Company: SRV
Filing Date: 2025-08-08
Form Type: N-CSRS
Source: 0001398344-25-014835
Chunk: 4

Company: NXG Cushing Midstream Energy Fund
Filing Date: 2025-08-08
Form: N-CSRS
Chunk 4
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 guidance just weeks after its IPO forecast. We exited the position quickly but not before realizing a loss.

The second-largest relative detractor was XPLR Infrastructure, LP (formerly NextEra Energy Partners, LP). After avoiding the majority of its drawdown through 2022–2024, we initiated a position in late 2024, anticipating upside from a strategic review. Instead, the company announced a full distribution cut, a projected free cash flow deficit, and no forward growth guidance. This lack of clarity undermined confidence. We exited following the update, realizing a ~40% loss.

Viper Energy also detracted relatively, as falling crude oil prices weighed on performance.

On the positive side, our top contributors on both an absolute and relative basis included Constellation Energy Corporation (NASDAQ: CEG), GE Vernova Inc. (NYSE: GEV), and EQT Corporation (NYSE: EQT). These positions aligned well with our broader thematic views, particularly around the long-term implications of AI-driven data center growth, increasing power demand, natural gas demand, and LNG infrastructure. Constellation Energy solidified its industry leadership with the acquisition of Calpine Corp., significantly expanding its generation portfolio and geographic footprint. The company also delivered record financial results and secured several high-profile energy contracts, including a 20-year power purchase agreement with Microsoft to support data center operations. In parallel, GE Vernova and EQT benefited from similar secular tailwinds. GE Vernova saw continued strength in turbine, transformer, and grid software demand, while EQT remained well-positioned to capitalize on rising natural gas demand and favorable LNG market dynamics.

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While the quarter’s results were disappointing, we remain anchored in our long-term investment framework. We are continually refining our approach to security selection, and the themes we remain exposed to – particularly in power infrastructure, natural gas, and LNG – are highly relevant and, in our view, underappreciated by the market. We believe the Fund is positioned to benefit from both cyclical recovery and secular demand growth, and we expect the dislocations this period created to offer compelling opportunities ahead.

Leverage

The Fund’s investment strategy focuses on holding core positions in companies generating stable cash flows and long-term growth prospects. We also work diligently to optimize the use of leverage for additional income and total return potential. This involves leveraging investments when the probabilities of positive total return are deemed to be skewed favorably. As the prices of the Fund’s investment increase or decline, there is a risk