OHA Investment Corporation
NGP Capital Resources Co (Form: 10-Q, Received: 11/09/2010 12:57:42)

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 September 30, 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 November 5, 2010, there were 21,628,202 shares of the registrant’s common stock outstanding.

 
 

 
 
TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
1
   
Item 1.     Financial Statements
1
Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
30
Item 3.     Quantitative and Qualitative Disclosures About Market Risk
37
Item 4.     Controls and Procedures
38
   
PART II – OTHER INFORMATION
39
   
Item 1.     Legal Proceedings
39
Item 1A.  Risk Factors
39
Item 6.     Exhibits
39
 
 
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED BALANCE SHEETS

   
September 30, 2010
   
December 31, 2009
 
   
(Unaudited)
       
Assets
           
Investments in portfolio securities at fair value
           
Control investments - majority owned
           
(cost: $126,227,931 and $118,590,412, respectively)
  $ 77,161,810     $ 72,449,620  
Affiliate investments
               
(cost: $34,096,517 and $30,727,367, respectively)
    33,216,052       31,578,945  
Non-affiliate investments
               
(cost: $78,812,538 and $92,832,647, respectively)
    76,884,017       86,965,378  
Investments in corporate notes at fair value
               
(cost: $11,502,179 and $11,539,564, respectively)
    10,413,838       9,062,200  
Investments in commodity derivative instruments at fair value
               
(cost: $0 and $30,100, respectively)
    -       49,000  
Total investments
    197,675,717       200,105,143  
                 
Cash and cash equivalents
    95,315,228       108,288,217  
Accounts receivable and other current assets
    1,937,783       2,115,663  
Interest receivable
    879,360       1,241,609  
Prepaid assets
    1,308,235       2,201,468  
Deferred tax assets
    3,867,362       2,979,209  
Total current assets
    103,307,968       116,826,166  
                 
Total assets
  $ 300,983,685     $ 316,931,309  
                 
Liabilities and stockholders' equity (net assets)
               
Current liabilities
               
Accounts payable and accrued expenses
  $ 1,010,799     $ 1,098,414  
Management and incentive fees payable
    1,409,553       1,415,866  
Payables for investment securities purchased
    2,856,806       -  
Dividends payable
    3,676,794       3,676,794  
Income taxes payable
    48,837       62,321  
Total current liabilities
    9,002,789       6,253,395  
                 
Deferred tax liabilities
    3,890,519       3,002,366  
Long-term debt
    50,000,000       67,500,000  
                 
Total liabilities
    62,893,308       76,755,761  
                 
Commitments and contingencies  (Note 6)
               
                 
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)
    (7,898,735 )     (4,944,530 )
Undistributed net realized capital gain (loss)
    (110,492 )     -  
Net unrealized appreciation (depreciation) of portfolio securities,
               
corporate notes and commodity derivative instruments
    (49,096,087 )     (50,075,613 )
                 
Total stockholders’ equity (net assets)
    238,090,377       240,175,548  
                 
Total liabilities and stockholders' equity (net assets)
  $ 300,983,685     $ 316,931,309  
                 
Net asset value per share
  $ 11.01     $ 11.10  

(See accompanying notes to consolidated financial statements)

 
1

 
 
NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

   
For The Three Months Ended
   
For The Nine Months Ended
 
   
September 30, 2010
   
September 30, 2009
   
September 30, 2010
   
September 30, 2009
 
                         
Investment income
                       
Interest and dividend income:
                       
Control investments - majority owned
  $ 1,188,139     $ 967,554     $ 3,384,042     $ 967,554  
Affiliate investments
    959,298       1,158,016       2,692,192       3,959,181  
Non-affiliate investments
    3,011,209       3,965,629       9,568,456       13,731,339  
Royalty income (loss), net of amortization:
                               
Control investments - majority owned
    522,473       828,553       1,277,258       894,233  
Non-affiliate investments
    (75,337 )     (1,755,557 )     (1,038,012 )     (5,489,340 )
Commodity derivative income, net of expired options
    -       829,946       16,079       5,884,027  
Other income
    640,000       27,526       1,570,000       144,264  
                                 
Total investment income
    6,245,782       6,021,667       17,470,015       20,091,258  
                                 
Operating expenses
                               
Management and incentive fees
    1,409,553       1,540,756       4,171,952       5,021,782  
Professional fees
    159,960       214,591       646,936       701,217  
Insurance expense
    185,658       199,959       556,974       600,140  
Interest expense and fees
    339,073       446,600       956,254       2,541,151  
Other general and administrative expenses
    973,024       718,585       2,763,012       2,261,123  
                                 
Total operating expenses
    3,067,268       3,120,491       9,095,128       11,125,413  
                                 
Net investment income before income taxes
    3,178,514       2,901,176       8,374,887       8,965,845  
                                 
Benefit (provision) for income taxes
    (808,279 )     2,321       (298,709 )     15,314  
                                 
Net investment income
    2,370,235       2,903,497       8,076,178       8,981,159  
                                 
Net realized capital gain (loss) on investments
                               
Net realized capital gain (loss) on portfolio securities, and corporate notes:
                               
Control investments - majority owned
    -       -       -       (350,000 )
Non-affiliate investments
    -       -       -       296,037  
Benefit (provision) for taxes on capital gain (loss)
    (91,879 )     -       (110,492 )     119,000  
                                 
Total net realized capital gain (loss) on investments
    (91,879 )     -       (110,492 )     65,037  
                                 
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
    (2,838,653 )     1,688,108       (2,925,328 )     (3,056,931 )
Affiliate investments
    (1,542,752 )     4,511,162       (1,732,043 )     5,105,390  
Non-affiliate investments
    1,261,745       5,113,957       5,308,870       (19,724,604 )
Benefit for taxes on unrealized gain (loss)
    905,413       513,400       328,027       2,154,226  
                                 
Total net unrealized gain (loss) on investments
    (2,214,247 )     11,826,627       979,526       (15,521,919 )
                                 
Net increase (decrease) in stockholders' equity (net assets) resulting from operations
  $ 64,109     $ 14,730,124     $ 8,945,212     $ (6,475,723 )
                                 
Net increase (decrease) in stockholders' equity (net assets) resulting from operations per common share
  $ -     $ 0.68     $ 0.42     $ (0.30 )

(See accompanying notes to consolidated financial statements)

 
2

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

                                 
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
    -       -       -       8,076,178       (110,492 )     979,526       8,945,212  
                                                         
Dividends declared
    -       -       -       (11,030,383 )     -       -       (11,030,383 )
                                                         
Balance at September 30, 2010
    21,628,202     $ 21,628     $ 295,174,063     $ (7,898,735 )   $ (110,492 )   $ (49,096,087 )   $ 238,090,377  

 (See accompanying notes to consolidated financial statements)
 
 
3

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

   
For The Nine Months Ended
 
   
September 30, 2010
   
September 30, 2009
 
             
Cash flows from operating activities
           
Net increase (decrease) in stockholders' equity (net assets) resulting from operations
  $ 8,945,212     $ (6,475,723 )
Adjustments to reconcile net increase (decrease) in stockholders' equity (net assets) resulting from operations to net cash provided by operating activities
               
Payment-in-kind interest
    (4,547,397 )     (3,317,164 )
Net amortization of premiums, discounts and fees
    8,650,115       10,128,588  
Change in unrealized (appreciation) depreciation on portfolio securities, corporate notes and commodity derivative instruments before taxes
    (651,499 )     17,676,145  
Current portion of deferred income taxes
    (888,153 )     (2,726,619 )
Non-current deferred income taxes
    888,153       (314,194 )
Effects of changes in operating assets and liabilities
               
Accounts receivable and other current assets
    177,880       83,125  
Interest receivable
    362,249       1,314,942  
Prepaid assets
    893,233       903,284  
Accounts payable and accrued expenses
    (93,928 )     (3,435,521 )
Payables for investment securities purchased
    2,856,806       -  
Income taxes payable
    (13,484 )     390,227  
Purchase of investments in portfolio securities, corporate notes and commodity derivative instruments
    (21,318,320 )     (33,196,662 )
Redemption of investments in portfolio securities, corporate notes and commodity derivative instruments
    20,296,527       64,459,403  
                 
Net cash provided by operating activities
    15,557,394       45,489,831  
                 
Cash flows from financing activities
               
Borrowings under revolving credit facility
    174,905,200       72,000,000  
Repayments on revolving credit facility
    (192,405,200 )     (152,000,000 )
Dividends paid
    (11,030,383 )     (15,788,587 )
                 
Net cash used in financing activities
    (28,530,383 )     (95,788,587 )
                 
Net decrease in cash and cash equivalents
    (12,972,989 )     (50,298,756 )
Cash and cash equivalents, beginning of period
    108,288,217       133,805,575  
                 
Cash and cash equivalents, end of period
  $ 95,315,228     $ 83,506,819  

(See accompanying notes to consolidated financial statements)

 
4

 
 
NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2010
(Unaudited)

Portfolio Company
 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS
                         
Control Investments - Majority Owned (50% or more owned)
                     
Alden Resources, LLC (18)
 
Coal Production
 
Senior Secured
  $ 16,497,033     $ 14,961,969     $ 14,861,969  
       
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
    23,420,914       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)
                       
                                 
       
Senior Secured
    1,000,000       1,000,000       1,000,000  
       
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)
                       
                                 
       
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)
                       
                                 
       
Royalty Interest
            2,497,219       5,330,000  
                                 
BSR Holdings, LLC (7) (18)
 
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
            14,750       100,000  
                                 
DeanLake Operator, LLC (18)
 
Oil & Natural Gas
 
Class A Preferred Units - 100% of outstanding
            14,000,255       7,500,000  
   
 Production and Development
 
units entitled to 100% of distributions of
                       
       
DeanLake Operator, LLC until payout,
                       
       
80% after payout (5)
                       
                                 
       
Overriding Royalty Interest
            17,673       50,000  
                                 
Formidable, LLC (18)
 
Oil & Natural Gas
 
Senior Secured
    38,780,316       38,780,316       5,300,000  
   
 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)
                       
                                 
Gatliff Services, LLC (18)
 
Coal Processing
 
Membership Units - 100% of outstanding
            12,100,000       12,100,000  
       
units of Gatliff Services, LLC  (5)
                       
                                 
Rubicon Energy Partners,
 
Oil & Natural Gas
 
LLC Units (4,000 units) representing
            -       -  
    LLC (18)
 
 Production and Development
 
50% ownership of the assets of
                       
       
Rubicon Energy Partners, LLC (5)
                       
                                 
TierraMar Energy LP (18)
 
Oil & Natural Gas
 
Class A Preferred LP Units - 100% of
            16,710,788       5,000,000  
   
 Production and Development
 
outstanding units entitled to 100% of
                       
       
distributions of TierraMar Energy LP until
                       
       
payout, 67% after payout (5)
                       
                                 
       
Overriding Royalty Interest
            15,120       300,000  
                                 
Total Control Investments - Majority Owned (50% or more owned)
          $ 126,227,931     $ 77,161,810  

(See accompanying notes to consolidated financial statements)
 
 
5

 
 
NGP CAPITAL RESOURCES COMPANY
  CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2010
(Unaudited)
(continued)

 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS - Continued
                     
Affiliate Investments - (5% to 25% owned)
                     
BioEnergy Holding, LLC (18)
 
Alternative Fuels and
 
Senior Secured Notes
  $ 15,485,039     $ 14,256,743     $ 14,256,743  
   
Specialty Chemicals
 
(15.00%, due 3/06/2015)
                       
       
BioEnergy Holding Units - 11.5% of outstanding
            1,296,771       1,296,771  
       
units of BioEnergy Holdings, LLC (5)
                       
       
Myriant Technologies Warrants (5) (12)
            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) (16) (18)
 
Alternative Fuels and
 
Senior Secured Tranche C
    4,962,500       4,962,500       4,962,500  
   
Specialty Chemicals
 
2nd Lien Term Loan
                       
       
(LIBOR + 7.00% cash, LIBOR + 9.00%
                       
       
default, due 9/06/2016)
                       
                                 
Resaca Exploitation Inc.
 
Oil & Natural Gas
 
Senior Secured
    10,000,000       9,877,254       9,877,254  
   
 Production and Development
 
Revolving Credit Facility
                       
       
(The greater of 8.0% or LIBOR + 5.50%,
                       
       
due 5/01/2012) (18)
                       
       
Common Stock (1,345,595 shares) - representing
            3,235,256       2,354,791  
       
6.84% of outstanding common stock of
                       
       
Resaca Exploitation Inc. (5) (13) (17)
                       
                                 
Subtotal Affiliate Investments - (5% to 25% owned)
              $ 34,096,517     $ 33,216,052  
                                 
Non-affiliate Investments - (Less than 5% owned)
                           
Anadarko Petroleum Corporation
 
Oil & Natural Gas
 
Multiple-Advance Net Profits Interest
  $ 9,699,045     $ 9,761,267     $ 10,061,265  
    2007-III Drilling Fund (18)
 
 Production and Development
 
(Due 4/23/2032)
                       
                                 
ATP Oil & Gas Corporation (18)
 
Oil & Natural Gas
 
Limited Term Royalty Interest
            8,881,349       8,881,349  
   
 Production and Development
 
(Dollar Denominated - 16.00% Return)
                       
                                 
Black Pool Energy
 
Oil & Natural Gas
 
Senior Secured
    17,895,000       17,715,397       17,715,397  
   Partners, LLC (18)
 
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 15.00% or LIBOR +
                       
       
11.00% cash, due 10/24/2011)
                       
       
Overriding Royalty Interest
            9,758       100,000  
       
Warrants (5) (14)
            10,000       10,000  
                                 
Chroma Exploration &
 
Oil & Natural Gas
 
10,611 Shares Series A Participating
            2,221,710       -  
    Production, Inc. (18)
 
 Production and Development
 
Convertible Preferred Stock (6)
                       
       
9,690 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 (18)
 
Oil & Natural Gas
 
Senior Secured
    8,944,362       8,868,014       8,868,014  
   
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 10.50% or LIBOR + 6.50%,
                       
       
due 4/30/2011)
                       
       
Overriding Royalty Interest
            5,197       400,000  
                                 
GMX Resources, Inc. (17)
 
Oil & Natural Gas
 
Senior Convertible Notes
    6,025,000       4,870,984       4,865,188  
   
 Production and Development
 
(5.00%, due 2/1/2013)
                       
                                 
Nighthawk Transport I, LP (18)
 
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
September 30, 2010
(Unaudited)
(continued)

Portfolio Company
 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS - Continued
                   
Non-affiliate Investments - (Less than 5% owned) - Continued
                 
Tammany Oil & Gas, LLC (18)
 
Oil & Natural Gas
 
Senior Secured
  $ 24,232,804     $ 24,232,804     $ 24,232,804  
   
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 13.0% or LIBOR + 8.00%,
                       
       
 due 3/21/2010) (15)
                       
       
Overriding Royalty Interest
            146,188       1,000,000  
                                 
Subtotal Non-affiliate Investments - (Less than 5% owned)
              $ 78,812,538     $ 76,884,017  
                                 
   Subtotal Targeted Investments (63.92% of total investments)
              $ 239,136,986     $ 187,261,879  
                                 
CORPORATE NOTES
                               
Pioneer Natural Resources Co. (17)
 
Oil & Natural Gas
 
Senior Notes, 7.2%, due 2028
  $ 10,000,000     $ 11,502,179     $ 10,413,838  
   
 Production and Development
                           
                                 
   Subtotal Corporate Notes ( 3.55% of total investments)
              $ 11,502,179     $ 10,413,838  
                                 
CASH AND CASH EQUIVALENTS
                           
   Subtotal Cash and Cash Equivalents (32.53% of total investments)
          $ 95,315,228     $ 95,315,228  
                                 
TOTAL INVESTMENTS, CASH AND CASH EQUIVALENTS
              $ 345,954,393     $ 292,990,945  
                                 
LIABILITIES IN EXCESS OF OTHER ASSETS
                      $ (54,900,568 )
                                 
NET ASSETS
                      $ 238,090,377  

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS

(1)
All of our investments are collateral for obligations under our credit facility.
(2)
Percentages represent interest rates in effect at the end of the period and due dates represent the contractual maturity dates.
(3)
Our Board of Directors determines, in good faith, the fair value of our investments.
(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.  We retain ownership of the overriding royalty interest and have exercised warrants in exchange for 50% working interest in certain BSR Loco Bayou properties that have been contributed to NGPC Asset Holdings II, LP in exchange for 100% of the outstanding units in BSR Holdings, LLC.  We sold our interest in BSR Loco Bayou in October 2010.  See "Note 11: Subsequent Events."
(8)
Chroma warrants expire on April 5, 2012 and provide us the right to purchase 2,462 shares of common stock at a purchase price of $75.00 per share.
(9)
BioEnergy Holdings, LLC owns 100% of Bionol Clearfield, LLC.
(10)
Due to insufficient recoveries in the liquidation under Nighthawk's voluntary petition under Chapter 7 of the United States Bankruptcy Code, we recognized a realized loss of our total remaining investment in Nighthawk notes, warrants and units in December 2009.
(11)
We accelerated the Formidable, LLC senior note and foreclosed on the Formidable, LLC member units on September 28, 2009.  We sold our interest in Formidable, LLC in October 2010.  See "Note 11: Subsequent Events."
(12)
Myriant Technologies, LLC warrants expire on August 15, 2015 and provide us the right to purchase  32,680 units, representing membership interests of Myriant Technologies, LLC, at the  purchase price of $10.00 per unit.
(13)
Resaca stock trades on the Alternative Investment Market of the London Stock Exchange.  On April 1, 2010, it began trading in U.S Dollars
(14)
Black Pool warrants expire seven years after repayment of principal and interest and provide us the right to purchase approximately 25% of membership interest at the exercise price of $0.01 per unit.
(15)
We are currently negotiating an extension of the Tammany Oil & Gas, LLC facility
(16)
We issued a forebearance agreement to Bionol Clearfield, LLC on June 16, 2010 due to a default event.
(17)
Investments are level 2 securities hierarchy.
(18)
Investments 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% or more 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% or more owned)
    $ 118,590,412     $ 72,449,620  
 
 
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)