ote

Partners' Equity

Units represent limited partnership interests in Everflow. The Units are transferable subject only to the approval of any transfer by 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 all 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 price associated with the

2019

Repurchase Right, based upon the

December 31, 2018

calculation, is estimated to be

$1.50

per Unit, net of a

$0.30

per Unit distribution expected to be made in

April 2019.

June 2018,

the Company repurchased

68,261

Units pursuant to the Repurchase Right at a price of

$0.11

per Unit. The Company did

not

offer to repurchase any Units pursuant to the Repurchase Right during

2017

2016

because the price associated with the Repurchase Rights for both years was negative.

The Company has an Option Repurchase Plan (the "Option Plan") which permits the grant of options to repurchase certain Units to select officers and employees (the "Option Plan Participants"). The purpose of the Option Plan is to assist the Company in attracting and retaining 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 Option Plan Participants with the financial interests of the Unitholders. In

June 2018,

the Company granted

30,000

options to officers and certain key employees. All options granted were exercised on the same date. The Company did

not

grant any options in

2017.

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

5,549,355

outstanding Units following the Company’s repurchase of Units and issuance of options in

June 2018.

There were

instruments outstanding at

December 31, 2018

2017

that would potentially dilute net income per Unit.