OHA Investment Corporation
NGP Capital Resources Co (Form: 10-Q, Received: 08/09/2011 16:19:08)

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 June 30, 2011

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 August 4, 2011, 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
 
28
Item 3.     Quantitative and Qualitative Disclosures About Market Risk
 
35
Item 4.     Controls and Procedures
 
35
     
PART II – OTHER INFORMATION
 
36
     
Item 1.     Legal Proceedings
 
36
Item 1A.  Risk Factors
 
36
Item 6.     Exhibits
  
36

 
 

 

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

   
June 30, 2011
   
December 31, 2010
 
   
(Unaudited)
       
             
Assets
           
Investments in portfolio securities at fair value
               
Control investments - majority owned
(cost: $101,989,595 and $89,502,910, respectively)
  $ 74,221,913     $ 70,973,316  
Affiliate investments
(cost: $36,083,334 and $34,146,328, respectively)
    13,463,505       33,064,028  
Non-affiliate investments
(cost: $113,556,532 and $114,852,057, respectively)
    112,012,623       112,025,645  
Investments in U.S. Treasury Bills at fair value
(cost: $30,600,298 and $0, respectively)
    30,599,663       -  
Total investments
    230,297,704       216,062,989  
                 
Cash and cash equivalents
    50,010,276       68,456,908  
Accounts receivable and other current assets
    1,242,430       3,095,882  
Interest receivable
    1,397,457       2,236,122  
Prepaid assets
    1,342,941       1,736,732  
Total current assets
    53,993,104       75,525,644  
                 
Deferred tax assets
    5,615,099       -  
                 
Total assets
  $ 289,905,907     $ 291,588,633  
                 
Liabilities and net assets
               
Current liabilities
               
Accounts payable and accrued expenses
  $ 485,831     $ 525,111  
Management and incentive fees payable
    1,591,714       1,376,032  
Dividends payable
    3,893,076       3,893,076  
Income taxes payable
    18,052       50,350  
Current portion of long-term debt
    30,000,000       -  
Deferred tax liabilities
    5,630,437       -  
Total current liabilities
    41,619,110       5,844,569  
                 
Deferred tax liabilities
    -       18,136  
Long-term debt, less current portion
    40,000,000       50,000,000  
                 
Total liabilities
    81,619,110       55,862,705  
                 
Commitments and contingencies  (Note 6)
               
                 
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
    293,789,803       293,789,803  
Undistributed net investment income (loss)
    (8,234,138 )     (7,845,925 )
Undistributed net realized capital gain (loss)
    (32,319,233 )     (32,778,782 )
Net unrealized appreciation (depreciation) of portfolio securities
    (44,971,263 )     (17,460,796 )
                 
Total net assets
    208,286,797       235,725,928  
                 
Total liabilities and net assets
  $ 289,905,907     $ 291,588,633  
                 
Net asset value per share
  $ 9.63     $ 10.90  

(See accompanying notes to consolidated financial statements)

 
1

 

 NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

   
For The Three Months Ended
   
For The Six Months Ended
 
    
June 30,  2011
   
June 30,  2010
   
June 30,  2011
   
June 30,  2010
 
Investment income
                       
Interest income:
                       
Control investments - majority owned
  $ 5,810,435     $ 1,095,924     $ 7,166,344     $ 2,195,903  
Affiliate investments
    (320,821 )     899,981       631,044       1,732,894  
Non-affiliate investments
    3,038,632       3,379,706       6,517,637       6,557,247  
Royalty income (loss), net of amortization:
                               
Control investments - majority owned
    201,785       459,974       680,135       754,785  
Non-affiliate investments
    270,906       (444,619 )     526,688       (962,675 )
Other income
    58,887       640,000       92,637       946,079  
                                 
Total investment income
    9,059,824       6,030,966       15,614,485       11,224,233  
                                 
Operating expenses
                               
Management and incentive fees
    1,591,714       1,423,830       2,925,002       2,762,399  
Professional fees
    236,026       221,672       435,066       486,976  
Insurance expense
    182,303       185,658       364,846       371,316  
Interest expense and fees
    457,256       304,118       766,677       617,181  
Other general and administrative expenses
    896,969       843,568       1,726,704       1,789,988  
                                 
Total operating expenses
    3,364,268       2,978,846       6,218,295       6,027,860  
                                 
Net investment income before income taxes
    5,695,556       3,052,120       9,396,190       5,196,373  
                                 
Benefit (provision) for income taxes
    (1,295,534 )     222,496       (1,998,250 )     509,570  
                                 
Net investment income
    4,400,022       3,274,616       7,397,940       5,705,943  
                                 
Net realized capital gain (loss) on investments
                               
Net realized capital gain (loss) on portfolio securities:
                               
Control investments - majority owned
    -       -       81,275       -  
Non-affiliate investments
    984,571       -       378,210       -  
Benefit (provision) for taxes on capital gain (loss)
    (223 )     (9,462 )     64       (18,613 )
                                 
Total net realized capital gain (loss) on investments
    984,348       (9,462 )     459,549       (18,613 )
                                 
Net unrealized gain (loss) on investments
                               
Net increase (decrease) in unrealized appreciation
(depreciation) on portfolio securities
                               
Control investments - majority owned
    (12,665,451 )     (93,176 )     (9,238,088 )     (86,675 )
Affiliate investments
    (10,343,205 )     (748,010 )     (21,537,528 )     (189,291 )
Non-affiliate investments
    (58,606 )     1,733,136       1,281,867       4,047,125  
Benefit (provision) for taxes on unrealized gain (loss)
    1,289,139       (284,237 )     1,983,282       (577,386 )
                                 
Total net unrealized gain (loss) on investments
    (21,778,123 )     607,713       (27,510,467 )     3,193,773  
                                 
Net increase (decrease) in net assets resulting from operations
  $ (16,393,753 )   $ 3,872,867     $ (19,652,978 )   $ 8,881,103  
                                 
Net increase (decrease) in net assets resulting from operations per common share
  $ (0.76 )   $ 0.18     $ (0.91 )   $ 0.42  

(See accompanying notes to consolidated financial statements)

 
2

 

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

                                 
Net Unrealized
       
               
Paid-in
         
Undistributed
   
Appreciation
       
               
Capital
   
Undistributed
   
Net Realized
   
(Depreciation)
       
   
Common Stock
   
in Excess
   
Net Investment
   
Capital
   
of Portfolio
   
Total
 
   
Shares
   
Amount
   
of Par
   
Income (Loss)
   
Gain (Loss)
   
Securities
   
Net Assets
 
Balance at December 31, 2010
    21,628,202     $ 21,628     $ 293,789,803     $ (7,845,925 )   $ (32,778,782 )   $ (17,460,796 )   $ 235,725,928  
Net increase (decrease) in net assets resulting from operations
    -       -       -       7,397,940       459,549       (27,510,467 )     (19,652,978 )
                                                         
Dividends declared
    -       -       -       (7,786,153 )     -       -       (7,786,153 )
Balance at June 30, 2011
    21,628,202     $ 21,628     $ 293,789,803     $ (8,234,138 )   $ (32,319,233 )   $ (44,971,263 )   $ 208,286,797  

(See accompanying notes to consolidated financial statements)

 
3

 

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

   
For The Six Months Ended
 
   
June 30, 2011
   
June 30, 2010
 
Cash flows from operating activities
           
Net increase (decrease) in net assets resulting from operations
  $ (19,652,978 )   $ 8,881,103  
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash (used in) provided by operating activities
               
Payment-in-kind interest
    (6,321,743 )     (2,585,664 )
Net amortization of premiums, discounts and fees
    202,102       6,856,303  
Net realized capital (gain) loss on portfolio securities before taxes
    (459,485 )     -  
Change in unrealized (appreciation) depreciation on portfolio securities before taxes
    29,493,749       (3,771,159 )
Net deferred income tax provision (benefit)
    (2,798 )     50,137  
Effects of changes in operating assets and liabilities:
               
Accounts receivable and other current assets
    1,853,452       (38,260 )
Interest receivable
    838,665       (140,404 )
Prepaid assets
    393,791       600,583  
Accounts payable and accrued expenses
    176,402       (376,879 )
Income taxes payable
    (32,298 )     (28,708 )
Purchase of investments in portfolio securities
    (51,475,085 )     (3,967,803 )
Proceeds from the redemption of investments in portfolio securities
    44,926,045       6,436,615  
Purchase of investments in U.S. Treasury Bills
    (30,600,298 )     -  
Net cash provided by (used in) operating activities
    (30,660,479 )     11,915,864  
                 
Cash flows from financing activities
               
Borrowings under revolving credit facilities
    95,000,000       124,905,200  
Repayments on revolving credit facilities
    (75,000,000 )     (132,405,200 )
Dividends paid
    (7,786,153 )     (7,353,589 )
Net cash provided by (used in) financing activities
    12,213,847       (14,853,589 )
                 
Net decrease in cash and cash equivalents
    (18,446,632 )     (2,937,725 )
Cash and cash equivalents, beginning of period
    68,456,908       108,288,217  
                 
Cash and cash equivalents, end of period
  $ 50,010,276     $ 105,350,492  

(See accompanying notes to consolidated financial statements)

 
4

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2011
(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 (7)
 
Coal Production
 
Senior Secured
  $ 16,497,033     $ 15,408,942     $ 16,497,033  
       
Multiple-Advance Term Loan - Tranche A
                       
       
(The greater of 12.0% or LIBOR +
                       
       
9.0% cash, due 1/05/2013)
                       
                                 
       
Senior Secured
    26,223,742       24,066,616       24,066,616  
       
Multiple-Advance Term Loan - Tranche B
                       
       
(The greater of 12.0% or LIBOR +
                       
       
9.0% cash, 15.0% or LIBOR +
                       
       
12.0% PIK, due 1/05/2013) (9)
                       
                                 
       
Senior Secured
    9,429,225       9,429,225       9,429,225  
       
Multiple-Advance Term Loan - Revolver
                       
       
(The greater of 12.0% or LIBOR +
                       
       
9.0% cash, 15.0% or LIBOR +
                       
       
12.0% PIK, due 1/05/2013)
                       
                                 
       
5.8 million Class E Units - entitled  to
            5,800,000       -  
       
 100% of distributions of Alden Resources
                       
       
until payout, 80% after payout (8)
                       
                                 
       
Royalty Interest
            2,469,862       8,150,000  
                                 
BSR Holdings, LLC (7) (18)
 
Oil & Natural Gas
 
100% of membership interests of
            -       -  
   
 Production and Development
 
BSR Holdings, LLC (8)
                       
                                 
DeanLake Operator, LLC (7)
 
Oil & Natural Gas
 
Class A membership interests - entitled to 100%
            14,050,255       700,000  
   
 Production and Development
 
of distribution of DeanLake Operator, LLC
                       
       
until payout, 80% after payout (8)
                       
       
Overriding Royalty Interest
            17,390       50,000  
                                 
Gatliff Services, LLC (7)
 
Coal Processing
 
Senior Secured
    14,286,517       14,286,517       14,286,517  
       
Multiple-Advance Term Loan
                       
       
(8.0% during construction, 12.0%
                       
       
after completion, due 9/30/2020)
                       
       
One Membership Unit - representing 100%
            1,100,000       967,522  
       
ownership of Gatliff Services, LLC  (8)
                       
                                 
Rubicon Energy Partners,
 
Oil & Natural Gas
 
4,000 LLC Units representing
            -       -  
    LLC (7) (18)
 
 Production and Development
 
50% ownership of the assets of
                       
       
Rubicon Energy Partners, LLC (8)
                       
                                 
TierraMar Energy, LP (7) (18)
 
Oil & Natural Gas
 
212,637 Class A Preferred LP Units - entitled to
                       
   
 Production and Development
 
100% of distribution of TierraMar Energy, LP
                       
       
until payout, 67% after payout (8)
            15,360,788       75,000  
                                 
Subtotal Control Investments - Majority Owned (50% or more owned)
          $ 101,989,595     $ 74,221,913  

(See accompanying notes to consolidated financial statements)

 
5

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2011
(Unaudited)
(continued)
Portfolio Company
 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS  - Continued
                     
Affiliate Investments - (5% to 25% owned)
                     
BioEnergy Holding, LLC (7) (11)
 
Alternative Fuels and
 
Senior Secured Notes
  $ 16,662,326     $ 15,510,855     $ -  
   
Specialty Chemicals
 
(15.0%, due 3/06/2015) (9)
                       
       
BioEnergy Holding Units - 11.1% of outstanding
            1,296,771       -  
       
units of BioEnergy Holdings, LLC (8)
                       
       
Myriant Technologies Warrants (8) (13)
            49,238       49,238  
       
Myriant Technologies Units - 0.59% of the
            418,755       706,132  
       
outstanding units of Myriant Technologies, Inc. (8)
                       
                                 
Bionol Clearfield, LLC (7) (11) (17)
 
Alternative Fuels and
 
Senior Secured Tranche C
    4,950,000       4,950,000       -  
   
Specialty Chemicals
 
2nd Lien Term Loan
                       
       
(LIBOR + 7.0% cash, LIBOR + 9.0%
                       
       
default, due 9/06/2016) (9)
                       
                                 
Resaca Exploitation Inc.
 
Oil & Natural Gas
 
Senior Unsecured Term Loan
    10,597,681       10,372,461       10,372,461  
   
 Production and Development
 
(9.5% cash or 12.0% PIK,
                       
       
due on 12/31/2014) (7)
                       
       
Warrants (7) (8) (20)
            250,000       250,000  
       
Common Stock (1,345,595 shares) – representing
                       
       
6.82% of outstanding common stock of
                       
       
Resaca Exploitation Inc. (6) (8) (14)
            3,235,254       2,085,674  
                                 
Subtotal Affiliate Investments - (5% to 25% owned)
              $ 36,083,334     $ 13,463,505  
                                 
Non-affiliate Investments - (Less than 5% owned)
                           
Anadarko Petroleum Corporation
 
Oil & Natural Gas
 
Multiple-Advance Net Profits Interest
  $ 8,637,944     $ 8,673,651     $ 8,973,650  
2007-III Drilling Fund (7)
 
 Production and Development
 
(Due 4/23/2032)
                       
                                 
ATP Oil & Gas Corporation - II (7)
 
Oil & Natural Gas
 
Limited Term Royalty Interest
            2,027,766       2,500,000  
   
 Production and Development
 
(Dollar Denominated - 16.0% Return)
                       
                                 
ATP Oil & Gas Corporation - III (7)
 
Oil & Natural Gas
 
Limited Term Royalty Interest
            25,000,000       25,000,000  
   
 Production and Development
 
(Dollar Denominated - 12.35% annual
                       
       
interest, 13.0% IRR to pay-out)
                       
                                 
Black Pool Energy
 
Oil & Natural Gas
 
Senior Secured
    16,780,001       16,721,588       16,721,588  
Partners, LLC (7)
 
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 15.0% or LIBOR +
                       
       
11.0% cash, due 10/24/2011)
                       
       
Overriding Royalty Interest
            8,928       100,000  
       
Warrants (8) (15)
            10,000       -  
                                 
Chroma Exploration &
 
Oil & Natural Gas
 
10,930 Shares Series A Participating
            2,221,710       -  
Production, Inc. (7)
 
 Production and Development
 
Convertible Preferred Stock (9)
                       
       
9,981 Shares Series AA Participating
            2,089,870       650,000  
       
Convertible Preferred Stock ( 9)
                       
       
8.11 Shares Common Stock (8)
            -       -  
       
Warrants (8) (10)
            -       -  
                                 
Crestwood Holdings, LLC (7)
 
Natural Gas
 
Senior Secured Term Loan
    8,670,000       8,507,607       8,507,607  
   
Gathering and Processing
 
(The greater of 10.5% or LIBOR + 8.5%,
                       
       
due 10/01/2016)
                       

(See accompanying notes to consolidated financial statements)

 
6

 

 NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2011
(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
                     
GMX Resources, Inc. (6)
 
Oil & Natural Gas
 
Senior Convertible Notes
  $ 4,661,000     $ 4,007,557     $ 4,398,819  
   
Production and Development
 
(5.0%, due 2/1/2013)
                       
                                 
Nighthawk Transport I, LP (7)
 
Energy Services
 
LP Units (8) (19)
            -       -  
       
Warrants (8) (19)
            -       -  
                                 
Pallas Contour Mining, LLC (7)
 
Coal Mining
 
Senior Secured
    12,911,290       12,957,276       12,957,276  
       
Multiple-Advance Term Loan
                       
       
(14.0%, due 10/14/2015)
                       
                                 
Powder River Acquisitions, LLC (7)
 
Oil & Natural Gas
 
Senior Secured
    3,000,000       3,000,000       3,000,000  
   
Production and Development
 
Multiple-Advance Term Loan
                       
       
(14.0%, due 10/14/2015)
                       
                                 
Spirit Resouces, LLC (7)
 
Oil & Natural Gas
 
Senior Secured
    7,700,000       7,439,019       7,439,019  
   
Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 12.0% or LIBOR + 8.00%,
                       
       
 due 4/27/2015)
                       
       
Warrants (8) (21)
            25,000       25,000  
                                 
Tammany Oil & Gas, LLC (7)
 
Oil & Natural Gas
 
Senior Secured
    20,732,804       20,719,664       20,719,664  
   
Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 13.0% or LIBOR + 8.00%,
                       
       
 due 9/30/2012)
                       
       
Overriding Royalty Interest
            126,896       1,000,000  
       
After Pay-Out Overriding Royalty Interest (8) (16)
            10,000       10,000  
       
Warrants (8) (12) (16)
            10,000       10,000  
                                 
Subtotal Non-affiliate Investments - (Less than 5% owned)
              $ 113,556,532     $ 112,012,623  
Subtotal Targeted Investments (86.71% of total investments)
              $ 251,629,461     $ 199,698,041  
                                 
GOVERNMENT SECURITIES (5)
                               
U.S. Treasury Bills
     
U.S. Treasury Bills, -0.01%, due 07/28/2011
  $ 30,600,000     $ 30,600,298     $ 30,599,663  
Subtotal Government Securities (13.29% of total investments)
              $ 30,600,298     $ 30,599,663  
                                 
TOTAL INVESTMENTS
                  $ 282,229,759     $ 230,297,704  
 
(See accompanying notes to consolidated financial statements)

 
7

 

NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2011
(Unaudited)
(continued)

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS

 
  (1)
All of our targeted investments are collateral for obligations under our Investment Facility.  Our investments in U.S. Treasury Bills are collateral for obligations under our Treasury Facility.  See Note 3 of Notes to Consolidated Financial Statements.
 
  (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)
Investments are level 1 securities hierarchy.
 
  (6)
Investments are level 2 securities hierarchy.
 
  (7)
Investments are level 3 securities hierarchy.
 
  (8)
Non-income producing securities.
 
  (9)
Non-accrual status.
 
(10)
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.
 
(11)
BioEnergy Holdings, LLC owns 100% of Bionol Clearfield, LLC.  In July 2011, both entities filed for protection under Chapter 7 of the U.S. Bankruptcy Code.
 
(12)
Tammany Oil & Gas, LLC warrants expire five years after repayment of principal and interest and provide us the right to purchase approximately 20% of membership shares at the exercise price of approximately $17.61 per share.
 
(13)
Myriant Technologies, Inc. warrants expire on August 15, 2015 and provide us the right to purchase  32,680 units, representing membership interests of Myriant Technologies, Inc., at the  purchase price of $10.00 per unit.
 
(14)
Resaca Exploitation, Inc. stock trades on the Alternative Investment Market of the London Stock Exchange.  On April 1, 2010, it began trading in U.S. Dollars.
 
(15)
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.
 
(16)
Tammany Oil & Gas, LLC retains the right to repurchase the after pay-out ORRI and 10% warrants for $1,250,000 on or before September 30, 2011.
 
(17)
We issued a forbearance agreement to Bionol Clearfield, LLC on June 16, 2010 due to a default event.
 
(18)
Assets of this portfolio company have been sold.  The legal entity, in which we retain an equity interest, is in the process of dissolution.
 
(19)
Due to insufficient recoveries in the liquidation under Nighthawk's voluntary petition under Chapter 7 of the U.S. Bankruptcy Code, we recognized a realized loss of our total remaining investment in Nighthawk notes in December 2009.  We retain ownership in warrants and units in Nighthawk and have assigned no value to that interest.
 
(20)
Resaca Exploitation, Inc. warrants expire 10 business days following termination of the credit agreement and entitle us to purchase up to 2,420,000 shares of Resaca common stock at a purchase price of $1.93 per share.
 
(21)
Spirit Resources, LLC penny warrants expire five years after repayment of principal and interest and entitle us to acquire 33% of the Investor Units.

(See accompanying notes to consolidated financial statements)

 
8

 

 NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2010

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 (17)
 
Coal Production
 
Senior Secured
 
$
16,497,033
   
$
15,106,754
   
$
15,006,754
 
       
Multiple-Advance Term Loan - Tranche A
                       
       
(The greater of 12.00% or LIBOR +
                       
       
9.00% cash, due 1/05/2013) (18)
                       
                                 
       
Senior Secured
   
24,330,226
     
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
   
3,000,000
     
3,000,000
     
3,000,000
 
       
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) (18)
                       
                                 
       
5.8 million Class E Units - entitled  to
           
5,800,000
     
5,800,000
 
       
 100% of distributions of Alden Resources
                       
       
until payout, 80% after payout (5)
                       
                                 
       
Royalty Interest
           
2,486,020
     
10,300,000
 
                                 
BSR Holdings, LLC (15) (17)
 
Oil & Natural Gas
 
100% of membership interests of
           
-
     
-
 
   
 Production and Development
 
BSR Holdings, LLC.
                       
                                 
DeanLake Operator, LLC (17)
 
Oil & Natural Gas
 
Class A membership interests - entitled to 100%
           
14,050,255
     
3,500,000
 
   
 Production and Development
 
of distribution of DeanLake Operator, LLC
                       
       
until payout, 80% after payout (5)
                       
                                 
       
Overriding Royalty Interest
           
17,622
     
50,000
 
                                 
Gatliff Services, LLC (17)
 
Coal Processing
 
Senior Secured
   
11,696,721
     
11,696,721
     
11,696,721
 
       
Multiple-Advance Term Loan
                       
       
(8.00% during construction, 12.00%
                       
       
after completion, due 9/30/2020)
                       
                                 
       
One Membership Unit - representing 100%
           
1,100,000
     
1,100,000
 
       
ownership of Gatliff Services, LLC  (5)
                       
                                 
Rubicon Energy Partners,
 
Oil & Natural Gas
 
4,000 LLC Units representing
           
-
     
-
 
LLC (17)
 
 Production and Development
 
50% ownership of the assets of
                       
       
Rubicon Energy Partners, LLC (5)
                       
                                 
TierraMar Energy, LP (17)
 
Oil & Natural Gas
 
212,637 Class A Preferred LP Units - entitled to
           
16,710,788
     
900,000
 
   
 Production and Development
 
100% of distribution of TierraMar Energy LP
                       
       
until payout, 67% after payout (5)
                       
                                 
       
Overriding Royalty Interest
           
14,909
     
100,000
 
                                 
Subtotal Control Investments - Majority Owned (50% or more owned)
         
$
89,502,910
   
$
70,973,316
 

(See accompanying notes to consolidated financial statements)

 
9

 

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

Portfolio Company
 
Energy Industry Segment
 
Investment (1) (2) (4)
 
Principal
   
Cost
   
Fair Value (3)
 
TARGETED INVESTMENTS  - Continued
                     
Affiliate Investments - (5% to 25% owned)
                     
BioEnergy Holding, LLC (17)
 
Alternative Fuels and
 
Senior Secured Notes
 
$
15,485,039
   
$
14,302,570
   
$
14,302,570
 
   
Specialty Chemicals
 
(15.00%, due 3/06/2015)
                       
       
BioEnergy Holding Units - 11.1% of outstanding
           
1,296,771
     
1,296,771
 
       
units of BioEnergy Holdings, LLC (5)
                       
       
Myriant Technologies Warrants (5) (10)
           
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 (8) (14) (17)
 
Alternative Fuels and
 
Senior Secured Tranche C
   
4,950,000
     
4,950,000
     
4,950,000
 
   
Specialty Chemicals
 
2nd Lien Term Loan
                       
       
(LIBOR + 7.00% cash, LIBOR + 9.00%
                       
       
default, due 9/06/2016) (19)
                       
                                 
Resaca Exploitation Inc.
 
Oil & Natural Gas
 
Senior Secured
   
10,000,000
     
9,893,740
     
9,893,740
 
   
 Production and Development
 
Revolving Credit Facility
                       
       
(The greater of 8.0% or LIBOR + 5.50%,
                       
       
due 7/01/2012) (17)
                       
       
Common Stock (1,345,595 shares) - representing
           
3,235,254
     
2,152,954
 
       
6.84% of outstanding common stock of
                       
       
Resaca Exploitation Inc. (5) (11) (16)
                       
                                 
Subtotal Affiliate Investments - (5% to 25% owned)
             
$
34,146,328
   
$
33,064,028
 
                                 
Non-affiliate Investments - (Less than 5% owned)
                           
                                 
Anadarko Petroleum Corporation
 
Oil & Natural Gas
 
Multiple-Advance Net Profits Interest
 
$
9,532,723
   
$
9,586,637
   
$
9,886,635
 
2007-III Drilling Fund (17)
 
 Production and Development
 
(Due 4/23/2032)
                       
                                 
ATP Oil & Gas Corporation (17)
 
Oil & Natural Gas
 
Limited Term Royalty Interest
           
6,548,318
     
6,548,318
 
   
 Production and Development
 
(Dollar Denominated - 16.00% Return)