units”) to qualified investors and subscriptions are generally accepted monthly. There is no maximum number of Redeemable Units that may be sold by the Fund. The Fund invests substantially all of its assets in the Sydling AAA Master Fund LLC (“Master Fund”), also a Delaware limited liability company, which has the same investment objective as the Fund. The Master Fund’s Statements of Financial Condition, including Condensed Schedules of Investments and Statements of Operations and Changes in Members’ Capital are included herein. The percentage of the Master Fund’s capital owned by the Fund at September 30, 2014 and December 31, 2013 was 100%. The performance of the Fund is directly affected by the performance of the Master Fund.

The Fund is member-managed for purposes of Delaware law. Pursuant to the Fund’s limited liability company agreement, as may be amended from time to time (the “LLC Agreement”), the members of the Fund (each, a “Member” and collectively, the “Members”) have appointed Sydling Futures Management LLC (“Sydling”) to act as the Fund’s commodity pool operator and trading manager. Sydling is registered with the Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator and a commodity trading advisor and is a member of the National Futures Association (“NFA”) effective August 10, 2011. Sydling, a wholly owned subsidiary of UBS Alternatives LLC, was formed on August 4, 2011. UBS Alternatives LLC is a wholly owned subsidiary of UBS Americas Inc. which ultimately is a wholly owned subsidiary of UBS AG.

BNY Mellon Investment Servicing (US) Inc. serves as administrator of the Fund.

AAA Capital Management Advisors, Ltd. (the “Advisor”) serves as the trading advisor to the Fund and the Master Fund. In addition, the Advisor is also a special member of the Fund (in such capacity, the “Special Member”).

Sydling and each Member share in the profits and losses of the Fund, after the allocation to the Special Member, if any, in proportion to the amount of limited liability company interest owned by each except that no Member shall be liable for obligations of the Fund in excess of such member’s capital contribution and profits, if any, net of distributions and losses, if any.

The accompanying financial statements and notes are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. These financial statements should be read in conjunction with the financial statements and notes included in the Fund’s Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (the “SEC”).

The preparation of financial statements and accompanying notes in conformity with U.S. GAAP requires Sydling to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

The Master Fund’s Statements of Financial Condition and Condensed Schedules of Investments as of September 30, 2014 and December 31, 2013 and Statements of Operations and Changes in Members’ Capital for the three and nine months ended September 30, 2014 and 2013 are presented below:

Table of Contents

Sydling AAA Master Fund LLC

Statements of Financial Condition

	(Unaudited)
	September 30, 2014		December 31, 2013

ASSETS

Cash (including restricted cash of $7,227,291 and $2,075,137, respectively)	$	111,892,300	$	158,555,081
Future options purchased, at fair value (premiums paid $15,793,664 and $15,387,440, respectively)	7,387,229		8,382,120
Net unrealized appreciation on open futures contracts	—		1,717,472
Interest receivable	17,507		1,672
Total Assets	$	119,297,036	$	168,656,345

LIABILITIES AND MEMBER’S CAPITAL

Future options written, at fair value (premiums received $8,038,194 and $11,024,220, respectively)	$	5,766,482	$	5,878,520
Net unrealized depreciation on open futures contracts	4,353,133		—
Redemptions payable	6,036,676		7,049,457
Accrued expenses:
Brokerage fees	318,198		474,646
Professional fees and other expenses	80,909		41,959
Total Liabilities	16,555,398		13,444,582

MEMBER’S CAPITAL

Non-Managing Members	102,741,638		155,211,763
Total Member’s Capital	102,741,638		155,211,763
Total Liabilities and Member’s Capital	$	119,297,036	$	168,656,345

Table of Contents

Sydling AAA Master Fund LLC

Condensed Schedule of Investments

September 30, 2014

(Unaudited)

						Percent of
Number of						Member’s
Contracts			Fair Value			Capital
		FUTURE OPTIONS PURCHASED
4,772		ENERGY
		Call
2,684		Other	$	2,521,096		2.45	%
		Total Call Options Purchased	2,521,096			2.45	%
		Put
2,088		Other	4,866,133			4.74	%
		Total Put Options Purchased	4,866,133			4.74	%

		Total Energy Options Purchased	7,387,229			7.19	%

		TOTAL FUTURE OPTIONS PURCHASED (Premiums paid $15,793,664)	7,387,229			7.19	%

		FUTURE OPTIONS WRITTEN
(2,421	)	ENERGY
		Call
(704	)	Other	(662,738		)	(0.65	)%
		Total Call Options Written	(662,738		)	(0.65	)%
		Put
(1,717	)	Other	(5,103,744		)	(4.97	)%
		Total Put Options Written	(5,103,744		)	(4.97	)%

		Total Energy Options Written	(5,766,482		)	(5.62	)%

		TOTAL FUTURE OPTIONS WRITTEN (Premiums received $8,038,194)	(5,766,482		)	(5.62	)%

		FUTURES CONTRACTS OWNED
3,495		ENERGY
1,653		Brent Crude November 2014 - February 2015	(9,257,148		)	(9.01	)%
1,842		Other	(4,604,573		)	(4.48	)%
		TOTAL FUTURES CONTRACTS OWNED	(13,861,721		)	(13.49	)%

		FUTURES CONTRACTS SOLD
(3,699	)	ENERGY	9,508,588			9.25	%
		TOTAL FUTURES CONTRACTS SOLD	9,508,588			9.25	%

		TOTAL FUTURES CONTRACTS	(4,353,133		)	(4.24	)%

		TOTAL OPTIONS AND FUTURES	(2,732,386		)	(2.67	)%

		OTHER ASSETS IN EXCESS OF OTHER LIABILITIES	105,474,024			102.67	%
		TOTAL MEMBER’S CAPITAL	$	102,741,638		100.00	%

Percentages shown represent a percentage of member’s capital as of September 30, 2014.

Table of Contents

Sydling AAA Master Fund LLC

Condensed Schedule of Investments

December 31, 2013

						Percent of
Number of						Member’s
Contracts			Fair Value			Capital
		FUTURE OPTIONS PURCHASED
2,053		ENERGY
		Call
1,471		Other	$	6,110,750		3.94	%
		Total Call Options Purchased	6,110,750			3.94	%
		Put
582		Other	2,271,370			1.46	%
		Total Put Options Purchased	2,271,370			1.46	%

		Total Energy Options Purchased	8,382,120			5.40	%
		TOTAL FUTURE OPTIONS PURCHASED (Premiums paid $15,387,440)	8,382,120			5.40	%

		FUTURE OPTIONS WRITTEN
(2,436	)	ENERGY
		Call
(1,405	)	Other	(2,041,620		)	(1.32	)%
		Total Call Options Purchased	(2,041,620		)	(1.32	)%
		Put
(1,031	)	Other	(3,836,900		)	(2.47	)%
		Total Put Options Purchased	(3,836,900		)	(2.47	)%

		Total Energy Options Purchased	(5,878,520		)	(3.79	)%
		TOTAL FUTURE OPTIONS WRITTEN (Premiums received $11,024,220)	(5,878,520		)	(3.79	)%

		FUTURES CONTRACTS OWNED
1,330		ENERGY	558,030			0.36	%
		TOTAL FUTURES CONTRACTS OWNED	558,030			0.36	%
		FUTURES CONTRACTS SOLD
(1,560	)	ENERGY	1,159,442			0.75	%
		TOTAL FUTURES CONTRACTS SOLD	1,159,442			0.75	%

		TOTAL FUTURES CONTRACTS	1,717,472			1.11	%

		TOTAL OPTIONS AND FUTURES	4,221,072			2.72	%
		OTHER ASSETS IN EXCESS OF OTHER LIABILITIES	150,990,691			97.28	%
		TOTAL MEMBER’S CAPITAL	$	155,211,763		100.00	%

Percentages shown represent a percentage of member’s capital as of December 31, 2013.

Table of Contents

Sydling AAA Master Fund LLC

Statements of Operations and Changes in Member’s Capital

(Unaudited)

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013

INVESTMENT INCOME

Interest income	$	2,913		$	8,415		$	24,834		$	56,368

EXPENSES

Brokerage, clearing and transaction fees	1,157,210			2,003,804			3,745,863			6,743,509
Professional fees	20,250			21,250			60,750			63,750
Total Expenses	1,177,460			2,025,054			3,806,613			6,807,259

NET INVESTMENT (LOSS)	(1,174,547		)	(2,016,639		)	(3,781,779		)	(6,750,891		)

NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM DERIVATIVE INSTRUMENTS

Net realized gain/(loss) from:
Options on futures	(4,289,058		)	(6,517,584		)	(2,475,794		)	(8,990,130		)
Futures	8,382,551			(4,439,835		)	8,895,984			(16,957,273		)
Net change in unrealized appreciation/(depreciation) on:
Options on futures	(8,462,837		)	5,058,882			(4,275,103		)	(421,123		)
Futures	2,219,698			(1,669,313		)	(6,070,605		)	2,135,325
Net Realized and Unrealized Gain/(Loss) from Derivative Instruments	(2,149,646		)	(7,567,850		)	(3,925,518		)	(24,233,201		)

Net (loss)	(3,324,193		)	(9,584,489		)	(7,707,297		)	(30,984,092		)

INCREASE/(DECREASE) IN MEMBER’S CAPITAL FROM CAPITAL TRANSACTIONS

Subscriptions	835,000			6,038,449			2,012,000			35,956,760
Redemptions	(18,068,624		)	(25,603,358		)	(46,774,828		)	(73,289,168		)

Net (Decrease) in Member’s Capital Derived from Capital Transactions	(17,233,624		)	(19,564,909		)	(44,762,828		)	(37,332,408		)

Net (Decrease) in Member’s Capital	(20,557,817		)	(29,149,398		)	(52,470,125		)	(68,316,500		)
Member’s Capital, Beginning of Period	123,299,455			221,466,774			155,211,763			260,633,876
Member’s Capital, End of Period	$	102,741,638		$	192,317,376		$	102,741,638		$	192,317,376

Table of Contents

2. Financial Highlights

Changes in the net asset value per Redeemable Unit for the three and nine months ended September 30, 2014 and 2013 are as follows:

	Three Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
Per share operating performance: (a)
Members’ capital per Redeemable Unit, beginning of period	$	789.49		$	872.34		$	824.97		$	960.28
Income/(loss) from investment operations:
Net investment income/(loss) and incentive allocation	(12.37		)	(12.70		)	(36.50		)	(39.63		)
Net realized and unrealized gain/(loss) from investment activities	(14.41		)	(29.97		)	(25.76		)	(90.98		)
Total from investment operations	(26.78		)	(42.67		)	(62.26		)	(130.61		)
Members’ capital per Redeemable Unit, end of period	$	762.71		$	829.67		$	762.71		$	829.67

Ratio/Supplemental Data: (b)
Ratio of net investment loss to average Members’ capital	(6.55		)%	(6.15		)%	(6.18		)%	(6.19		)%
Ratio of total expenses to average Members’ capital	6.56		%	6.17		%	6.21		%	6.23		%
Ratio of incentive allocation to average Members’ capital	—		%	—		%	—		%	—		%
Ratio of total expenses and incentive allocation to average Members’ capital	6.56		%	6.17		%	6.21		%	6.23		%

Total return before incentive allocation	(3.39		)%	(4.89		)%	(7.55		)%	(13.60		)%
Incentive allocation	—			—			—			—		%
Total return after incentive allocation	(3.39		)%	(4.89		)%	(7.55		)%	(13.60		)%

Members’ capital at end of period	$	102,741,638		$	192,287,686		$	102,741,638		$	192,287,686

The computation of ratios to average Members’ capital and total return based on the amount of expenses and incentive allocation assessed to an individual Member’s capital may vary from these ratios and total return based on the timing of capital transactions.

(a) Per share operating performance is calculated on a monthly basis by dividing each line item by the outstanding units at month-end prior to the reduction of redeemed units.

(b) The ratios to average Members’ capital are annualized. The average Members’ capital used in the above ratios is an average of each month-end Members’ capital during the period.

Financial Highlights of the Master Fund:

	Three Months Ended September 30, 2014			Three Months Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013

Ratio/Supplemental Data: (a)
Ratio of net investment (loss) to average member’s capital	(4.18		)%	(3.92		)%	(3.87		)%	(3.97		)%
Ratio of total expenses to average member’s capital	4.19		%	3.93		%	3.90		%	4.00		%
Total return	(2.83		)%	(4.52		)%	(5.95		)%	(11.79		)%
Member’s capital at end of period	$	102,741,638		$	192,317,376		$	102,741,638		$	192,317,376

Total return and the ratios to average Member’s capital are calculated for investor’s capital taken as a whole. An individual investor’s capital may vary from these ratios and total return based on the timing of capital transactions.

(a) The ratios to average Member’s capital are annualized. The average Member’s capital used in the above ratios is an average of each month-end member’s capital during the period.

Table of Contents

3. Trading Activities

The Fund was formed for the purpose of trading contracts in a variety of commodity interests, including derivative financial instruments and derivative commodity instruments. The Fund invests substantially all of its assets through a “master/feeder” structure. The Fund’s pro rata share of the results of the Master Fund’s trading activities is shown in the Fund’s Statements of Operations and Changes in Members’ Capital.

The Customer Agreement between the Master Fund and UBS Securities LLC (“UBS Securities”), the Master Fund’s commodity broker, gives the Master Fund the legal right to net unrealized gains and losses on open futures contracts. Futures contracts are executed on exchanges and are typically liquidated by entering into offsetting contracts. The Master Fund nets, for financial reporting purposes, the unrealized gains and losses on open futures contracts on the Master Fund’s Statements of Financial Condition. Options on futures contracts are settled on a gross basis and therefore are disclosed on a gross basis on the Master Fund’s Statements of Financial Condition.

All of the commodity interests owned by the Master Fund are held for trading purposes. The average number of futures contracts traded for the three months ended September 30, 2014 and 2013, based on a monthly calculation, was 7,703 and 7,557, respectively. The average number of options contracts traded for the three months ended September 30, 2014 and 2013, based on a monthly calculation, was 5,377 and 3,948, respectively. The average number of futures contracts traded for the nine months ended September 30, 2014 and 2013, based on a monthly calculation, was 5,055 and 8,472, respectively. The average number of options contracts traded for the nine months ended September 30, 2014 and 2013, based on a monthly calculation, was 2,865 and 5,124, respectively.

The following tables indicate the gross fair values of derivative instruments of futures and option contracts as separate assets and liabilities as of September 30, 2014 and December 31, 2013.

	September 30, 2014			December 31, 2013
ASSETS
Futures Contracts
Energy	$	9,831,193		$	2,678,080
Total unrealized appreciation on open futures contracts	$	9,831,193		$	2,678,080

LIABILITIES
Futures Contracts
Energy	$	(14,184,326	)	$	(960,608	)
Total unrealized depreciation on open futures contracts	$	(14,184,326	)	$	(960,608	)

Net unrealized appreciation (depreciation) on open futures contracts *	$	(4,353,133	)	$	1,717,472

ASSETS
Options Purchased
Energy	$	7,387,229		$	8,382,120
Options Purchased **	$	7,387,229		$	8,382,120

LIABILITIES
Options Written
Energy	$	(5,766,482	)	$	(5,878,520	)
Options Written ***	$	(5,766,482	)	$	(5,878,520	)

* These amounts are presented as “Net unrealized appreciation (depreciation) on open futures contracts” on the Master Fund’s Statements of Financial Condition.

** These amounts are presented as “Future options purchased, at fair value” on the Master Fund’s Statements of Financial Condition.

***These amounts are presented as “Future options written, at fair value” on the Master Fund’s Statements of Financial Condition.

Table of Contents

The following table indicates the trading gains and losses, by market sector, on derivative instruments for the three and nine months ended September 30, 2014 and 2013.

	Three months ended September 30, 2014			Three months ended September 30, 2013			Nine months ended September 30, 2014			Nine months ended September 30, 2013
Sector	Gain/(loss) from trading			Gain/(loss) from trading			Gain/(loss) from trading			Gain/(loss) from trading
Energy	$	(2,149,646	)	$	(7,567,850	)	$	(3,925,518	)	$	(24,233,201	)
	$	(2,149,646	)****	$	(7,567,850	)****	$	(3,925,518	)****	$	(24,233,201	)****

**** These amounts are presented as “Net Realized and Unrealized Gain/(Loss) from Derivative Instruments” on the Master Fund’s Statements of Operations and Changes in Members’ Capital.

The volume of activity of futures and futures options that are presented in the Master Fund’s Condensed Schedule of Investments is consistent with the average monthly activity during the three and nine months ended September 30, 2014 and 2013.

Table of Contents

4. Fair Value Measurements

Fund Fair Value Measurements. The Fund values its investments at fair value, in accordance with U.S. GAAP, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Various inputs are used in determining the fair value of the Fund’s investments which are summarized in the three broad levels listed below.

Level 1 — quoted prices (unadjusted) in active markets for identical securities

Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment spreads, credit risk, etc.)

Level 3 — significant unobservable inputs (including Sydling’s own assumptions and indicative non-binding broker quotes)

Fair value measurement disclosure for each class of assets and liabilities requires greater disaggregation than the Fund’s line items in its Statements of Financial Condition. The Fund determines the appropriate classes for those disclosures on the basis of the nature and risks of the assets and liabilities and their classification in the fair value hierarchy (i.e., Level 1, Level 2, and Level 3).

The Fund values investments in the Master Fund, where there are no other rights or obligations inherent within the ownership interest held by the Fund, based on the end of the day net asset value of the Master Fund (Level 2). The value of the Fund’s investment in the Master Fund reflects its proportional interest in the Master Fund. As of and for the periods ended September 30, 2014 and December 31, 2013, the Fund did not hold any derivative instruments that were based on unadjusted quoted prices in active markets for identical assets (Level 1) or priced at fair value using unobservable inputs through the application of Sydling’s assumptions and internal valuation pricing models (Level 3).

The Fund recognizes transfers into and out of the levels indicated above at the end of the reporting period. During the periods ended September 30, 2014 and December 31, 2013, there were no transfers amongst Levels 1, 2 and 3 of the valuation hierarchy.

Master Fund Fair Value Measurements. For assets and liabilities measured at fair value on a recurring basis during the period, the Master Fund provides quantitative disclosures about the fair value measurements separately for each class of assets and liabilities, as well as a reconciliation of beginning and ending balances of Level 3 assets and liabilities broken down by class.

The Master Fund considers prices for exchange-traded commodity futures and option contracts to be based on unadjusted quoted prices in active markets for identical assets (Level 1). As of and for the periods ended September 30, 2014 and December 31, 2013, the Master Fund did not hold any derivative instruments for which market quotations were not readily available and which were priced by broker-dealers who derive fair values for these assets from observable inputs (Level 2) or that were priced at fair value using unobservable inputs through the application of Sydling’s assumptions and internal valuation pricing models (Level 3). The gross presentation of the fair value of the Master Fund’s derivatives by instrument type is shown in Note 3, “Trading Activities.”

The Master Fund recognizes transfers into and out of the levels indicated above at the end of the reporting period. During the periods ended September 30, 2014 and December 31, 2013, there were no transfers amongst Levels 1, 2 and 3 of the valuation hierarchy.

Table of Contents

The following is a summary of the Master Fund’s investments at fair value. The inputs or methodology used for valuing derivative instruments are not necessarily an indication of the risk associated with investing in those derivative instruments.

ASSET TABLE (Unaudited)

Description	Total Fair Value at September 30, 2014		Level 1		Level 2		Level 3
Future Options Purchased	$	7,387,229	$	7,387,229	$	—	$	—
Total Assets	$	7,387,229	$	7,387,229	$	—	$	—

LIABILITIES TABLE (Unaudited)

Description	Total Fair Value at September 30, 2014			Level 1			Level 2		Level 3
Future Options Written	$	(5,766,482	)	$	(5,766,482	)	$	—	$	—
Futures Contracts	$	(4,353,133	)	$	(4,353,133	)	$	—	$	—
Total Liabilities	$	(10,119,615	)	$	(10,119,615	)	$	—	$	—

ASSET TABLE

Description	Total Fair Value at December 31, 2013		Level 1		Level 2		Level 3
Future Options Purchased	$	8,382,120	$	8,382,120	$	—	$	—
Futures Contracts	$	1,717,472	$	1,717,472	$	—	$	—
Total Assets	$	10,099,592	$	10,099,592	$	—	$	—

LIABILITIES TABLE

Description	Total Fair Value at December 31, 2013			Level 1			Level 2		Level 3
Future Options Written	$	(5,878,520	)	$	(5,878,520	)	$	—	$	—
Total Liabilities	$	(5,878,520	)	$	(5,878,520	)	$	—	$	—

5. Financial Instrument Risks

In the normal course of business, the Master Fund is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include futures, forward, option and swaps, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash balances, or to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange or over-the-counter (“OTC”). Exchange-traded instruments are standardized and include futures contracts and certain forward and option contracts. OTC contracts are negotiated between contracting parties and include swap contracts and certain forward and option contracts. Specific market movements of commodities or futures contracts underlying an option cannot accurately be predicted. The purchaser of an option may lose the entire premium paid for the option. The writer, or seller, of an option has unlimited risk. Each of these instruments is subject to various risks similar to those related to the underlying financial instruments including market and credit risk. In general, the risks

Table of Contents

associated with OTC contracts are greater than those associated with exchange-traded instruments because of the greater risk of default by the counterparty to an OTC contract.

The risk to a Member in the Master Fund is limited to the amount of such Member’s capital contribution to the Master Fund and its share of the Master Fund’s assets and undistributed profits. This limited liability is a consequence of the organization of the Master Fund as a limited liability company under Delaware law.

Market risk is the potential for changes in the value of the financial instruments traded by the Master Fund due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded. The Master Fund is exposed to a market risk equal to the value of futures contracts purchased and unlimited liability on such contracts sold short.

Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. The Master Fund’s risk of loss in the event of a counterparty default is typically limited to the amounts recognized in its Statements of Financial Condition and not represented by the contract or notional amounts of the instruments. The Master Fund has credit risk and concentration risk because the sole counterparty or broker with respect to the Master Fund’s assets is UBS Securities or an affiliate thereof. Credit risk with respect to exchange-traded instruments is reduced to the extent that, through UBS Securities, the Master Fund’s counterparty is an exchange or clearing organization. Futures contracts are conducted through regulated exchanges which have margin requirements, and are settled in cash on a daily basis, thereby minimizing credit risk.

The Advisor will concentrate the Master Fund’s trading in energy-related markets. Concentration in a limited number of commodity interests may subject the Master Fund’s account to greater volatility than if a more diversified portfolio of contracts were traded on behalf of the Master Fund.

As both a buyer and seller of options, the Master Fund 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. Written options expose the Master Fund to potentially unlimited liability; for purchased options the risk of loss is limited to the premiums paid. Certain written put options permit cash settlement and do not require the option holder to own the reference asset. As such, the Master Fund does not consider these contracts to be guarantees.

6. Significant Accounting Policies

The Fund’s and the Master Fund’s accounting policies are the same and are consistent with the accounting policies in the Fund’s financial statements on Form 10-K.

Statement of Cash Flows. The Fund is not required to provide a Statement of Cash Flows in accordance with Accounting Standards Codification (“ASC”) 230.

Investment in Master Fund. The Fund records its investment in the Master Fund at fair value and is represented by the Fund’s proportionate interest in the capital of the Master Fund at September 30, 2014 and December 31, 2013. Valuation of securities held by the Master Fund is discussed in the Notes to the Master Fund’s financial statements. The Fund records its pro rata share of the Master Fund’s income, expenses and realized and unrealized gains and losses. The performance of the Fund is directly attributable to the performance of the Master Fund. The Fund records its subscription and withdrawal of the capital account related to its investment in the Master Fund on the transaction date. The Master Fund will adjust the capital account of the Fund. Brokerage, clearing and transaction fees are incurred by the Master Fund and are reflected in the pro rata allocation received by the Fund from the Master Fund.

Subscriptions Received in Advance. Subscriptions received in advance represent amounts paid by the non-managing Members for a percentage ownership into the Fund which have not yet been added as Members’ capital as of September 30, 2014 and December 31, 2013. The amount paid is held as cash in the Fund’s escrow account and represents the cash on the Fund’s Statements of Financial Condition.

Redemptions Payable. Pursuant to ASC Topic 480, Distinguishing Liabilities from Equity, capital withdrawals effective September 30, 2014 and December 31, 2013 have been reflected as redemptions payable in the Statements of Financial Condition.

Income Taxes. The Fund is classified as a partnership for U.S. federal income tax purposes, and the Fund will not pay U.S. federal income tax. As a result, no income tax liability or expense has been recorded in the financial statements.

Sydling has analyzed the Master Fund’s tax positions for the open tax period and has concluded that no provision is required in the Master Fund’s financial statements. The Master Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in its Statements of Income. For the periods ended September 30, 2014 and December 31, 2013, the Master Fund did not incur any interest or penalties.

Table of Contents

Recent Accounting Pronouncements. In June 2013, the FASB issued ASU No. 2013-08, Financial Services — Investment Companies (Topic 946), which creates a two-tiered approach to assess whether an entity is an investment company. The guidance will also require an investment company to measure non-controlling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. The Fund and the Master Fund are investment companies as described in ASU No. 2013-08. The Fund carries its investment in the Master Fund at fair value and therefore, there is no impact to the Fund’s financial statements as a result of adopting the pronouncement.

7. Subsequent Events

Sydling has evaluated the impact of all subsequent events on the Fund through the date of the filing. Subsequent to September 30, 2014, additional subscriptions were received from the non-managing Members totaling $90,000. Subsequent to September 30, 2014, redemptions of $9,228,973 will be paid to the non-managing Members. Sydling has determined that there were no additional subsequent events requiring recognition or disclosure in the financial statements.

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

Liquidity and Capital Resources

The Fund does not engage in sales of goods or services. Its only assets are its investment in the Master Fund, cash and receivables from the Master Fund. The Master Fund does not engage in the sale of goods or services. The Master Fund’s only assets are its equity in its trading accounts, consisting of cash, future options purchased at fair value, net unrealized appreciation on open futures contracts and interest receivable. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Fund, through its investment in the Master Fund. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred during the third quarter of 2014.

For the nine months ended September 30, 2014 and 2013, the Master Fund’s average margin to equity ratio was 2.58% and 2.41%, respectively.

The Fund’s capital consists of the capital contributions of the Members as increased or decreased by income/(loss) from its investment in the Master Fund and by expenses, interest income, redemptions of Redeemable Units and distributions of profits, if any.

For the nine months ended September 30, 2014, the Fund’s capital decreased 33.8% from $155,211,763 to $102,741,638. This decrease was attributable to a net loss from operations of $9,969,003, coupled with the redemptions of Redeemable Units resulting in an outflow of $44,513,122, which was partially offset by subscriptions for Redeemable Units totaling $2,012,000. Future redemptions from the Fund could impact the amount of funds available for investment in the Master Fund in subsequent periods.

The Master Fund’s capital consists of the capital contributions of the Member of the Master Fund as increased or decreased by realized and/or unrealized gains or losses on trading and by expenses, interest income, withdrawals of interest from the Master Fund and distributions of profits, if any.

For the nine months ended September 30, 2014, the Master Fund’s capital decreased 33.8% from $155,211,763 to $102,741,638. This decrease was attributable to a net loss from operations of $7,707,297, coupled with the withdrawal of interest in the Master Fund resulting in an outflow of $46,774,828, which was partially offset by subscriptions for interest in the Master Fund totaling $2,012,000. Future withdrawals from the Master Fund can impact the amount of funds available for investments in commodity contract positions in subsequent periods.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. GAAP requires Sydling to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Sydling believes that the estimates and assumptions utilized in preparing the financial statements are reasonable. Actual results could differ from those estimates. The Fund’s significant accounting policies are described in detail in Note 6. “Significant Accounting Polices.”

The Fund records all investments at fair value in its financial statements, with changes in fair value reported as a component of net realized gains/(losses) and change in net unrealized gains/(losses) in the Statements of Operations and Changes in Members’ Capital.

Table of Contents

Results of Operations

During the Fund’s third quarter of 2014, the net asset value per Redeemable Unit decreased 3.4% from $789.49 to $762.71. The Fund, for its own account, through its investment in the Master Fund, experienced a net trading loss before brokerage fees and related fees in the third quarter of 2014 of $2,149,646. Losses were primarily attributable to the Master Fund’s trading of commodity futures in IPE Brent Crude Oil, RBOB/gasoline, WTI Crude Oil and NYMEX Natural Gas and were partially offset by gains in NYMEX Heating Oil.

The Fund was down for the third quarter of 2014. The Fund’s primary detractors were relative value trades in which the fund had long Brent and long RBOB gasoline positions. The entire petroleum complex extended losses since its peak in June and pushed down further during September as a result of mediocre global demand, increasing production from the United States, increased production from Libya and little negative impact on production from the geopolitical front. Furthermore, the Advisor believed that an increasing glut of global refining capacity would add to the pool of distillate supply leading to lower distillate prices relative to Brent. Additionally, the Advisor established a long gasoline position in July in an attempt to take advantage of seasonality of December contracts and its relative cheapness to distillate. The market did not respond to the fundamentals as the Advisor expected resulting in losses for the Fund. The Master Fund’s positions in WTI crude and gasoil were approximately flat for the quarter.

The Fund’s exposure to natural gas produced slightly negative returns in the third quarter. Natural gas prices traded in a narrow band as robust US production growth was neutralized by low storage figures. The Master Fund had a small long position in July but established a small short position in the second half of August. Going forward, the Advisor believes prices will remain suppressed if temperatures stay below average and production continues to overwhelm demand.

During the Fund’s third quarter of 2013, the net asset value per Redeemable Unit decreased 4.9% from $872.34 to $829.67. The Fund, for its own account, through its investment in the Master Fund, experienced a net trading loss before brokerage fees and related fees in the third quarter of 2013 of $7,567,850. Losses were primarily attributable to the Master Fund’s trading of commodity futures in NYMEX Gasoil, NYMEX Heating Oil, IPE Brent Crude Oil, NYMEX Natural Gas and RBOB/gasoline and were partially offset by gains in WTI Crude Oil.

The Fund was down for the third quarter of 2013 as short positions in Gasoil and Heating Oil declined and as crack spreads rallied. Long WTI Crude saw gains during the summer benefiting from higher Crude oil prices. Other petroleum products such as short IPE Brent Crude Oil and RBOB/gasoline were slightly negative. Political conflict, primarily in the Middle East, was an important factor which drove up Brent and gasoil prices as well as WTI Crude. Throughout the quarter, the Fund largely eliminated its large short distillate structure and began shifting its petroleum focus back towards WTI Crude and more towards short-term fixed-price strategies versus curve-spread structures. By quarter end, all of the petroleum positions were significantly smaller than they were at the beginning of the quarter. The manager believes there is opportunity to increase exposure tactically in the near term. Natural Gas remains the largest profit contributor this year despite a slight loss in the third quarter. The Fund entered the quarter with a bearish view which played out as CME Henry Hub prices declined to $3.12/MM BTU in August as a result of firm supply and limited coal-to-gas fuel switching. The Fund transitioned from a bearish structure to a slightly long position in natural gas after production peaked in July and nonmaterial change is expected in near term demand.

Commodity futures markets are highly volatile. Broad and rapid price fluctuations and rapid inflation increase the risks involved in commodity trading, but also increase the possibility for profit or loss. The profitability of the Fund (and the Master Fund) depends on the Advisor’s ability to forecast price changes in energy and energy-related commodities. Such price changes are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and changes in interest rates. To the extent that the Advisor correctly makes such forecasts, the Fund (and the Master Fund) expects to increase capital through operations.

Brokerage fees are calculated as a percentage of the Fund’s capital account balance at the Master Fund as of the end of each month and are affected by trading performance and redemptions. Brokerage, clearing and transaction fees of the Master Fund for the three months ended September 30, 2014 and 2013 were $1,157,210 and $2,003,804, respectively. Brokerage, clearing and transaction fees of the Master Fund for the nine months ended September 30, 2014 and 2013 were $3,745,863 and $6,743,509, respectively. The decrease in brokerage, clearing and transaction fees for the three and nine months ended September 30, 2014 is due to lower average net assets as compared to the corresponding periods in 2013.

Advisory fees are calculated as a percentage of the Fund’s net asset value as of the end of each month and are affected by trading performance, subscriptions and redemptions.

Table of Contents

Advisory fees of the Fund for the three months ended September 30, 2014 and 2013 were $430,320 and $784,994, respectively. The calculation of advisory fees for the three months ended September 30, 2014 and 2013 was based on a monthly average net asset value of $114,751,991 and $209,331,636, respectively. The decrease in advisory fees for the three months ended September 30, 2014 as compared to the corresponding period in 2013 is due to a decrease in the average net assets.

Advisory fees of the Fund for the nine months ended September 30, 2014 and 2013 were $1,492,686 and $2,598,728, respectively. The calculation of advisory fees for the nine months ended September 30, 2014 and 2013 was based on a monthly average net asset value of $132,683,164 and $230,998,043, respectively. The decrease in advisory fees for the nine months ended September 30, 2014 as compared to the corresponding period in 2013 is due to a decrease in the average net assets.

Administrative fees are paid to Sydling for administering the business and affairs of the Fund. These fees are calculated as a percentage of the Fund’s net asset value as of the end of each month and are affected by trading performance, subscriptions and redemptions.

Administrative fees of the Fund for the three months ended September 30, 2014 and 2013 were $143,440 and $261,665, respectively. The calculation of administrative fees for the three months ended September 30, 2014 and 2013 was based on a monthly average net asset value of $114,751,991 and $209,331,636, respectively. The decrease in administrative fees for the three months ended September 30, 2014 as compared to the corresponding period in 2013 is due to a decrease in the average net assets.

Administrative fees of the Fund for the nine months ended September 30, 2014 and 2013 were $497,562 and $866,243, respectively. The calculation of administrative fees for the nine months ended September 30, 2014 and 2013 was based on a monthly average net asset value of $132,683,164 and $230,998,043, respectively. The decrease in administrative fees for the nine months ended September 30, 2014 as compared to the corresponding period in 2013 is due to a decrease in the average net assets.

Incentive allocations to the Advisor (as the Special Member) are based on the new trading profits generated by the Advisor, allocable at the end of each quarter, as defined in the Trading Advisory Agreement between the Fund, Sydling and the Advisor. There was no incentive allocation made for the nine months ended September 30, 2014 or 2013.

In allocating substantially all of the assets of the Fund to the Master Fund, Sydling considers the Advisor’s past performance, trading style, volatility of markets traded and fee requirements. Sydling may modify or terminate the allocation of assets to the Advisor at any time.

Table of Contents

Item 3. Quantitative and Qualitative Disclosures about Market Risk

All of the Fund’s assets are subject to the risk of trading loss through its investment in the Master Fund.

The Master Fund is a speculative commodity pool. The market sensitive instruments held by the Master Fund are acquired for speculative trading purposes, and all or substantially all of the Fund’s capital is subject to the risk of trading loss through its investment in the Master Fund. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Master Fund’s and the Fund’s main line of business.

The risk to the Members that have purchased Redeemable Units is limited to the amount of their capital contributions to the Fund and their share of Fund assets and undistributed profits. This limited liability is a consequence of the organization of the Fund as a limited liability company under Delaware law.

Market movements result in frequent changes in the fair value of the Master Fund’s open positions and, consequently, in its earnings and cash balances. The Master Fund’s and the Fund’s market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects among the Master Fund’s open contracts and the liquidity of the markets in which the Master Fund trades.

The Master Fund rapidly acquires and liquidates both long and short positions in a range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Master Fund’s past performance is not necessarily indicative of its future results.

“Value at Risk” is a measure of the maximum amount which the Master Fund could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Master Fund’s speculative trading and the recurrence in the markets traded by the Master Fund of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Master Fund’s experience to date (i.e., “risk of ruin”). In light of the foregoing as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Master Fund’s losses in any market sector will be limited to Value at Risk or by the Master Fund’s attempts to manage its market risk.

Exchange maintenance margin requirements have been used by the Master Fund as the measure of its Value at Risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day interval. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component, which is not relevant to Value at Risk.

Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. The following tables indicate the trading Value at Risk associated with the Master Fund’s open positions by market category as of September 30, 2014 and December 31, 2013, and the highest, lowest and average value during the three months ended September 30, 2014 and the twelve months ended December 31, 2013. All open position trading risk exposures of the Master Fund have been included in calculating the figures set forth below. There has been no material change in the trading Value at Risk information previously disclosed in the Fund’s Annual Report on Form 10-K for the year ended December 31, 2013.

As of September 30, 2014, the Master Fund’s total capitalization was $102,741,638 and the Fund owned 100% of the Master Fund. The Fund invests substantially all of its assets in the Master Fund. The Master Fund’s Value at Risk as of September 30, 2014 was as follows:

					Three Months ended September 30, 2014 (unaudited)
Market Sector	Value at Risk		% of Total Capitalization		High Value at Risk		Low Value at Risk		Average Value at Risk*
Energy	$	7,227,791	7.03	%	$	8,338,376	$	512,283	$	2,935,868
Total	$	7,227,791	7.03	%

* Average daily Value at Risk.

Table of Contents

As of December 31, 2013, the Master Fund’s total capitalization was $155,211,763 and the Fund owned 100% of the Master Fund. The Fund invests substantially all of its assets in the Master Fund. The Master Fund’s Value at Risk as of December 31, 2013 was as follows:

					Twelve Months ended December 31, 2013 (unaudited)
Market Sector	Value at Risk		% of Total Capitalization		High Value at Risk		Low Value at Risk		Average Value at Risk*
Energy	$	2,075,137	1.33	%	$	10,102,233	$	1,093,732	$	4,530,496
Total	$	2,075,137	1.33	%

* Average daily Value at Risk.

Item 4. Controls and Procedures

The Fund’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Fund on the reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods expected in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Fund in the reports it files is accumulated and communicated to Sydling, including the President and Chief Financial Officer (“CFO”) of Sydling, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

Sydling is responsible for ensuring that there is an adequate and effective process for establishing, maintaining and evaluating disclosure controls and procedures for the Fund’s external disclosures.

Sydling’s President and CFO have evaluated the effectiveness of the Fund’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2014 and, based on that evaluation, Sydling’s President and CFO have concluded that, at that date, the Fund’s disclosure controls and procedures were effective.

The Fund’s internal control over financial reporting is a process under the supervision of Sydling’s President and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. These controls include policies and procedures that:

· pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Fund;

· provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and (ii) the Fund’s receipts are handled and expenditures are made only pursuant to authorizations of Sydling; and

· provide reasonable assurance regarding prevention or timely detection and correction of unauthorized acquisition, use or disposition of the Fund’s assets that could have a material effect on the financial statements.

There were no changes in the Fund’s internal control over financial reporting process during the fiscal quarter ended September 30, 2014 that materially affected, or are reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The following information supplements and amends the discussion set forth under Item 3. “Legal Proceedings” in the Fund’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. There are no material legal proceedings pending against the Fund and Sydling.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth under Part 1, Item 1A. “Risk Factors” in the Fund’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

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

For the three months ended September 30, 2014, there were additional subscriptions of 1,078.081 Redeemable Units totaling $835,000. The Redeemable Units were issued in reliance upon applicable exemptions from registration under Section 4(a)(2) of the Securities Act of 1933 and Section 506 of Regulation D promulgated thereunder. These Redeemable Units were purchased by accredited investors as defined in Regulation D. In determining the applicability of the exemption, Sydling relied on the fact that the Redeemable Units were purchased by accredited investors in a private offering.

Proceeds of net offering were used for the trading of commodity interests, including futures and option contracts.

The following chart sets forth the purchases of Redeemable Units by the Fund.

Period	(a) Total Number of Redeemable Units Purchased*	(b) Average Price Paid per Redeemable Unit**		(c) Total Number of Redeemable Units Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Redeemable Units that May Yet Be Purchased Under the Plans or Programs
July 1, 2014 — July 31, 2014	9,230.126	$	787.28	N/A	N/A
August 1, 2014 — August 31, 2014	5,679.822	$	759.04	N/A	N/A
September 1, 2014 — September 30, 2014	7,636.803	$	762.71	N/A	N/A
Total	22,546.751	$	769.68

* Generally, Members are permitted to redeem their Redeemable Units as of the end of each month on three business days’ notice to Sydling. Under certain circumstances, Sydling can compel redemption, although to date, it has not exercised this right. Purchases of Redeemable Units by the Fund reflected in the chart above were made in the ordinary course of the Fund’s business in connection with effecting redemptions for Members.

** Redemptions of Redeemable Units are effected as of the end of each month at the net asset value per Redeemable Unit as of that day.

Item 3. Defaults Upon Senior Securities — None

Item 4. Mine Safety Disclosures — None

Item 5. Other Information — None

Table of Contents

Item 6. Exhibits

Exhibit 3.1		Certificate of Formation (filed as Exhibit 3.1 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 3.2		Application for Authority (filed as Exhibit 3.2 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 3.3		Second Amended and Restated LLC Agreement (filed as Exhibit 3.3 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 10.1		Customer Agreement between the Master Fund and UBS Securities (filed as Exhibit 10.1 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 10.2		Agency Agreement between the Fund and UBS Financial Services (filed as Exhibit 10.2 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 10.3		Trading Manager Agreement among the Fund, the Master Fund and Sydling (filed as Exhibit 10.3 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 10.4		Trading Advisory Agreement between the Fund and the Advisor (filed as Exhibit 10.4 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

(a)		Letter from Sydling extending the Trading Advisory Agreement for 2012, dated June 19, 2012 (filed as Exhibit
		10.4(a) to the Form 10-K filed on March 28, 2013 and incorporated herein by reference).

(b)		Amendment to the Trading Advisory Agreement between the Fund and the Advisor (filed as Exhibit 10.4(b) to the Form 10-Q filed on May 15, 2013 and incorporated herein by reference).

(c)		Letter from Sydling extending the Trading Advisory Agreement for 2013, dated June 28, 2013 (filed as Exhibit 10.4(c) to the Form 10-Q filed on August 14, 2013 and incorporated herein by reference).

(d)		Letter from Sydling extending the Trading Advisory Agreement for 2014, dated June 26, 2014 (filed as Exhibit 10.4(d) to the Form 10-Q filed on August 14, 2014 and incorporated herein by reference).

Exhibit 10.5		Fee Arrangement Agreement among Sydling, the Master Fund and UBS Securities (filed as Exhibit 10.5 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 31.1		Rule 13a-14(a)/15d-14(a) Certification (Certification of President and Director filed herewith).

Exhibit 31.2		Rule 13a-14(a)/15d-14(a) Certification (Certification of CFO filed herewith).

Exhibit 32.1		Section 1350 Certification (Certification of President and Director filed herewith).

Exhibit 32.2		Section 1350 Certification (Certification of CFO filed herewith).

Exhibit 99.1		Annual Report of the Fund for the period ended December 31, 2013 (filed as Exhibit 99.1 to the general form for registration of securities on Form 10 filed on April 26, 2012 and incorporated herein by reference).

Exhibit 99.2		Organization Chart (filed as Exhibit 99.2 to the amended general form for registration of securities on Form 10/A filed on August 8, 2012 and incorporated herein by reference).

Exhibit 101.INS		XBRL Instance Document.

Exhibit 101.SCH		XBRL Taxonomy Extension Schema Document.

Exhibit 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

Table of Contents

Exhibit 101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

Exhibit 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit 101.DEF		XBRL Taxonomy Extension Definition Document.

Table of Contents

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.

AAA ENERGY OPPORTUNITIES FUND LLC
(Registrant)


By:	Sydling Futures Management LLC


By:	/s/ Jerry Pascucci
	Jerry Pascucci
	President and Director

Date:	November 14, 2014

AAA Energy Opportunities Fund LLC - FORM 10-Q - November 14, 2014

Attached files