OHA Investment Corporation
NGP Capital Resources Co (Form: 10-Q, Received: 05/10/2010 13:52:52)
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 


FORM 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010
 
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: 814-00672
 

 
NGP Capital Resources Company
(Exact name of registrant as specified in its charter)
 

 
Maryland
20-1371499
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
   
1221 McKinney Street, Suite 2975
Houston, Texas
77010
(Address of principal executive offices)
(Zip Code)

(713) 752-0062
(Registrant’s telephone number, including area code)

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

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

Large accelerated filer   ¨
Accelerated filer     þ
Non-accelerated filer     ¨
Smaller reporting company   ¨
   
(Do not check if smaller reporting company)

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

As of May 7, 2010, there were 21,628,202 shares of the registrant’s common stock outstanding.

 
 

 

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
1
   
Item 1.     Consolidated Financial Statements
1
Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
26
Item 3.     Quantitative and Qualitative Disclosures About Market Risk
32
Item 4.     Controls and Procedures
32
Item 4T.  Controls and Procedures
33
   
PART II – OTHER INFORMATION
34
   
Item 1.     Legal Proceedings
34
Item 1A.  Risk Factors
34
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
34
Item 3.     Defaults Upon Senior Securities
34
Item 4.     (Removed and Reserved)
34
Item 5.     Other Information
34
Item 6.     Exhibits
34
 
 
 

 
 
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED BALANCE SHEETS

   
March 31, 2010
   
December 31, 2009
 
   
(Unaudited)
       
Assets
           
Investments in portfolio securities at fair value
           
Control investments - majority owned
           
(cost: $121,569,741 and $118,590,412, respectively)
  $ 75,435,448     $ 72,449,620  
Affiliate investments
               
(cost: $32,935,839 and $30,727,367, respectively)
    34,346,136       31,578,945  
Non-affiliate investments
               
(cost: $87,157,197 and $92,832,647, respectively)
    83,256,296       86,965,378  
Investments in corporate notes at fair value
               
(cost: $11,527,241 and $11,539,564, respectively)
    9,416,400       9,062,200  
Investments in commodity derivative instruments at fair value
               
(cost: $0 and $30,100, respectively)
    -       49,000  
Total investments
    202,454,280       200,105,143  
                 
Cash and cash equivalents
    105,337,155       108,288,217  
Accounts receivable and other current assets
    2,106,347       2,115,663  
Interest receivable
    834,042       1,241,609  
Prepaid assets
    1,904,024       2,201,468  
Deferred tax assets
    3,246,184       2,979,209  
Total current assets
    113,427,752       116,826,166  
                 
Total assets
  $ 315,882,032     $ 316,931,309  
                 
Liabilities and stockholders' equity (net assets)
               
Current liabilities
               
Accounts payable and accrued expenses
  $ 1,072,981     $ 1,098,414  
Management and incentive fees payable
    1,373,179       1,415,866  
Dividends payable
    3,676,794       3,676,794  
Income taxes payable
    77,547       62,321  
Total current liabilities
    6,200,501       6,253,395  
                 
Deferred tax liabilities
    3,269,341       3,002,366  
Long-term debt
    64,905,200       67,500,000  
                 
Total liabilities
    74,375,042       76,755,761  
                 
Commitments and contingencies  (Note 7)
               
                 
Stockholders’ equity (net assets)
               
Common stock, $.001 par value, 250,000,000 shares authorized;
               
21,628,202 shares issued and outstanding
    21,628       21,628  
Paid-in capital in excess of par
    295,174,063       295,174,063  
Undistributed net investment income (loss)
    (6,189,997 )     (4,944,530 )
Undistributed net realized capital gain (loss)
    (9,151 )     -  
Net unrealized appreciation (depreciation) of portfolio securities,
               
corporate notes and commodity derivative instruments
    (47,489,553 )     (50,075,613 )
                 
Total stockholders’ equity (net assets)
    241,506,990       240,175,548  
                 
Total liabilities and stockholders' equity (net assets)
  $ 315,882,032     $ 316,931,309  
                 
Net asset value per share
  $ 11.17     $ 11.10  

(See accompanying notes to consolidated financial statements)

 
1

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

   
For The Three Months Ended
 
   
March 31, 2010
   
March 31, 2009
 
         
(As Restated)
 
Investment income
           
Interest and dividend income:
           
Control investments - majority owned
  $ 1,099,979     $ -  
Affiliate investments
    832,913       1,356,076  
Non-affiliate investments
    3,177,541       4,838,463  
Royalty income (loss), net of amortization:
               
Control investments - majority owned
    294,811       23,336  
Non-affiliate investments
    (518,056 )     (917,638 )
Commodity derivative income, net of expired options
    16,079       3,173,852  
Other income
    290,000       58,800  
                 
Total investment income
    5,193,267       8,532,889  
                 
Operating expenses
               
Management fees and incentive fees
    1,338,569       1,833,848  
Professional fees
    265,304       166,727  
Insurance expense
    185,658       200,221  
Interest expense and fees
    313,063       997,842  
Other general and administrative expenses
    946,420       796,948  
                 
Total operating expenses
    3,049,014       3,995,586  
                 
Net investment income before income taxes
    2,144,253       4,537,303  
                 
Benefit (provision) for income taxes
    287,074       4,291  
                 
Net investment income
    2,431,327       4,541,594  
                 
Net realized capital gain (loss) on investments
               
  Benefit (provision) for taxes on capital gain
    (9,151 )     -  
                 
Total net realized capital gain (loss) on investments
    (9,151 )     -  
                 
Net unrealized gain (loss) on investments
               
Net increase (decrease) in unrealized appreciation
               
(depreciation) on portfolio securities, corporate
               
notes and commodity derivative instruments:
               
Control investments - majority owned
    6,501       (4,075,662 )
Affiliate investments
    558,719       205,744  
Non-affiliate investments
    2,313,989       (20,690,114 )
Benefit (provision) for taxes on unrealized gain
    (293,149 )     1,385,826  
                 
Total net unrealized gain (loss) on investments
    2,586,060       (23,174,206 )
                 
Net increase (decrease) in stockholders' equity
               
(net assets) resulting from operations
  $ 5,008,236     $ (18,632,612 )
                 
Net increase (decrease) in stockholders' equity (net assets)
               
resulting from operations per common share
  $ 0.24     $ (0.86 )

(See accompanying notes to consolidated financial statements)

 
2

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (NET ASSETS)

                                 
Net Unrealized
       
                                 
Appreciation (Depreciation)
   
Total
 
               
Paid-in Capital
   
Undistributed
   
Undistributed
   
of Portfolio Securities,
   
Stockholders'
 
   
Common Stock
   
in Excess
   
Net Investment
   
Net Realized
   
Corporate Notes and Commodity
   
Equity
 
   
Shares
   
Amount
   
of Par
   
Income (Loss)
   
Capital Gain (Loss)
   
Derivative Instruments
   
(Net Assets)
 
Balance at December 31, 2009
    21,628,202     $ 21,628     $ 295,174,063     $ (4,944,530 )   $ -     $ (50,075,613 )   $ 240,175,548  
Net increase (decrease) in stockholders' equity (net assets) resulting from operations
     -        -        -        2,431,327        (9,151 )      2,586,060        5,008,236  
                                                         
Dividends declared
    -       -       -       (3,676,794 )     -       -       (3,676,794 )
                                                         
Balance at March 31, 2010  (unaudited)
    21,628,202     $ 21,628     $ 295,174,063     $ (6,189,997 )   $ (9,151 )   $ (47,489,553 )   $ 241,506,990  

 (See accompanying notes to consolidated financial statements)

 
3

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
 
For The Three Months Ended
 
   
 
March 31, 2010
   
March 31, 2009
 
   
       
(As Restated)
 
Cash flows from operating activities
           
Net increase (decrease) in stockholders' equity (net assets) resulting from operations
  $ 5,008,236     $ (18,632,612 )
Adjustments to reconcile net increase (decrease) in stockholders' equity (net assets)
               
resulting from operations to net cash provided by (used in) operating activities
               
Payment-in-kind interest
    (1,731,489 )     (912,526 )
Net amortization of premiums, discounts and fees
    2,968,431       1,445,811  
Change in unrealized (appreciation) depreciation on portfolio securities,
corporate notes and commodity derivative instruments before taxes
    (2,879,209 )     24,560,032  
Effects of changes in operating assets and liabilities
               
Accounts receivable and other current assets
    9,316       29,705  
Interest receivable
    407,567       (320,274 )
Prepaid assets
    297,444       471,922  
Current portion of deferred income taxes
    (266,975 )     (1,958,219 )
Non-current deferred income taxes
    266,975       522,032  
Accounts payable and accrued expenses
    (68,120 )     (366,449 )
Income taxes payable
    15,226       (3,365,739 )
Purchase of investments in portfolio securities, corporate notes
               
and commodity derivative instruments
    (3,294,585 )     (11,136,736 )
Redemption of investments in portfolio securities, corporate notes
               
and commodity derivative instruments
    2,587,715       5,775,530  
Net sale (purchase) of investments in U.S. Treasury Bills
    -       (76,134,101 )
                 
Net cash provided by (used in) operating activities
    3,320,532       (80,021,624 )
                 
Cash flows from financing activities
               
Borrowings under revolving credit facility
    64,905,200       27,000,000  
Repayments on revolving credit facility
    (67,500,000 )     (45,000,000 )
Dividends paid
    (3,676,794 )     (8,867,563 )
                 
Net cash used in financing activities
    (6,271,594 )     (26,867,563 )
                 
Net increase (decrease) in cash and cash equivalents
    (2,951,062 )     (106,889,187 )
Cash and cash equivalents, beginning of period
    108,288,217       133,805,575  
                 
Cash and cash equivalents, end of period
  $ 105,337,155     $ 26,916,388  

 (See accompanying notes to consolidated financial statements)

 
4

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
March 31, 2010
(Unaudited)

Portfolio Company
 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS (17)
                         
Control Investments - Majority Owned (50% to 100% owned)
                     
Alden Resources, LLC
 
Coal Production
 
Senior Secured
  $ 22,245,994     $ 20,439,434     $ 20,339,434  
       
Multiple-Advance Term Loan - Tranche A
                       
       
(The greater of 12.00% or LIBOR +
                       
       
9.00 % cash, 15.00% or LIBOR +
                       
       
12.00% PIK, due 1/05/2013)
                       
                                 
       
Senior Secured
    21,711,913       19,519,841       19,519,841  
       
Multiple-Advance Term Loan - Tranche B
                       
       
(The greater of 12.00% or LIBOR +
                       
       
9.00 % cash, 15.00% or LIBOR +
                       
       
12.00% PIK, due 1/05/2013) (6)
                       
                                 
       
Class E Units - 100% of outstanding units
            5,800,000       5,800,000  
       
entitled to 100% of distributions of
                       
       
Alden Resources until payout,
                       
       
80% after payout (5)
                       
                                 
       
Senior Secured
    2,046,173       2,046,173       2,046,173  
       
Multiple-Advance Term Loan - Revolver
                       
       
(The greater of 12.00% or LIBOR +
                       
       
9.00 % cash, 15.00% or LIBOR +
                       
       
12.00% PIK, due 1/05/2013)
                       
                                 
       
Royalty Interest
            2,513,928       5,330,000  
                                 
BSR Holdings, LLC (7)
 
Oil & Natural Gas
 
Units - 100% of outstanding units of
            300,000       300,000  
   
 Production and Development
 
BSR Holdings, LLC which holds 50% working
                       
       
interest in certain BSR Loco Bayou, LLC
                       
       
oil and gas properties (5)
                       
                                 
       
Overriding Royalty Interest
            15,621       100,000  
                                 
DeanLake Operator, LLC
 
Oil & Natural Gas
 
Senior Secured Term Loan
    3,500,000       3,500,000       3,500,000  
   
 Production and Development
 
(10.00% cash, 12.00% PIK,
                       
       
payable quarterly, due 6/30/2011)
                       
                                 
       
Class A Preferred Units - 100% of outstanding
            10,400,255       6,500,000  
       
units representing 100% of distributions of
                       
       
DeanLake Operator, LLC until payout,
                       
       
80% after payout (5)
                       
                                 
       
Overriding Royalty Interest
            17,846       100,000  
                                 
Formidable, LLC
 
Oil & Natural Gas
 
Senior Secured
    38,780,316       38,780,316       5,600,000  
   
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(LIBOR + 5.50% cash, LIBOR + 8.50%
                       
       
 default, due 5/31/2008) (6) (11)
                       
       
Warrants (5)
            500,000       -  
                                 
       
Formidable Holdings, LLC Units - 100% of
            10,000       -  
       
pledged stock of Formidable, LLC (5) (11)
                       
                                 
Rubicon Energy Partners,
 
Oil & Natural Gas
 
LLC Units (4,000 units) representing
            -       -  
LLC
 
 Production and Development
 
50% ownership of the assets of
                       
       
Rubicon Energy Partners, LLC (5)
                       
                                 
TierraMar Energy LP
 
Oil & Natural Gas
 
Class A Preferred LP Units - 100% of
            17,710,788       6,000,000  
   
 Production and Development
 
outstanding units representing 100% of
                       
       
distributions of TierraMar Energy LP until
                       
       
payout, 67% after payout (5)
                       
                                 
       
Overriding Royalty Interest
            15,539       300,000  
                                 
Total Control Investments - Majority Owned (50% to 100% owned)
          $ 121,569,741     $ 75,435,448  

(See accompanying notes to consolidated financial statements)

 
5

 

NGP CAPITAL RESOURCES COMPANY
  CONSOLIDATED SCHEDULE OF INVESTMENTS
March 31, 2010
(Unaudited)
(continued)

Portfolio Company
 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS (17) - Continued
                     
Affiliate Investments - (5% to 25% owned)
                     
BioEnergy Holding, LLC
 
Alternative Fuels and
 
Senior Secured Notes
  $ 14,420,170     $ 13,068,012     $ 13,068,012  
   
Specialty Chemicals
 
(15.00%, due 3/06/2015)
                       
       
BioEnergy International Warrants (5) (12)
            34,766       34,766  
       
BioEnergy Holding Units - 11.5% of outstanding
            1,296,771       1,296,771  
       
units of BioEnergy Holdings, LLC (5)
                       
       
Myriant Technologies Warrants (5) (13)
            49,238       49,238  
       
Myriant Technologies Units - 1.9% of the
            418,755       418,755  
       
outstanding units of Myriant Technologies, LLC (5)
                       
                                 
Bionol Clearfield, LLC (9)
 
Alternative Fuels and
 
Senior Secured Tranche C
    4,987,500       4,987,500       4,987,500  
   
Specialty Chemicals
 
Construction Loan
                       
       
(LIBOR + 7.00%, due 9/06/2016)
                       
                                 
Resaca Exploitation Inc.
 
Oil & Natural Gas
 
Senior Secured
    10,000,000       9,845,541       9,845,541  
   
 Production and Development
 
Revolving Credit Facility
                       
       
(The greater of 8.0% or LIBOR + 5.50%,
                       
       
due 5/01/2012)
                       
       
Common Stock (6,651,098 shares) - representing
            3,235,256       4,645,553  
       
6.86% of outstanding common stock of
                       
       
Resaca Exploitation Inc. (5) (14)
                       
                                 
Subtotal Affiliate Investments - (5% to 25% owned)
              $ 32,935,839     $ 34,346,136  
                                 
Non-affiliate Investments - (Less than 5% owned)
                           
Anadarko Petroleum Corporation
 
Oil & Natural Gas
 
Multiple-Advance Net Profits Interest
  $ 10,229,604     $ 10,306,694     $ 10,606,693  
2007-III Drilling Fund
 
 Production and Development
 
(Due 4/23/2032)
                       
                                 
ATP Oil & Gas Corporation
 
Oil & Natural Gas
 
Limited Term Royalty Interest
            6,120,339       4,173,689  
   
 Production and Development
 
(Volume Denominated - 400 MBBL Pay-off)
                       
                                 
       
Limited Term Royalty Interest
            13,506,511       13,506,511  
       
(Dollar Denominated - 16.00% Return)
                       
                                 
Black Pool Energy
 
Oil & Natural Gas
 
Senior Secured
    18,300,000       18,047,454       18,047,454  
Partners, LLC
 
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 15.00% or LIBOR +
                       
       
11.00 % cash, due 10/24/2011)
                       
       
Overriding Royalty Interest
            9,789       100,000  
       
Warrants (5) (15)
            10,000       10,000  
                                 
Chroma Exploration &
 
Oil & Natural Gas
 
10,302 Shares Series A Participating
            2,221,710       -  
Production, Inc.
 
 Production and Development
 
Convertible Preferred Stock (6)
                       
       
9,408 Shares Series AA Participating
            2,089,870       750,000  
       
Convertible Preferred Stock (6)
                       
       
8.11 Shares Common Stock (5)
            -       -  
       
Warrants (5) (8)
            -       -  
                                 
Greenleaf Investments, LLC
 
Oil & Natural Gas
 
Senior Secured
    10,267,454       10,129,145       10,129,145  
   
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 10.50% or LIBOR + 6.50%,
                       
       
due 4/30/2011)
                       
       
Overriding Royalty Interest
            20,556       400,000  
                                 
Nighthawk Transport I, LP
 
Energy Services
 
Second Lien Term Loan B (10)
    13,022,642       -       -  
       
LP Units (5) (10)
            -       -  
       
Warrants (5) (10)
            -       -  
                                 
       
Second Lien Delayed Draw Term Loan B (10)
    1,457,656       -       -  

(See accompanying notes to consolidated financial statements)

 
6

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
March 31, 2010
(Unaudited)
(continued)

Portfolio Company
 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS (17) - Continued
                     
Non-affiliate Investments - (Less than 5% owned) - Continued
                 
Tammany Oil & Gas, LLC
 
Oil & Natural Gas
 
Senior Secured
  $ 24,532,804     $ 24,532,804     $ 24,532,804  
   
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 13.0% or LIBOR + 8.00%,
                       
       
 due 3/21/2010) (16)
                       
       
Overriding Royalty Interest
            162,325       1,000,000  
                                 
Subtotal Non-affiliate Investments - (Less than 5% owned)
              $ 87,157,197     $ 83,256,296  
                                 
Subtotal Targeted Investments (62.72% of total investments)
              $ 241,662,777     $ 193,037,880  
                                 
CORPORATE NOTES (17)
                               
Pioneer Natural Resources Co.
 
Oil & Natural Gas
 
Senior Notes, 7.2%, due 2028
  $ 10,000,000     $ 11,527,241     $ 9,416,400  
   
 Production and Development
                           
                                 
Subtotal Corporate Notes ( 3.06% of total investments)
              $ 11,527,241     $ 9,416,400  
                                 
CASH AND CASH EQUIVALENTS
                               
Subtotal Cash and Cash Equivalents  (34.22% of total investments)
              $ 105,337,155     $ 105,337,155  
                                 
TOTAL INVESTMENTS, CASH AND CASH EQUIVALENTS
              $ 358,527,173     $ 307,791,435  
                                 
LIABILITIES IN EXCESS OF OTHER ASSETS
                      $ (66,284,445 )
                                 
NET ASSETS
                          $ 241,506,990  

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS

(1)
All investments are pledged as collateral for obligations under the Company's credit facility.
(2)
Percentages represent interest rates in effect at the end of the period and due dates represent the contractual maturity dates.
(3)
Fair value of targeted investments is determined by or under the direction of the Board of Directors.
(4)
All investments are in entities with primary operations in the United States of America.
(5)
Non-income producing securities.
(6)
Non-accrual status.
(7)
BSR Loco Bayou repaid its term note in full on July 31, 2009. The Company retains ownership of ORRI and has exercised warrants in exchange for 50% working interest in certain BSR Loco Bayou properties which have been contributed to NGPC Asset Holdings II, LP in exchange for 100% of the outstanding units in BSR Holdings, LLC.
(8)
Chroma warrants expire on April 5, 2012 and provide the Company the right to purchase 2,462 shares of common stock at a purchase price of $75.00 per share.
(9)
Bionol Clearfield, LLC is owned 100% by BioEnergy Holdings, LLC.
(10)
Due to insufficient recoveries in the liquidation under Nighthawk's voluntary petition under Chapter 7 of the United States Bankruptcy Code, the Company recognized a realized loss of its total remaining investment in Nighthawk notes, warrants and units in December 2009.
(11)
Formidable senior note was accelerated and the Company foreclosed on the member units of Formidable, LLC on September 28, 2009.
(12)
BioEnergy International, LLC warrants expire on August 15, 2010 and provide the Company the right to purchase 140,687 units, representing membership interests of BioEnergy International, LLC, at the purchase price of $10.00 per unit.
(13)
Myriant Technologies, LLC warrants expire on August 15, 2015 and provide the Company the right to purchase 32,680 units, representing membership interests of Myriant Technologies, LLC, at the purchase price of $10.00 per unit.
(14)
Resaca stock is listed on the Alternative Investment Market of the London Stock Exchange, denominated in British pounds and its reported fair value at March 31, 2010 has been converted to U.S. dollars at the exchange rate effective on March 31, 2010.
(15)
Black Pool warrants expire seven years after repayment of principal and interest and provide the Company the right to purchase approximately 25% of membership interest at the exercise price of $0.01 per unit.
(16)
Tammany Oil & Gas, LLC. maturity date extended until April 21, 2010.
(17)
All investments in portfolio securities, corporate notes and commodity derivative instruments are level 3 securities hierarchy.

(See accompanying notes to consolidated financial statements)

 
7

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009

Portfolio Company
 
Energy Industry Segment
 
Investment (1)(2)(4)
 
Principal
 
Cost
 
Fair Value (3)
Targeted Investments (17)
   
  
     
  
     
  
 
Control Investments – Majority Owned (50% to 100% owned)
   
  
     
  
     
  
 
Alden Resources, LLC
 
Coal Production
 
Senior Secured
Multiple-Advance Term Loan - Tranche A
(The greater of 12.00% or LIBOR +
9.00% cash, 15.00% or LIBOR +
12.00% PIK, due 1/05/2013)
  $
21,432,224
    $
19,499,779
    $
19,399,779
 
  
 
  
 
Senior Secured
Multiple-Advance Term Loan - Tranche B
(The greater of 12.00% or LIBOR +
9.00% cash, 15.00% or LIBOR +
12.00% PIK, due 1/05/2013) (6)
   
20,917,680
     
19,519,841
     
19,519,841
 
  
 
  
 
Class E Units – 100% of outstanding units
entitled to 100% of distributions of
Alden Resources until payout,
80% after payout (5)
   
  
     
5,800,000
     
5,800,000
 
  
 
  
 
Royalty Interest
   
  
     
2,519,051
     
5,330,000
 
BSR Holdings, LLC (7)
 
Oil & Natural Gas
Production and Development
 
Units – 100% of outstanding units of
BSR Holdings, LLC which holds 50%
working interest in certain BSR Loco
Bayou, LLC oil and gas properties (5)
   
  
     
300,000
     
300,000
 
  
 
  
 
Overriding Royalty Interest
   
  
     
16,460
     
100,000
 
DeanLake Operator, LLC
 
Oil & Natural Gas
Production and Development
 
Senior Secured Term Loan
(10.00% cash, 12.00% PIK,
payable quarterly, due 6/30/2011)
   
3,500,000
     
3,500,000
     
3,500,000
 
  
 
  
 
Class A Preferred Units – 100%
of outstanding units entitled to 100%
of distributions of DeanLake Operator, LLC
until payout, 80% after payout (5)
   
  
     
10,400,255
     
6,500,000
 
  
 
  
 
Overriding Royalty Interest
   
  
     
18,046
     
100,000
 
Formidable, LLC
 
Oil & Natural Gas
Production and Development
 
Senior Secured
Multiple-Advance Term Loan
(LIBOR + 5.50% cash, LIBOR + 8.50%
default, due 5/31/2008) (6)
   
38,780,316
     
38,780,316
     
5,600,000
 
  
 
  
 
Warrants (5)
   
  
     
500,000
     
 
  
 
  
 
Formidable Holdings, LLC Units – 100%
of pledged stock of Formidable, LLC (5)(11)
   
  
     
10,000
     
 
Rubicon Energy Partners, LLC
 
Oil & Natural Gas
Production and Development
 
LLC Units (4,000 units) representing 50%
ownership of the assets of
Rubicon Energy Partners, LLC (5)
   
  
     
     
 
TierraMar Energy LP
 
Oil & Natural Gas
Production and Development
 
Class A Preferred LP Units – 100%
of outstanding units entitled to 100%
of distributions of TierraMar Energy LP
until payout, 67% after payout (5)
   
  
     
17,710,788
     
6,000,000
 
  
     
Overriding Royalty Interest
           
15,876
     
300,000
 
Total Control Investments – Majority Owned (50% to 100% owned)
 
$
118,590,412
   
$
72,449,620
 
 
 
8

 
 
NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
(continued)

Portfolio Company
 
Energy Industry Segment
 
Investment (1)(2)(4)
 
Principal
 
Cost
 
Fair Value (3)
Targeted Investments (17)  – Continued
 
  
   
  
     
  
     
  
 
Affiliate Investments – (5% to 25% owned)
   
  
     
  
     
  
 
BioEnergy Holding, LLC
 
Alternative Fuels and
Specialty Chemicals
 
Senior Secured Notes
(15.00%, due 3/06/2015)
  $
12,255,231
    $
10,862,125
    $
10,862,125
 
   
  
 
BioEnergy International Warrants (5)(12)
   
  
     
34,766
     
34,766
 
   
  
 
BioEnergy Holding Units – 11.5%
of outstanding units of BioEnergy
Holdings, LLC (5)
   
  
     
1,296,771
     
1,296,771
 
   
  
 
Myriant Technologies Warrants (5)(13)
   
  
     
49,238
     
49,238
 
   
  
 
Myriant Technologies Units – 1.9%
of the outstanding units of
Myriant Technologies, LLC (5)
   
  
     
418,755
     
418,755
 
Bionol Clearfield, LLC (9)
 
Alternative Fuels and
Specialty Chemicals
 
Senior Secured Tranche C
Construction Loan
(LIBOR + 7.00%, due 9/06/2016)
   
5,000,000
     
5,000,000
     
5,000,000
 
Resaca Exploitation Inc.
 
Oil & Natural Gas
Production and Development
 
Senior Secured
Revolving Credit Facility
(The greater of 8.0% or LIBOR + 5.50%,
due 5/01/2012)
   
10,000,000
     
9,830,456
     
9,830,456
 
       
Common Stock (6,651,098 shares) – 
representing 6.86% of outstanding common stock of
Resaca Exploitation Inc. (5)(15)
           
3,235,256
     
4,086,834
 
Subtotal Affiliate Investments – (5% to 25% owned)
 
$
30,727,367
   
$
31,578,945
 
Non-affiliate Investments – (Less than 5% owned)
 
  
   
  
     
  
     
  
 
Anadarko Petroleum
Corporation 2007 – III Drilling Fund
 
Oil & Natural Gas
Production and Development
 
Multiple-Advance Net Profits Interest
(Due 4/23/2032)
  $
10,579,495
    $
10,662,801
    $
11,012,799
 
ATP Oil & Gas Corporation
 
Oil & Natural Gas
Production and Development
 
Limited Term Royalty Interest
(Volume Denominated – 400 MBBL Pay-off)
   
  
     
9,335,754
     
5,642,113
 
   
  
 
Limited Term Royalty Interest
(Dollar Denominated – 16.00% Return)
   
  
     
14,935,631
     
14,935,631
 
Black Pool Energy Partners, LLC
 
Oil & Natural Gas
Production and Development
 
Senior Secured
Multiple-Advance Term Loan
(The greater of 12.00% or LIBOR + 8.00% cash,
14.00% or LIBOR + 10.00% PIK,
due 10/24/2011)
   
18,300,000
     
18,013,814
     
18,013,814
 
   
  
 
Overriding Royalty Interest
   
  
     
9,884
     
100,000
 
   
  
 
Warrants (5)(16)
   
  
     
10,000
     
10,000
 
Chroma Exploration &
Production, Inc.
 
Oil & Natural Gas
Production and Development
 
10,302 Shares Series A Participating
Convertible Preferred Stock (6)
   
  
     
2,221,710
     
 
   
  
 
9,408 Shares Series AA Participating
Convertible Preferred Stock (6)
   
  
     
2,089,870
     
500,000
 
   
  
 
8.11 Shares Common Stock (5)
   
  
     
     
 
   
  
 
Warrants (5)(8)
   
  
     
     
 
Greenleaf Investments, LLC
 
Oil & Natural Gas
Production and Development
 
Senior Secured
Multiple-Advance Term Loan
(The greater of 10.50% or LIBOR + 6.50%,
due 4/30/2011)
   
10,783,558
     
10,616,048
     
10,616,048
 
   
  
 
Overriding Royalty Interest
   
  
     
31,028
     
400,000
 
Nighthawk Transport I,  LP
 
Energy Services
 
Second Lien Term Loan B (10)
   
13,022,642
     
     
 
 
 
  
 
LP Units (5)(10)
   
  
     
     
 
   
  
 
Warrants (5)(10)
   
  
     
     
 
   
  
 
Second Lien Delayed Draw Term Loan B (10)
   
1,457,656
     
     
 

(See accompanying notes to consolidated financial statements)

 
9

 

NGP CAPITAL RESOURCES COMPANY   
 
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
(continued)

Portfolio Company
 
Energy Industry Segment
 
Investment (1)(2)(4)
 
Principal
 
Cost
 
Fair Value (3)
Targeted Investments (17)  – Continued
 
  
   
  
     
  
     
  
 
Non-affiliate Investments – (Less than 5% owned) – Continued
   
  
     
  
     
  
 
Tammany Oil & Gas, LLC
 
Oil & Natural Gas
Production and Development
 
Senior Secured
Multiple-Advance Term Loan
(The greater of 13.0% or LIBOR + 8.00%,
due 3/21/2010)
  $
24,782,804
    $
24,734,973
    $
24,734,973
 
  
     
Overriding Royalty Interest
           
171,134
     
1,000,000
 
Subtotal Non-affiliate Investments – (Less than 5% owned)
 
$
92,832,647
   
$
86,965,378
 
Subtotal Targeted Investments (61.93% of total investments)
 
$
242,150,426
   
$
190,993,943
 
Corporate Notes (17)
 
  
 
  
   
  
     
  
     
  
 
Pioneer Natural Resources Co.
 
Oil & Natural Gas
Production and Development
 
Senior Notes, 7.2%, due 2028
 
$
10,000,000
   
$
11,539,564
   
$
9,062,200
 
Subtotal Corporate Notes (2.94% of total investments)
 
$
11,539,564
   
$
9,062,200
 
Commodity Derivative Instruments (17)
 
  
   
  
     
  
     
  
 
Put Options (14)
     
Put Options with BP Corporation North
America, Inc. to sell up to 32,750 Bbls of
crude oil at a strike price of $85.00 per Bbl.
4 monthly contracts beginning on October 1, 2009
 and expiring on January 31, 2010.
          $
30,100
    $
49,000
 
Subtotal Commodity Derivatives (0.02% of total investments)
 
$
30,100
   
$
49,000
 
Cash and Cash Equivalents  
  
   
  
     
  
     
  
 
Subtotal Cash and Cash Equivalents (35.11% of total investments)
 
$
108,288,217
   
$
108,288,217
 
Total investments, cash and cash equivalents
 
$
362,008,307
   
$
308,393,360
 
Liabilities in excess of other assets
 
$
(68,217,812)
 
Net assets
 
$
240,175,548
 
 
 
10

 

NGP CAPITAL RESOURCES COMPANY
  
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
(continued)
 
Notes to Consolidated Schedule of Investments
 
(1)
All investments are pledged as collateral for obligations under the Company s credit facility.
 
(2)
Percentages represent interest rates in effect at the end of the period and due dates represent the contractual maturity dates.
 
(3)
Fair value of targeted investments is determined by or under the direction of the Board of Directors.
 
(4)
All investments are in entities with primary operations in the United States of America.
 
(5)
Non-income producing securities.
 
(6)
Non-accrual status.
 
(7)
BSR Loco Bayou repaid its term note in full on July 31, 2009. The Company retains ownership of ORRI and has exercised warrants in exchange for 50% working interest in certain BSR Loco Bayou properties which have been contributed to NGPC Asset Holdings II, LP in exchange for 100% of the outstanding units in BSR Holdings, LLC.
 
(8)
Chroma warrants expire on April 5, 2012 and provide the Company the right to purchase 2,462 shares of common stock at a purchase price of $75.00 per share.
 
(9)
Bionol Clearfield, LLC is owned 100% by BioEnergy Holdings, LLC.
 
(10)
Due to insufficient recoveries in the liquidation under Nighthawk s voluntary petition under Chapter 7 of the United States Bankruptcy Code, the Company recognized a realized loss of its total remaining investment in Nighthawk notes, warrants and units in December 2009.
 
(11)
Formidable senior note was accelerated and the Company foreclosed on the member units of Formidable, LLC on September 28, 2009.
 
(12)
BioEnergy International, LLC warrants expire on August 15, 2010 and provide the Company the right to purchase 140,687 units, representing membership interests of BioEnergy International, LLC, at the purchase price of $10.00 per unit.
 
(13)
Myriant Technologies, LLC warrants expire on August 15, 2015 and provide the Company the right to purchase 32,680 units, representing membership interests of Myriant Technologies, LLC, at the purchase price of $10.00 per unit.
 
(14)  
Put Options are related to the limited term royalty interest purchased from ATP Oil & Gas Corporation.
 
(15)
Resaca stock is listed on the Alternative Investment Market of the London Stock Exchange, denominated in British pounds and its reported fair value at December 31, 2009 has been converted to U.S. dollars at the exchange rate effective on December 31, 2009.
 
(16)
Black Pool warrants expire seven years after repayment of principal and interest and provide the Company the right to purchase approximately 25% of membership interest at the exercise price of $0.01 per unit.
 
(17)
All investments in portfolio securities, corporate notes and commodity derivative instruments are level 3 securities hierarchy.
 
(See accompanying notes to consolidated financial statements)
 
11

 
NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

   
For The Three Months Ended
 
   
March 31, 2010
   
March 31, 2009