OHA Investment Corporation
NGP Capital Resources Co (Form: 10-Q, Received: 11/15/2011 06:04:36)
 

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, 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 November 11, 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.
27
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
34
Item 4.
Controls and Procedures.
34
PART II – OTHER INFORMATION
35
Item 1.
Legal Proceedings.
35
Item 1A.
Risk Factors.
35
Item 6.
Exhibits.
35

 
 
 
 
 

 

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED BALANCE SHEETS
 
     
September 30, 2011
   
December 31, 2010
 
   
(Unaudited)
       
             
Assets
           
Investments in portfolio securities at fair value
           
 Control investments - majority owned
           
 (cost: $0 and $89,502,910, respectively)
  $ 150,000     $ 70,973,316  
 Affiliate investments
               
 (cost: $36,425,265 and $34,146,328, respectively)
    13,576,684       33,064,028  
 Non-affiliate investments
               
 (cost: $130,623,421 and $114,852,057, respectively)
    128,077,749       112,025,645  
Total investments
    141,804,433       216,062,989  
Cash and cash equivalents
    80,223,340       68,456,908  
Accounts receivable and other current assets
    1,768,858       3,095,882  
Interest receivable
    623,689       2,236,122  
Prepaid assets
    992,194       1,736,732  
Total current assets
    83,608,081       75,525,644  
Total assets
  $ 225,412,514     $ 291,588,633  
                 
Liabilities and net assets
               
Current liabilities
               
Accounts payable and accrued expenses
  $ 674,333     $ 525,111  
Management and incentive fees payable
    1,337,211       1,376,032  
Dividends payable
    3,893,076       3,893,076  
Income taxes payable
    35,065       50,350  
Current portion of long-term debt
    15,000,000       -  
Total current liabilities
    20,939,685       5,844,569  
Deferred tax liabilities
    15,438       18,136  
Long-term debt, less current portion
    -       50,000,000  
Total liabilities
    20,955,123       55,862,705  
                 
Commitments and contingencies  (Note 7)
               
                 
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
    295,684,737       295,684,737  
Undistributed net investment income (loss)
    (5,876,731 )     (7,845,925 )
Undistributed net realized capital gain (loss)
    (63,213,264 )     (32,778,782 )
Net unrealized appreciation (depreciation) of portfolio securities
    (22,158,979 )     (19,355,730 )
Total net assets
    204,457,391       235,725,928  
Total liabilities and net assets
  $ 225,412,514     $ 291,588,633  
                 
Net asset value per share
  $ 9.45     $ 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 Nine Months Ended
 
   
September 30, 2011
   
September 30, 2010
   
September 30, 2011
   
September 30, 2010
 
Investment income
                       
Interest income:
                       
Control investments - majority owned
  $ 1,438,834     $ 1,188,139     $ 8,605,178     $ 3,384,042  
Affiliate investments
    341,930       959,298       972,974       2,692,192  
Non-affiliate investments
    4,715,863       3,011,209       11,233,500       9,568,456  
Royalty income (loss), net of amortization:
                               
Control investments - majority owned
    514,835       522,473       1,194,970       1,277,258  
Non-affiliate investments
    274,574       (75,337 )     801,262       (1,038,012 )
Other income
    33,750       640,000       126,387       1,586,079  
Total investment income
    7,319,786       6,245,782       22,934,271       17,470,015  
                                 
Operating expenses
                               
Management and incentive fees
    1,337,211       1,409,553       4,262,213       4,171,952  
Professional fees
    376,086       159,960       811,152       646,936  
Insurance expense
    182,182       185,658       547,028       556,974  
Interest expense and bank fees
    376,374       339,073       1,143,051       956,254  
Other general and administrative expenses
    760,985       973,024       2,487,689       2,763,012  
Total operating expenses
    3,032,838       3,067,268       9,251,133       9,095,128  
Income tax provision (benefit), net
    17,013       15,224       34,715       51,516  
Net investment income
    4,269,935       3,163,290       13,648,423       8,323,371  
                                 
Net realized capital gain (loss) on investments
                               
Net realized capital gain (loss) on portfolio securities:
                               
Control investments - majority owned
    (32,879,825 )     -       (32,798,550 )     -  
Non-affiliate investments
    1,985,858       -       2,364,068       -  
Total net realized capital gain (loss) on investments
    (30,893,967 )     -       (30,434,482 )     -  
                                 
Net unrealized gain (loss) on investments
                               
Net increase (decrease) in unrealized appreciation
                               
(depreciation) on portfolio securities
                               
Control investments - majority owned
    27,917,683       (2,838,653 )     18,679,595       (2,925,328 )
Affiliate investments
    (228,752 )     (1,542,752 )     (21,766,280 )     (1,732,043 )
Non-affiliate investments
    (1,001,129 )     1,261,745       280,738       5,308,870  
Benefit (provision) for taxes on unrealized gain (loss)
    (100 )     20,479       2,698       (29,658 )
Total net unrealized gain (loss) on investments
    26,687,702       (3,099,181 )     (2,803,249 )     621,841  
                                 
Net increase (decrease) in net assets resulting
                               
from operations
  $ 63,670     $ 64,109     $ (19,589,308 )   $ 8,945,212  
                                 
Net increase (decrease) in net assets resulting
                               
from operations per common share
  $ -     $ -     $ (0.91 )   $ 0.42  
 
(See accompanying notes to consolidated financial statements)

 
2

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

   
Common Stock
   
Paid-in
Capital
in Excess
   
Undistributed
Net Investment
Income
   
Undistributed
Net Realized
Capital
   
Net Unrealized
Appreciation
(Depreciation)
of Portfolio
   
Total
 
   
Shares
   
Amount
   
of Par
   
(Loss)
   
Gain (Loss)
   
Securities
   
Net Assets
 
Balance at December 31, 2010
    21,628,202     $ 21,628     $ 295,684,737     $ (7,845,925 )   $ (32,778,782 )   $ (19,355,730 )   $ 235,725,928  
Net increase (decrease)
                                                       
in net assets resulting
                                                       
from operations
    -       -       -       13,648,423       (30,434,482 )     (2,803,249 )     (19,589,308 )
Dividends declared
    -       -       -       (11,679,229 )     -       -       (11,679,229 )
                                                         
Balance at September 30, 2011
    21,628,202     $ 21,628     $ 295,684,737     $ (5,876,731 )   $ (63,213,264 )   $ (22,158,979 )   $ 204,457,391  

(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, 2011
   
September 30, 2010
 
Cash flows from operating activities
           
Net increase (decrease) in net assets resulting from operations
  $ (19,589,308 )   $ 8,945,212  
Adjustments to reconcile net increase (decrease) in net assets resulting from
               
operations to net cash provided by operating activities:
               
Payment-in-kind interest
    (6,650,072 )     (4,547,397 )
Net amortization of premiums, discounts and fees
    (2,096,619 )     8,650,115  
Net realized capital loss on portfolio securities
    30,434,482       -  
Net unrealized (appreciation) depreciation on portfolio securities
    2,805,947       (651,499 )
Net deferred income tax liabilities
    (2,698 )     -  
Effects of changes in operating assets and liabilities:
               
Accounts receivable and other current assets
    1,327,024       177,880  
Interest receivable
    1,612,433       362,249  
Prepaid assets
    744,538       893,233  
Accounts payable and accrued expenses
    110,401       (93,928 )
Payables for investment securities purchased
    -       2,856,806  
Income taxes payable
    (15,285 )     (13,484 )
Purchase of investments in portfolio securities
    (88,390,690 )     (21,318,320 )
Proceeds from the redemption of investments in portfolio securities
    138,155,508       20,296,527  
Purchase of investments in U.S. Treasury Bills
    (30,601,000 )     -  
Proceeds from the redemption of investments in U.S. Treasury Bills
    30,601,000       -  
Net cash provided by operating activities
    58,445,661       15,557,394  
                 
Cash flows from financing activities
               
Borrowings under revolving credit facilities
    110,000,000       174,905,200  
Repayments on revolving credit facilities
    (145,000,000 )     (192,405,200 )
Dividends paid
    (11,679,229 )     (11,030,383 )
Net cash used in financing activities
    (46,679,229 )     (28,530,383 )
Net increase (decrease) in cash and cash equivalents
    11,766,432       (12,972,989 )
Cash and cash equivalents, beginning of period
    68,456,908       108,288,217  
Cash and cash equivalents, end of period
  $ 80,223,340     $ 95,315,228  

(See accompanying notes to consolidated financial statements)
 
 
4

 
 
 NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2011
(Unaudited)
 
Portfolio Company
 
Energy Industry Segment
 
Investment (1)
   
Principal
   
Cost
   
Fair Value (2)
Control Investments - Majority Owned (50% or more owned)
BSR Holdings, LLC (11)
 
Oil & Natural Gas
 
100% of membership interests of
        $
-
  $
-
   
 Production and Development
 
BSR Holdings, LLC
                 
                           
DeanLake Operator,
 
Oil & Natural Gas
 
Class A membership interests -
         
-
   
150,000
    LLC (11)  
 Production and
  entitled to 100%                  
    Development  
of distribution of DeanLake
                 
        Operator, LLC                  
                           
Rubicon Energy Partners,
 
Oil & Natural Gas
 
4,000 LLC Units -
                 
    LLC (11)
 
 Production and
 
50% ownership of the assets of
                 
    Development  
Rubicon Energy Partners, LLC
         
-
   
-
                           
Subtotal Control Investments - Majority Owned (50% or more owned)
        $
-
  $
150,000
                           
Affiliate Investments - (5% to 25% owned)
BioEnergy Holding, LLC (6)
 
Alternative Fuels and
 
Senior Secured Notes
  $
16,662,326
  $
15,510,855
  $
-
   
Specialty Chemicals
 
(15%, due 3/06/2015) (4)
                 
       
BioEnergy Holding Units - 11.1% of outstanding
         
1,296,771
   
-
       
units of BioEnergy Holdings, LLC
                 
       
Myriant Corporation -
0.59% of
         
418,755
   
706,132
       
outstanding common shares of Myriant
 Corporation
                 
       
Myriant Corporation Warrants (8)
         
49,238
   
49,238
                           
Bionol Clearfield, LLC (6)
 
Alternative Fuels and
 
Senior Secured Tranche C
   
4,950,000
   
4,950,000
   
-
   
Specialty Chemicals
 
2nd Lien Term Loan
                 
       
(LIBOR + 7% cash, LIBOR + 9%
                 
       
default, due 9/06/2016) (4)
                 
                           
Resaca Exploitation Inc.
 
Oil & Natural Gas
 
Senior Unsecured Term Loan
   
10,926,010
   
10,714,392
   
10,714,392
   
 Production and
 
(9.5% cash or 12% PIK,
                 
    Development  
due on 12/31/2014)
                 
       
Common Stock (1,360,972 shares) - representing
         
3,235,254
   
1,856,922
       
6.56% of outstanding
common stock of
                 
       
Resaca Exploitation Inc. (3) (9)
                 
       
Warrants (13)
         
250,000
   
250,000
                           
Subtotal Affiliate Investments - (5% to 25% owned)
            $
36,425,265
  $
13,576,684
                           
Non-affiliate Investments - (Less than 5% owned)
Anadarko Petroleum
 
Oil & Natural Gas
 
Net Profits Interest
  $
5,654,145
  $
5,680,474
  $
5,980,474
     Corporation  
 Production and
 
(Due 4/23/2032)
                 
    2007-III Drilling Fund
  Development                      
                           
ATP Oil & Gas
 
Oil & Natural Gas
 
Limited Term Royalty Interest
         
20,714,799
   
20,714,799
    Corporation - III  
 Production and
 
(12.35% annual interest, 13% IRR
                 
    Development   to pay-out)                  
                           
Black Pool Energy
 
Oil & Natural Gas
 
Senior Secured Term Loan
   
15,854,631
   
15,840,696
   
12,100,000
    Partners, LLC
 
 Production and
 
(The greater of 15% or LIBOR +
                 
    Development  
11%, due 10/24/2011) (18)
                 
       
3% Overriding Royalty Interest
         
8,324
   
              100,000
       
Warrants (10)
         
10,000
   
-
 
(See accompanying notes to consolidated financial statements)
 
5

 
 
 NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2011
(Unaudited)
(continued)
 
Portfolio Company
 
Energy Industry Segment
 
Investment (1)
   
Principal
   
Cost
   
Fair Value (2)
Non-affiliate Investments - (Less than 5% owned) - Continued
                   
Castex Energy Development
 
Oil & Natural Gas
 
Senior Secured Term Loan
  $
27,500,000
  $
26,961,669
  $
26,961,669
    Fund, LLC
 
 Production and
 
(The greater of 11.5% or LIBOR +
                 
    Development  
10.5%, due 12/31/2014)
                 
       
Castex Class B Units - 5% (16)
         
50
   
50
                           
Chroma Exploration &
 
Oil & Natural Gas
 
10,930 Shares Series A Participating
         
2,221,710
   
-
    Production, Inc.
 
 Production and
 
Convertible Preferred Stock (4)
                 
    Development  
9,981 Shares Series AA Participating
         
2,089,870
   
650,000
       
Convertible Preferred Stock (4)
                 
       
8.11 Shares Common Stock
         
-
   
-
       
Warrants (5)
         
-
   
-
                           
Crestwood Holdings, LLC
 
Natural Gas
 
Senior Secured Term Loan
   
8,465,000
   
8,308,599
   
8,308,599
   
Gathering and Processing
 
(The greater of 10.5% or LIBOR +
                 
       
8.5%, due 10/01/2016)
                 
                           
Globe BG, LLC
 
Coal Production
 
Contingent earn-out related to July
   
-
   
-
   
3,400,000
       
2011 sale of royalty interests in Alden Resources (15)
                 
                           
GMX Resources, Inc. (3)
 
Oil & Natural Gas
 
Senior Convertible Notes
   
12,661,000
   
11,055,228
   
10,255,410
   
 Production and
 
(5%, due 2/1/2013)
                 
    Development                      
                           
Nighthawk Transport I, LP
 
Energy Services
 
LP Units (12)
         
-
   
-
       
Warrants (12)
         
-
   
-
                           
Pallas Contour Mining, LLC
 
Coal Mining
 
Senior Secured Term Loan
   
12,411,290
   
12,455,201
   
12,455,201
       
(14%, due 10/14/2015)
                 
                           
Powder River Acquisitions,
 
Oil & Natural Gas
 
Senior Secured Promissory Note
   
3,000,000
   
3,000,000
   
3,000,000
    LLC  
 Production and
 
(8%, due 9/30/2011) (17)
                 
    Development                      
                           
Spirit Resouces, LLC
 
Oil & Natural Gas
 
Senior Secured Term Loan
   
9,500,000
   
9,254,415
   
9,254,415
   
 Production and
 
(The greater of 12% or LIBOR + 8%,
                 
    Development  
 due 4/27/2015)
                 
       
Warrants (14)
         
25,000
   
25,000
                           
Tammany Oil & Gas, LLC
 
Oil & Natural Gas
 
Senior Secured Term Loan
   
12,882,804
   
12,872,132
   
12,872,132
   
 Production and
 
(The greater of 13% or LIBOR + 8%,
                 
    Development  
 due 9/30/2012)
                 
       
3.33% Overriding Royalty Interest
         
120,254
   
1,000,000
       
Warrants (7)
         
5,000
   
1,000,000
                           
Subtotal Non-affiliate Investments - (Less than 5% owned)
        $
130,623,421
  $
128,077,749
                           
TOTAL INVESTMENTS
                $
167,048,686
  $
141,804,433
 
(See accompanying notes to consolidated financial statements)
 
 
6

 
 
 NGP CAPITAL RESOURCES COMPANY
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2011
(Unaudited)
(continued)
 
NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS
 
(1)
All of our targeted investments are collateral for obligations under our Investment Facility.  See Note 4 of Notes to Consolidated Financial Statements.  All investments are in entities with primary operations in the United States of America.  Percentages represent interest rates in effect at the end of the period and due dates represent the contractual maturity dates.  Warrants, common stocks, units and earn-outs are non-income producing securities,  unless otherwise stated.
(2)
Our Board of Directors determines, in good faith, the fair value of our investments.  Fair value is determined using unobservable inputs (Level 3 hierarchy),  unless otherwise stated.
(3)
Fair value is determined using prices with observable market inputs (Level 2 hierarchy).  See note 8 of the Notes to Consolidated Financial Statements.
(4)
Non-accrual status.
(5)
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.
(6)
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.
(7)
Tammany Oil & Gas, LLC warrants expire five years after repayment of principal and interest and provide us the right to purchase approximately 10% of  membership shares at the exercise price of approximately $17.61 per share.
(8)
Myriant Corporation warrants expire on August 15, 2015 and provide us the right to purchase  32,680 shares of  Myriant Corporation, at a purchase price of $10.00 per share.
(9)
Resaca Exploitation, Inc. stock trades in U.S. dollars on the Alternative Investment Market of the London Stock Exchange.
(10)
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 share.
(11)
Assets of this portfolio company have been sold.  The legal entity, in which we retain an equity interest, is in the process of dissolution.
(12)
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 those securities.
(13)
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 $1.92 per share.
(14)
Spirit Resources, LLC penny warrants expire five years after repayment of principal and interest and entitle us to acquire 33% of the Units of  Membership Interest.
(15)
Contingent payment of up to $6.8MM is dependent upon Alden Resources’ ability to achieve certain sales volume and operating efficiency levels during the three year period ending July 2014.
(16)
Lenders were granted 10% (5% net to NGPC Asset Holdings II) of the LP interest in Castex Energy Development Fund via Class B LP units that will become effective at the earlier of maturity or a liquidity event in which the Castex Energy Development Fund assets are sold.
(17)
We issued a written notice of default on September 30, 2011 and have filed a suit against Powder River Acquisitions, LLC and an individual guarantor for failure to pay principal and interest when due.
(18)
The Term Loan to Black Pool Energy Partners matured on October 24, 2011 without repayment. We are currently negotiating with Black Pool toward a potential amendment and extension of the Term Loan.
 
(See accompanying notes to consolidated financial statements)
 
 
7

 
 
 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
 
Oil & Natural Gas
 
100% of membership interests of
           
-
     
-
 
(15) (17)  
 Production and
 
BSR Holdings, LLC.
                       
    Development                            
                                 
DeanLake Operator, LLC (17)
 
Oil & Natural Gas
Production and Development
 
Class A membership interests - entitled to 100% of distribution of DeanLake Operator, LLC
until payout, 80% after payout (5)
           
14,050,255
     
3,500,000
 
                                 
       
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
 
50% ownership of the assets of
                       
    Development  
Rubicon Energy Partners, LLC (5)
                       
                                 
TierraMar Energy, LP (17)
 
Oil & Natural Gas
 
212,637 Class A Preferred LP Units -
           
16,710,788
     
900,000
 
   
 Production and
 
entitled to 100% of distribution of
                       
    Development  
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)
 
 
8

 
 
 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
           
418,755
     
418,755
 
       
the outstanding units of Myriant Technologies, LLC (5)
                       
                                 
Bionol Clearfield, LLC (8)
 
Alternative Fuels and
 
Senior Secured Tranche C
   
4,950,000
     
4,950,000
     
4,950,000
 
(14) (17)  
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
 
Oil & Natural Gas
 
Multiple-Advance Net Profits Interest
 
$
9,532,723
   
$
9,586,637
   
$
9,886,635
 
Corporation  
 Production and Development
 
(Due 4/23/2032)
                       
2007-III Drilling Fund (17)
                               
                                 
ATP Oil & Gas Corporation
 
Oil & Natural Gas
 
Limited Term Royalty Interest
           
6,548,318
     
6,548,318
 
(17)  
 Production and Development
 
(Dollar Denominated - 16.00% Return)
                       
                                 
Black Pool Energy
 
Oil & Natural Gas
 
Senior Secured
   
17,895,000
     
17,754,507
     
17,754,507
 
Partners, LLC (17)
 
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 15.00% or LIBOR +
                       
       
11.00% cash, due 10/24/2011)
                       
       
Overriding Royalty Interest
           
9,750
     
100,000
 
       
Warrants (5) (12)
           
10,000
     
10,000
 
                                 
Chroma Exploration &
 
Oil & Natural Gas
 
10,930 Shares Series A Participating
           
2,221,710
     
100,000
 
Production, Inc. (17)
 
 Production and Development
 
Convertible Preferred Stock (6)
                       
       
9,981 Shares Series AA Participating
           
2,089,870
     
650,000
 
       
Convertible Preferred Stock (6)
                       
       
8.11 Shares Common Stock (5)
           
-
     
-
 
       
Warrants (5) (7)
           
-
     
-
 
                                 
Crestwood Holdings, LLC
 
Natural Gas
 
Senior Secured Term Loan
   
9,000,000
     
8,836,125
     
8,836,125
 
(17)  
Gathering and Processing
 
(The greater of 10.50% or LIBOR + 8.50%,
                       
       
due 10/01/2016)
                       
                                 
Greenleaf Investments,
 
Oil & Natural Gas
 
Senior Secured
   
8,587,076
     
8,543,239
     
8,543,239
 
LLC (17)  
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 10.50% or LIBOR + 6.50%,
                       
       
due 4/30/2011)
                       
       
Overriding Royalty Interest
           
20,785
     
400,000
 
 
(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
                     
Non-affiliate Investments - (Less than 5% owned) - Continued
                 
GMX Resources, Inc. (16)
 
Oil & Natural Gas
 
Senior Convertible Notes
 
$
7,925,000
   
$
6,532,576
   
$
6,676,813
 
   
 Production and Development
 
(5.00%, due 2/1/2013)
                       
                                 
Nighthawk Transport I,
 
Energy Services
 
LP Units (5) (20)
           
-
     
-
 
LP (17)      
Warrants (5) (20)
           
-
     
-
 
                                 
Pallas Contour Mining,
 
Coal Mining
 
Senior Secured
   
14,411,290
     
14,459,867
     
14,459,867
 
LLC (17)      
Multiple-Advance Term Loan
                       
       
(14.00%, due 10/14/2015)
                       
                                 
Pioneer Natural Resources
 
Oil & Natural Gas
 
Senior Notes, 7.2%, due 2028
   
10,000,000
     
11,489,439
     
10,450,100
 
Co. (16)  
 Production and Development
                           
                                 
Powder River Acquisitions,
 
Oil & Natural Gas
 
Senior Secured
   
3,000,000
     
3,000,000
     
3,000,000
 
LLC (17)  
 Production and Development
 
Promissory Note
                       
       
(8.00%, due 9/30/2011)
                       
                                 
Tammany Oil & Gas,
 
Oil & Natural Gas
 
Senior Secured
   
23,607,804
     
23,590,041
     
23,590,041
 
LLC (17)  
 Production and Development
 
Multiple-Advance Term Loan
                       
       
(The greater of 13.0% or LIBOR + 8.00%,
                       
       
 due 9/30/2012)
                       
                                 
       
Overriding Royalty Interest
           
139,193
     
1,000,000
 
       
After Pay-Out Overriding Royalty Interest (5) (13)
           
10,000
     
10,000
 
       
Warrants (5) (9) (13)
           
10,000
     
10,000
 
                                 
Subtotal Non-affiliate Investments - (Less than 5% owned)
       
$
114,852,057
   
$
112,025,645
 
                                 
TOTAL INVESTMENTS
                 
$
238,501,295
   
$
216,062,989
 

(See accompanying notes to consolidated financial statements)
 
10

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

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)
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.
(8)
BioEnergy Holdings, LLC owns 100% of Bionol.
(9)