10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒             Quarterly report pursuant to Section 13 or 15(d)

                   of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2017

OR

☐              Transition report pursuant to Section 13 or 15(d)

                    of the Securities Exchange Act of 1934

For the transition period from                      to                     .

Commission File Number 0-19279

EVERFLOW EASTERN PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

Delaware	34-1659910
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

585 West Main Street P.O. Box 629 Canfield, Ohio	44406
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (330) 533-2692

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             

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). Yes    X         No _____

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

Large accelerated filer	Accelerated filer
Non-accelerated filer           (Do not check if a smaller reporting company)	Smaller reporting company              X
Emerging growth company     ________

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

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

There were 5,587,616 Units of limited partnership interest of the registrant as of August 10, 2017. The Units generally do not have any voting rights, but, in certain circumstances, the Units are entitled to one vote per Unit.

Except as otherwise indicated, the information contained in this report is as of June 30, 2017.

EVERFLOW EASTERN PARTNERS, L.P.

INDEX

		DESCRIPTION	PAGE NO.
Part I.	Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets June 30, 2017 and December 31, 2016	F-1
		Consolidated Statements of Operations Three and Six Months Ended June 30, 2017 and 2016	F-3
		Consolidated Statements of Partners’ Equity Six Months Ended June 30, 2017 and 2016	F-4
		Consolidated Statements of Cash Flows Six Months Ended June 30, 2017 and 2016	F-5
		Notes to Unaudited Consolidated Financial Statements	F-6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7
	Item 4.	Controls and Procedures	7
Part II.	Other Information
	Item 6.	Exhibits	8
		Signature	9

2 

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

CONSOLIDATED BALANCE SHEETS

June 30, 2017 and December 31, 2016

	June 30,		December 31,
	2017		2016
	(Unaudited)		(Audited)
ASSETS
CURRENT ASSETS
Cash and equivalents	$	13,272,535	$	11,224,865
Investments		10,141,696		10,080,608
Accounts receivable:
Production		1,414,961		1,014,946
Joint venture partners		-		3,366
Employees' notes receivable		38,500		41,000
Other		10,850		52,831
Total current assets		24,878,542		22,417,616
PROPERTY AND EQUIPMENT
Proved properties (successful efforts accounting method)		181,123,808		181,447,571
Pipeline and support equipment		682,135		682,135
Corporate and other		2,127,423		2,116,482
Gross property and equipment		183,933,366		184,246,188
Less accumulated depreciation, depletion, amortization and write down		173,995,755		173,979,881
Net property and equipment		9,937,611		10,266,307
OTHER ASSETS
Employees' notes receivable		4,135		46,045
Other		122,145		176,558
Total other assets		126,280		222,603
TOTAL ASSETS	$	34,942,433	$	32,906,526

See notes to unaudited consolidated financial statements.

F-1

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

CONSOLIDATED BALANCE SHEETS

June 30, 2017 and December 31, 2016

	June 30,		December 31,
	2017		2016
	(Unaudited)		(Audited)
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,877,946	$	1,703,441
Accrued expenses		680,187		1,137,290
Total current liabilities		2,558,133		2,840,731
DEFERRED INCOME TAXES		74,000		74,000
OPERATIONAL ADVANCES		1,320,740		1,053,582
ASSET RETIREMENT OBLIGATIONS		16,886,330		16,740,630
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' EQUITY, SUBJECT TO REPURCHASE RIGHT
Authorized - 8,000,000 Units
Issued and outstanding - 5,587,616 Units		13,935,883		12,052,848
GENERAL PARTNER'S EQUITY		167,347		144,735
Total partners' equity		14,103,230		12,197,583
TOTAL LIABILITIES AND PARTNERS' EQUITY	$	34,942,433	$	32,906,526

See notes to unaudited consolidated financial statements.

F-2

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017		2016			2017		2016
REVENUES
Crude oil and natural gas sales	$	2,085,823	$	744,385		$	4,286,445	$	1,397,915
Well management and operating		135,098		97,874			278,401		203,187
Other		45,628		25,516			56,069		27,716
Total revenues		2,266,549		867,775			4,620,915		1,628,818
DIRECT COST OF REVENUES
Production costs		530,147		439,509			1,205,130		1,142,524
Well management and operating		79,509		57,989			163,783		120,276
Depreciation, depletion and amortization		190,031		1,025,033			380,890		2,094,928
Accretion expense		88,900		95,500			186,700		205,900
Total direct cost of revenues		888,587		1,618,031			1,936,503		3,563,628
GENERAL AND ADMINISTRATIVE EXPENSE		491,179		541,807			1,071,302		1,150,018
Total cost of revenues		1,379,766		2,159,838			3,007,805		4,713,646
INCOME (LOSS) FROM OPERATIONS		886,783		(1,292,063	)		1,613,110		(3,084,828	)
OTHER INCOME
Interest and dividend income		36,776		21,146			69,791		33,209
Gain on disposal of property and equipment		63,709		-			63,709		-
Gain on sale of other assets		159,037		-			159,037		-
Total other income		259,522		21,146			292,537		33,209
INCOME (LOSS) BEFORE INCOME TAXES		1,146,305		(1,270,917	)		1,905,647		(3,051,619	)
INCOME TAX EXPENSE (BENEFIT)
Current		-		500			-		1,000
Deferred		-		(1,000	)		-		(2,000	)
Total income tax benefit		-		(500	)		-		(1,000	)
NET INCOME (LOSS)	$	1,146,305	$	(1,270,417	)	$	1,905,647	$	(3,050,619	)
Allocation of Partnership Net Income (Loss):
Limited Partners	$	1,132,703	$	(1,255,343	)	$	1,883,035	$	(3,014,421	)
General Partner		13,602		(15,074	)		22,612		(36,198	)
Net income (loss)	$	1,146,305	$	(1,270,417	)	$	1,905,647	$	(3,050,619	)
Net income (loss) per unit	$	0.20	$	(0.23	)	$	0.33	$	(0.54	)

See notes to unaudited consolidated financial statements.

F-3

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY

Six Months Ended June 30, 2017 and 2016

(Unaudited)

	2017		2016
PARTNERS' EQUITY - BEGINNING OF PERIOD	$	12,197,583	$	18,160,096
Net income (loss)		1,905,647		(3,050,619	)
PARTNERS' EQUITY - END OF PERIOD	$	14,103,230	$	15,109,477

See notes to unaudited consolidated financial statements.

F-4

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2017 and 2016

(Unaudited)

	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	1,905,647		$	(3,050,619	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization		424,090			2,138,728
Accretion expense		186,700			205,900
Gain on disposal of property and equipment		(63,709	)		-
Gain on sale of other assets		(159,037	)		-
Deferred income taxes		-			(2,000	)
Changes in assets and liabilities:
Accounts receivable		(396,649	)		50,035
Other current assets		41,981			1,000
Other assets		(12,837	)		-
Accounts payable		174,505			(39,516	)
Accrued expenses		(498,103	)		(478,225	)
Operational advances		267,158			19,582
Total adjustments		(35,901	)		1,895,504
Net cash provided by (used in) operating activities		1,869,746			(1,155,115	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments		(61,088	)		(10,029,229	)
Payments received on receivables from employees		44,410			36,313
Proceeds on disposal of property and equipment		92,200			-
Proceeds on sale of other assets		226,287			-
Purchase of property and equipment		(123,885	)		(470	)
Net cash provided by (used in) investing activities		177,924			(9,993,386	)
NET CHANGE IN CASH AND EQUIVALENTS		2,047,670			(11,148,501	)
CASH AND EQUIVALENTS - BEGINNING OF PERIOD		11,224,865			22,734,047
CASH AND EQUIVALENTS - END OF PERIOD	$	13,272,535		$	11,585,546
Supplemental disclosures of cash flow information and non-cash activities:
Cash paid during the period for:
Income taxes	$	499		$	390

See notes to unaudited consolidated financial statements.

F-5

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies

A. Interim Financial Statements - The interim consolidated financial statements included herein have been prepared by the management of Everflow Eastern Partners, L.P., without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations have been made.

The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by GAAP, or those normally made in an Annual Report on Form 10-K, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto which are incorporated in Everflow Eastern Partners, L.P.’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 28, 2017.

The results of operations for the interim periods may not necessarily be indicative of the results to be expected for the full year.

B. Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates impacting the Company’s financial statements include revenue and expense accruals and oil and gas reserve quantities. In the oil and gas industry, and especially as related to the Company’s natural gas sales, the processing of actual transactions generally occurs 60-90 days after the month of delivery of its product. Consequently, accounts receivable from production and oil and gas sales are recorded using estimated production volumes and market or contract prices. Differences between estimated and actual amounts are recorded in subsequent period’s financial results. As is typical in the oil and gas industry, a significant portion of the Company’s accounts receivable from production and oil and gas sales consists of unbilled receivables. Oil and gas reserve quantities are utilized in the calculation of depreciation, depletion and amortization and the impairment of oil and gas wells and also impact the timing and costs associated with asset retirement obligations. The Company’s estimates, especially those related to oil and gas reserves, could change in the near term and could significantly impact the Company’s results of operations and financial position.

F-6

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies

C. Organization - Everflow Eastern Partners, L.P. (“Everflow”) is a Delaware limited partnership which was organized in September 1990 to engage in the business of oil and gas acquisition, exploration, development and production. Everflow was formed to consolidate the business and oil and gas properties of Everflow Eastern, Inc. (“EEI”) and subsidiaries and the oil and gas properties owned by certain limited partnership and working interest programs managed or sponsored by EEI (“EEI Programs” or the “Programs”).

Everflow Management Limited, LLC (“EML”), an Ohio limited liability company, is the general partner of Everflow and, as such, is authorized to perform all acts necessary or desirable to carry out the purposes and conduct of the business of Everflow. The members of EML are Everflow Management Corporation ("EMC"); two individuals who are officers and directors of EEI and employees of Everflow; one individual who is the Chairman of the Board of EEI; one individual who is an employee of Everflow; and one private limited liability company founded by an individual who is a director of EEI. EMC is an Ohio corporation formed in September 1990 and is the managing member of EML. EML holds no assets other than its general partner’s interest in Everflow, nor does it have any liabilities. In addition, EML has no separate operations or role apart from its role as the Company’s general partner.

D. Principles of Consolidation - The consolidated financial statements include the accounts of Everflow, its wholly-owned subsidiaries, including EEI, and interests with joint venture partners (collectively, the “Company”), which are accounted for under the proportional consolidation method. All significant accounts and transactions between the consolidated entities have been eliminated.

E. Cash and Equivalents - The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company maintains, at various financial institutions, cash and equivalents which may exceed federally insured amounts and which may, at times, significantly exceed balance sheet amounts due to float.  As of June 30, 2017 and December 31, 2016, cash and equivalents include $1,320,740 and $1,053,582, respectively, of operational advances, which are funds collected and held on behalf of joint venture partners for their anticipated share of future plugging and abandonment costs, including interest earned. Operational advances held on behalf of joint venture partners include those held on behalf of employees, including officers and directors (see Note 6).

F. Investments – The Company’s investments are classified as available-for-sale securities and consist of shares held in a mutual fund that invests primarily in investment grade, U.S. dollar denominated short-term fixed and floating rate debt securities. The mutual fund seeks current income while seeking to maintain a low volatility of principal.

F-7

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies

F. Investments (continued)

The Financial Accounting Standards Board established a framework for measuring fair value and expanded disclosures about fair value measurements by establishing a fair value hierarchy that prioritizes the inputs and defines valuation techniques used to measure fair value. The hierarchy gives highest priority to Level I inputs and lowest priority to Level III inputs. The three levels of the fair value hierarchy are described below:

Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

Level III – Pricing inputs are unobservable for the financial instrument and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation.

The Company’s investments are carried at fair market value based on quoted prices available in active markets and are therefore classified as Level 1.

G. Asset Retirement Obligations - GAAP requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. For the Company, these obligations include dismantlement, plugging and abandonment of oil and gas wells and associated pipelines and equipment. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depleted over the estimated useful life of the related asset.

The estimated liability is based on historical experience in dismantling, plugging and abandoning wells, estimated remaining lives of those wells based on reserves estimates, estimates of the external cost to dismantle, plug and abandon the wells in the future and federal and state regulatory requirements. The liability is discounted using an assumed credit-adjusted, risk-free interest rate.

F-8

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies

H. Revenue Recognition - The Company recognizes oil and gas revenues when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred, title and risk of loss have transferred to the purchaser, and collectability of the revenue is reasonably assured. The Company utilizes the sales method to account for gas production volume imbalances. Under this method, revenue is recognized only when gas is produced and sold on the Company’s behalf. The Company had no material gas imbalances at June 30, 2017 and December 31, 2016. Other revenues consist of miscellaneous revenues that are recognized at the time services are rendered, the Company has a contractual right to such revenue and collection is reasonably assured.

The Company participates (and may act as drilling contractor) with unaffiliated joint venture partners and employees in the drilling, development and operation of jointly owned oil and gas properties.

Each owner, including the Company, has an undivided interest in the jointly owned properties. Generally, the joint venture partners and employees participate on the same drilling/development cost basis as the Company and, therefore, no revenue, expense or income is recognized on the drilling and development of the properties. Accounts and notes receivable from joint venture partners and employees consist principally of drilling and development costs the Company has advanced or incurred on behalf of joint venture partners and employees (see Note 6). The Company earns and receives monthly management and operating fees from certain joint venture partners and employees after the properties are completed and placed into production.

I. Income Taxes - Everflow is not a tax-paying entity and the net taxable income or loss, other than the taxable income or loss allocable to EEI, which is a C corporation owned by Everflow, will be allocated directly to its respective partners. The Company is not able to determine the net difference between the tax bases and the reported amounts of Everflow’s assets and liabilities due to separate elections that were made by owners of the working interests and limited partnership interests that comprised the Programs.

The Company believes that it has appropriate support for any tax positions taken and, as such, does not have any uncertain tax positions that are material to the financial statements.  The Company's tax returns are subject to examination by the Internal Revenue Service, as well as various state and local taxing authorities, generally for three years after they are filed.

F-9 

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies

J. Allocation of Income and Per Unit Data - Under the terms of the limited partnership agreement, initially, 99% of revenues and costs were allocated to the Unitholders (the limited partners) and 1% of revenues and costs were allocated to the General Partner. Such allocation has changed and may change in the future due to Unitholders electing to exercise the Repurchase Right and select officers and employees electing to exercise options (see Note 3).

Earnings per limited partner Unit have been computed based on the weighted average number of Units outstanding during each period presented. Average outstanding Units for earnings per limited partner Unit calculations amounted to 5,587,616 for the three and six months ended June 30, 2017 and 2016, respectively.

K. New Accounting Standards – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”).  ASU 2014-09 is intended to improve the financial reporting requirements for revenue from contracts with customers by providing a principle based approach.  The core principle of the standard is that revenue should be recognized when the transfer of promised goods or services is made in an amount that the entity expects to be entitled to in exchange for the transfer of goods and services.  ASU 2014-09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09, through issuance of ASU 2015-14, is to be effective for financial statements issued for annual periods beginning after December 31, 2017 (including interim reporting periods within those periods). Early adoption is permitted as of the original effective date. The Company is currently evaluating the potential impact of these standards on the financial statements.  

The Company has reviewed all other recently issued accounting standards in order to determine their effects, if any, on the consolidated financial statements. Based on that review, the Company believes that none of these standards will have a significant effect on current or future earnings or results of operations.

F-10

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Current Liabilities

The Company’s current liabilities consist of the following at June 30, 2017 and December 31, 2016:

	June 30,		December 31,
	2017		2016
Accounts Payable:
Production and related other	$	1,538,811	$	1,364,131
Other		291,901		292,076
Joint venture partner deposits		47,234		47,234
Total accounts payable	$	1,877,946	$	1,703,441
Accrued Expenses:
Current portion of asset retirement obligations	$	384,000	$	384,000
Payroll and retirement plan contributions		275,227		641,326
Federal, state and local taxes		16,560		32,464
Other		4,400		79,500
Total accrued expenses	$	680,187	$	1,137,290

Note 3. Partners’ Equity

Units represent limited partnership interests in Everflow. The Units are transferable subject to the approval of EML and to the laws governing the transfer of securities. The Units are not listed for trading on any securities exchange nor are they quoted in the automated quotation system of a registered securities association. However, Unitholders may have an opportunity to require Everflow to repurchase their Units pursuant to the Repurchase Right.

The partnership agreement provides that Everflow will repurchase for cash up to 10% of the then outstanding Units, to the extent Unitholders offer Units to Everflow for repurchase pursuant to the Repurchase Right. The Repurchase Right entitles any Unitholder, between May 1 and June 30 of each year, to notify Everflow that the Unitholder elects to exercise the Repurchase Right and have Everflow acquire certain or all Units. The price to be paid for any such Units is calculated based upon the audited financial statements of the Company as of December 31 of the year prior to the year in which the Repurchase Right is to be effective and independently prepared reserve reports. The price per Unit equals 66% of the adjusted book value of the Company allocable to the Units, divided by the number of Units outstanding at the beginning of the year in which the

F-11

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Partners’ Equity (continued)

applicable Repurchase Right is to be effective less interim cash distributions received by a Unitholder. The adjusted book value is calculated by adding partners’ equity, the Standardized Measure of Discounted Future Net Cash Flows and the tax effect included in the Standardized Measure and subtracting from that sum the carrying value of oil and gas properties (net of undeveloped lease costs). If more than 10% of the then outstanding Units are tendered during any period during which the Repurchase Right is to be effective, the Investors’ Units tendered shall be prorated for purposes of calculating the actual number of Units to be acquired during any such period. The Company determined that the price associated with the 2017 Repurchase Right, based upon the December 31, 2016 calculation, is negative, and as such the Company did not offer to repurchase Units in 2017. Additionally, the Company did not offer to repurchase Units in 2016. The Company has not made a distribution in 2017.

The Company has an Option Repurchase Plan (the “Option Plan”) which permits the grant of options to select officers and employees to purchase certain Units acquired by the Company pursuant to the Repurchase Right. The purpose of the Option Plan is to assist the Company to attract and retain officers and other key employees and to enable those individuals to acquire or increase their ownership interest in the Company in order to encourage them to promote the growth and profitability of the Company. The Option Plan is designed to align directly the financial interests of the participants with the financial interests of the Unitholders. The Company did not grant any options in 2017 or 2016.

Units repurchased pursuant to the Repurchase Right and Units issued through the exercise of options pursuant to the Option Plan (collectively the “Units Activity”) for the years 2014 and 2015 are as follows:

	Per Unit										Units Out-
	Calculated										standing
	Price for		Less		Net						Following
	Repurchase		Interim		Price		Units		Units		Units
Year	Right		Distributions		Paid		Repurchased		Issued		Activity
2014	$	7.010	$	0.500	$	6.51		11,964		5,982		5,601,003
2015	$	4.935	$	0.375	$	4.56		26,774		13,387		5,587,616

All Units repurchased pursuant to the Repurchase Right are retired except for those Units issued through the exercise of options pursuant to the Option Plan. There were no instruments outstanding at June 30, 2017 or 2016 that would potentially dilute net income per Unit.

F-12

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 4. Gas Purchase Agreements

The Company has multiple contracts with Dominion Field Services and Interstate Gas Supply (collectively, the “Gas Purchasers”) which obligate the Gas Purchasers to purchase, and the Company to sell and deliver, certain quantities of natural gas production from the Company’s oil and gas properties throughout the contract periods. The Company may elect to lock-in specific volumes of natural gas to be sold in specific months at a mutually agreeable price. The Company has elected to lock-in various monthly quantities of natural gas which total 390,000 MCF from July 2017 through March 2018 at various monthly weighted-average pricing provisions averaging $2.93 per MCF, net of regional basis adjustments. Pricing provisions with the Gas Purchasers apply to certain fixed quantities on a monthly basis with excess monthly quantities being priced based on the current spot market price, plus or minus a current regional basis adjustment. The impact of these contracts on the Company’s future oil and gas sales cannot fully be measured until actual production volumes and prices have been determined.

Note 5. Commitments and Contingencies

The Company operates exclusively in Ohio and Pennsylvania of the United States in the business of oil and gas acquisition, exploration, development and production. The Company operates in an environment with many financial risks, including, but not limited to, the ability to acquire additional economically recoverable oil and gas reserves, the inherent risks of the search for, development of and production of oil and gas, the ability to sell oil and gas at prices which will provide attractive rates of return, the volatility and seasonality of oil and gas production and prices, and the highly competitive and, at times, seasonal nature of the industry and worldwide economic conditions. The Company’s ability to expand its reserve base and diversify its operations is also dependent upon the Company’s ability to obtain the necessary capital through operating cash flow, borrowings or equity offerings. Various federal, state and governmental agencies are considering, and some have adopted, laws and regulations regarding environmental protection which could adversely affect the proposed business activities of the Company. The Company cannot predict what effect, if any, current and future regulations may have on the operations of the Company.

The Company has natural gas delivery commitments to the Gas Purchasers (see Note 4). Management believes the Company can meet its delivery commitments based on estimated production. If, however, the Company cannot meet its delivery commitments, it may be required to purchase natural gas at market prices to meet such commitments which may result in a gain or loss for the difference between the delivery commitment price and the price at which the Company is able to purchase the natural gas for redelivery (resale) to its customers.

The Company is party to various legal proceedings and claims in the ordinary course of its business. The Company believes certain of these matters will be covered by insurance and that the outcome of other matters will not have a material adverse effect on its consolidated financial position, results of operations, or liquidity.

F-13

Table of Contents

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 6. Related Party Transactions

The Company’s officers, directors, affiliates and certain employees have frequently participated, and will likely continue to participate in the future, as working interest owners in wells in which the Company has an interest. Frequently, the Company has loaned the funds necessary for certain employees to participate in the drilling and development of such wells. Initial terms of the unsecured loans call for repayment of all principal and accrued interest at the end of four years, however, the loan amounts are reduced from payments made by employees and as production proceeds attributable to the employees’ working interests are not remitted to the employees but rather used to reduce the amounts owed by the employees to the Company. If an outstanding balance remains after the initial four-year term, the Company and employee shall, acting in good faith, agree upon further repayment terms.

Employees remain obligated for the entire loan amount regardless of a dry-hole event or otherwise insufficient production. The loans carry no loan forgiveness provisions, and no loans have ever been forgiven. The loans accrue interest at the prime rate, which was 4.25% at June 30, 2017.

In accordance with the Sarbanes-Oxley Act of 2002, the Company has not extended any loans to officers or directors since 2002. At June 30, 2017 and December 31, 2016, the Company has extended various loans, evidenced by notes, to two employees with origination dates ranging from December 2010 to December 2015. In addition, two subsequent addenda extending additional payment terms to certain notes are outstanding at June 30, 2017. Employees’ notes receivable, including accrued interest, amounted to $42,635 and $87,045 at June 30, 2017 and December 31, 2016, respectively.

The Company collects and holds operational advances from employees, including officers and directors, who own working interests in wells of which the Company operates (see Note 1). Operational advances held on behalf of employees, including officers and directors, as of June 30, 2017 and December 31, 2016 were approximately $118,200 and $40,300, respectively.

F-14

Table of Contents

Part I:  Financial Information

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to assist in the understanding of the Company’s liquidity, capital resources and results of operations. It is suggested that this information be read in conjunction with the Company’s interim consolidated financial statements, the related notes to consolidated financial statements and the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2017.

Liquidity and Capital Resources

The following table summarizes the Company's financial position at June 30, 2017 and December 31, 2016:

	June 30, 2017					December 31, 2016
	Amount		%			Amount		%
	(Amounts in Thousands)					(Amounts in Thousands)
Working capital	$	22,320		69	%	$	19,577		65	%
Property and equipment (net)		9,938		31			10,266		34
Other		126		-			223		1
Total	$	32,384		100	%	$	30,066		100	%
Deferred income taxes	$	74		-	%	$	74		-	%
Long-term liabilities		18,207		56			17,794		59
Partners' equity		14,103		44			12,198		41
Total	$	32,384		100	%	$	30,066		100	%

Working capital of $22.3 million as of June 30, 2017 represented an increase of $2.7 million from December 31, 2016, due primarily to increases in cash and equivalents and accounts receivable from production and a decrease in accrued expenses, offset somewhat by an increase in accounts payable. The increase in cash and equivalents is primarily the result of cash provided by operating and investing activities during the six months ended June 30, 2017. The increase in accounts receivable from production is primarily the result of increases in natural gas volumes produced and higher natural gas prices received during the current receivable production period as compared to the prior comparable receivable production period. The primary reason for the increase in natural gas volumes produced is the result of less operated oil and gas properties being voluntarily shut-in during the current receivable production period as compared to the prior comparable receivable production period. The decrease in accrued expenses is primarily the result of all payroll and retirement contributions accrued at December 31, 2016 having been paid during the six months ended June 30, 2017. The increase in accounts payable is primarily due to an increase in production and related other payables due.

3

Table of Contents

The Company funds its operation with cash generated by operations and/or existing cash and equivalent balances. The Company has had no borrowings since 2003 and no principal indebtedness was outstanding as of August 10, 2017.

The Company’s cash flow provided by operations before the change in working capital was $2.5 million during the six months ended June 30, 2017, an increase of $3.2 million as compared to $688,000 of cash flow used in operations before the change in working capital during the prior comparable period. Changes in working capital from operations other than cash and equivalents decreased cash by $678,000 during the six months ended June 30, 2017 due primarily to an increase in accounts receivable from production and a decrease in accrued expenses, offset somewhat by an increase in accounts payable. Cash flows provided by operating activities was $1.9 million for the six months ended June 30, 2017.

Management of the Company believes cash flows and existing cash and equivalents should be sufficient to meet the current funding requirements of ongoing operations and capital investments to develop and/or purchase oil and gas properties. The Company has not paid a quarterly cash distribution since October 2015.

The Company has multiple contracts with Dominion Field Services and Interstate Gas Supply (collectively, the “Gas Purchasers”) which obligate the Gas Purchasers to purchase, and the Company to sell and deliver, certain quantities of natural gas production from the Company’s oil and gas properties throughout the contract periods. The Company may elect to lock-in specific volumes of natural gas to be sold in specific months at a mutually agreeable price. The Company has elected to lock-in various monthly quantities of natural gas which total 390,000 MCF from July 2017 through March 2018 at various monthly weighted-average pricing provisions averaging $2.93 per MCF, net of regional basis adjustments. Pricing provisions with the Gas Purchasers apply to certain fixed quantities on a monthly basis with excess monthly quantities being priced based on the current spot market price, plus or minus a current regional basis adjustment. The impact of these contracts on the Company’s future oil and gas sales cannot fully be measured until actual production volumes and prices have been determined.

4

Table of Contents

Results of Operations

The following table and discussion is a review of the results of operations of the Company for the three and six month periods ended June 30, 2017 and 2016. All items in the table are calculated as a percentage of total revenues. This table should be read in conjunction with the discussions of each item below:

	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2017			2016			2017			2016
Revenues:
Crude oil and natural gas sales		92	%		86	%		93	%		86	%
Well management and operating		6			11			6			12
Other		2			3			1			2
Total revenues		100	%		100	%		100	%		100	%
Expenses:
Production costs		23			50			26			70
Well management and operating		4			7			4			7
Depreciation, depletion and amortization		8			118			8			129
Accretion expense		4			11			4			13
General and administrative expense		22			62			23			70
Total expenses		61	%		248	%		65	%		289	%
Other income:
Interest and dividend income		2			2			2			2
Gain on disposal of property and equipment		3			-			1			-
Gain on sale of other assets		7			-			3			-
Total other income		12	%		2	%		6	%		2	%
Net income (loss)		51	%		(146	)%		41	%		(187	)%

Revenues for the three and six month periods ended June 30, 2017 increased $1.4 million and $3.0 million, respectively, as compared to the prior comparable periods. Both increases were primarily the result of increases in crude oil and natural gas sales.

Crude oil and natural gas sales increased $1.3 million, or 180%, during the three months ended June 30, 2017 as compared to the prior comparable period. Crude oil and natural gas sales increased $2.9 million, or 207%, during the six months ended June 30, 2017 as compared to the prior comparable period. The increases were the combined result of increases in natural gas and crude oil volumes produced and higher natural gas and crude oil prices received during the three and six month periods ended June 30, 2017 as compared to the prior comparable periods. The increases in volumes produced was primarily the result of less Company operated properties being voluntarily shut-in during the three and six month periods ended June 30, 2017 as compared to the prior comparable periods.

5

Table of Contents

Production costs increased $91,000, or 21%, during the three month period ended June 30, 2017 as compared to the prior comparable period. Production costs increased $63,000, or 5%, during the six month period ended June 30, 2017 as compared to the prior comparable period. These increases were primarily the result of additional costs associated with less Company operated oil and gas properties voluntarily shut-in during the three and six month periods ended June 30, 2017 as compared to the prior comparable periods.

Depreciation, depletion and amortization (“DD&A”) decreased $835,000, or 81%, during the three months ended June 30, 2017 as compared to the prior comparable period. DD&A decreased $1.7 million, or 82%, during the six months ended June 30, 2017 as compared to the prior comparable period. The primary reasons for the decreases are less depletable bases of oil and gas properties available to deplete during the three and six month periods ended June 30, 2017 as compared to the prior comparable periods and higher projected natural gas and crude oil reserves, the effects of which are offset somewhat by an increase in natural gas and crude oil volumes produced during the three and six month periods ended June 30, 2017 as compared to the prior comparable periods. Less depletable bases of oil and gas properties is primarily the result of $26.8 million of DD&A, write down/impairment and abandonment of properties recognized during the fiscal years ended December 31, 2015 and 2016. The increase in projected natural gas and crude oil reserves is primarily the result of higher benchmark natural gas and crude oil prices indexed throughout the first six months of 2017 as compared to the benchmark prices indexed throughout the prior comparable period. The higher 2017 benchmark prices project to increase reserves at December 31, 2017, the next scheduled valuation date, which will in turn project to increase the average economic life of the Company’s oil and gas properties as compared to December 31, 2016, the prior valuation date.

General and administrative expense decreased $51,000, or 9%, during the three months ended June 30, 2017 as compared to the prior comparable period. General and administrative expense decreased $79,000, or 7%, during the six months ended June 30, 2017 as compared to the prior comparable period. The primary reason for these decreases is the result of cost cutting measures management has implemented in response to the recent years’ environment of volatile and often-depressed crude oil and natural gas prices within the national and regional oil and gas industries and its related effects on the Company’s sales, operational cash flows and working capital.

The Company recognized other income of $260,000 and $293,000 during the three and six months ended June 30, 2017, respectively, as compared to $21,000 and $33,000 of other income recognized during the three and six months ended June 30, 2016, respectively. Other income recognized during the three and six months ended June 30, 2017 included $64,000 of gains associated with disposal of property and equipment and a $159,000 gain associated with a sale of other assets.

The Company reported net income of $1.1 million and $1.9 million during the three and six months ended June 30, 2017, respectively, whereas the Company reported a net loss of $1.3 million and $3.1 million during the three and six months ended June 30, 2016, respectively. The increase in net income was primarily the result of increases in crude oil and natural gas sales and other income and decreases in DD&A and general and administrative expense, the effects of which were offset somewhat by an increase in production costs. The Company’s net income represented 51% and 41% of total revenues during the three and six month periods ended June 30, 2017, respectively, whereas the Company’s net loss represented 146% and 187% of total revenues during the three and six month periods ended June 30, 2016, respectively.

6

Table of Contents

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The critical accounting policies that affect the Company’s more complex judgments and estimates are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Forward-Looking Statements

Except for historical financial information contained in this Form 10-Q, the statements made in this report are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). In addition, words such as “expects,” “anticipate,” “intends,” “plans,” “believes,” “estimates,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include price fluctuations in the gas market in the Appalachian Basin, actual oil and gas production and the ability to locate economically productive oil and gas prospects for development by the Company. In addition, any forward-looking statements speak only as of the date on which such statement is made and the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This information has been omitted, as the Company qualifies as a smaller reporting company.

Item 4. CONTROLS AND PROCEDURES

(a)           Disclosure Controls and Procedures. As of the end of the period covered by this report, management performed, with the participation of our Principal Executive Officer (the “CEO”) and Principal Financial and Accounting Officer (the “CFO”), an evaluation of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15 (the “evaluation”). Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures. Based on the evaluation, management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

The certifications of the Company’s CEO and CFO are attached as Exhibits 31.1 and 31.2 to this Quarterly Report on Form 10-Q and include, in paragraph 4 of such certifications, information concerning the Company’s disclosure controls and procedures and internal control over financial reporting. Such certifications should be read in conjunction with the information contained in this Item 4., including the information incorporated by

reference to our filing on Form 10-K for the year ended December 31, 2016, for a more complete understanding of the matters covered by such certifications.

(b)           Changes in internal control over financial reporting. No change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

7

Table of Contents

Part II.  Other Information

Item 6.                EXHIBITS

Exhibit 31.1 Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF XBRL Taxonomy Definition Linkbase Document

8

Table of Contents

SIGNATURE

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.

	EVERFLOW EASTERN PARTNERS, L.P.
	By:	EVERFLOW MANAGEMENT LIMITED, LLC
		General Partner
	By:	EVERFLOW MANAGEMENT CORPORATION
		Managing Member
Dated: August 10, 2017	By:	/s/ Brian A. Staebler
		Brian A. Staebler
		Vice President, Secretary-Treasurer and Principal Financial and Accounting Officer
		(Duly Authorized Officer)

9

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William A. Siskovic, certify that:

1.             I have reviewed this Quarterly Report on Form 10-Q of Everflow Eastern Partners, L.P.;

2.            Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.             Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.             The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(c) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)     designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)     designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)     evaluated the effectiveness of the registrant’s disclosure controls and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report, based on such evaluation; and

d)     disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.             The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)     all significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 10, 2017
	/s/ William A. Siskovic
	William A. Siskovic
	President and Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian A. Staebler, certify that:

1.             I have reviewed this Quarterly Report on Form 10-Q of Everflow Eastern Partners, L.P.;

2.             Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.             Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.             The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(c) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)     designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)     designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)     evaluated the effectiveness of the registrant’s disclosure controls and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report, based on such evaluation; and

d)     disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.             The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)     all significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 10, 2017
	/s/ Brian A. Staebler
	Brian A. Staebler
	Vice President, Secretary-Treasurer and Principal Financial and Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned, William A. Siskovic, President and Principal Executive Officer of Everflow Eastern Partners, L.P. (the “Company”), and Brian A. Staebler, Vice President, Secretary-Treasurer and Principal Financial and Accounting Officer of the Company, hereby certify that, to his knowledge:

(1)     the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)     the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

Dated:     August 10, 2017          

/s/ William A. Siskovic

William A. Siskovic

President and Principal Executive Officer

/s/ Brian A. Staebler

Brian A. Staebler

Vice President, Secretary-Treasurer and Principal Financial and Accounting Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 10, 2017
Document Information [Line Items]
Entity Registrant Name	EVERFLOW EASTERN PARTNERS LP
Entity Central Index Key	0000868082
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		5,587,616
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash and equivalents	$ 13,272,535	$ 11,224,865
Investments	10,141,696	10,080,608
Accounts receivable:
Production	1,414,961	1,014,946
Joint venture partners		3,366
Employees' notes receivable	38,500	41,000
Other	10,850	52,831
Total current assets	24,878,542	22,417,616
PROPERTY AND EQUIPMENT
Proved properties (successful efforts accounting method)	181,123,808	181,447,571
Pipeline and support equipment	682,135	682,135
Corporate and other	2,127,423	2,116,482
Gross property and equipment	183,933,366	184,246,188
Less accumulated depreciation, depletion, amortization and write down	173,995,755	173,979,881
Net property and equipment	9,937,611	10,266,307
OTHER ASSETS
Employees' notes receivable	4,135	46,045
Other	122,145	176,558
Total other assets	126,280	222,603
TOTAL ASSETS	34,942,433	32,906,526
CURRENT LIABILITIES
Accounts payable	1,877,946	1,703,441
Accrued expenses	680,187	1,137,290
Total current liabilities	2,558,133	2,840,731
DEFERRED INCOME TAXES	74,000	74,000
OPERATIONAL ADVANCES	1,320,740	1,053,582
ASSET RETIREMENT OBLIGATIONS	16,886,330	16,740,630
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' EQUITY, SUBJECT TO REPURCHASE RIGHT
Authorized - 8,000,000 Units Issued and outstanding - 5,587,616 Units	13,935,883	12,052,848
GENERAL PARTNER'S EQUITY	167,347	144,735
Total partners' equity	14,103,230	12,197,583
TOTAL LIABILITIES AND PARTNERS' EQUITY	$ 34,942,433	$ 32,906,526

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - shares	Jun. 30, 2017	Dec. 31, 2016
Limited partner's equity, units authorized (in shares)	8,000,000	8,000,000
Limited partner's equity, units issued (in shares)	5,587,616	5,587,616
Limited partner's equity, units outstanding (in shares)	5,587,616	5,587,616

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
REVENUES
Crude oil and natural gas sales	$ 2,085,823	$ 744,385	$ 4,286,445	$ 1,397,915
Well management and operating	135,098	97,874	278,401	203,187
Other	45,628	25,516	56,069	27,716
Total revenues	2,266,549	867,775	4,620,915	1,628,818
DIRECT COST OF REVENUES
Production costs	530,147	439,509	1,205,130	1,142,524
Well management and operating	79,509	57,989	163,783	120,276
Depreciation, depletion and amortization	190,031	1,025,033	380,890	2,094,928
Accretion expense	88,900	95,500	186,700	205,900
Total direct cost of revenues	888,587	1,618,031	1,936,503	3,563,628
GENERAL AND ADMINISTRATIVE EXPENSE	491,179	541,807	1,071,302	1,150,018
Total cost of revenues	1,379,766	2,159,838	3,007,805	4,713,646
INCOME (LOSS) FROM OPERATIONS	886,783	(1,292,063)	1,613,110	(3,084,828)
OTHER INCOME
Interest and dividend income	36,776	21,146	69,791	33,209
Gain on disposal of property and equipment	63,709		63,709
Gain on sale of other assets	159,037		159,037
Total other income	259,522	21,146	292,537	33,209
INCOME (LOSS) BEFORE INCOME TAXES	1,146,305	(1,270,917)	1,905,647	(3,051,619)
INCOME TAX EXPENSE (BENEFIT)
Current		500		1,000
Deferred		(1,000)		(2,000)
Total income tax benefit		(500)		(1,000)
NET INCOME (LOSS)	1,146,305	(1,270,417)	1,905,647	(3,050,619)
Allocation of Partnership Net Income (Loss):
Limited Partners	1,132,703	(1,255,343)	1,883,035	(3,014,421)
General Partner	13,602	(15,074)	22,612	(36,198)
Net income (loss)	$ 1,146,305	$ (1,270,417)	$ 1,905,647	$ (3,050,619)
Net income (loss) per unit (in dollars per share)	$ 0.20	$ (0.23)	$ 0.33	$ (0.54)

XML

Consolidated Statements of Partners' Equity (Unaudited)	USD ($)
PARTNERS' EQUITY - BEGINNING OF PERIOD at Dec. 31, 2015	$ 18,160,096
Net income (loss)	(3,050,619)
PARTNERS' EQUITY - END OF PERIOD at Jun. 30, 2016	15,109,477
PARTNERS' EQUITY - BEGINNING OF PERIOD at Dec. 31, 2016	12,197,583
Net income (loss)	1,905,647
PARTNERS' EQUITY - END OF PERIOD at Jun. 30, 2017	$ 14,103,230

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 1,905,647	$ (3,050,619)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization	424,090	2,138,728
Accretion expense	186,700	205,900
Gain on disposal of property and equipment	(63,709)
Gain on sale of other assets	(159,037)
Deferred income taxes		(2,000)
Changes in assets and liabilities:
Accounts receivable	(396,649)	50,035
Other current assets	41,981	1,000
Other assets	(12,837)
Accounts payable	174,505	(39,516)
Accrued expenses	(498,103)	(478,225)
Operational advances	267,158	19,582
Total adjustments	(35,901)	1,895,504
Net cash provided by (used in) operating activities	1,869,746	(1,155,115)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(61,088)	(10,029,229)
Payments received on receivables from employees	44,410	36,313
Proceeds on disposal of property and equipment	92,200
Proceeds on sale of other assets	226,287
Purchase of property and equipment	(123,885)	(470)
Net cash provided by (used in) investing activities	177,924	(9,993,386)
NET CHANGE IN CASH AND EQUIVALENTS	2,047,670	(11,148,501)
CASH AND EQUIVALENTS - BEGINNING OF PERIOD	11,224,865	22,734,047
CASH AND EQUIVALENTS - END OF PERIOD	13,272,535	11,585,546
Supplemental disclosures of cash flow information and non-cash activities:
Income taxes	$ 499	$ 390

XML

Note 1 - Organization and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

Note 1. Organization and Summary of Significant Accounting Policies

A. Interim Financial Statements - The interim consolidated financial statements included herein have been prepared by the management of Everflow Eastern Partners, L.P., without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations have been made.

The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form

10

-Q and Article

8

-

03

of Regulation S-

X.

Accordingly, they do

not

include all of the disclosures normally required by GAAP, or those normally made in an Annual Report on Form

10

-K, although the Company believes that the disclosures made are adequate to make the information

not

misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto which are incorporated in Everflow Eastern Partners, L.P.’s annual report on Form

10

-K filed with the Securities and Exchange Commission (“SEC”) on

March 28, 2017.

The results of operations for the interim periods

may

not

necessarily be indicative of the results to be expected for the full year.

B. Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates impacting the Company’s financial statements include revenue and expense accruals and oil and gas reserve quantities. In the oil and gas industry, and especially as related to the Company’s natural gas sales, the processing of actual transactions generally occurs 60 - 90 days after the month of delivery of its product. Consequently, accounts receivable from production and oil and gas sales are recorded using estimated production volumes and market or contract prices. Differences between estimated and actual amounts are recorded in subsequent period’s financial results. As is typical in the oil and gas industry, a significant portion of the Company’s accounts receivable from production and oil and gas sales consists of unbilled receivables. Oil and gas reserve quantities are utilized in the calculation of depreciation, depletion and amortization and the impairment of oil and gas wells and also impact the timing and costs associated with asset retirement obligations. The Company’s estimates, especially those related to oil and gas reserves, could change in the near term and could significantly impact the Company’s results of operations and financial position.

C. Organization - Everflow Eastern Partners, L.P. (“Everflow”) is a Delaware limited partnership which was organized in September 1990 to engage in the business of oil and gas acquisition, exploration, development and production. Everflow was formed to consolidate the business and oil and gas properties of Everflow Eastern, Inc. (“EEI”) and subsidiaries and the oil and gas properties owned by certain limited partnership and working interest programs managed or sponsored by EEI (“EEI Programs” or the “Programs”).

Everflow Management Limited, LLC (“EML”), an Ohio limited liability company, is the general partner of Everflow and, as such, is authorized to perform all acts necessary or desirable to carry out the purposes and conduct of the business of Everflow. The members of EML are Everflow Management Corporation ("EMC");

two

individuals who are officers and directors of EEI and employees of Everflow;

one

individual who is the Chairman of the Board of EEI;

one

individual who is an employee of Everflow; and

one

private limited liability company founded by an individual who is a director of EEI. EMC is an Ohio corporation formed in

September 1990

and is the managing member of EML.

EML holds

no

assets other than its general partner’s interest in Everflow,

nor

does it have any liabilities. In addition, EML has

no

separate operations or role apart from its role as the Company’s general partner.

D. Principles of Consolidation - The consolidated financial statements include the accounts of Everflow, its wholly-owned subsidiaries, including EEI, and interests with joint venture partners (collectively, the “Company”), which are accounted for under the proportional consolidation method. All significant accounts and transactions between the consolidated entities have been eliminated.

E. Cash and Equivalents - The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company maintains, at various financial institutions, cash and equivalents which may exceed federally insured amounts and which may, at times, significantly exceed balance sheet amounts due to float.  As of June 30, 2017 and December 31, 2016, cash and equivalents include $1,320,740 and $1,053,582, respectively, of operational advances, which are funds collected and held on behalf of joint venture partners for their anticipated share of future plugging and abandonment costs, including interest earned. Operational advances held on behalf of joint venture partners include those held on behalf of employees, including officers and directors (see Note 6 ).

F. Investments – The Company’s investments are classified as available-for-sale securities and consist of shares held in a mutual fund that invests primarily in investment grade, U.S. dollar denominated short-term fixed and floating rate debt securities. The mutual fund seeks current income while seeking to maintain a low volatility of principal.

The Financial Accounting Standards Board established a framework for measuring fair value and expanded disclosures about fair value measurements by establishing a fair value hierarchy that prioritizes the inputs and defines valuation techniques used to measure fair value. The hierarchy gives highest priority to Level I inputs and lowest priority to Level III inputs. The

three

levels of the fair value hierarchy are described below:

Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

Level III – Pricing inputs are unobservable for the financial instrument and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation.

The Company’s investments are carried at fair market value based on quoted prices available in active markets and are therefore classified as Level

1.

G. Asset Retirement Obligations - GAAP requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. For the Company, these obligations include dismantlement, plugging and abandonment of oil and gas wells and associated pipelines and equipment. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depleted over the estimated useful life of the related asset.

The estimated liability is based on historical experience in dismantling, plugging and abandoning wells, estimated remaining lives of those wells based on reserves estimates, estimates of the external cost to dismantle, plug and abandon the wells in the future and federal and state regulatory requirements. The liability is discounted using an assumed credit-adjusted, risk-free interest rate.

H. Revenue Recognition - The Company recognizes oil and gas revenues when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred, title and risk of loss have transferred to the purchaser, and collectability of the revenue is reasonably assured. The Company utilizes the sales method to account for gas production volume imbalances. Under this method, revenue is recognized only when gas is produced and sold on the Company’s behalf. The Company had no material gas imbalances at June 30, 2017 and December 31, 2016. Other revenues consist of miscellaneous revenues that are recognized at the time services are rendered, the Company has a contractual right to such revenue and collection is reasonably assured.

The Company participates (and

may

act as drilling contractor) with unaffiliated joint venture partners and employees in the drilling, development and operation of jointly owned oil and gas properties.

Each owner, including the Company, has an undivided interest in the jointly owned properties. Generally, the joint venture partners and employees participate on the same drilling/development cost basis as the Company and, therefore,

no

revenue, expense or income is recognized on the drilling and development of the properties. Accounts and notes receivable from joint venture partners and employees consist principally of drilling and development costs the Company has advanced or incurred on behalf of joint venture partners and employees (see Note

6

). The Company earns and receives monthly management and operating fees from certain joint venture partners and employees after the properties are completed and placed into production.

I. Income Taxes - Everflow is not a tax-paying entity and the net taxable income or loss, other than the taxable income or loss allocable to EEI, which is a C corporation owned by Everflow, will be allocated directly to its respective partners. The Company is not able to determine the net difference between the tax bases and the reported amounts of Everflow’s assets and liabilities due to separate elections that were made by owners of the working interests and limited partnership interests that comprised the Programs.

The Company believes that it has appropriate support for any tax positions taken and, as such, does

not

have any uncertain tax positions that are material to the financial statements.  The Company's tax returns are subject to examination by the Internal Revenue Service, as well as various state and local taxing authorities, generally for

three

years after they are filed.

J. Allocation of Income and Per Unit Data - Under the terms of the limited partnership agreement, initially, 99% of revenues and costs were allocated to the Unitholders (the limited partners) and 1% of revenues and costs were allocated to the General Partner. Such allocation has changed and may change in the future due to Unitholders electing to exercise the Repurchase Right and select officers and employees electing to exercise options (see Note 3 ).

Earnings per limited partner Unit have been computed based on the weighted average number of Units outstanding during each period presented. Average outstanding Units for earnings per limited partner Unit calculations amounted to

5,587,616

for the

three

and

six

months ended

June 30, 2017

and

2016,

respectively.

K. New Accounting Standards – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014 - 09, “Revenue from Contracts with Customers (Topic 606 )” (“ASU 2014 - 09” ).  ASU 2014 - 09 is intended to improve the financial reporting requirements for revenue from contracts with customers by providing a principle based approach.  The core principle of the standard is that revenue should be recognized when the transfer of promised goods or services is made in an amount that the entity expects to be entitled to in exchange for the transfer of goods and services.  ASU 2014 - 09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014 - 09, through issuance of ASU 2015 - 14, is to be effective for financial statements issued for annual periods beginning after December 31, 2017 ( including interim reporting periods within those periods). Early adoption is permitted as of the original effective date. The Company is currently evaluating the potential impact of these standards on the financial statements.  

The Company has reviewed all other recently issued accounting standards in order to determine their effects, if any, on the consolidated financial statements. Based on that review, the Company believes that

none

of these standards will have a significant effect on current or future earnings or results of operations.

XML

Note 2 - Current Liabilities

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note 2. Current Liabilities

The Company’s current liabilities consist of the following at

June 30, 2017

and

December 31, 2016:

	June 30,		December 31,
	2017		2016
Accounts Payable:
Production and related other	$	1,538,811	$	1,364,131
Other		291,901		292,076
Joint venture partner deposits		47,234		47,234
Total accounts payable	$	1,877,946	$	1,703,441
Accrued Expenses:
Current portion of asset retirement obligations	$	384,000	$	384,000
Payroll and retirement plan contributions		275,227		641,326
Federal, state and local taxes		16,560		32,464
Other		4,400		79,500
Total accrued expenses	$	680,187	$	1,137,290

XML

Note 3 - Partners' Equity

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Partners' Capital Notes Disclosure [Text Block]

Note 3. Partners’ Equity

Units represent limited partnership interests in Everflow. The Units are transferable subject to the approval of EML and to the laws governing the transfer of securities. The Units are

not

listed for trading on any securities exchange nor are they quoted in the automated quotation system of a registered securities association. However, Unitholders

may

have an opportunity to require Everflow to repurchase their Units pursuant to the Repurchase Right.

The partnership agreement provides that Everflow will repurchase for cash up to

10%

of the then outstanding Units, to the extent Unitholders offer Units to Everflow for repurchase pursuant to the Repurchase Right. The Repurchase Right entitles any Unitholder, between

May 1

and

June 30

of each year, to notify Everflow that the Unitholder elects to exercise the Repurchase Right and have Everflow acquire certain or all Units. The price to be paid for any such Units is calculated based upon the audited financial statements of the Company as of

December 31

of the year prior to the year in which the Repurchase Right is to be effective and independently prepared reserve reports. The price per Unit equals

66%

of the adjusted book value of the Company allocable to the Units, divided by the number of Units outstanding at the beginning of the year in which the

applicable Repurchase Right is to be effective less interim cash distributions received by a Unitholder. The adjusted book value is calculated by adding partners’ equity, the Standardized Measure of Discounted Future Net Cash Flows and the tax effect included in the Standardized Measure and subtracting from that sum the carrying value of oil and gas properties (net of undeveloped lease costs). If more than

10%

of the then outstanding Units are tendered during any period during which the Repurchase Right is to be effective, the Investors’ Units tendered shall be prorated for purposes of calculating the actual number of Units to be acquired during any such period. The Company determined that the price associated with the

2017

Repurchase Right, based upon the

December 31, 2016

calculation, is negative, and as such the Company did

not

offer to repurchase Units in

2017.

Additionally, the Company did

not

offer to repurchase Units in

2016.

The Company has

not

made a distribution in

2017.

The Company has an Option Repurchase Plan (the “Option Plan”) which permits the grant of options to select officers and employees to purchase certain Units acquired by the Company pursuant to the Repurchase Right. The purpose of the Option Plan is to assist the Company to attract and retain officers and other key employees and to enable those individuals to acquire or increase their ownership interest in the Company in order to encourage them to promote the growth and profitability of the Company. The Option Plan is designed to align directly the financial interests of the participants with the financial interests of the Unitholders. The Company did

no

t

grant any options in

2017

or

2016.

Units repurchased pursuant to the Repurchase Right and Units issued through the exercise of options pursuant to the Option Plan (collectively the “Units Activity”) for the years

2014

and

2015

are as follows:

	Per Unit										Units Out-
	Calculated										standing
	Price for		Less		Net						Following
	Repurchase		Interim		Price		Units		Units		Units
Year	Right		Distributions		Paid		Repurchased		Issued		Activity
2014	$	7.010	$	0.500	$	6.51		11,964		5,982		5,601,003
2015	$	4.935	$	0.375	$	4.56		26,774		13,387		5,587,616

All Units repurchased pursuant to the Repurchase Right are retired except for those Units issued through the exercise of options pursuant to the Option Plan. There were

no

instruments outstanding at

June 30, 2017

or

2016

that would potentially dilute net income per Unit.

XML

Note 4 - Gas Purchase Agreements

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Oil and Gas Delivery Commitments and Contracts [Text Block]

Note 4. Gas Purchase Agreements

The Company has multiple contracts with Dominion Field Services and Interstate Gas Supply (collectively, the “Gas Purchasers”) which obligate the Gas Purchasers to purchase, and the Company to sell and deliver, certain quantities of natural gas production from the Company’s oil and gas properties throughout the contract periods. The Company

may

elect to lock-in specific volumes of natural gas to be sold in specific months at a mutually agreeable price. The Company has elected to lock-in various monthly quantities of natural gas which total

390,000

MCF from

July 2017

through

March 2018

at various monthly weighted-average pricing provisions averaging

$2.93

per MCF, net of regional basis adjustments.

Pricing provisions with the Gas Purchasers apply to certain fixed quantities on a monthly basis with excess monthly quantities being priced based on the current spot market price, plus or minus a current regional basis adjustment. The impact of these contracts on the Company’s future oil and gas sales cannot fully be measured until actual production volumes and prices have been determined.

XML

Note 5 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 5. Commitments and Contingencies

The Company operates exclusively in Ohio and Pennsylvania of the United States in the business of oil and gas acquisition, exploration, development and production. The Company operates in an environment with many financial risks, including, but

not

limited to, the ability to acquire additional economically recoverable oil and gas reserves, the inherent risks of the search for, development of and production of oil and gas, the ability to sell oil and gas at prices which will provide attractive rates of return, the volatility and seasonality of oil and gas production and prices, and the highly competitive and, at times, seasonal nature of the industry and worldwide economic conditions. The Company’s ability to expand its reserve base and diversify its operations is also dependent upon the Company’s ability to obtain the necessary capital through operating cash flow, borrowings or equity offerings. Various federal, state and governmental agencies are considering, and some have adopted, laws and regulations regarding environmental protection which could adversely affect the proposed business activities of the Company. The Company cannot predict what effect, if any, current and future regulations

may

have on the operations of the Company.

The Company has natural gas delivery commitments to the Gas Purchasers (see Note

4

). Management believes the Company can meet its delivery commitments based on estimated production. If, however, the Company cannot meet its delivery commitments, it

may

be required to purchase natural gas at market prices to meet such commitments which

may

result in a gain or loss for the difference between the delivery commitment price and the price at which the Company is able to purchase the natural gas for redelivery (resale) to its customers.

The Company is party to various legal proceedings and claims in the ordinary course of its business. The Company believes certain of these matters will be covered by insurance and that the outcome of other matters will

not

have a material adverse effect on its consolidated financial position, results of operations, or liquidity.

XML

Note 6 - Related Party Transactions

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note 6. Related Party Transactions

The Company’s officers, directors, affiliates and certain employees have frequently participated, and will likely continue to participate in the future, as working interest owners in wells in which the Company has an interest. Frequently, the Company has loaned the funds necessary for certain employees to participate in the drilling and development of such wells. Initial terms of the unsecured loans call for repayment of all principal and accrued interest at the end of

four

years, however, the loan amounts are reduced from payments made by employees and as production proceeds attributable to the employees’ working interests are

not

remitted to the employees but rather used to reduce the amounts owed by the employees to the Company. If an outstanding balance remains after the initial

four

-year term, the Company and employee shall, acting in good faith, agree upon further repayment terms.

Employees remain obligated for the entire loan amount regardless of a dry-hole event or otherwise insufficient production. The loans carry

no

loan forgiveness provisions, and

no

loans have ever been forgiven. The loans accrue interest at the prime rate, which was

4.25%

at

June 30, 2017.

In accordance with the Sarbanes-Oxley Act of

2002,

the Company has

not

extended any loans to officers or directors since

2002.

At

June 30, 2017

and

December 31, 2016,

the Company has extended various loans, evidenced by notes, to

two

employees with origination dates ranging from

December 2010

to

December 2015.

In addition,

two

subsequent addenda extending additional payment terms to certain notes are outstanding at

June 30, 2017.

Employees’ notes receivable, including accrued interest, amounted to

$42,635

and

$87,045

at

June 30, 2017

and

December 31, 2016,

respectively.

The Company collects and holds operational advances from employees, including officers and directors, who own working interests in wells of which the Company operates (see Note

1

). Operational advances held on behalf of employees, including officers and directors, as of

June 30, 2017

and

December 31, 2016

were approximately

$118,200

and

$40,300,

respectively.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

A. Interim Financial Statements - The interim consolidated financial statements included herein have been prepared by the management of Everflow Eastern Partners, L.P., without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations have been made.

The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form

10

-Q and Article

8

-

03

of Regulation S-

X.

Accordingly, they do

not

include all of the disclosures normally required by GAAP, or those normally made in an Annual Report on Form

10

-K, although the Company believes that the disclosures made are adequate to make the information

not

misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto which are incorporated in Everflow Eastern Partners, L.P.’s annual report on Form

10

-K filed with the Securities and Exchange Commission (“SEC”) on

March 28, 2017.

The results of operations for the interim periods

may

not

necessarily be indicative of the results to be expected for the full year.

Use of Estimates, Policy [Policy Text Block]

B. Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates impacting the Company’s financial statements include revenue and expense accruals and oil and gas reserve quantities. In the oil and gas industry, and especially as related to the Company’s natural gas sales, the processing of actual transactions generally occurs 60 - 90 days after the month of delivery of its product. Consequently, accounts receivable from production and oil and gas sales are recorded using estimated production volumes and market or contract prices. Differences between estimated and actual amounts are recorded in subsequent period’s financial results. As is typical in the oil and gas industry, a significant portion of the Company’s accounts receivable from production and oil and gas sales consists of unbilled receivables. Oil and gas reserve quantities are utilized in the calculation of depreciation, depletion and amortization and the impairment of oil and gas wells and also impact the timing and costs associated with asset retirement obligations. The Company’s estimates, especially those related to oil and gas reserves, could change in the near term and could significantly impact the Company’s results of operations and financial position.

Organization [Policy Text Block]

C. Organization - Everflow Eastern Partners, L.P. (“Everflow”) is a Delaware limited partnership which was organized in September 1990 to engage in the business of oil and gas acquisition, exploration, development and production. Everflow was formed to consolidate the business and oil and gas properties of Everflow Eastern, Inc. (“EEI”) and subsidiaries and the oil and gas properties owned by certain limited partnership and working interest programs managed or sponsored by EEI (“EEI Programs” or the “Programs”).

Everflow Management Limited, LLC (“EML”), an Ohio limited liability company, is the general partner of Everflow and, as such, is authorized to perform all acts necessary or desirable to carry out the purposes and conduct of the business of Everflow. The members of EML are Everflow Management Corporation ("EMC");

two

individuals who are officers and directors of EEI and employees of Everflow;

one

individual who is the Chairman of the Board of EEI;

one

individual who is an employee of Everflow; and

one

private limited liability company founded by an individual who is a director of EEI. EMC is an Ohio corporation formed in

September 1990

and is the managing member of EML.

EML holds

no

assets other than its general partner’s interest in Everflow,

nor

does it have any liabilities. In addition, EML has

no

separate operations or role apart from its role as the Company’s general partner.

Consolidation, Policy [Policy Text Block]

D. Principles of Consolidation - The consolidated financial statements include the accounts of Everflow, its wholly-owned subsidiaries, including EEI, and interests with joint venture partners (collectively, the “Company”), which are accounted for under the proportional consolidation method. All significant accounts and transactions between the consolidated entities have been eliminated.

Cash and Cash Equivalents, Policy [Policy Text Block]

E. Cash and Equivalents - The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company maintains, at various financial institutions, cash and equivalents which may exceed federally insured amounts and which may, at times, significantly exceed balance sheet amounts due to float.  As of June 30, 2017 and December 31, 2016, cash and equivalents include $1,320,740 and $1,053,582, respectively, of operational advances, which are funds collected and held on behalf of joint venture partners for their anticipated share of future plugging and abandonment costs, including interest earned. Operational advances held on behalf of joint venture partners include those held on behalf of employees, including officers and directors (see Note 6 ).

Investment, Policy [Policy Text Block]

F. Investments – The Company’s investments are classified as available-for-sale securities and consist of shares held in a mutual fund that invests primarily in investment grade, U.S. dollar denominated short-term fixed and floating rate debt securities. The mutual fund seeks current income while seeking to maintain a low volatility of principal.

The Financial Accounting Standards Board established a framework for measuring fair value and expanded disclosures about fair value measurements by establishing a fair value hierarchy that prioritizes the inputs and defines valuation techniques used to measure fair value. The hierarchy gives highest priority to Level I inputs and lowest priority to Level III inputs. The

three

levels of the fair value hierarchy are described below:

Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

Level III – Pricing inputs are unobservable for the financial instrument and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation.

The Company’s investments are carried at fair market value based on quoted prices available in active markets and are therefore classified as Level

1.

Asset Retirement Obligation [Policy Text Block]

G. Asset Retirement Obligations - GAAP requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. For the Company, these obligations include dismantlement, plugging and abandonment of oil and gas wells and associated pipelines and equipment. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depleted over the estimated useful life of the related asset.

The estimated liability is based on historical experience in dismantling, plugging and abandoning wells, estimated remaining lives of those wells based on reserves estimates, estimates of the external cost to dismantle, plug and abandon the wells in the future and federal and state regulatory requirements. The liability is discounted using an assumed credit-adjusted, risk-free interest rate.

Revenue Recognition, Policy [Policy Text Block]

H. Revenue Recognition - The Company recognizes oil and gas revenues when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred, title and risk of loss have transferred to the purchaser, and collectability of the revenue is reasonably assured. The Company utilizes the sales method to account for gas production volume imbalances. Under this method, revenue is recognized only when gas is produced and sold on the Company’s behalf. The Company had no material gas imbalances at June 30, 2017 and December 31, 2016. Other revenues consist of miscellaneous revenues that are recognized at the time services are rendered, the Company has a contractual right to such revenue and collection is reasonably assured.

The Company participates (and

may

act as drilling contractor) with unaffiliated joint venture partners and employees in the drilling, development and operation of jointly owned oil and gas properties.

Each owner, including the Company, has an undivided interest in the jointly owned properties. Generally, the joint venture partners and employees participate on the same drilling/development cost basis as the Company and, therefore,

no

revenue, expense or income is recognized on the drilling and development of the properties. Accounts and notes receivable from joint venture partners and employees consist principally of drilling and development costs the Company has advanced or incurred on behalf of joint venture partners and employees (see Note

6

). The Company earns and receives monthly management and operating fees from certain joint venture partners and employees after the properties are completed and placed into production.

Income Tax, Policy [Policy Text Block]

I. Income Taxes - Everflow is not a tax-paying entity and the net taxable income or loss, other than the taxable income or loss allocable to EEI, which is a C corporation owned by Everflow, will be allocated directly to its respective partners. The Company is not able to determine the net difference between the tax bases and the reported amounts of Everflow’s assets and liabilities due to separate elections that were made by owners of the working interests and limited partnership interests that comprised the Programs.

The Company believes that it has appropriate support for any tax positions taken and, as such, does

not

have any uncertain tax positions that are material to the financial statements.  The Company's tax returns are subject to examination by the Internal Revenue Service, as well as various state and local taxing authorities, generally for

three

years after they are filed.

Earnings Per Share, Policy [Policy Text Block]

J. Allocation of Income and Per Unit Data - Under the terms of the limited partnership agreement, initially, 99% of revenues and costs were allocated to the Unitholders (the limited partners) and 1% of revenues and costs were allocated to the General Partner. Such allocation has changed and may change in the future due to Unitholders electing to exercise the Repurchase Right and select officers and employees electing to exercise options (see Note 3 ).

Earnings per limited partner Unit have been computed based on the weighted average number of Units outstanding during each period presented. Average outstanding Units for earnings per limited partner Unit calculations amounted to

5,587,616

for the

three

and

six

months ended

June 30, 2017

and

2016,

respectively.

New Accounting Pronouncements, Policy [Policy Text Block]

K. New Accounting Standards – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014 - 09, “Revenue from Contracts with Customers (Topic 606 )” (“ASU 2014 - 09” ).  ASU 2014 - 09 is intended to improve the financial reporting requirements for revenue from contracts with customers by providing a principle based approach.  The core principle of the standard is that revenue should be recognized when the transfer of promised goods or services is made in an amount that the entity expects to be entitled to in exchange for the transfer of goods and services.  ASU 2014 - 09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014 - 09, through issuance of ASU 2015 - 14, is to be effective for financial statements issued for annual periods beginning after December 31, 2017 ( including interim reporting periods within those periods). Early adoption is permitted as of the original effective date. The Company is currently evaluating the potential impact of these standards on the financial statements.  

The Company has reviewed all other recently issued accounting standards in order to determine their effects, if any, on the consolidated financial statements. Based on that review, the Company believes that

none

of these standards will have a significant effect on current or future earnings or results of operations.

XML

Note 2 - Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

	June 30,		December 31,
	2017		2016
Accounts Payable:
Production and related other	$	1,538,811	$	1,364,131
Other		291,901		292,076
Joint venture partner deposits		47,234		47,234
Total accounts payable	$	1,877,946	$	1,703,441
Accrued Expenses:
Current portion of asset retirement obligations	$	384,000	$	384,000
Payroll and retirement plan contributions		275,227		641,326
Federal, state and local taxes		16,560		32,464
Other		4,400		79,500
Total accrued expenses	$	680,187	$	1,137,290

XML

Note 3 - Partners' Equity (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Units Repurchased and Issued [Table Text Block]

	Per Unit										Units Out-
	Calculated										standing
	Price for		Less		Net						Following
	Repurchase		Interim		Price		Units		Units		Units
Year	Right		Distributions		Paid		Repurchased		Issued		Activity
2014	$	7.010	$	0.500	$	6.51		11,964		5,982		5,601,003
2015	$	4.935	$	0.375	$	4.56		26,774		13,387		5,587,616

XML

Note 1 - Organization and Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) shares	Jun. 30, 2016 shares	Jun. 30, 2017 USD ($) shares	Jun. 30, 2016 shares	Dec. 31, 2016 USD ($)
General Partner, Assets	$ 0		$ 0
General Partner, Operations	0		0
Cash and Equivalents Maturity Period			90 days
Customer Advances, Noncurrent	$ 1,320,740		$ 1,320,740		$ 1,053,582
Number of Uncertain Tax Positions	0		0
Period Open to Tax Returns Examination			3 years
General Partner, Liabilities	$ 0		$ 0
Gas Balancing Payable	$ 0		$ 0		$ 0
Limited Partner [Member]
Initial Percentage of Revenue and Cost Allocation	99.00%		99.00%
Weighted Average Limited Partnership Units Outstanding, Basic | shares	5,587,616	5,587,616	5,587,616	5,587,616
General Partner [Member]
Initial Percentage of Revenue and Cost Allocation	1.00%		1.00%
Minimum [Member]
Actual Processing Time for Sales Transaction			60 days
Maximum [Member]
Actual Processing Time for Sales Transaction			90 days

XML

Note 2 - Current Liabilities - Components of Accounts Payable and Accrued (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Production and related other	$ 1,538,811	$ 1,364,131
Other	291,901	292,076
Joint venture partner deposits	47,234	47,234
Total accounts payable	1,877,946	1,703,441
Current portion of asset retirement obligations	384,000	384,000
Payroll and retirement plan contributions	275,227	641,326
Federal, state and local taxes	16,560	32,464
Other	4,400	79,500
Total accrued expenses	$ 680,187	$ 1,137,290

XML

Note 3 - Partners' Equity (Details Textual) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Maximum percentage of units to be repurchased	10.00%
Percentage of adjusted book value of company allocable to the repurchase right per unit	66.00%
Minimum Percentage of Outstanding Units Tendered to Use Prorated Method for Calculating Actual Number of Units Acquired	10.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	0	0

XML

Note 3 - Partners' Equity - Units Repurchased Pursuant to Repurchase Right and Issued Pursuant to Option Repurchase Plan (Details) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Jun. 30, 2017	Dec. 31, 2016
Units repurchased (in shares)	26,774	11,964
Units issued (in shares)	13,387	5,982
Units outstanding following units activity (in shares)	5,587,616	5,601,003	5,587,616	5,587,616
Calculated price for Repurchase Right (in dollars per share)	$ 4.935	$ 7.01
Interim distributions (in dollars per share)	0.375	0.50
Net price paid (in dollars per share)	$ 4.56	$ 6.51

XML

Note 4 - Gas Purchase Agreements (Details Textual)	Jun. 30, 2017 Mcf $ / Mcf
Oil and Gas Delivery Commitments and Contracts, Significant Supplies Dedicated or Contracted to Entity | Mcf	390,000
Oil and Gas Delivery Commitments and Contracts, Fixed Price | $ / Mcf	2.93

XML

Note 6 - Related Party Transactions (Details Textual)	6 Months Ended
	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Related Party Deposit Liabilities	$ 118,200	$ 40,300
Employee [Member]
Term of Employee Receivables	4 years
Loan Forgiveness Provisions	0
Loans Forgiven	0
Related Party Transaction, Rate	4.25%
Number of Employees to Whom Loans have been Extended	2	2
Subsequent Addenda	2
Due from Employees	$ 42,635	$ 87,045