SecProbe.io

CORRESP
 1
 filename1.htm

 CORRESP

 555 Eleventh Street, N.W., Suite 1000

 Washington, D.C. 20004-1304

 Tel: +1.202.637.2200 Fax: +1.202.637.2201

 www.lw.com

 FIRM / AFFILIATE OFFICES

 Austin

 Milan

 Beijing

 Munich

 Boston

 New York

 Brussels

 Orange County

 Century City

 Paris

 Chicago

 Riyadh

 Dubai

 San Diego

 May 6, 2025

 Düsseldorf

 San Francisco

 Frankfurt

 Seoul

 Hamburg

 Silicon Valley

 Via EDGAR

 Hong Kong

 Singapore

 Houston

 Tel Aviv

 Division of Corporation Finance

 London

 Tokyo

 Office of Energy & Transportation

 Los Angeles

 Washington, D.C.

 U.S. Securities and Exchange Commission

 Madrid

 100 F Street, N.E. Washington,
D.C. 20549

 Attn:
 Myra Moosariparambil
 Craig Arakawa Anuja Majmudar
 Daniel Morris

 Re:
 Phoenix Energy One, LLC
 Amendment No. 3 to Registration Statement on Form S-1
 Submitted on March 28, 2025
 File No. 333-282862
 To Whom It May Concern: On behalf of our
client, Phoenix Energy One, LLC (the “ Company ”), and pursuant to the applicable provisions of the U.S. Securities Act of 1933, as amended, and the rules promulgated thereunder, we are submitting this letter setting forth the
responses of the Company to the comments provided by the staff (the “ Staff ”) of the U.S. Securities and Exchange Commission (the “ Commission ”) in its comment letter dated May 2, 2025 (the
“ Comment Letter ”) with respect to the Company’s Amendment No. 3 to Registration Statement on Form S-1 filed by the Company on April 25, 2025. We are submitting this
letter via EDGAR in advance of our public filing of Amendment No. 4 (“ Amendment No. 4 ”) to the above-mentioned Registration Statement on Form S-1 (the “ Registration Statement ”), which will be revised
to address the Staff’s comments. In response to the Staff’s comments and as discussed with the Staff on May 5, 2025, we are providing the Staff with copies of certain pages of Amendment No. 4, marked to show changes from Amendment No. 3,
containing proposed revised disclosure to be included in Amendment No. 4 to address the Staff’s comments. For the convenience of the Staff, these pages are organized by comment into separate schedules to this letter.
 The numbered paragraphs in bold italics below set forth the comments of the Staff in the Comment Letter and are followed by the Company’s
responses, which include a reference to the relevant schedule to this letter. Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them in Amendment No. 3. All references to page numbers and captions (other
than those in the Staff’s comments) correspond to the page numbers and captions in Amendment No. 3.

 May 6, 2025
 Page
 2

 Registration Statement on Form S-1
 Mandatory Redemption, Page 11

 1.
 We note your response to prior comment 4. However, your disclosure remains unclear as to what your
reference to “applicable subordination provisions” means. In addition, please reconcile your statement in the first sentence of the second paragraph that redemption requests “will” be processed in the order they are received with
your revised disclosure in the next sentence that you “intend” to process redemption requests in the order received and “do not intend” to prioritize requests .
 Response: The Company acknowledges the Staff’s comment and advises the Staff that it proposes to make the revisions to the
Registration Statement as set forth in Schedule I to this letter. Management’s Discussion and Analysis of Financial Condition and
Results of Operations Overview, page 54

 2.
 We note discussion elsewhere in your filing regarding tariffs. If it is reasonably possible that changes
in tariffs could have a material impact on your liquidity, capital resources or results of operations in future periods, revise your disclosure to clarify this and to describe the impacts.
 Response: The Company acknowledges the Staff’s comment and respectfully advises the Staff that it proposes to make the revisions to
the Registration Statement as set forth in Schedule II to this letter. Commodity Prices, page 57

 3.
 We note recent decreases in index prices for WTI and Henry Hub. If current prices are below the price
assumptions underlying your development plans and related cash flow projections, expand your disclosure to clarify this and to describe the reasonably possible impact on your liquidity, capital resources, results of operations and reported reserve
volumes in the event that prices do not increase above current levels. requests . Response: The Company
acknowledges the Staff’s comment and advises the Staff that it proposes to make the revisions to the Registration Statement as set forth in Schedule III to this letter.
 Elements of Our Executive Compensation Program, page 111

 4.
 We note your response to prior comment 10. Specifically, we note revisions to provide additional
information related to the compensation arrangements for Mr. Ferrari, Mr. Allen, and Ms. Wilson. Please further revise as follows:

 •

 Please clarify, if true, that the twice monthly amounts payable to Mr. Ferrari, Mr. Allen, and
Ms. Wilson in 2024 were calculated based on the assumption that the company would meet the revenue target set by LJC. Also, please state, if true, that Mr. Ferrari, Mr. Allen, and Ms. Wilson received the full variable
compensation

 May 6, 2025
 Page
 3

amounts (i.e., $3,1350,000, $1,567,500, and $399,000, respectively), even though Phoenix did not meet its gross revenue target of $285 million upon which variable compensation was contingent
under the 2024 employee agreements. In this regard, since you did not meet the applicable revenue target, please reconcile your disclosure under Base Compensation on page 111 that the employees were entitled to these payments.

 •

 You describe the $3,000,000 payment to Adam Ferrari in January 2025 as an advance which will, in turn,
reduce the amount of subsequent payments due from Phoenix to LJC. Please confirm, if true, that the advance was paid in January. Also, given that your twice monthly payments to Mr. Ferrari,
Mr. Allen, and Ms. Wilson in 2024 appear to have been advances on 2024 compensation, and given that you will continue to make twice monthly advances to
Mr. Allen and Ms. Wilson in 2025, please explain your rationale for modifying Mr. Ferrari’s compensation arrangement in 2025 to provide for a
large lump sum advance to him in January, rather than continuing to make pro rata incremental payments throughout the course of the year.

 •

 Please disclose your process for recovering payments in the event your performance falls short of the
revenue target, including whether any compensation amounts are placed in escrow prior to the true-up in December. Provide similar disclosure for your 2025 compensation plan.

 •

 We note that you have revised to disclose a revenue target for 2024 of
$285 million. However, the employee agreements with Mr. Ferrari, Mr. Allen, and Ms. Wilson appear to refer to
multiple revenue targets. Please advise. Response: The Company acknowledges the Staff’s comment
advises the Staff that it proposes to make the revisions to the Registration Statement as set forth in Schedule IV to this letter. With
respect to the second bullet of this comment, the Company advises the Staff that LJC determined to modify Mr. Ferrari’s compensation arrangement for 2025 to provide for a lump sum advance to him in January due to the substantial growth in
operations the Company experienced under his leadership, including its successful and rapid expansion into oil and gas production and execution of its business strategy, as well as LJC’s determination, based on its business judgement, that
Mr. Ferrari’s prior pay was below market competitive levels. With respect to the fourth bullet of this comment, the Company
respectfully advises the Staff that gross revenue was the only revenue target used for determining 2024 variable revenue-based compensation for Mr. Ferrari, Mr. Allen, and Ms. Wilson, and that such compensation was tied to a gross revenue target of
$285 million set by LJC. No other target was used. * * * *

 May 6, 2025
 Page
 4

 We hope that the foregoing has been responsive to the Staff’s comments and look forward
to resolving any outstanding issues as quickly as possible. Please direct any questions or comments regarding the foregoing to me by email at ross.mcaloon@lw.com or by telephone at (714) 755-8051, or to my
colleague, Christopher Clark, by email at christopher.j.clark@lw.com or by telephone at (202) 637-2374.

 Sincerely,

 /s/ Ross McAloon

 Ross McAloon of LATHAM & WATKINS
LLP

 cc:
 Adam Ferrari, Chief Executive Officer, Phoenix Energy One, LLC
 Lindsey Wilson, Chief Business Officer, Phoenix Energy One, LLC
 Curtis Allen, Chief Financial Officer, Phoenix Energy One, LLC
 David Wheeler, Chief Legal Officer, Phoenix Energy One, LLC
 Christopher J. Clark, Latham & Watkins LLP
 Michele M. Anderson, Latham & Watkins LLP

 SCHEDULE I
 (Attached)

reserves, respectively, and that we will need to raise approximately $658.9 million in additional capital through the end of 2028 to fund such development. Although we expect our cash flows
from operations to be sufficient to service cash interest and principal payment obligations under our debt for the foreseeable future, there can be no assurance as to the sufficiency of our cash flows for that purpose, and we do not expect such cash
flows alone to be adequate to fund both our debt service obligations and the development of our reserves. Therefore, we expect to require additional capital to fund our growth and may require additional liquidity to service our debt. As a result, we
may use the proceeds of additional debt, including the Notes offered hereby, to make interest and principal payments on our existing debt. See “ Risk Factors — Risks Related to Our Business and
Operations — The acquisition and development of our properties, directly or through our third-party E&P operators, will require substantial capital, and we and our third-party E&P operators may be unable to obtain needed
capital or financing on satisfactory terms or at all, including as a result of increases in the cost of capital resulting from Federal Reserve policies in the past few years and otherwise ,” “ Risk Factors — Risks
Related to Our Indebtedness — Despite our current level of indebtedness, we will still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described above ,”
“ Risk Factors—Risks Related to Our Indebtedness— We may not be able to generate sufficient cash to service all of our existing and future indebtedness, including the Notes, and may be forced to take other actions
 to satisfy our obligations under our indebtedness, which may not be successful ,” “ Risk Factors—Risks Related to the Notes and this Offering—We may invest or spend the proceeds of this offering in ways with which you
may not agree ,” “ Use of Proceeds ,” and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations .”
 We may redeem any Note, in whole or in part, at any time, at a redemption price equal to the then-outstanding principal amount thereof, plus
accrued and unpaid interest, to, but excluding, the date of redemption. We may also purchase Notes, in whole or in part, at any time, through open-market or privately negotiated transactions with noteholders or pursuant to one or more tender or
exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we may determine. A Subject to the provisions described in “ Description of
Notes —Subordination ,” a holder may require us, at any time and from time to time prior to maturity, to redeem its Notes at a price equal to 95% of the aggregate principal
amount of such Notes plus accrued and unpaid interest to, but excluding, the date of redemption, subject to certain exceptions and to an annual cap on all such redemptions of 10% of the aggregate principal amount of all Notes issued and then
outstanding (the “ 10% Limit ”). The principal amount of any Notes requested for redemption by, and redeemed from, our manager, executive officers, or their respective family members during any calendar year will not be
included in calculating the 10% Limit with respect to any other holders for such calendar year; however, such redemptions will be included in calculating the 10% Limit with respect to our manager, executive officers, and their respective family
members. Noteholders will not otherwise have the right to require us to redeem any Notes. If we are prohibited by law or contract (including the terms of our indebtedness) from redeeming Notes, or the 10.0% Limit limits a holder’s ability to
have its Notes redeemed, the holder may have to hold its Notes to maturity. Our ability to redeem Notes may also be limited by our then-existing financial resources. We cannot assure you that sufficient funds will be available when necessary to make
any required purchases. See “ Risk Factors—Risks Related to the Notes and this Offering— Holders of Notes will have a
limited right to require us to redeem their Notes, and we may not be able to repurchase such Notes when requested ” and “ Description of Notes — Mandatory Redemption;
 Repu r chase at the Option of the Holders .”
 The Notes will be issued only in registered form in minimum denominations of $1,000, and the initial minimum investment amount per holder will
be $5,000 (the “ Minimum Purchase Amount ”). From time to time, we may, however, accept investments of less than the Minimum Purchase Amount or increase or decrease the Minimum Purchase Amount. There is no aggregate minimum
purchase amount of Notes we are seeking to offer. We have the right to reject any investment, in whole or in part, for any reason. The
Notes will be a new issue of securities for which there is currently no established public trading market or trading platform. The Notes will not be listed on any securities exchange or automated quotation system. Notes will be transferable by a
holder only with our prior written consent, which we may provide at our sole discretion and determine on an ad hoc basis. Accordingly, there can be no assurance as to the development of a trading platform, or the development or liquidity of any
market, for the Notes, or that you will be able to transfer your Notes. Therefore, you must be prepared to hold your Notes to maturity. See “ Risk Factors—Risks Related to the Notes and this Offering—Notes may only be transferred
with our consent. There is no established trading market for the Notes and an active trading market for the Notes is not expected to develop ” and “ Description of Notes—Transfer. ”
 We are a wholly owned subsidiary of Phoenix Equity Holdings, LLC, a Delaware limited liability company (“ Phoenix
Equity ”). Phoenix Equity is our sole member and, as such, directs our business and operations, including appointment and compensation of our officers. Lion of Judah Capital, LLC, a Delaware limited liability company
(“ LJC ”), controls Phoenix Equity and, therefore, indirectly has control over our management. Furthermore, Adam Ferrari, our Chief Executive Officer, is the manager of Phoenix Equity. Daniel Ferrari and Charlene Ferrari each
own 50% of the voting membership interests in, and are the managers of, LJC. Adam Ferrari, our Chief Executive Officer and the son of Daniel and Charlene Ferrari, owns 100% of the economic interests in LJC, but has no voting or managerial interest
in LJC. We are offering the Notes directly, without an underwriter or placement agent, and on a continuous basis. We have not made any
arrangement to place any of the proceeds from this offering in an escrow, trust, or similar account. The Notes will be offered to prospective investors on a commercially reasonable efforts basis by Dalmore Group, LLC (“ Dalmore
Group ” or, in its capacity as our

 with the Reg D Bonds, the