UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-Q/A







(Mark
One)


x
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the quarterly period ended June 30, 2007




OR




 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the transition period
             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
              (I.R.S.
      employerincorporation
      or organization)
              identification
      number)1221
      McKinney Street, Suite 2975Houston,
      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   x
    No    ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act. (Check one):





Large
      accelerated filer     ̈
              Accelerated
         x
              Non-accelerated
      filer     ̈





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





As of
June 22, 2010, there were 21,628,202 shares of the registrant’s common stock
outstanding.





TABLE OF
CONTENTS





PART
      I - FINANCIAL INFORMATION
                                              1Item
      1.  Consolidated Financial Statements
                                              1Item
      2.  Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
                                              22Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk
                                              26Item
      4.  Controls and Procedures
                                              26PART
      II – OTHER INFORMATIONItem
      1. Legal Proceedings
                                              27Item
      1A.  Risk Factors
                                              27Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                                              28Item
      3. Defaults Upon Senior Securities
                                              28Item
      4. Submission of Matters to a Vote of Security Holders
                                              28Item
      5. Other Information
                                              28Item
      6. Exhibits
                                              29




i


Explanatory
Note





We are filing this Amended Quarterly
Report on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2007, which we refer to as the Amended Filing, to restate our unaudited
consolidated financial statements and related disclosures for the quarter ended
June 30, 2007, as discussed in Note 2 to the accompanying restated unaudited
consolidated financial statements and to report the voting results of our 2007
annual meeting, which were previously omitted from Part II - Item 4. Submission
of Matters to a Vote of Security Holders in our original filing.  Our
original Quarterly Report on Form 10-Q for the quarter ended June 30, 2007,
which we refer to as the Original Filing, was filed with the Securities and
Exchange Commission on August 8, 2007.





Background
of the Restatement





On March, 15, 2010, our Board of
Directors and the members of the Audit Committee of our Board of Directors
concluded that the Company should restate its financial statements for the years
ended December 31, 2007 and December 31, 2008 and for each of the quarters in
2007 and 2008 and the first three quarters in 2009, which we collectively refer
to as the Affected Periods.





The determination to restate the
financial statements for the Affected Periods was made in connection with
management’s assessment of accounting errors it discovered as part of a process
to remediate a material weakness in internal controls previously disclosed in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2008
and the Company’s Quarterly Reports on Form 10-Q in 2009.  While the
Company has taken steps to remediate the previously disclosed material weakness,
the material weakness existed throughout the quarterly periods of 2009, and at
December 31, 2009, the Company had not yet remediated the material
weakness.  The Company anticipates that it will complete its testing of the
additional internal control processes designed to remediate the previously
disclosed material weakness in 2010.





The errors and consequent restatements
described below principally involved non-cash accounting entries related to net
deferred tax assets and liabilities that typically arise as a result of timing
differences in tax and GAAP (book) accounting.  Taxable Net Investment
Income, which is the primary determinant of the Company’s distributable income,
has not been affected in any of the Affected Periods by these
restatements.





The Company’s assessment of certain
identified accounting errors results in the following adjustments to previously
reported periods:





1.      In the
quarter ended March 31, 2007, the Company failed to record a deferred tax
liability with respect to approximately $2.1 million in unrealized appreciation
on an investment in partnerships.  Similarly, in the quarters ended June
30, 2007 and September 30, 2007, the Company failed to record deferred tax
liabilities with respect to approximately $4.0 million and $2.0 million,
respectively, in unrealized appreciation on an investment.





2.      In the
quarter ended September 30, 2008, the Company realized a $12.34 million pre-tax
gain on this same investment (as compared to the $8.15 million of unrealized
appreciation previously recorded in 2007).  The reversal of the previously
unrecorded deferred tax liability in 2008 resulted in the incorrect recording of
a net tax deferred tax asset of $3.8 million at year end 2008.  This item
does not affect the periods presented in this Amended Filing.





Unrelated
to the restatements, we have reclassified certain balance sheet, statement of
operations and statement of cash flows amounts to conform to the presentation in
our most recently-filed Annual Report on Form 10-K. These reclassifications were
primarily related to the disaggregation of investments in portfolio securities,
investment income, net realized capital gain (loss) on investments and net
unrealized gain (loss) on investments into separate classifications according to
level of control.


ii


Restatement
of Other Financial Statements





We have restated our financial
statements for the years ended December 31, 2007 and December 31, 2008 in our
Annual Report on Form 10-K for the year ended December 31, 2009, which was filed
on March 31, 2010.  We have not amended, and we do not intend to amend,
either of our previously filed Annual Reports on Form 10-K for the years ended
December 31, 2007 or December 31, 2008.  We have previously filed
amendments to our Quarterly Reports on Form 10-Q for each of the quarters ended
March 31 in the Affected Periods.  With the filing of this Amended Filing,
we are concurrently filing amendments to our Quarterly Reports on Form 10−Q
for the quarters ended June 30 and September 30 in each of the Affected
Periods.  For this reason, readers should no longer rely on those
previously issued financial statements and the related information contained in
such previously filed reports for the Affected Periods.





For the convenience of the reader, this
Amended Filing sets forth the Original Filing, as modified and superseded where
necessary to reflect the amendment and restatement of our unaudited consolidated
financial statements and related disclosures.  The following items have
been amended principally as a result of, and to reflect, the
restatement:





·
            Part
      I – Item 1. Consolidated Financial
Statements;


·
            Part
      I – Item 2. Management’s Discussion and Analysis of Financial Condition
      and Results of Operations;


·
            Part
      I – Item 4. Controls and
Procedures;


·
            Part
      II – Item 1.A. Risk Factors; and


·
            Part
      II – Item 6. Exhibits.





In accordance with applicable rules of
the Securities and Exchange Commission, this Amended Filing includes
certifications from our Chief Executive Officer and Chief Financial Officer
dated as of the date of this filing.





The remaining items contained in this
Amended Filing consist of all other items originally contained in the Original
Filing and are included for the convenience of the reader.  The sections of
the Original Filing which were not amended are unchanged and continue in full
force and effect as originally filed.  This Amended Filing speaks as of
August 8, 2007, the date we filed the Original Filing, and has not been updated
to reflect events occurring subsequent to the date of the original filing other
than those associated with the evaluation of and resulting restatement of the
Company’s consolidated financial statements.


iii




PART I - FINANCIAL
INFORMATION


Item
1. Consolidated Financial Statements.




NGP
CAPITAL RESOURCES COMPANY


CONSOLIDATED
BALANCE SHEETS





(Unaudited)June 30, 2007
                          
                          
                          December 31, 2006(As Restated)AssetsInvestments
      in portfolio securities at fair valueControl
      investments - majority owned
                            (cost:  $18,139,421
      and $36,136,463 respectively)
                          
                          $
                          24,321,062
                          
                          
                          $
                          36,136,463Non-affiliate
      investments
                            (cost:  $200,398,014
      and $134,726,740, respectively)
                          
                          
                          201,613,836
                          
                          
                          
                          135,889,035Investments
      in corporate notes at fair value
                            (cost:  $17,660,444
      and $17,681,646, respectively)
                          
                          
                          14,880,860
                          
                          
                          
                          15,116,080Investments
      in U.S. Treasury Bills, at amortized cost which approximates fair
      value
                          
                          
                          101,501,831
                          
                          
                          
                          142,669,579Total
      investments
                          
                          
                          342,317,589
                          
                          
                          
                          329,811,157Cash
      and cash equivalents
                          
                          
                          19,747,765
                          
                          
                          
                          12,334,329Accounts
      receivable
                          
                          
                          732
                          
                          
                          
                          452,916Interest
      receivable
                          
                          
                          793,588
                          
                          
                          
                          1,400,757Prepaid
      assets
                          
                          
                          1,121,330
                          
                          
                          
                          1,598,501Total
      assets
                          
                          $
                          363,981,004
                          
                          
                          $
                          345,597,660Liabilities
      and stockholders' equity (net assets)Current
      liabilitiesAccounts
      payable
                          
                          $
                          723,832
                          
                          
                          $
                          965,105Management
      and incentive fees payable
                          
                          
                          2,639,852
                          
                          
                          
                          1,374,299Dividends
      payable
                          
                          
                          5,407,938
                          
                          
                          
                          -Income
      taxes payable
                          
                          
                          210,489
                          
                          
                          
                          -Deferred
      tax liabilities
                          
                          
                          2,090,924
                          
                          
                          
                          -Total
      current liabilities
                          
                          
                          11,073,035
                          
                          
                          
                          2,339,404Long-term
      debt
                          
                          
                          100,000,000
                          
                          
                          
                          100,000,000Total
      liabilities
                          
                          
                          111,073,035
                          
                          
                          
                          102,339,404Commitments
      and contingencies  (Note 8)Stockholders’
      equity (net assets)Common
      stock, $.001 par value, 250,000,000 shares authorized; 17,444,960 and
      17,422,268 issued and 17,444,960 and 17,422,268 outstanding,
      respectively
                          
                          
                          17,445
                          
                          
                          
                          17,422Paid-in
      capital in excess of par
                          
                          
                          245,019,403
                          
                          
                          
                          244,660,173Undistributed
      net investment income (loss)
                          
                          
                          (922,575
                          )
                          
                          
                          229,791Undistributed
      net realized capital gain  (loss)
                          
                          
                          6,266,741
                          
                          
                          
                          (245,859
                          )Net
      unrealized appreciation (depreciation) of portfolio securities and
      corporate notes
                          
                          
                          2,526,955
                          
                          
                          
                          (1,403,271
                          )Total
      stockholders’ equity (net assets)
                          
                          
                          252,907,969
                          
                          
                          
                          243,258,256Total
      liabilities and stockholders' equity (net assets)
                          
                          $
                          363,981,004
                          
                          
                          $
                          345,597,660Net
      asset value per share
                          
                          $
                          14.50
                          
                          
                          $
                          13.96





(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 EndedJune30,2007
                      
                      
                      June30,2006
                      
                      
                      June30,2007
                      
                      
                      June30,2006(As Restated)
                      
                      
                      
                      
                      
                      (As Restated)Investment
      incomeInterest
      and dividend income:Control
      investments - majority owned
                      
                      $
                      1,239,507
                      
                      
                      $
                      -
                      
                      
                      $
                      2,246,785
                      
                      
                      $
                      -Non-affiliate
      investments
                      
                      
                      8,051,232
                      
                      
                      
                      5,769,142
                      
                      
                      
                      15,264,458
                      
                      
                      
                      10,533,181Royalty
      income (loss), net of amortization:Non-affiliate
      investments
                      
                      
                      310,833
                      
                      
                      
                      94,539
                      
                      
                      
                      511,584
                      
                      
                      
                      189,004Other
      income
                      
                      
                      142,237
                      
                      
                      
                      136,078
                      
                      
                      
                      197,745
                      
                      
                      
                      273,627Total
      investment income
                      
                      
                      9,743,809
                      
                      
                      
                      5,999,759
                      
                      
                      
                      18,220,572
                      
                      
                      
                      10,995,812Operating
      expensesManagement
      fees
                      
                      
                      1,585,494
                      
                      
                      
                      1,118,105
                      
                      
                      
                      3,150,003
                      
                      
                      
                      2,235,124Incentive
      fees
                      
                      
                      1,054,358
                      
                      
                      
                      -
                      
                      
                      
                      1,054,358
                      
                      
                      
                      -Professional
      fees
                      
                      
                      174,987
                      
                      
                      
                      236,126
                      
                      
                      
                      328,583
                      
                      
                      
                      357,828Insurance
      expense
                      
                      
                      132,423
                      
                      
                      
                      144,234
                      
                      
                      
                      264,846
                      
                      
                      
                      288,589Interest
      expense and fees
                      
                      
                      1,619,226
                      
                      
                      
                      81,071
                      
                      
                      
                      3,176,422
                      
                      
                      
                      160,074Other
      general and administrative expenses
                      
                      
                      666,103
                      
                      
                      
                      531,866
                      
                      
                      
                      1,317,656
                      
                      
                      
                      1,075,944Total
      operating expenses
                      
                      
                      5,232,591
                      
                      
                      
                      2,111,402
                      
                      
                      
                      9,291,868
                      
                      
                      
                      4,117,559Net
      investment income before income taxes
                      
                      
                      4,511,218
                      
                      
                      
                      3,888,357
                      
                      
                      
                      8,928,704
                      
                      
                      
                      6,878,253Benefit
      (provision) for income taxes
                      
                      
                      (44,760
                      )
                      
                      
                      -
                      
                      
                      
                      (56,231
                      )
                      
                      
                      -Net
      investment income
                      
                      
                      4,466,458
                      
                      
                      
                      3,888,357
                      
                      
                      
                      8,872,473
                      
                      
                      
                      6,878,253Net
      realized capital gain (loss) on portfolio securities, corporate notes and
      commodity derivative instruments:Non-affiliate
      investments
                      
                      
                      6,666,858
                      
                      
                      
                      -
                      
                      
                      
                      6,666,858
                      
                      
                      
                      -Benefit
      (provision) for taxes on capital gain
                      
                      
                      (154,258
                      )
                      
                      
                      -
                      
                      
                      
                      (154,258
                      )
                      
                      
                      -Total
      net realized capital gain (loss) on investments
                      
                      
                      6,512,600
                      
                      
                      
                      -
                      
                      
                      
                      6,512,600
                      
                      
                      
                      -Net
      unrealized gain (loss) on investmentsNet
      increase (decrease) in unrealized appreciation (depreciation) on portfolio
      securities, corporate notesControl
      investments - majority owned
                      
                      
                      4,000,000
                      
                      
                      
                      -
                      
                      
                      
                      6,000,000
                      
                      
                      
                      -Non-affiliate
      investments
                      
                      
                      (1,708,835
                      )
                      
                      
                      (1,360,159
                      )
                      
                      
                      21,150
                      
                      
                      
                      (2,506,521
                      )Benefit
      (provision) for taxes on unrealized gain (loss)
                      
                      
                      (1,377,000
                      )
                      
                      
                      -
                      
                      
                      
                      (2,090,924
                      )
                      
                      
                      -Total
      net unrealized gain (loss) on investments
                      
                      
                      914,165
                      
                      
                      
                      (1,360,159
                      )
                      
                      
                      3,930,226
                      
                      
                      
                      (2,506,521
                      )Net
      increase in stockholders' equity (net assets) resulting from
      operations
                      
                      $
                      11,893,223
                      
                      
                      $
                      2,528,198
                      
                      
                      $
                      19,315,299
                      
                      
                      $
                      4,371,732Net
      increase in stockholders' equity (net assets) resulting from operations
      per common share
                      
                      $
                      0.70
                      
                      
                      $
                      0.15
                      
                      
                      $
                      1.12
                      
                      
                      $
                      0.25
 
 (See
accompanying notes to consolidated financial statements)
 
 2
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (NET ASSETS)
 
 Net UnrealizedAppreciation
                    
                    
                    TotalPaid-in Capital
                    
                    
                    Undistributed
                    
                    
                    Undistributed
                    
                    
                    (Depreciation)
                    
                    
                    Stockholders'CommonStock
                    
                    
                    in Excess
                    
                    
                    Net Investment
                    
                    
                    Net Realized
                    
                    
                    of PortfolioSecurities
                    
                    
                    EquityShares
                    
                    
                    Amount
                    
                    
                    ofPar
                    
                    
                    Income(Loss)
                    
                    
                    CapitalGain(Loss)
                    
                    
                    andCorporateNotes
                    
                    
                    (Net Assets)Balance
      at December 31, 2006
                    
                    
                    17,422,268
                    
                    
                    $
                    17,422
                    
                    
                    $
                    244,660,173
                    
                    
                    $
                    229,791
                    
                    
                    $
                    (245,859
                    )
                    
                    $
                    (1,403,271
                    )
                    
                    $
                    243,258,256Net
      increase in stockholders' equity (net assets) resulting from
      operations
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    8,872,473
                    
                    
                    
                    6,512,600
                    
                    
                    
                    3,930,226
                    
                    
                    
                    19,315,299Dividends
      declared
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (10,024,839
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (10,024,839
                    )Issuance
      of common stock under dividend reinvestment plan
                    
                    
                    22,692
                    
                    
                    
                    23
                    
                    
                    
                    359,230
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    359,253Balance
      at June 30, 2007 (unaudited and as restated)
                    
                    
                    17,444,960
                    
                    
                    $
                    17,445
                    
                    
                    $
                    245,019,403
                    
                    
                    $
                    (922,575
                    )
                    
                    $
                    6,266,741
                    
                    
                    $
                    2,526,955
                    
                    
                    $
                    252,907,969
 
 (See
accompanying notes to consolidated financial statements)
 
 3
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (Unaudited)
 
 For the Six Months EndedJune30,2007
                  
                  
                  June30,2006(As Restated)Cash
      flows from operating activitiesNet
      increase in stockholders' equity (net assets) resulting from
      operations
                  
                  $
                  19,315,299
                  
                  
                  $
                  4,371,732Adjustments
      to reconcile net increase in stockholders' equity (net assets) resulting
      from operations to net cash provided by (used in) operating
      activitiesPayment-in-kind
      interest
                  
                  
                  (1,935,532
                  )
                  
                  
                  (84,755
                  )Payment-in-kind
      dividend
                  
                  
                  (93,710
                  )
                  
                  
                  (60,998
                  )Net
      amortization of premiums, discounts and fees
                  
                  
                  (1,498,175
                  )
                  
                  
                  (272,220
                  )Change
      in unrealized appreciation (depreciation) on portfolio securities and
      corporate notes before taxes
                  
                  
                  (6,021,150
                  )
                  
                  
                  2,506,521Effects
      of changes in operating assets and liabilitiesAccounts
      receivable
                  
                  
                  452,184
                  
                  
                  
                  50,965Interest
      receivable
                  
                  
                  607,169
                  
                  
                  
                  (219,733
                  )Prepaid
      assets
                  
                  
                  477,171
                  
                  
                  
                  369,878Accounts
      payable
                  
                  
                  1,024,280
                  
                  
                  
                  729,773Income
      taxes payable
                  
                  
                  210,489
                  
                  
                  
                  -Current
      portion of deferred income taxes
                  
                  
                  2,090,924
                  
                  
                  
                  -Purchase
      of investments in portfolio securities
                  
                  
                  (152,705,108
                  )
                  
                  
                  (59,123,623
                  )Redemption
      of investments in portfolio securities
                  
                  
                  108,579,495
                  
                  
                  
                  2,402Net
      sale of investments in U.S. Treasury Bills
                  
                  
                  41,167,748
                  
                  
                  
                  42,805,222Net
      cash provided by (used in) operating activities
                  
                  
                  11,671,084
                  
                  
                  
                  (8,924,836
                  )Cash
      flows from financing activitiesBorrowings
      under revolving credit facility
                  
                  
                  -
                  
                  
                  
                  7,000,000Dividends
      paid
                  
                  
                  (4,257,648
                  )
                  
                  
                  (7,569,044
                  )Net
      cash used in financing activities
                  
                  
                  (4,257,648
                  )
                  
                  
                  (569,044
                  )Net
      increase (decrease) in cash and cash equivalents
                  
                  
                  7,413,436
                  
                  
                  
                  (9,493,880
                  )Cash
      and cash equivalents, beginning of the period
                  
                  
                  12,334,329
                  
                  
                  
                  13,350,588Cash
      and cash equivalents, end of period
                  
                  $
                  19,747,765
                  
                  
                  $
                  3,856,708
 
 (See
accompanying notes to consolidated financial statements)
 
 4
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 June
30, 2007
 (Unaudited)
 
 Portfolio Company
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Energy Industry Segment
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Investment (1) (2) (4)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Principal
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Cost
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Fair ValueTARGETED
      INVESTMENTSControl
      Investments- Majority Owned (50% to 100% owned)Rubicon
      Energy Partners, LLC
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          LLC
      Units (4,000 units)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          $
                                                                                                                                                                                                                                                                          4,000,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          $
                                                                                                                                                                                                                                                                          10,000,000and
      DevelopmentTierraMar
      Energy, LLC
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Overriding
      Royalty Interest
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          18,359
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          200,000and
      Development
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Class
      A Preferred LP Units (5)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          14,121,062
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          14,121,062Total
      Control Investments- Majority Owned (50% to 100% owned)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          $
                                                                                                                                                                                                                                                                          18,139,421
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          $
                                                                                                                                                                                                                                                                          24,321,062Non-affiliate
      Investments- (Less than 5% owned)Alden
      Resources, LLC
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Coal
      Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Senior
      Secured
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          $
                                                                                                                                                                                                                                                                          35,000,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          $
                                                                                                                                                                                                                                                                          31,882,657
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          $
                                                                                                                                                                                                                                                                          31,882,657Multiple-Advance
      Term Loan(LIBOR
      + 8.00% cash, +10.00% PIK - until 1/05/2008,cash
      only thereafter, due 1/05/2013)Royalty
      Interest
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,647,792
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,660,000Warrants
      (5)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          100,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          100,000Anadarko
      Petroleum Corporation
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Multiple-Advance
      Net Profits Interest
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          22,511,417
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          22,524,488
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          22,524,4882007-III
      Drilling Fund
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          and
      Development
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          (Due
      4/23/2032)BSR
      Alto, LLC
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Senior
      Secured
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,445,129
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,337,478
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,337,478and
      Development
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Multiple-Advance
      Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK - until 8/17/08,cash
      only thereafter, due 8/17/2009)Overriding
      Royalty Interest
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          29,615
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          75,000Warrants
      (5)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          10,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          100,000BSR
      Loco Bayou, LLC
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Senior
      Secured
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          3,649,853
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          3,501,702
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          3,501,702and
      Development
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Multiple-Advance
      Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK - until 8/15/08,cash
      only thereafter, due 8/15/2009)Overriding
      Royalty Interest  (5)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          20,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          20,000Warrants
      (5)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          10,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          10,000Chroma
      Exploration &
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          8,887
      Shares Series A Participating
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,221,710
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,221,710Production,
      Inc.
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          and
      Development
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Convertible
      Preferred Stock8,116
      Shares Series AA Participating
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,029,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          2,029,000Convertible
      Preferred Stock8.11
      Shares Common Stock (5)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          -
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          -Crossroads
      Energy, LP
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Senior
      Secured
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          3,549,071
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          3,478,838
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          3,478,838and
      Development
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Multiple-Advance
      Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK - until 12/29/07,cash
      only thereafter, due 6/29/2009)Overriding
      Royalty Interest
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          9,429
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          150,000DeanLake
      Operator, LLC
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Oil
      & Gas Production
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Senior
      Secured
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          11,392,310
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          11,103,896
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          11,103,896and
      Development
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          Multiple-Advance
      Term Loan(LIBOR
      + 7.00%, due 6/25/2010)Overriding
      Royalty Interest
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          20,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          20,000Warrants
      (5)
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          10,000
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                          10,000
 
 (See
accompanying notes to consolidated financial statements)
 
 5
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 June
30, 2007
 (Unaudited)
 (Continued)
 
 Portfolio Company
                                                                                                                                
                                                                                                                                Energy Industry Segment
                                                                                                                                
                                                                                                                                Investment (1) (2) (4)
                                                                                                                                
                                                                                                                                Principal
                                                                                                                                
                                                                                                                                
                                                                                                                                Cost
                                                                                                                                
                                                                                                                                
                                                                                                                                Fair Value (3)TARGETED
      INVESTMENTS - ContinuedNon-affiliate
      Investments- (Less than 5% owned)- ContinuedFormidable,
      LLC
                                                                                                                                
                                                                                                                                Oil
      & Gas Production
                                                                                                                                
                                                                                                                                Senior
      Secured
                                                                                                                                
                                                                                                                                $
                                                                                                                                27,247,259
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                26,506,483
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                26,506,483and
      Development
                                                                                                                                
                                                                                                                                Multiple-Advance
      Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK due 12/31/2007)Warrants
      (5)
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                500,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                500,000Nighthawk
      Transport I, LP
                                                                                                                                
                                                                                                                                Energy
      Services
                                                                                                                                
                                                                                                                                Second
      Lien
                                                                                                                                
                                                                                                                                
                                                                                                                                15,529,220
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                14,432,293
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                14,432,293Term
      Loan B(LIBOR
      + 8.00%, due 6/15/2011)LP
      Units (5)
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                224
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                150,000Warrants
      (5)
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                850,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                850,000Resaca
      Exploitation, LP
                                                                                                                                
                                                                                                                                Oil
      & Gas Production
                                                                                                                                
                                                                                                                                Senior
      Secured
                                                                                                                                
                                                                                                                                
                                                                                                                                25,464,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                25,028,351
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                25,028,351and
      Development
                                                                                                                                
                                                                                                                                Multiple-Advance
      Tranche A Term Loan(LIBOR
      + 6.00%, due 5/01/2012)Overriding
      Royalty Interest
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                30,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                125,000Senior
      Secured Tranche B Term Loan
                                                                                                                                
                                                                                                                                
                                                                                                                                6,000,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                5,988,866
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                5,988,866(LIBOR
      + 9.00%, due 8/01/2007)Overriding
      Royalty Interest
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                30,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                125,000Senior
      Subordinated
                                                                                                                                
                                                                                                                                
                                                                                                                                4,000,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                4,000,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                4,000,000Secured
      Convertible Term Loan(6.00%
      cash, 8.00% PIK, due 5/01/2012)Tammany
      Oil & Gas, LLC
                                                                                                                                
                                                                                                                                Oil
      & Gas Production
                                                                                                                                
                                                                                                                                Senior
      Secured
                                                                                                                                
                                                                                                                                
                                                                                                                                22,535,796
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                22,076,833
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                22,076,833and
      Development
                                                                                                                                
                                                                                                                                Multiple-Advance
      Term Loan(LIBOR
      + 6.00%, due 3/21/2010)Overriding
      Royalty Interest (5)
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                200,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                300,000Sonoran
      Energy, Inc.
                                                                                                                                
                                                                                                                                Oil
      & Gas Production
                                                                                                                                
                                                                                                                                Senior
      Secured
                                                                                                                                
                                                                                                                                
                                                                                                                                6,943,853
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                6,806,241
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                6,806,241and
      Development
                                                                                                                                
                                                                                                                                Multiple-Advance
      Term Loan(LIBOR
      + 6.00%, due 2/28/2008)Overriding
      Royalty Interest
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                97,801
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                100,000Warrants
      (5)
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                10,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                10,000Venoco,
      Inc.
                                                                                                                                
                                                                                                                                Oil
      & Gas Production
                                                                                                                                
                                                                                                                                Senior
      Notes (6)
                                                                                                                                
                                                                                                                                
                                                                                                                                8,000,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                7,964,007
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                8,260,000and
      Development
                                                                                                                                
                                                                                                                                (8.75%,
      due 12/15/2011)Venoco,
      Inc.
                                                                                                                                
                                                                                                                                Oil
      & Gas Production
                                                                                                                                
                                                                                                                                Senior
      Notes (6)
                                                                                                                                
                                                                                                                                
                                                                                                                                4,000,000
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                3,940,310
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                4,130,000and
      Development
                                                                                                                                
                                                                                                                                (8.75%,
      due 12/15/2011)Total
      Non-affiliate Investments- (Less than 5% owned)
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                200,398,014
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                201,613,836Subtotal
      Targeted Investments (62.42% of total investments)
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                218,537,435
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                225,934,898
 
 (See
accompanying notes to consolidated financial statements)
 
 6
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 June
30, 2007
 (Unaudited)
 (Continued)
 
 Portfolio Company
                                                                                            
                                                                                            Energy Industry Segment
                                                                                            
                                                                                            Investment (1) (2) (4)
                                                                                            
                                                                                            Principal
                                                                                            
                                                                                            
                                                                                            Cost
                                                                                            
                                                                                            
                                                                                            Fair Value (3)CORPORATE NOTESPioneer
      Natural Resources Co.
                                                                                            
                                                                                            Oil
      & Gas Production
                                                                                                and
      Development
                                                                                            
                                                                                            Senior
      Notes, 7.2%, due 2028
                                                                                            
                                                                                            $
                                                                                            10,000,000
                                                                                            
                                                                                            
                                                                                            $
                                                                                            11,653,006
                                                                                            
                                                                                            
                                                                                            $
                                                                                            9,243,800XTO
      Energy, Inc.
                                                                                            
                                                                                            Oil
      & Gas Production
                                                                                                and
      Development
                                                                                            
                                                                                            Senior
      Notes, 5.0%, due 2015
                                                                                            
                                                                                            
                                                                                            6,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            6,007,438
                                                                                            
                                                                                            
                                                                                            
                                                                                            5,637,060Subtotal
      Corporate Notes ( 4.11% of total investments)
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            17,660,
      444
                                                                                            
                                                                                            
                                                                                            $
                                                                                            14,880,
      860GOVERNMENT
      SECURITIESU.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            $
                                                                                            6,203,000
                                                                                            
                                                                                            
                                                                                            $
                                                                                            6,160,444
                                                                                            
                                                                                            
                                                                                            $
                                                                                            6,160,444U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,674
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,674U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,674
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,674U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,674
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,674U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673U.S.
      Treasury Bills
                                                                                            
                                                                                            Government
                                                                                            
                                                                                            U.S.
      Treasury Bills, 4.781%, due 08/23/2007
                                                                                            
                                                                                            
                                                                                            12,000,000
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673
                                                                                            
                                                                                            
                                                                                            
                                                                                            11,917,673Subtotal
      Government Securities (28.02% of total investments)
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            101,501
      ,831
                                                                                            
                                                                                            
                                                                                            $
                                                                                            101,501
      ,831CASH
      AND CASH EQUIVALENTSSubtotal
      Cash and Cash Equivalents (5.45% of total investments)
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            19,747,765
                                                                                            
                                                                                            
                                                                                            $
                                                                                            19,747,765TOTAL
      INVESTMENTS, CASH AND CASH EQUIVALENTS
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            357,447
      ,475
                                                                                            
                                                                                            
                                                                                            $
                                                                                            362,065,354LIABILITIES
      IN EXCESS OF OTHER ASSETS (7)
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            (109,157,385
                                                                                            )NET
      ASSETS (7)
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            252,907,969
 
 NOTES TO CONSOLIDATED
SCHEDULE OF INVESTMENTS
 
 (1)
              All
      investments are pledged as collateral for obligations under the Company's
      credit facilities.
 (2)
              Percentages
      represent interest rates in effect at June 30, 2007, and due dates
      represent the contractual maturity
dates.
 (3)
              Fair
      value of targeted investments is determined by or under the direction of
      the Board of Directors.
 (4)
              All
      investments are in entities with primary operations in the United States
      of America.
 (5)
              Non-income
      producing securities.
 (6)
              Upon the March 30, 2006 closing
      of Venoco, Inc.'s TexCal acquisition, Venoco Inc.'s senior notes
      became collateralized by second priority
      liens.
 (7)
              As
      restated.
 
 (See
accompanying notes to consolidated financial statements)
 
 7
  NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 December
31, 2006
 
 Portfolio
      Company (1)
                                                                                                                    
                                                                                                                    Energy
      Industry Segment
                                                                                                                    
                                                                                                                    Investment
      (1) (2) (4)
                                                                                                                    
                                                                                                                    Principal
                                                                                                                    
                                                                                                                    
                                                                                                                    Cost
                                                                                                                    
                                                                                                                    
                                                                                                                    Fair
      Value (3)TARGETED
      INVESTMENTSControl
      Investments- Majority Owned (50% to 100%
    owned)Rubicon Energy Partners, LLC
                                                                                                                    
                                                                                                                    Oil
      & Gas Production
                                                                                                                    
                                                                                                                    Senior
      Secured
                                                                                                                    
                                                                                                                    $
                                                                                                                    32,595,949
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    32,136,463
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    32,136,463and
      Development
                                                                                                                    
                                                                                                                    Multiple-Advance
      Term Loan(LIBOR
      + 6.50%, due 7/26/2010)LLC
      Units (4,000 units )
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    4,000,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    4,000,000Total
      Control Investments- Majority Owned (50% to 100%
      owned)
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    36,136,463
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    36,136,463Non-affiliate
      Investments - (Less than 5% owned)Atchee
      CBM, LLC
                                                                                                                    
                                                                                                                    Oil
      & Gas Production
                                                                                                                    
                                                                                                                    Senior
      Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    1,391,562
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,369,123
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,369,123and
      Development
                                                                                                                    
                                                                                                                    Multiple-Advance
      Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK, due 4/25/2009)Overriding
      Royalty Interest (5)
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    5,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    5,000Senior
      Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    713,036
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    705,373
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    705,373Multiple-Advance
      Supplemental Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK, due 2/28/2007)BSR
      Alto, LLC
                                                                                                                    
                                                                                                                    Oil
      & Gas Production
                                                                                                                    
                                                                                                                    Senior
      Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    1,838,943
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,708,559
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,708,559and
      Development
                                                                                                                    
                                                                                                                    Multiple-Advance
      Term Loan(LIBOR
      + 5.50% Cash, +7.5% PIK - until 8/17/08, cash only thereafter, due
      8/17/2009)Overriding
      Royalty Interest
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    29,922
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    75,000Warrants
      (5)
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    10,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    100,000BSR
      Loco Bayou, LLC
                                                                                                                    
                                                                                                                    Oil
      & Gas Production
                                                                                                                    
                                                                                                                    Senior
      Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    2,188,432
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    2,010,533
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    2,010,533and
      Development
                                                                                                                    
                                                                                                                    Multiple-Advance
      Term Loan(LIBOR
      + 5.50% Cash, +7.5% PIK - until 8/15/08, cash only thereafter, due
      8/15/2009)Overriding
      Royalty Interest  (5)
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    20,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    20,000Warrants
      (5)
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    10,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    10,000C-Gas,
      LLC
                                                                                                                    
                                                                                                                    Oil
      & Gas Production
                                                                                                                    
                                                                                                                    Senior
      Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    17,749,511
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    17,534,057
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    17,534,057and
      Development
                                                                                                                    
                                                                                                                    Multiple-Advance
      Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK, due 4/25/2009)Overriding
      Royalty Interest
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    44,651
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    200,000Senior
      Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    4,300,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    4,251,351
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    4,251,351Multiple-Advance
      Supplemental Term Loan(LIBOR
      + 5.50% cash, +7.50% PIK, due 2/28/2007)Chroma
      Exploration &
                                                                                                                    
                                                                                                                    Oil
      & Gas Production
                                                                                                                    
                                                                                                                    Tranche
      A - Senior Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    15,000,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    14,781,240
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    14,781,240Production,
      Inc.
                                                                                                                    
                                                                                                                    and
      Development
                                                                                                                    
                                                                                                                    Multiple-Advance
      Term Loan(LIBOR
      + 7.75% until Tranche B payoff, +6.00% thereafter, due
      9/20/2008)Overriding
      Royalty Interest
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    82,687
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    400,0008,628
      Shares Series A Participating
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    2,157,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    2,157,000Convertible
      Preferred Stock8.11
      Shares Common Stock
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -Tranche
      B - Senior Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    1,325,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,300,609
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,300,609Multiple-Advance
      Term Loan(LIBOR
      + 7.75%, due 4/04/2007)Crossroads
      Energy, LP
                                                                                                                    
                                                                                                                    Oil
      & Gas Production
                                                                                                                    
                                                                                                                    Senior
      Secured
                                                                                                                    
                                                                                                                    
                                                                                                                    1,723,533
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,673,251
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    1,673,251and
      Development
                                                                                                                    
                                                                                                                    Multiple-Advance
      Term Loan(LIBOR
      + 5.50% Cash, +7.5% PIK - until 12/29/07,cash
      only thereafter, due 6/29/2009)Overriding
      Royalty Interest
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    9,926
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    70,000
 
 (See
accompanying notes to consolidated financial statements)
  8
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 December
31, 2006
 (Continued)
 
 Portfolio
      Company (1)
                                                                                                        
                                                                                                        Energy
      Industry Segment
                                                                                                        
                                                                                                        Investment
      (1) (2) (4)
                                                                                                        
                                                                                                        Principal
                                                                                                        
                                                                                                        
                                                                                                        Cost
                                                                                                        
                                                                                                        
                                                                                                        Fair
      Value (3)Non-affiliate
      Investments - (Less than 5% owned) -
    ContinuedEnergy
      XXI Gulf Coast, Inc.
                                                                                                        
                                                                                                        Oil
      & Gas Production
                                                                                                        
                                                                                                        Second
      Lien Term Loan
                                                                                                        
                                                                                                        
                                                                                                        14,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        14,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        14,000,000and
      Development
                                                                                                        
                                                                                                        (LIBOR
      + 5.50%, due 4/04/2010)Nighthawk
      Transport I, LP
                                                                                                        
                                                                                                        Oilfield
      Services
                                                                                                        
                                                                                                        Senior
      Secured
                                                                                                        
                                                                                                        
                                                                                                        2,159,443
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        2,128,317
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        2,128,317Term
      Loan A(LIBOR
      + 3.50%, due 6/15/2010)Second
      Lien
                                                                                                        
                                                                                                        
                                                                                                        3,760,863
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,686,628
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,686,628Term
      Loan B(LIBOR
      + 8.00%, due 6/15/2011)Second
      Lien
                                                                                                        
                                                                                                        
                                                                                                        3,387,585
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,320,190
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,320,190Delayed
      Draw Term Loan B(LIBOR
      + 8.00%, due 6/15/2011)Warrants
      (5)
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        224
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        224Piceance Basin Properties, LLC
                                                                                                        
                                                                                                        Oil
      & Gas Production
                                                                                                        
                                                                                                        Senior
      Secured
                                                                                                        
                                                                                                        
                                                                                                        5,495,802
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        5,540,185
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        5,540,185and
      Development
                                                                                                        
                                                                                                        Multiple-Advance
      Term Loan(11.3868%,
      due 10/31/2010)LLC
      Units (19,900 units)
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        40,876
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        19,745Warrants
      (5)
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        25,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        25,000Resaca
      Exploitation, LP
                                                                                                        
                                                                                                        Oil
      & Gas Production
                                                                                                        
                                                                                                        Senior
      Secured
                                                                                                        
                                                                                                        
                                                                                                        21,800,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        21,443,100
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        21,443,100and
      Development
                                                                                                        
                                                                                                        Multiple-Advance
      Tranche A Term Loan(LIBOR
      + 6.00%, due 5/01/2012)Overriding
      Royalty Interest
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        30,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        125,000Senior
      Secured Tranche B Term Loan
                                                                                                        
                                                                                                        
                                                                                                        6,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        5,926,736
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        5,926,736(LIBOR
      + 9.00%, due 8/01/2007)Overriding
      Royalty Interest
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        30,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        125,000Senior
      Subordinated
                                                                                                        
                                                                                                        
                                                                                                        4,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        4,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        4,000,000Secured
      Convertible Term Loan(6.00%
      Cash, 8.00% PIK, due 05/01/2012)Sonoran
      Energy, Inc.
                                                                                                        
                                                                                                        Oil
      & Gas Production
                                                                                                        
                                                                                                        Senior
      Secured
                                                                                                        
                                                                                                        
                                                                                                        6,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        5,763,781
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        5,763,781and
      Development
                                                                                                        
                                                                                                        Multiple-Advance
      Term Loan(LIBOR
      + 6.00%, due 2/28/2008)Overriding
      Royalty Interest
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        100,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        100,000Warrants
      (5)
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        10,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        10,000TierraMar
      Energy, LLC
                                                                                                        
                                                                                                        Oil
      & Gas Production
                                                                                                        
                                                                                                        Senior
      Secured
                                                                                                        
                                                                                                        
                                                                                                        9,183,372
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        9,054,033
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        9,054,033and
      Development
                                                                                                        
                                                                                                        Multiple-Advance
      Term Loan(LIBOR
      + 6.00% cash, +7.50% PIK, due 5/13/2008)Overriding
      Royalty Interest
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        18,623
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        200,000Warrants
      (5)
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        10,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        200,000Non-affiliate
      Investments - (Less than 5% owned) -
    ContinuedVenoco,
      Inc.
                                                                                                        
                                                                                                        Oil
      & Gas Production
                                                                                                        
                                                                                                        Senior
      Notes (6)
                                                                                                        
                                                                                                        
                                                                                                        8,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        7,960,772
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        7,900,000and
      Development
                                                                                                        
                                                                                                        (8.75%,
      due 12/15/2011)Venoco,
      Inc.
                                                                                                        
                                                                                                        Oil
      & Gas Production
                                                                                                        
                                                                                                        Senior
      Notes (6)
                                                                                                        
                                                                                                        
                                                                                                        4,000,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,934,993
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,950,000and
      Development
                                                                                                        
                                                                                                        (8.75%,
      due 12/15/2011)Total
      Control Investments- Majority Owned (50% to 100%
      owned)
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        134,726,740
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        135,889,035Subtotal
      Targeted Investments (50.28% of total investments)
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        170,863,203
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        172,025,498
 
 (See
accompanying notes to consolidated financial statements)
  9
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 December
31, 2006
 (Continued)
 
 Issuing
      Company
                                        
                                        Industry
      Segment
                                        
                                        Investment
      (1) (2) (4)
                                        
                                        Principal
                                        
                                        
                                        Cost
                                        
                                        
                                        ValueCORPORATE
      NOTESPioneer Natural Resources Co.
                                        
                                        Energy
                                        
                                        Senior
      Notes, 7.2%, due 2028
                                        
                                        $
                                        10,000,000
                                        
                                        
                                        $
                                        11,673,809
                                        
                                        
                                        $
                                        9,418,600XTO
      Energy, Inc.
                                        
                                        Energy
                                        
                                        Senior
      Notes, 5.0%, due 2015
                                        
                                        
                                        6,000,000
                                        
                                        
                                        
                                        6,007,837
                                        
                                        
                                        
                                        5,697,480Subtotal
      Corporate Notes ( 4.42% of total investments)
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        17,681,646
                                        
                                        
                                        $
                                        15,116,080GOVERNMENT
      SECURITIESU.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        $
                                        7,407,000
                                        
                                        
                                        $
                                        7,355,217
                                        
                                        
                                        $
                                        7,355,217U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.967%, due 02/22/2007
                                        
                                        
                                        12,000,000
                                        
                                        
                                        
                                        11,916,107
                                        
                                        
                                        
                                        11,916,107U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.250%, due 01/04/2007
                                        
                                        
                                        10,000,000
                                        
                                        
                                        
                                        9,996,458
                                        
                                        
                                        
                                        9,996,458U.S.
      Treasury Bills
                                        
                                        Government
                                        
                                        U.S.
      Treasury Bills, 4.380%, due 01/04/2007
                                        
                                        
                                        30,000,000
                                        
                                        
                                        
                                        29,989,048
                                        
                                        
                                        
                                        29,989,048Subtotal
      Government Securities (41.7% of total investments)
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        142,669,579
                                        
                                        
                                        $
                                        142,669,579CASHSubtotal
      Cash (3.6% of total investments)
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        12,334,329
                                        
                                        
                                        $
                                        12,334,329TOTAL
      INVESTMENTS, CASH AND CASH EQUIVALENTS
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        343,548,757
                                        
                                        
                                        $
                                        342,145,486LIABILITIES
      IN EXCESS OF OTHER ASSETS
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        (98,887,230
                                        )NET
      ASSETS
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        243,258,256
 
 (1)
                All
      investments are pledged as collateral for obligations under the Company's
      credit facilities.
 (2)
                Percentages
      represent interest rates in effect at December 31, 2006, and due dates
      represent the contractual maturity
dates.
 (3)
                Fair
      value of targeted investments is determined by or under the direction of
      the Board of Directors.
 (4)
                All
      investments are in entities with primary operations in the United States
      of America.
 (5)
                Non-income
      producing securities.
  (6)
                Upon
      the March 30, 2006 closing of Venoco, Inc.'s TexCal acquisition, Venoco
      Inc.'s senior notes became collateralized by second priority
      liens.
 
 (See
accompanying notes to consolidated financial statements)
  10
  NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
FINANCIAL HIGHLIGHTS
 (Unaudited)
 
 For the Six Months EndedJune 30, 2007
                    
                    
                    June 30, 2006(As restated)Per
      Share DataNet
      asset value, beginning of period
                    
                    $
                    13.96
                    
                    
                    $
                    14.02Net
      investment income
                    
                    
                    0.51
                    
                    
                    
                    0.39Net
      realized and unrealized gain (loss) on portfolio securities and corporate
      notes (3)
                    
                    
                    0.61
                    
                    
                    
                    (0.14
                    )Net
      increase in stockholders' equity (net assets) resulting from
      operations
                    
                    
                    1.12
                    
                    
                    
                    0.25Dividends
      declared
                    
                    
                    (0.58
                    )
                    
                    
                    (0.34
                    )Net
      asset value, end of period
                    
                    $
                    14.50
                    
                    
                    $
                    13.93Market
      value, beginning of period
                    
                    $
                    16.75
                    
                    
                    $
                    13.13Market
      value, end of period
                    
                    $
                    16.72
                    
                    
                    $
                    14.63Market
      value return  (1)
                    
                    
                    3.28
                    %
                    
                    
                    14.29
                    %Net
      asset value return (1)
                    
                    
                    7.46
                    %
                    
                    
                    1.91
                    %Ratios
      and Supplemental Data($
      and shares in thousands)Net
      assets, end of period
                    
                    $
                    252,908
                    
                    
                    $
                    242,354Average
      net assets
                    
                    
                    248,083
                    
                    
                    
                    243,126Common
      shares outstanding at end of period
                    
                    
                    17,445
                    
                    
                    
                    17,400Total
      operating expenses/average net assets (2)
                    
                    
                    7.55
                    %
                    
                    
                    3.42
                    %Total
      operating expenses less management and incentive fees and interest
      expense/average net assets (2)
                    
                    
                    1.55
                    %
                    
                    
                    1.43
                    %Total
      operating expenses less management and incentive fees/average net assets
      (2)
                    
                    
                    4.14
                    %
                    
                    
                    1.56
                    %Net
      investment income/average net assets (2)
                    
                    
                    7.21
                    %
                    
                    
                    5.71
                    %Net
      increase in net assets resulting from operations/average net assets
      (2)
                    
                    
                    15.70
                    %
                    
                    
                    3.63
                    %Portfolio
      turnover rate
                    
                    
                    43.77
                    %
                    
                    
                    0.00
                    %
 
 (1)
Return calculations assume reinvestment of dividends and are not
annualized.
 (2)
Annualized.
 (3)
Calculated as a balancing amount necessary to reconcile the change in net assets
value per share with the other per share information presented.  This
amount may not agree with the aggregate gains and losses for the period because
the difference in the net asset value at the beginning and end of year may not
equal the per share changes of the line items disclosed.
 
 (See
accompanying notes to consolidated financial statements)
  11


NGP
CAPITAL RESOURCES COMPANY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


June
30, 2007


(Unaudited)




Note
1: Organization





NGP
Capital Resources Company (the “Company”) was organized as a Maryland
corporation in July 2004. The Company has elected to be treated as a business
development company under the Investment Company Act of 1940, as amended (the
“1940 Act”). In addition, for tax purposes the Company has elected to be treated
as a regulated investment company, (“RIC”), under the Internal Revenue Code of
1986, as amended (the “Code”) for 2005 and later years. The Company has several
subsidiaries that are single member limited liability companies and wholly owned
limited partnerships established to hold certain portfolio investments or
provide services to the Company in accordance with specific rules prescribed for
a company operating as a RIC.  These subsidiaries are: NGPC Funding GP,
LLC, a Texas limited liability company; NGPC Nevada, LLC, a Nevada limited
liability company; NGPC Funding, LP, a Texas limited partnership; NGPC Asset
Holdings GP, LLC, a Texas limited liability company; NGPC Asset Holdings, LP, a
Texas limited partnership; NGPC Asset Holdings II, LP, a Texas limited
partnership; NGPC Asset Holdings III, LP, a Texas limited partnership and NGPC
Asset Holdings IV, LP, a Texas limited partnership.  The Company
consolidates the results of its subsidiaries for financial reporting purposes.
The Company does not consolidate the financial results of its portfolio
companies.





The
Company was created to invest primarily in small and mid-size private energy
companies, which are generally defined as companies that have net asset values
or annual revenues of less than $500 million and are not issuers of securities
listed on a national exchange.  The Company’s investment objective is to
generate both current income and capital appreciation through debt and equity
investments or a combination thereof.




The
Company is managed and advised, subject to the overall supervision of the
Company’s Board of Directors, by NGP Investment Advisor, LP (the “Manager”), a
Delaware limited partnership owned by NGP Energy Capital Management, LLC, and
NGP Administration, LLC (the “Administrator”), the Company’s
administrator.





Note
2: Restatement of Consolidated Financial Statements





Background of the
Restatement





On March 15, 2010, our Board of
Directors and the members of the Audit Committee of our Board of Directors
concluded that we should restate our consolidated financial statements for the
years ended December 31, 2007 and December 31, 2008, and for the quarters in
2007 and 2008 and the first three quarters of 2009 (collectively, the “Affected
Periods”).





The determination to restate the
financial statements for the Affected Periods was made in connection with
management’s assessment of accounting errors it discovered as part of a process
to remediate a material weakness in internal controls previously disclosed in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2008
and the Company’s Quarterly Reports on Form 10-Q in 2009. While the Company has
taken steps to remediate the previously disclosed material weakness, the
material weakness existed throughout the quarterly periods of 2009, and at
December 31, 2009, the Company had not yet completed its assessment as to
whether the material weakness had been fully remediated. The Company anticipates
that it will complete its testing of the additional internal control processes
designed to remediate the previously disclosed material weakness in
2010.





The errors and consequent restatements
described below principally involved non-cash accounting entries related to net
deferred tax assets and liabilities that typically arise as a result of timing
differences in tax and GAAP (book) accounting. Taxable Net Investment Income,
which is the primary determinant of the Company’s distributable income, has not
been affected in any of the Affected Periods by these restatements.





The Company’s assessment of certain
identified accounting errors results in the following adjustments to previously
reported periods:





1. 
         In the quarter ended March
31, 2007, the Company failed to record a deferred tax liability with respect to
approximately $2.1 million in unrealized appreciation on an investment in
partnerships.  Similarly, in the quarters ended June 30, 2007 and September
30, 2007, the Company failed to record deferred tax liabilities with respect to
approximately $4.0 million and $2.0 million, respectively, in unrealized
appreciation on an investment.





2. 
         In the quarter ended
September 30, 2008, the Company realized a $12.34 million pre-tax gain on this
same investment (as compared to the $8.15 million of unrealized appreciation
previously recorded in 2007). The reversal of the previously unrecorded deferred
tax liability in 2008 resulted in the incorrect recording of a net deferred tax
asset of $3.8 million at year end 2008.  This item does not affect the
periods presented in this Amended Filing.


12


Unrelated
to the restatements, we have reclassified certain  balance sheet,
statement of operations and statement of cash flows amounts to conform to the
presentation in our most recently-filed Annual Report on Form 10-K. These
reclassifications were primarily related to the disaggregation of investments in
portfolio securities, investment income, net realized capital gain (loss) on
investments and net unrealized gain (loss) on investments into separate
classifications according to level of control.





Impact of the Restatement
and Reclassification





The
restatement and reclassification adjustments detailed below to our previously
filed consolidated financial statements reflect adjustments which principally
involved non-cash accounting entries related to net deferred tax assets and
liabilities, which impact the consolidated balance sheets, consolidated
statement of operations and consolidated statement of cash flows.





The
effects of the restatement on the unaudited consolidated balance sheet at June
30, 2007 are summarized in the following table:





As PreviouslyReported
                    
                    
                    Reclassifications
                    
                    
                    As Reclassified
                    
                    
                    Restatement
                    
                    
                    As RestatedConsolidated
      Balance SheetAs
      of June 30, 2007Investments
      in portfolio securities at fair value
                    
                    $
                    225,934,898
                    
                    
                    $
                    (225,934,898
                    )
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Control
      investments - majority owned
                    
                    
                    -
                    
                    
                    
                    24,321,062
                    
                    
                    
                    24,321,062
                    
                    
                    
                    -
                    
                    
                    
                    24,321,062Non-affiliate
      investments
                    
                    
                    -
                    
                    
                    
                    201,613,836
                    
                    
                    
                    201,613,836
                    
                    
                    
                    -
                    
                    
                    
                    201,613,836Income
      taxes payable
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    210,489
                    
                    
                    
                    210,489Deferred
      tax liabilities - current
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,090,924
                    
                    
                    
                    2,090,924Total
      current liabilities
                    
                    
                    8,771,622
                    
                    
                    
                    -
                    
                    
                    
                    8,771,622
                    
                    
                    
                    2,301,413
                    
                    
                    
                    11,073,035Total
      liabilities
                    
                    
                    108,771,622
                    
                    
                    
                    -
                    
                    
                    
                    108,771,622
                    
                    
                    
                    2,301,413
                    
                    
                    
                    111,073,035Undistributed
      net investment income (loss)
                    
                    
                    (866,344
                    )
                    
                    
                    -
                    
                    
                    
                    (866,344
                    )
                    
                    
                    (56,231
                    )
                    
                    
                    (922,575
                    )Undistributed
      net realized capital gain (loss)
                    
                    
                    6,420,999
                    
                    
                    
                    -
                    
                    
                    
                    6,420,999
                    
                    
                    
                    (154,258
                    )
                    
                    
                    6,266,741Net
      unrealized appreciation (depreciation) of portfolio securities and
      corporate notes
                    
                    
                    4,617,879
                    
                    
                    
                    -
                    
                    
                    
                    4,617,879
                    
                    
                    
                    (2,090,924
                    )
                    
                    
                    2,526,955Total
      stockholders’ equity (net assets)
                    
                    
                    255,209,382
                    
                    
                    
                    -
                    
                    
                    
                    255,209,382
                    
                    
                    
                    (2,301,413
                    )
                    
                    
                    252,907,969Net
      asset value per share
                    
                    
                    14.63
                    
                    
                    
                    -
                    
                    
                    
                    14.63
                    
                    
                    
                    (0.13
                    )
                    
                    
                    14.50





The
effects of the restatement on the unaudited consolidated statements of
operations for the three and six-month periods ended June 30, 2007 are
summarized in the following table:


13





As PreviouslyReported
                                
                                
                                Reclassifications
                                
                                
                                As Reclassified
                                
                                
                                Restatement
                                
                                
                                As RestatedConsolidated
      Statements of Operations:For
      the Three Months Ended June 30, 2007Investment
      incomeInterest
      and dividend income:
                                
                                $
                                9,601,572
                                
                                
                                $
                                (9,601,572
                                )
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                -Control
      investments - majority owned
                                
                                
                                -
                                
                                
                                
                                1,239,507
                                
                                
                                
                                1,239,507
                                
                                
                                
                                -
                                
                                
                                
                                1,239,507Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                8,051,232
                                
                                
                                
                                8,051,232
                                
                                
                                
                                -
                                
                                
                                
                                8,051,232Royalty
      income (loss), net of amortization:Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                310,833
                                
                                
                                
                                310,833
                                
                                
                                
                                -
                                
                                
                                
                                310,833Benefit
      (provision) for income taxes
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (44,760
                                )
                                
                                
                                (44,760
                                )Net
      investment income
                                
                                
                                4,511,218
                                
                                
                                
                                -
                                
                                
                                
                                4,511,218
                                
                                
                                
                                (44,760
                                )
                                
                                
                                4,466,458Net
      realized gain (loss) on investments
                                
                                
                                6,666,858
                                
                                
                                
                                (6,666,858
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                6,666,858
                                
                                
                                
                                6,666,858
                                
                                
                                
                                -
                                
                                
                                
                                6,666,858Benefit
      (provision) for taxes on capital gain (loss)
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (154,258
                                )
                                
                                
                                (154,258
                                )Total
      net unrealized gain (loss) on investments
                                
                                
                                6,666,858
                                
                                
                                
                                -
                                
                                
                                
                                6,666,858
                                
                                
                                
                                (154,258
                                )
                                
                                
                                6,512,600Net
      increase (decrease) in unrealized appreciation (depreciation) on
      portfolio securities and corporate notes
                                
                                
                                2,291,165
                                
                                
                                
                                (2,291,165
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Control
      investments - majority owned
                                
                                
                                -
                                
                                
                                
                                4,000,000
                                
                                
                                
                                4,000,000
                                
                                
                                
                                -
                                
                                
                                
                                4,000,000Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                (1,708,835
                                )
                                
                                
                                (1,708,835
                                )
                                
                                
                                -
                                
                                
                                
                                (1,708,835
                                )Benefit
      (provision) for taxes on unrealized gain (loss)
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (1,377,000
                                )
                                
                                
                                (1,377,000
                                )Total
      net unrealized gain (loss) on investments
                                
                                
                                2,291,165
                                
                                
                                
                                -
                                
                                
                                
                                2,291,165
                                
                                
                                
                                (1,377,000
                                )
                                
                                
                                914,165Net
      increase (decrease) in stockholders' equity(net
      assets) resulting from operations
                                
                                
                                13,469,241
                                
                                
                                
                                -
                                
                                
                                
                                13,469,241
                                
                                
                                
                                (1,576,018
                                )
                                
                                
                                11,893,223Net
      increase (decrease) in stockholders' equity (net assets) resulting
      from operations per common share
                                
                                
                                0.78
                                
                                
                                
                                -
                                
                                
                                
                                0.78
                                
                                
                                
                                (0.08
                                )
                                
                                
                                0.70For
      the Six Months Ended June 30, 2007Investment
      incomeInterest
      and dividend income:
                                
                                $
                                18,022,827
                                
                                
                                $
                                (18,022,827
                                )
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                -Control
      investments - majority owned
                                
                                
                                -
                                
                                
                                
                                2,246,785
                                
                                
                                
                                2,246,785
                                
                                
                                
                                -
                                
                                
                                
                                2,246,785Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                15,264,458
                                
                                
                                
                                15,264,458
                                
                                
                                
                                -
                                
                                
                                
                                15,264,458Royalty
      income (loss), net of amortization:Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                511,584
                                
                                
                                
                                511,584
                                
                                
                                
                                -
                                
                                
                                
                                511,584Benefit
      (provision) for income taxes
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (56,231
                                )
                                
                                
                                (56,231
                                )Net
      investment income
                                
                                
                                8,928,704
                                
                                
                                
                                -
                                
                                
                                
                                8,928,704
                                
                                
                                
                                (56,231
                                )
                                
                                
                                8,872,473Net
      realized gain (loss) on investments
                                
                                
                                6,666,858
                                
                                
                                
                                (6,666,858
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                6,666,858
                                
                                
                                
                                6,666,858
                                
                                
                                
                                -
                                
                                
                                
                                6,666,858Benefit
      (provision) for taxes on capital gain (loss)
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (154,258
                                )
                                
                                
                                (154,258
                                )Total
      net unrealized gain (loss) on investments
                                
                                
                                6,666,858
                                
                                
                                
                                -
                                
                                
                                
                                6,666,858
                                
                                
                                
                                (154,258
                                )
                                
                                
                                6,512,600Net
      increase (decrease) in unrealized appreciation (depreciation) on
      portfolio securities and corporate notes
                                
                                
                                6,021,150
                                
                                
                                
                                (6,021,150
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Control
      investments - majority owned
                                
                                
                                -
                                
                                
                                
                                6,000,000
                                
                                
                                
                                6,000,000
                                
                                
                                
                                -
                                
                                
                                
                                6,000,000Non-affiliate
      investments
                                
                                
                                -
                                
                                
                                
                                21,150
                                
                                
                                
                                21,150
                                
                                
                                
                                -
                                
                                
                                
                                21,150Benefit
      (provision) for taxes on unrealized gain (loss)
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (2,090,924
                                )
                                
                                
                                (2,090,924
                                )Total
      net unrealized gain (loss) on investments
                                
                                
                                6,021,150
                                
                                
                                
                                -
                                
                                
                                
                                6,021,150
                                
                                
                                
                                (2,090,924
                                )
                                
                                
                                3,930,226Net
      increase (decrease) in stockholders' equity (net assets) resulting
      from operations
                                
                                
                                21,616,712
                                
                                
                                
                                -
                                
                                
                                
                                21,616,712
                                
                                
                                
                                (2,301,413
                                )
                                
                                
                                19,315,299Net
      increase (decrease) in stockholders' equity (net assets) resulting
      from operations per common share
                                
                                
                                1.25
                                
                                
                                
                                -
                                
                                
                                
                                1.25
                                
                                
                                
                                (0.13
                                )
                                
                                
                                1.12




14


The
effects of the restatement on the unaudited consolidated statement of cash flows
for the six-month period ended June 30, 2007 are summarized in the following
table:





As PreviouslyReported
                  
                  
                  Reclassifications
                  
                  
                  As Reclassified
                  
                  
                  Restatement
                  
                  
                  As RestatedConsolidated
      Statement of Cash Flows:For
      the Six Months Ended June 30, 2007Cash
      flows from operating activitiesNet
      increase (decrease) in stockholders' equity (net assets) resulting from
      operations
                  
                  $
                  21,616,712
                  
                  
                  $
                  -
                  
                  
                  $
                  21,616,712
                  
                  
                  $
                  (2,301,413
                  )
                  
                  $
                  19,315,299Effects
      of changes in operating assets and liabilitiesIncome
      taxes payable
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  210,489
                  
                  
                  
                  210,489Current
      portion of deferred income taxes
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,090,924
                  
                  
                  
                  2,090,924





Note
3: Significant Accounting Policies





The
interim unaudited consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The interim consolidated financial statements
have been prepared by management of the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted pursuant to such rules and
regulations, although the Company believes the disclosures included herein are
adequate to make the information presented not misleading.  In the opinion
of management, all adjustments which are of a normal recurring nature considered
necessary for presentation of the information have been included.  These
unaudited consolidated financial statements should be read in conjunction with
the consolidated financial statements and related notes included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2006.
Interim results are not necessarily indicative of results for a full
year.





The
following is a summary of the significant accounting policies consistently
applied by the Company in the preparation of its consolidated financial
statements:




Use
of Estimates




The
interim consolidated financial statements have been prepared in accordance with
U.S. Generally Accepted Accounting Principles that require management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and the accompanying notes to the consolidated financial
statements.  Actual results could differ from these estimates.




Cash
and Cash Equivalents




Cash and
cash equivalents consist of demand deposits and highly liquid investments with
original maturities of three months or less when purchased. Cash and cash
equivalents are carried at cost which approximates fair value.


15




Prepaid
Assets




Prepaid
assets consist of premiums paid for directors’ and officers’ insurance and
fidelity bonds with policy terms of one year and fees associated with the
establishment of the credit facility. Such premiums and fees are amortized
monthly on a straight line basis over the term of the policy or credit
facility.




Concentration
of Credit Risk




The
Company places its cash and cash equivalents with financial institutions and, at
times, cash held in checking accounts may exceed the Federal Deposit Insurance
Corporation insured limit.




Valuation
of Investments




Investments
are carried at fair value, as determined in good faith by the Company’s Board of
Directors.  On a quarterly basis, the Manager prepares valuations for all
of the securities of its portfolio companies and presents the valuations to the
Company’s Valuation Committee and Board of Directors.  The valuations are
determined and recommended by the Valuation Committee to the Board of Directors,
which reviews and ratifies the final portfolio valuations.





Investments
in securities for which market quotations are readily available are recorded in
the financial statements at such market quotations as of the valuation date
adjusted for appropriate liquidity discounts, if applicable. For investments in
securities for which market quotations are unavailable, or which have various
degrees of trading restrictions, the Manager prepares valuation analyses, as
generally described below.





Using the
most recently available financial statements, forecasts and, when applicable,
comparable transaction data, the Manager prepares valuation analyses for the
various securities in the Company’s investment portfolio. These valuation
analyses are prepared using traditional valuation methodologies which rely on
estimates of the asset values and enterprise values of portfolio companies
issuing securities.




The
methodologies for determining asset valuations include estimates based on the
liquidation or sale value of a portfolio company’s assets, the discounted value
of expected future net cash flows from the assets, third party valuations of the
portfolio company’s assets (such as engineering reserve reports of oil and gas
properties) or multiples from transactions involving the sale of comparable
assets.  The Manager considers some or all of the above valuation methods
to determine the estimated asset value of a portfolio company.





The
methodologies for determining enterprise valuations include estimates based on
valuations of comparable public companies, recent sales of comparable companies,
the value of recent investments in the equity securities of the portfolio
company and the asset valuation methodologies described above. The Manager
considers some or all of the above valuation methods to determine the estimated
enterprise value of a portfolio company.





Debt Securities: The Company
values its investments in non-convertible debt securities at its original net
book value plus amortized original issue discount, or OID, to the extent that
the estimated asset or enterprise value of the portfolio company exceeds the
outstanding debt of the portfolio company. The Company values convertible debt
securities at the higher of: 1) cost plus amortized OID, to the extent that the
estimated asset or enterprise value of the portfolio company equals or exceeds
the outstanding debt of the portfolio company; and 2) the Company’s pro rata
share, upon conversion, of the residual equity value of the portfolio company
available after deducting all outstanding debt from its estimated enterprise
value. If the estimated asset or enterprise value is less than the sum of the
value of the Company’s debt investment and all other debt securities of the
portfolio company pari
passu or senior to the Company’s debt investment, the Company reduces the
value of its debt investment beginning with its junior-most debt investment such
that the asset or enterprise value less the value of the outstanding pari passu or senior debt is
zero.





Equity Securities: The
Company values its investments in preferred and common equity securities
(including warrants or options to acquire equity securities) based on its pro
rata share of the residual equity value available after deducting all
outstanding debt from the estimated enterprise value.





Property-Based Equity Participation
Rights:   The Company values investments in overriding royalty and
net profits interests based on a multiple of cash flows generated by such
investments, multiples from transactions involving the sale of comparable assets
and/or the discounted value of expected future net cash flows from such
investments. Appropriate cash flow multiples are derived from the review of
comparable transactions involving similar assets. The discounted value of future
net cash flows is derived, when appropriate, from third party valuations of a
portfolio company’s assets, such as engineering reserve reports of oil and gas
properties.


16


Due to
the uncertainty inherent in the valuation process, such estimates of fair value
may differ significantly from the values that would have been used had a ready
market for the securities existed, and the differences could be material.
Additionally, changes in the market environment and other events that may occur
over the life of the investments may cause the gains or losses ultimately
realized on these investments to be different from the valuations currently
assigned.




Securities
Transactions, Interest and Dividend Income Recognition





All
securities transactions are accounted for on a trade-date basis. Interest income
is recorded on the accrual basis to the extent that such amounts are expected to
be collected. Premiums and discounts are accreted into interest income using the
effective interest method. Detachable warrants, other equity securities or
property interests such as overriding royalty interests obtained in conjunction
with the acquisition of debt securities are recorded separately from the debt
securities at their initial fair value, with a corresponding amount recorded as
a discount to the associated debt security. Income from overriding royalty
interests is recognized as received and the recorded assets are charged
depletion using the unit of production depletion method. The portion of the loan
origination fees paid that represent additional yield or discount on a loan are
deferred and accreted into interest income over the life of the loan using the
effective interest method. Upon the prepayment of a loan or debt security, any
unamortized loan origination fees are recorded as interest income and any
unamortized premium or discount is recorded as a realized gain or loss. Market
premiums or discounts on acquired loans or fixed income investments are accreted
into interest income using the effective interest method. Dividend income is
recognized on the ex-dividend date. Accruing interest or dividends on
investments is deferred when it is determined that the interest or dividend is
not collectible. Collectibility of the interest and dividends is assessed, based
on many factors including the portfolio company’s ability to service its loan
based on current and projected cash flows, as well as the current valuation of
the company’s assets. For investments with payment-in-kind (PIK) interest, the
Company bases income accruals on the valuation of the PIK notes or securities
received from the borrower. If the portfolio company’s asset valuation indicates
a value that is not sufficient to cover the contractual interest due on the PIK
notes, management will not accrue interest income on the notes.




Net
Realized Gains or Losses and Net Change in Unrealized Appreciation or
Depreciation




Realized
gains or losses are measured by the difference between the net proceeds from the
repayment or sale and the amortized cost basis of the investment, considering
unamortized fees and prepayment premiums, and without regard to unrealized
appreciation or depreciation previously recognized, and include investments
charged off during the year, net of recoveries. Net unrealized appreciation or
depreciation reflects the change in portfolio investment values during the
reporting period including the reversal of previously recorded unrealized
appreciation or depreciation, when capital gains or losses are
realized.





Fee
Income Recognition




Fees
primarily include financial advisory, transaction structuring, loan
administration, commitment and prepayment fees. Financial advisory fees
represent amounts received for providing advice and analysis to companies and
are recognized as earned when such services are performed provided collection is
probable. Transaction structuring fees represent amounts received for
structuring, financing and executing transactions and are generally payable only
if the transaction closes. Such fees are deferred and accreted into interest
income over the life of the loan using the effective interest method. Commitment
fees represent amounts received for committed funding and are generally payable
whether or not the transaction closes. On transactions that close within the
commitment period, commitment fees are deferred and accreted into interest
income over the life of the loan using the effective interest method. Commitment
fees on transactions that do not close are generally recognized over the time
period the commitment is outstanding. Prepayment and loan administration fees
are recognized as they are received.  In the second quarter of 2007, the
Company accreted approximately $1.1 million of fee income into interest income,
compared to accreted income of approximately $181,000 during the second quarter
of 2006.




Dividends




Dividends
to stockholders are recorded on the ex-dividend date. For tax purposes the
Company intends to continue to qualify as a RIC under the Code for 2005 and
later years. In order to maintain the Company’s status as a RIC, the Company is
required to distribute at least 90% of its investment company taxable income. In
addition, the Company must distribute at least 98% of its taxable income (both
ordinary income and net capital gains) to avoid excise tax. The Company intends
to make distributions to stockholders on a quarterly basis of substantially all
net taxable income.  The Company also intends to make distributions of net
realized capital gains, if any, at least annually.  However, the Company
may in the future decide to retain capital gains for investment and designate
such retained dividends as a deemed distribution.  The amount to be paid
out as a dividend is determined by the Company’s Board of Directors each quarter
and is based on the annual taxable earnings estimated by the Manager. Based on
that estimate, a dividend is declared each quarter and paid shortly
thereafter.


17




For the
period ended December 31, 2004, the Company was treated as a “C” corporation and
had no taxable income and therefore did not declare a dividend for that
period.  The following table summarizes the Company’s dividend
history:





Dividend HistoryDeclaration Date
                        
                        Amount
                        
                        Record Date
                        
                        Payment DateMarch 18, 2005
                        
                        $
                        0.120
                        
                        March 31, 2005
                        
                        April
      15, 2005June
      17, 2005
                        
                        $
                        0.125
                        
                        June
      30, 2005
                        
                        July
      15, 2005September
      19, 2005
                        
                        $
                        0.140
                        
                        September 30, 2005
                        
                        October
      14, 2005December
      15, 2005
                        
                        $
                        0.275
                        
                        December
      27, 2005
                        
                        January
      4, 2006March
      10, 2006
                        
                        $
                        0.160
                        
                        March
      31, 2006
                        
                        April
      17, 2006June
      14, 2006
                        
                        $
                        0.180
                        
                        June
      30, 2006
                        
                        July
      14, 2006September 14, 2006
                        
                        $
                        0.250
                        
                        September
      29, 2006
                        
                        October
      13, 2006December
      7, 2006
                        
                        $
                        0.330
                        
                        December
      19, 2006
                        
                        December 29, 2006March
      19, 2007
                        
                        $
                        0.265
                        
                        March
      30, 2007
                        
                        April
      13, 2007June
      13, 2007
                        
                        $
                        0.310
                        
                        June
      29, 2007
                        
                        July
      13,
2007





The
Company has established an “opt out” dividend reinvestment plan, operated by its
transfer agent, for its common stockholders. As a result, if the Company
declares a cash dividend, a stockholder’s cash dividend will be automatically
reinvested in additional shares of the Company’s common stock unless the
stockholder, or his or her broker, specifically “opts out” of the dividend
reinvestment plan and elects to receive cash dividends.  It is customary
practice for many brokers to “opt out” of dividend reinvestment plans on behalf
of their clients unless specifically instructed otherwise. 
 Stockholders whose shares are registered in his or her name are eligible
for the dividend reinvestment plan through our stock transfer agent. 
Stockholders whose shares are held in a brokerage account or registered in
street name can contact their broker regarding drip plan eligibility.  As
of June 30, 2007, holders of 1,362,981 shares, or approximately 7.8% of
outstanding shares, were participants in the Company’s dividend reinvestment
plan.





The
Company’s plan provides for the plan agent to purchase shares in the open market
for credit to the accounts of plan participants unless the average of the
closing sales prices for the shares for the five days immediately preceding the
payment date exceeds 110% of the most recently reported net asset value per
share. Through the third quarter of 2006, all shares credited to participants’
accounts were purchased in the open market.  The table below summarizes
participation in the Company’s dividend reinvestment plan:





Dividend Reinvestment Plan ParticipationCommon Stock DividendsParticipating
                      
                      
                      Percentage of
                        Outstanding
                      
                      
                      Total
                      
                      
                      Cash
                      
                      
                      Purchased
                        in
                        Open
                      
                      
                      Newly Issued SharesDividend
                      
                      Shares
                      
                      
                      Shares
                      
                      
                      Distribution
                      
                      
                      Dividends
                      
                      
                      Market
                      
                      
                      Amount
                      
                      
                      SharesMarch 2005
                      
                      
                      -
                      
                      
                      
                      0.0
                      %
                      
                      $
                      2,088,012
                      
                      
                      $
                      2,088,012
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      
                      -June
      2005
                      
                      
                      1,215,870
                      
                      
                      
                      7.0
                      %
                      
                      $
                      2,175,013
                      
                      
                      $
                      2,023,029
                      
                      
                      $
                      151,984
                      
                      
                      $
                      -
                      
                      
                      
                      -September
      2005
                      
                      
                      1,488,904
                      
                      
                      
                      8.6
                      %
                      
                      $
                      2,436,014
                      
                      
                      $
                      2,227,567
                      
                      
                      $
                      208,447
                      
                      
                      $
                      -
                      
                      
                      
                      -December
      2005
                      
                      
                      1,660,140
                      
                      
                      
                      9.5
                      %
                      
                      $
                      4,785,028
                      
                      
                      $
                      4,328,488
                      
                      
                      $
                      456,540
                      
                      
                      $
                      -
                      
                      
                      
                      -March
      2006
                      
                      
                      1,618,940
                      
                      
                      
                      9.3
                      %
                      
                      $
                      2,784,016
                      
                      
                      $
                      2,524,986
                      
                      
                      $
                      259,030
                      
                      
                      $
                      -
                      
                      
                      
                      -June
      2006
                      
                      
                      1,410,227
                      
                      
                      
                      8.1
                      %
                      
                      $
                      3,132,018
                      
                      
                      $
                      2,878,177
                      
                      
                      $
                      253,841
                      
                      
                      $
                      -
                      
                      
                      
                      -September
      2006
                      
                      
                      1,270,634
                      
                      
                      
                      7.3
                      %
                      
                      $
                      4,350,025
                      
                      
                      $
                      4,032,366
                      
                      
                      $
                      317,659
                      
                      
                      $
                      -
                      
                      
                      
                      -December
      2006
                      
                      
                      1,111,045
                      
                      
                      
                      6.4
                      %
                      
                      $
                      5,742,033
                      
                      
                      $
                      5,375,388
                      
                      
                      $
                      -
                      
                      
                      $
                      366,645
                      
                      
                      
                      22,168March
      2007
                      
                      
                      1,355,671
                      
                      
                      
                      7.8
                      %
                      
                      $
                      4,616,901
                      
                      
                      $
                      4,257,648
                      
                      
                      $
                      -
                      
                      
                      $
                      359,253
                      
                      
                      
                      22,692June
      2007
                      
                      
                      1,362,981
                      
                      
                      
                      7.8
                      %
                      
                      $
                      5,407,938
                      
                      
                      $
                      4,985,387
                      
                      
                      $
                      -
                      
                      
                      $
                      422,550
                      
                      
                      
                      24,694
                      (1)





(1) Shares
were issued on July 13, 2007 for the June 2007 dividend. See above and Note
5 for further detail.


18




Income
Taxes





The
Company adopted the Financial Accounting Standards Board’s Interpretation No.
48, Accounting for Uncertainty
in Income Taxes—an interpretation of FASB Statement No. 109 (“FIN 48”),
effective January 1, 2007.  FIN 48 establishes a
single model to address accounting for uncertain tax positions.  FIN 48
clarifies the accounting for income taxes by prescribing a minimum recognition
threshold a tax position is required to meet before being recognized in the
financial statements.  FIN 48 also provides guidance on derecognition,
measurement classification, interest and penalties, accounting in interim
periods, disclosure and transition.  The adoption of FIN 48 did not have a
material effect on the Company’s consolidated financial position or results of
operations.  (See Note 7 for additional information.)





In
conjunction with the adoption of FIN 48, the Company implemented its policy to
record estimated interest and penalties related to the underpayment of income
tax as a component of Other general and administrative expenses in the
Consolidated Statement of Operations.   However, there were no amounts
for tax-related interest or penalties incurred for the quarter ended June 30,
2007.





Note
4: Credit Facility




On August
31, 2006, the Company simultaneously repaid its original credit facility and
entered into an Amended and Restated Revolving Credit Agreement (the “Investment
Credit Agreement”) among the Company, the syndicated lenders party thereto and
SunTrust Bank, as administrative agent for the lenders.  Also on August 31,
2006, the Company entered into a Treasury Secured Revolving Credit Agreement
(the “Treasury Credit Agreement”) among the Company, the syndicated lenders
party thereto and SunTrust Bank, as administrative agent for the
lenders.





Under the
Investment Credit Agreement, the lenders have agreed to extend revolving credit
to the Company in an amount not to exceed $80 million, which includes a $10
million letter of credit subfacility; however, the Company has the ability to
increase the credit available under the Investment Credit Agreement to an amount
not to exceed $175 million by obtaining additional commitments from existing
lenders or new lenders.  The Investment Credit Agreement has a three year
term and bears interest, at the Company’s option, at either (i) LIBOR plus 125
to 225 basis points, based on the degree of leverage of the Company or (ii) the
base rate plus 25 to 75 basis points, based on the degree of leverage of the
Company.  Proceeds from the Investment Credit Agreement will be used to
supplement the Company’s equity capital to make portfolio
investments.





The
obligations under the Investment Credit Agreement are collateralized by
substantially all of the Company’s assets, except certain assets that
collateralize the Treasury Credit Agreement and are guaranteed by the Company’s
existing and future subsidiaries, other than special purpose subsidiaries and
certain other subsidiaries.  The Investment Credit Agreement contains
affirmative and reporting covenants and certain financial ratio and restrictive
covenants, including: (a) maintaining a ratio of net asset value to consolidated
total indebtedness (excluding net hedging liabilities) of the Company and its
subsidiaries, of not less than 2.25:1.0, (b) maintaining a ratio of net asset
value to consolidated total indebtedness (including net hedging liabilities) of
the Company and its subsidiaries, of not less than 2.0:1.0, (c) maintaining a
ratio of net income (excluding revenue from collateral under the Treasury Credit
Agreement) plus interest, taxes, depreciation and amortization expenses
(“EBITDA”) to interest expense (excluding interest on loans under the Treasury
Credit Agreement) of the Company and its subsidiaries of not less than 3.0:1.0,
(d) limitations on additional indebtedness, (e) limitations on liens, (f)
limitations on mergers and other fundamental changes, (g) limitations on
dividends, (h) limitations on disposition of assets other than in the normal
course of business, (i) limitations on transactions with affiliates, (j)
limitations on agreements that prohibit liens on properties of the Company and
its subsidiary guarantors, (k) limitations on sale and leaseback transactions,
(l) limitations on speculative hedging transactions and (m) limitations on the
aggregate amount of unfunded commitments.





As of
June 30, 2007, there was no outstanding balance under the Investment Credit
Agreement.  From time to time, certain of the lenders may provide customary
commercial and investment banking services to the Company.





Under the
Treasury Credit Agreement, the lenders have agreed to extend revolving credit
loans to the Company in an amount not to exceed $100 million.  Proceeds
from the Treasury Credit Agreement will be used to facilitate the growth of the
Company’s investment portfolio and provide flexibility in the sizing of its
portfolio investments.  The Treasury Credit Agreement has a three year term
and bears interest, at the Company’s option, at either (i) LIBOR plus 25 basis
points or (ii) the base rate.  As of June 30, 2007, the interest rate was
5.57% (LIBOR rate of 5.32% plus 25 basis points) on the Company’s $100 million
outstanding balance under the Treasury Credit Agreement.  Prepayments of
loans under the Treasury Credit Agreement made during the first year are subject
to a premium equal to 1% of the amount so prepaid.


19




The
obligations under the Treasury Credit Agreement are collateralized by certain
securities account assets and are guaranteed by the Company’s existing and
future subsidiaries, other than special purpose subsidiaries and certain other
subsidiaries.  The Treasury Credit Agreement contains affirmative and
reporting covenants and certain financial ratio and restrictive covenants,
including: (a) maintaining a ratio of net asset value to consolidated total
indebtedness (excluding net hedging liabilities) of the Company and its
subsidiaries, of not less than 2.25:1.0, (b) maintaining a ratio of net asset
value to consolidated total indebtedness (including net hedging liabilities) of
the Company and its subsidiaries, of not less than 2.0:1.0, (c) maintaining a
ratio of EBITDA (excluding revenue from cash collateral) to interest expense
(excluding interest on loans under the Treasury Credit Agreement) of the Company
and its subsidiaries of not less than 3.0:1.0, (d) maintaining a ratio of
collateral to the aggregate principal amount of loans under the Treasury Credit
Agreement of not less than 1.01:1.0, (e) limitations on additional indebtedness,
(f) limitations on liens, (g) limitations on mergers and other fundamental
changes, (h) limitations on dividends, (i) limitations on disposition of assets
other than in the normal course of business, (j) limitations on transactions
with affiliates, (k) limitations on agreements that prohibit liens on properties
of the Company and its subsidiary guarantors, (l) limitations on sale and
leaseback transactions, (m) limitations on speculative hedging transactions and
(n) limitations on the aggregate amount of unfunded commitments.





The
Company has borrowed $100 million as of June 30, 2007 under the Treasury Credit
Agreement.  From time to time, certain of the lenders may provide
customary commercial and investment banking services to the
Company.




Note
5: Issuance of Common Stock




On August
6, 2004, the Company, in its initial capitalization transaction, sold 100 shares
of common stock to Natural Gas Partners, LLC for $15.00 per share. On November
9, 2004, the Company’s Registration Statement (Registration No. 333-118279) was
declared effective by the SEC in connection with the public offering of
16,000,000 shares of common stock (plus up to 2,400,000 additional shares of
common stock upon the exercise of the underwriters’ over-allotment option),
which commenced on November 10, 2004. The number of securities registered,
including the shares of common stock subject to the underwriters’ over-allotment
option, was 18,400,000, of which 17,400,000 were sold to the public at a price
of $15.00 per share.





The net
proceeds from the initial public offering of the shares of common stock, after
deducting expenses of approximately $2,308,000 and underwriting discounts and
commissions of $0.825 per share, were approximately $244,337,000.





The
Company’s dividend reinvestment plan provides for the plan agent to purchase
shares in the open market for credit to the accounts of plan participants unless
the average of the closing sales prices for the shares for the five days
immediately preceding the payment date exceeds 110% of the most recently
reported net asset value per share. Through the third quarter of 2006, all
shares credited to participants’ accounts were purchased in the open
market.  See Note 3, Dividends,  for a table summary
of  Dividend Reinvestment Plan Participation.




Note
6: Investment Management




The
Company has entered into an investment advisory agreement with the Manager under
which the Manager, subject to the overall supervision of the Company’s Board of
Directors, manages the day-to-day operations of, and provides investment
advisory services to, the Company.  The investment advisory agreement
was originally approved by the Company’s Board of Directors on November 9, 2004,
and on October 25, 2006, the Company’s Board of Directors, including all of the
independent directors, approved an extension of the investment advisory
agreement through November 9, 2007.   The investment advisory
agreement provides that unless terminated earlier as described below, the
agreement shall remain in from year-to-year provided such continuance is
approved at least annually by the Board of Directors or by the affirmative vote
of the holders of a majority of the Company’s outstanding voting securities,
including, in either case, approval by a majority of the Company’s directors who
are not interested persons.





As a
result of the accounting errors that necessitated the restatement of our
financial statements for the fiscal years ended December 31, 2007 and 2008,
between 2007 and 2009, the Company overpaid the Manager’s management and
incentive fees by approximately $34,600. The Company overpaid the base
management fee to the Manager in 2008 and 2009 by approximately $33,400 as
detailed by quarter below. These errors resulted principally from the incorrect
reporting of Total Assets and Net Assets. In the quarters ended June 30, 2007
and December 31, 2007, the Company underpaid the Manager’s investment income
incentive fee by approximately $4,400 and $9,100, respectively and overpaid the
capital gains fee as of December 31, 2007 by approximately $14,700. The
approximate $34,600 net overpayment to the Manager was settled in the first
quarter of 2010.




20




Summary
      of (Over)/ Under Payment of Management Fee by QuarterAverageTotal Assets
                                                
                                                
                                                Change
      from
                                                
                                                
                                                0.45%
      Fee
                                                
                                                
                                                FeeAs Reported
                                                
                                                
                                                As Restated
                                                
                                                
                                                Change
                                                
                                                
                                                Prior Quarter
                                                
                                                
                                                Correction
                                                
                                                
                                                Quarter3Q
      2007
                                                
                                                $
                                                413,597,732
                                                
                                                
                                                $
                                                413,597,732
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -4Q
      2007
                                                
                                                
                                                478,232,876
                                                
                                                
                                                
                                                478,276,626
                                                
                                                
                                                
                                                43,750
                                                
                                                
                                                
                                                21,875
                                                
                                                
                                                
                                                100
                                                
                                                
                                                1Q
      20081Q
      2008
                                                
                                                
                                                446,563,953
                                                
                                                
                                                
                                                446,607,703
                                                
                                                
                                                
                                                43,750
                                                
                                                
                                                
                                                43,750
                                                
                                                
                                                
                                                200
                                                
                                                
                                                2Q
      20082Q
      2008
                                                
                                                
                                                539,759,446
                                                
                                                
                                                
                                                539,803,196
                                                
                                                
                                                
                                                43,750
                                                
                                                
                                                
                                                43,750
                                                
                                                
                                                
                                                200
                                                
                                                
                                                3Q
      20083Q
      2008
                                                
                                                
                                                505,800,049
                                                
                                                
                                                
                                                506,521,583
                                                
                                                
                                                
                                                721,534
                                                
                                                
                                                
                                                382,642
                                                
                                                
                                                
                                                1,700
                                                
                                                
                                                4Q
      20084Q
      2008
                                                
                                                
                                                400,748,657
                                                
                                                
                                                
                                                398,994,441
                                                
                                                
                                                
                                                (1,754,216
                                                )
                                                
                                                
                                                (516,341
                                                )
                                                
                                                
                                                (2,300
                                                )
                                                
                                                1Q
      20091Q
      2009
                                                
                                                
                                                353,330,559
                                                
                                                
                                                
                                                350,284,110
                                                
                                                
                                                
                                                (3,046,449
                                                )
                                                
                                                
                                                (2,400,333
                                                )
                                                
                                                
                                                (10,800
                                                )
                                                
                                                2Q
      20092Q
      2009
                                                
                                                
                                                333,449,837
                                                
                                                
                                                
                                                331,199,409
                                                
                                                
                                                
                                                (2,250,428
                                                )
                                                
                                                
                                                (2,648,439
                                                )
                                                
                                                
                                                (11,900
                                                )
                                                
                                                3Q
      20093Q
      2009
                                                
                                                
                                                295,823,883
                                                
                                                
                                                
                                                293,370,642
                                                
                                                
                                                
                                                (2,453,241
                                                )
                                                
                                                
                                                (2,351,835
                                                )
                                                
                                                
                                                (10,600
                                                )
                                                
                                                4Q
      2009$
                                                (7,424,931
                                                )
                                                
                                                $
                                                (33,400
                                                )





For
providing these services, the Manager receives a fee from the Company,
consisting of two components, a base management fee and an incentive
fee.




Under the
investment advisory agreement, the base management fee is calculated quarterly
as 0.45% of the average of total assets of the Company as of the end of the two
previous quarters.  The base management fee is payable quarterly in
arrears.  Of the $2,639,852 management and incentive fees payable as
of June 30, 2007, $1,585,494 was payable to the Manager for the base management
fee for the second quarter of 2007.





21





The
incentive fee under the investment advisory agreement consists of two parts. The
first part, which is calculated and payable quarterly in arrears, equals 20% of
the excess, if any, of the Company’s net investment income for the quarter that
exceeds a quarterly hurdle rate equal to 2% (8% annualized) of the Company’s net
assets.




For this
purpose, net investment income means interest income, dividend income and any
other income (including any other fees, such as commitment, origination,
syndication, structuring, diligence, managerial assistance, monitoring and
consulting fees or other fees that the Company receives from portfolio
companies) accrued during the fiscal quarter, minus the Company’s operating
expenses for the quarter (including the base management fee, expenses payable
under the administration agreement, any interest expense and dividends paid on
issued and outstanding preferred stock, if any, but excluding the incentive
fee). Net investment income includes, in the case of investments with a deferred
interest feature (such as premium and discount, debt instruments with
payment-in-kind interest and zero coupon securities), accrued income that the
Company has not yet received in cash. Net investment income does not include any
realized capital gains, realized capital losses or unrealized capital
appreciation or depreciation.





The
incentive fees due in any fiscal quarter are calculated as follows:




•
            no incentive fee in any fiscal
      quarter in which the Company’s net investment income does not exceed the
      hurdle rate.





•
            20% of the amount of the
      Company’s net investment income, if any, that exceeds the hurdle rate in
      any fiscal quarter.





There
were no investment income incentive fees earned for the second quarter of
2006.  The investment income incentive fees earned for the second
quarter of 2007 were $88,060.





The
second part of the incentive fee (the “Capital Gains Fee”) is determined and
payable in arrears as of the end of each fiscal year (or upon termination of the
investment advisory agreement, as of the termination date), and equals (1) 20%
of (a) the Company’s net realized capital gain (realized capital gains less
realized capital losses, but not less than zero) on a cumulative basis from the
closing date of the Company’s initial public offering to the end of such fiscal
year, less (b) any unrealized capital depreciation at the end of such fiscal
year, less (2) the aggregate amount of all Capital Gains Fees paid to the
Manager in prior fiscal years. Capital Gains Fees are estimated as of the end of
the each fiscal quarter based on the gains realized during such quarter and the
unrealized losses as of the end of such quarter.  To the extent that
Capital Gains Fees are earned by the Manager, an accrual is made in the amount
of the estimated Capital Gains Fee.  Because unrealized losses may
fluctuate from quarter to quarter, the accrual, if any, may fluctuate as
well.  There were no capital gains incentive fees earned for the
second quarter of 2006.  An accrual of $966,298 was made for estimated
Capital Gains Fees for the second quarter of 2007.





Realized
capital gains on a security are calculated as the excess of the net amount
realized from the sale or other disposition of such security over the amortized
cost for the security. Realized capital losses on a security are calculated as
the amount by which the net amount realized from the sale or other disposition
of such security is less than the amortized cost of such security. Unrealized
capital depreciation on a security is calculated as the amount by which the
original cost of such security exceeds the fair value of such security at the
end of a fiscal year. All period-end valuations are determined by the Company in
accordance with GAAP and the 1940 Act.





The
Manager has agreed that, beginning on November 9, 2006, and to the extent
permissible under federal securities laws and regulations, including Regulation
M, it will utilize 30% of the fees it receives from the capital gains portion of
the incentive fee (up to a maximum of $5 million of fees received in the
aggregate) to purchase shares of the Company’s common stock in open market
purchases through an independent trustee or agent. Any sales of such stock will
comply with any applicable six-month holding period under Section 16(b) of the
Securities Act of 1933, as amended, and all other restrictions contained in any
law or regulation, to the fullest extent applicable to any such sale. Any change
in this voluntary agreement will not be implemented without at least 90 days’
prior notice to stockholders and compliance with all applicable laws and
regulations.  No shares have been repurchased under this
agreement.





The
investment advisory agreement may be terminated at any time, without the payment
of any penalty, by a vote of the Company’s Board of Directors or the holders of
a majority of the Company’s shares on 60 days’ written notice to the Manager,
and would automatically terminate in the event of its “assignment” (as defined
in the 1940 Act).





22




The
investment advisory agreement provides that, absent willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of the
reckless disregard of its duties and obligations, the Manager, its partners and
the Managers’ and its partners’ respective officers, managers, partners, agents,
employees, controlling persons, members and any other person or entity
affiliated with it are entitled to indemnification from the Company for any
damages, liabilities, costs and expenses (including reasonable attorneys’ fees
and amounts reasonably paid in settlement) arising out of or otherwise based
upon any of the Manager’s duties or obligations under the investment advisory
agreement or otherwise as the Company’s investment adviser.





Pursuant
to the investment advisory agreement, the compensation and routine overhead
expenses of the investment professionals of the Company’s management team and
their respective staffs, when and to the extent engaged in providing management
and investment advisory services to the Company, will be paid for by the
Manager. The Company will bear all other costs and expenses of the Company’s
operations and transactions.





The
Manager, NGP Investment Advisor, LP, was formed in 2004 and maintains an office
at 1221 McKinney Street, Suite 2975, Houston, Texas 77010. The Manager’s sole
activity is to perform management and investment advisory services for the
Company. The Manager is a registered investment adviser under the Investment
Advisers Act of 1940, as amended.





The
foregoing description of the investment advisory agreement is qualified in its
entirety by reference to the full text of the document, a copy of which was
filed as Exhibit 10.1 to the Company’s Form 10-K for the year ended
December 31, 2004, and is incorporated herein by reference.





The
Company has entered into an administration agreement with the Administrator,
under which the Administrator furnishes the Company with office facilities,
equipment and clerical, bookkeeping and record keeping services at such
facilities and performs, or oversees the performance of, administrative
services, which include being responsible for the financial records that the
Company is required to maintain and preparing reports to the Company’s
stockholders and reports filed with the SEC.





In
addition, the Manager assists in determining and publishing the Company’s net
asset value, oversees the preparation and filing of the Company’s tax returns
and the printing and dissemination of reports to the Company’s stockholders and
generally oversees the payment of the Company’s expenses and the performance of
administrative and professional services rendered to the Company by others.
Payments under the administration agreement are equal to amounts based upon the
allocable portion of the Administrator’s costs and expenses in performing its
obligations under the administration agreement. The Administrator bills the
Company for charges under the administration agreement monthly in
arrears.





Of the
$723,832 in accounts payable as of June 30, 2007, $208,789 is due to the
Administrator for expenses incurred on the Company’s behalf for the month
of  June 2007.





The
administration agreement was originally approved by the Company’s Board of
Directors on November 9, 2004. The administration agreement provides that unless
terminated earlier as described below, the agreement will continue in effect
from year-to-year provided such continuance is approved at least annually by
(i) the Company’s Board of Directors and (ii) a majority of the
Company’s directors who are not parties to the administration agreement or
“interested persons” of any such party. On October 25, 2006, the Board of
Directors, including all of the independent directors, approved an extension of
the administration agreement through November 9, 2007.





The
foregoing description of the administration agreement is qualified in its
entirety by reference to the full text of the document, a copy of which was
filed as Exhibit 10.2 to the Company’s Form 10-K for the year ended
December 31, 2004, and is incorporated herein by reference.





Note
7: Federal Income Taxes





The
Company adopted the Financial Accounting Standards Board’s Interpretation
(“FIN”) No. 48, Accounting for
Uncertainty in Income taxes—an interpretation of FASB Statement No. 109
(“FIN 48”), effective January 1, 2007. FIN 48 establishes a single model to
address accounting for uncertain tax positions. FIN 48 clarifies the accounting
for income taxes by prescribing a minimum recognition threshold a tax position
is required to meet before being recognized in the financial statements. FIN 48
also provides guidance on derecognition, measurement classification, interest
and penalties, accounting in interim periods, disclosure and transition. The
adoption of FIN 48 did not have a material effect on the Company’s consolidated
financial position or results of operations. As a result, there was no
cumulative effect related to adopting FIN 48. For federal income tax purposes,
as of June 30, 2007, the tax years ended December 31, 2004, 2005 and 2006 remain
subject to examination.





The
Company intends to qualify for tax purposes as a RIC under Subchapter M of
Chapter 1 of the Internal Revenue Code of 1986, as amended.  As a RIC,
the Company generally will not be subject to federal income tax on the portion
of its investment company taxable income and net capital gain (i.e., realized
net long term capital gains in excess of realized net short term capital losses)
distributed to stockholders.  To qualify as a RIC, the Company is
required, among other things, to distribute to its stockholders at least 90% of
investment company taxable income, as defined by the Code, and to meet certain
asset diversification requirements.





23





The
Company met all RIC requirements and distributed substantially all of its
investment company taxable income for the year ended December 31,
2006.  Thus, the Company did not incur any federal income tax
liability for this period.





The
following Company consolidated subsidiaries are subject to federal income taxes
for the period ended June 30, 2007: NGPC Asset Holdings, LP, NGPC Asset Holdings
II, LP, NGPC Asset Holdings III, LP and NGPC Asset Holdings IV, LP.  The
difference between the effective income tax rate of 10.65% and the statutory
federal tax rate of 34% for the six months ended June 30, 2007 is primarily
attributable to RIC investment company taxable income that generally will not be
subject to federal income tax. The difference between the effective income tax
rate of 11.70% and the statutory federal tax rate of 34% for the three months
ended June 30, 2007 is attributable to RIC investment company taxable income
that generally will not be subject to federal income tax.




Note 8: Commitments and
Contingencies





As of
June 30, 2007, the Company had investments in or commitments to fund loan
facilities to 15 portfolio companies totaling $338 million, on which $220
million was drawn. In addition, the Company has continuing obligations under the
investment advisory agreement with the Manager and the administration agreement
with the Administrator. The agreements provide that, absent willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
the reckless disregard of its duties and obligations, the Manager, the
Administrator and its officers, managers, agents, employees, controlling
persons, members and any other person or entity affiliated with them will be
entitled to indemnification from the Company for any damages, liabilities, costs
and expenses (including reasonable attorneys’ fees and amounts reasonably paid
in settlement) arising from the rendering of the Manager’s or Administrator’s
services under the agreements or otherwise as the Company’s investment adviser
or administrator. The agreements also provide that the Manager, the
Administrator and their affiliates will not be liable to the Company or any
stockholder for any error of judgment, mistake of law, any loss or damage with
respect to any of the Company’s investments or any action taken or omitted to be
taken by the Manager or the Administrator in connection with the performance of
any of their duties or obligations under the agreements or otherwise as
investment adviser or administrator to the Company, except to the extent
specified in Section 36(b) of the 1940 Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services. In the normal course of business, the Company enters into a variety of
undertakings containing a variety of representations that may expose the Company
to some risk of loss. The amount of future loss, if any, arising from such
undertakings, while not quantifiable, is not expected to be
significant.





Note
9: Reclassifications





GAAP
requires that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. These reclassifications have no
effect on total net assets or net asset value per share. During the year ended
December 31, 2006, $15,710 has been reclassified to Undistributed net
investment income (loss) from Paid-in capital in excess of
par.





Unrelated
to the restatement, the Company has also reclassified certain balance sheet,
statement of operations and statement of cash flows amounts to conform to the
current year presentation. These reclassifications were primarily related to the
disaggregation of investments in portfolio securities, investment income, net
realized capital gain (loss) on investments and net unrealized gain (loss) on
investments into separate classifications according to level of control. See
Note 2 for a summary of these reclassified amounts.





Note
10: Subsequent Events





On August
1, 2007, the Company purchased $5 million of the $85 million Second Lien Term
Loan (the “Second Lien TL”) for Excel Mining Systems LLC (“Excel”), a private
company headquartered in Bowerston, Ohio.  The Second Lien TL earns
interest at LIBOR plus 725 basis points and is secured by second liens on
substantially all of Excel’s assets.    Proceeds from the
Second Lien TL will be used primarily to refinance existing indebtedness and pay
a dividend .





Note
11: New Accounting Interpretations and Standards





In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157 , Fair Value Measurements
(“SFAS 157”), which defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements.  SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
although earlier application is encouraged.  The Company is currently
reviewing the requirements of SFAS 157 to determine the effect, if any, on its
financial position or results of operations.





In
February 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 159, The Fair Value Options for Financial
Assets and Financial Liabilities (“SFAS 159”),  which gives entities
the option to measure eligible financial assets and financial liabilities at
fair value on an instrument by instrument basis that are otherwise not permitted
to be accounted for at fair value under other accounting
standards.  The election to use the fair value option is available
when an entity first recognizes a financial asset or financial
liability.  Subsequent changes in fair value must be recorded in
earnings.  SFAS 159 is effective as of the beginning of a company’s
first fiscal year after November 15, 2007.  The Company is currently
reviewing the requirements of SFAS 159 to determine the effect, if any, on its
consolidated financial position or results of operations.





24




Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.





The
following analysis of our financial condition and results of operations should
be read in conjunction with our financial statements and the notes thereto
contained elsewhere in this report.





As
discussed in the Explanatory Note to this Amended Filing, the Company is
amending and restating its Original Filing of its Quarterly Report on Form 10−Q
for the three and six-month periods ended June 30, 2007. For a discussion of the
significant restatement adjustments and the background leading to the
adjustments, see Note 2, Restatement of Consolidated Financial Statements, in
Notes to Consolidated Financial Statements. All amounts in this Amended Filing
affected by the restatement adjustments reflect such amounts as
restated.





Forward-Looking
Statements





Certain
statements in this report that relate to estimates or expectations of our future
performance or financial condition may constitute “forward-looking statements”
as defined under the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to various risks and uncertainties, which
could cause actual results and conditions to differ materially from those
projected, including, but not limited to,





·
            uncertainties associated with the
      timing of transaction
closings;


·
            changes in the prospects of our
      portfolio companies;


·
            changes in interest
      rates;


·
            changes in regional, national or
      international economic conditions and their impact on the industries in
      which we invest;


·
            the future operating results of
      our portfolio companies and their ability to achieve their
      objectives;


·
            changes in the conditions of the
      industries in which we
invest;


·
            the adequacy of our cash
      resources and working
capital;


·
            the timing of cash flows, if any,
      from the operations of our portfolio
  companies;


·
            the ability of our Manager to
      locate suitable investments for us and to monitor and administer the
      investments; and


·
            other factors enumerated in our
      filings with the SEC.





We may
use words such as “anticipates,” “believes,” “expects,” “intends,” “will,”
“should,” “may” and similar expressions to identify forward-looking statements.
Such statements are based on currently available operating, financial and
competitive information and are subject to various risks and uncertainties that
could cause actual results to differ materially from our historical experience
and present expectations. Undue reliance should not be placed on such
forward-looking statements, as such statements speak only as of the date on
which they are made. Additional information regarding these and other risks and
uncertainties is contained in our periodic filings with the SEC.





Overview





We are a
financial services company created to invest primarily in debt securities of
small and mid-size private energy companies. We have elected to be treated as a
business development company under the 1940 Act and, as such, we are required to
comply with certain regulatory requirements. For instance, we generally have to
invest at least 70% of our total assets in “qualifying assets,” which are
securities of companies which do not have a class of securities listed on a
national exchange, cash, cash equivalents, U.S. government securities and
high-quality debt investments that mature in one year or less. In addition, for
tax purposes we operate so as to be treated as a RIC under the Code. Pursuant to
these elections, we generally will not have to pay corporate-level taxes on any
income and capital gains we distribute to our stockholders.





Our
investment objective is to generate both current income and capital appreciation
primarily through debt and equity investments or a combination
thereof.  A key focus area for our targeted investments in the energy
industry is domestic exploration and production businesses and midstream
businesses that gather, process and transport oil and gas. We also evaluate
investment opportunities in such businesses as coal, power, electricity, energy
services and alternative energy. Our investments will generally range in size
from $10 million to $50 million, although a few investments may be substantially
in excess of this range. Our targeted investments primarily consist of debt
instruments, including senior and subordinated loans combined in one facility
with an equity component, subordinated loans and subordinated loans with equity
components and preferred stock and other similar securities.





Our level
of investment activity can and does vary substantially from period to period
depending on many factors, including the amount of debt and equity capital
available to energy companies, the level of acquisition and divestiture activity
for such companies, the level and volatility of energy commodity prices, the
general economic environment and the competitive environment for the types of
investments we make. We believe that, for energy companies, capital from banks,
mezzanine providers and alternative investment vehicles such as hedge funds
continues to be readily available.  Competition for deals remains strong
with continued downward pressure on spreads. However, we do not expect this
intensely competitive market to impair our ability to make good long-term
investment decisions with our capital.   We remain committed to
our underwriting and investment disciplines in selectively investing in
appropriate risk-reward opportunities within the energy sector.





25




We
generate revenue in the form of interest income on the debt securities that we
own, dividend income on any common or preferred stock that we own, and capital
gains or losses on any debt or equity securities that we acquire in portfolio
companies and subsequently sell. Our investments, if in the form of
debt  or similar securities, typically have a term of three to seven
years and bear interest at a fixed or floating rate. To the extent achievable,
we seek to collateralize our investments by obtaining security interests in our
portfolio companies' assets. We also may acquire minority or majority equity
interests in our portfolio companies, which may pay cash or in-kind dividends on
a recurring or otherwise negotiated basis. In addition, we may generate revenue
in other forms including commitment, origination, structuring, administration or
due diligence fees; fees for providing managerial assistance; and possibly
consultation fees.  Any such fees generated in connection with our
investments are recognized as earned.





Portfolio
and Investment Activity





During
the three months ended June 30, 2007, we added three companies to our
portfolio.  In April 2007, we closed an investment in the Anadarko
Petroleum Corporation 2007-III Drilling Fund of Houston,
Texas.   The investment is in the form of a term net profits
interest.  NGPC’s commitment is for a total of approximately $95.0
million and as of June 30, 2007, approximately $22.5 million had been
funded.  In June 2007, we closed a $32 million senior secured credit
facility with DeanLake Operator, LLC, to acquire and develop oil and gas
properties located in Montgomery County, Texas.  Initial availability
under the facility was $17.3 million, and as of June 30, 2007, approximately
$11.4 million was drawn.  Additionally, as partial consideration for
providing the facility, NGPC received an overriding royalty interest and
warrants in DeanLake.  Also in June 2007, we provided a $40.0 million
senior secured credit facility to Formidable, LLC.  The facility has
an initial availability of $34.0 million and as of June 30, 2007, approximately
$27.2 million was funded.  The proceeds of the Formidable facility was
used to repay the existing C-Gas, LLC and Atchee CBM, LLC credit facilities and
to acquire additional oil and gas properties.  It will also fund
development and working capital.  As part of the transaction, NGPC
exchanged its overriding royalty interest in C-Gas, LLC and Atchee CBM, LLC
for  warrants in Formidable, LLC.





In April
2007, the Company made a follow-on investment with an existing portfolio
company, TierraMar Energy, LP to acquire additional oil and gas properties and
accelerate its development drilling program.  In connection with the
transaction, the Company exchanged its $10 million Senior Secured Note and
Warrants for preferred limited partnership interests in TierraMar and
contributed an additional $3.1 million of preferred equity capital that was used
to acquire additional oil and gas properties. The Company maintained its
overriding royalty interest in the properties and has committed to make
additional capital contributions up to $7.9 million to be used for capital
expenditures.





In May
2007, the Company expanded its commitment in an amended and restated $190.0
million Senior Secured Credit Facility with Nighthawk Transport I, LP, an
existing portfolio company.  The Company’s portion of the availability
under the amended and restated facility is $18.3 million, with approximately
$15.5 million funded as of June 30, 2007.





During
the three months ended June 30, 2007, four companies repaid their
facilities.  In May 2007, Piceance Basin Properties, LLC (“PBP”) fully
repaid the outstanding balance on its senior secured term loan of approximately
$5.2 million.  Concurrent with the debt repayment, NGPC realized a
capital gain of approximately $5.1 million through the sale of its warrant and
equity positions in PBP.  In June 2007, Energy XXI Gulf Coast, Inc.
repaid in full the $14.0 million balance on its second lien term
loan.  Also in June 2007, C-Gas, LLC and Atchee CBM, LLC repaid in
full their senior secured credit facilities, of approximately $22.8 million and
$2.2 million, respectively, with partial proceeds from the Formidable, LLC
facility.  In April 2007, Rubicon Energy Partners, LLC repaid in full
the $33.6 million balance outstanding on its senior secured term loan. NGPC
continues to hold its membership units, which represent a 50% ownership interest
in Rubicon.  Also during the second quarter of 2007, Chroma
Exploration & Production, Inc. repaid its $17.5 million senior secured term
loan and repurchased its overriding royalty interest resulting in a realized
capital gain of approximately $1.6 million.  NGPC continues to hold
its $2.0 million of Series A participating convertible preferred stock and has
also purchased $2.0 million of Chroma’s Series AA participating convertible
preferred stock.





Following
these transactions, as of June 30, 2007, NGPC had investments in 15 portfolio
companies invested as follows: 39.5% in senior secured term loans, 8.7% in
senior subordinated secured notes, 1.2% in participating convertible preferred
stock,  4.1% in corporate notes, 6.8% in member and partnership units,
6.2% in net profits interests, 28.0%  in U.S. Treasury Bills, and 5.5%
in cash and cash equivalents. At June 30, 2007, the weighted average yield on
targeted portfolio investments, exclusive of capital gains, was
12.2%.  The weighted average yield of our corporate notes was 5.5%.
The weighted average yield of our U.S. Treasury Bills and cash equivalents was
4.8%.  The weighted average yield on our total capital invested at
June 30, 2007 was 9.4%.  Yields are computed using interest rates as
of the balance sheet date and include amortization of loan discount points,
original issue discount and market premium or discount, weighted by their
respective costs when averaged.





26




Results
of Operations





Investment
Income





Investment
income for the quarter ended June 30, 2007 was $9.7 million with $7.7 million
attributable to targeted investments in nineteen portfolio companies, $0.3
million from corporate notes, $1.6 million attributable to investments in cash
equivalents, and $0.1 million in fee income from third parties and affiliates.
This compares to investment income for the quarter ended June 30, 2006 of $6.0
million with $4.6 million attributable to targeted investments in ten portfolio
companies, $0.3 million from corporate notes, $0.1 million in fee income from
third parties and affiliates, and $1.0 million attributable to investments in
cash equivalents, agency notes and auction rate securities.





For the
six months ended June 30, 2007, investment income increased by $7.2 million, or
approximately 65%, to $18.2 million from $11.0 million for the same period in
2006.  For the six months ended June 30, 2007, we recorded $14.4
million attributable to targeted investments in portfolio companies, $0.5
million from corporate notes, $3.1 million attributable to investments in cash
equivalents, and $0.2 million in fee income from third parties and
affiliates.  This compares to investment income of $7.7 million
attributable to targeted investments portfolio companies, $0.6 million from
corporate notes, $0.3 million in fee income from third parties and affiliates,
and $2.4 million attributable to investments in cash equivalents and auction
rate securities for the same period in 2006.





Operating
Expenses





For the
quarter ended June 30, 2007, operating expenses were $5.2 million compared to
$2.1 million for the quarter ended June 30, 2006. The 2007 amount consisted of
investment advisory and management and incentive fees of $2.6 million, insurance
expenses, administrative services fees, professional fees, directors’ fees,
organization costs and other general and administrative expenses of $1.0 million
and credit facility interest and fees of $1.6 million.  In comparison,
for the quarter ended June 30, 2006, investment advisory and management fees
were $1.1 million, insurance expenses, administrative services fees,
professional fees, directors’ fees, organization costs and other general and
administrative expenses were $0.9 million and credit facility fees were $0.1
million.





For the
six months ended June 30, 2007, operating expenses were $9.3 million compared to
$4.1 million for the same period of 2006. The 2007 amount consisted of
investment advisory and management and incentive fees of $4.2 million, insurance
expenses, administrative services fees, professional fees, directors’ fees,
organization costs and other general and administrative expenses of $1.9 million
and credit facility interest and fees of $3.2 million.  In comparison,
for the six months ended June 30, 2006, investment advisory and management fees
were $2.2 million, insurance expenses, administrative services fees,
professional fees, directors’ fees, organization costs and other general and
administrative expenses were $1.7 million and credit facility fees were $0.2
million.





Operating
expenses for the three and six month periods include our allocable portion of
the total organizational and operating expenses incurred by us, our Manager, and
our Administrator, as determined by our Board of Directors and representatives
of our Manager and our Administrator.  According to the terms of the
investment advisory agreement, the base management fee is calculated quarterly
as 0.45% of the average of the total assets of the Company as of the end of the
two previous quarters, an increase from the lesser of $900,000 or 0.375% of such
average.





Net
Investment Income Before Income Taxes





For the
second quarter of 2007, net investment income before income taxes was $4.5
million compared to $3.9 million for the second quarter of 2006, primarily due
to increased interest on the higher portfolio balances partially offset by
higher management and incentive fees,  general and administrative
expenses and interest and credit facility fees.   Net investment
income before income taxes for the six months ended June 30, 2007 was $8.9
million compared to $6.9 million for six months ended June 30, 2006 primarily
due to increased interest on the higher portfolio balances partially offset by
higher management and incentive fees,  general and administrative
expenses and interest and credit facility fees.





Unrealized
Appreciation or Depreciation on Investments





For the
quarter ended June 30, 2007, as restated, net unrealized appreciation before
income taxes of $1.4 million was $2.3 million, compared to $1.4 million net
unrealized depreciation for the second quarter of 2006.  The $3.7
million increase is attributable to $3.1 million in changes in the fair values
of our targeted investments and $0.6 million in changes in market prices of our
corporate notes.  For the six months ended June 30, 2007, as
restated, net unrealized appreciation before income taxes of $2.1
million was $6.0 million, compared to $2.5 million net unrealized
depreciation for the same period of 2006.  The $8.5 million increase
is attributable to $6.7 million in changes in the fair values of our targeted
investments and $1.8 million in changes in market prices of our corporate
notes.





27




Net
Realized Gains





For the
quarter ended June 30, 2007, as restated, we realized a capital gain of $6.7
million before income taxes of $0.2 million from the sale of client warrants and
overriding royalty interests.  No realized capital gains or losses
were recorded for the quarter or six months ended June 30, 2006.





Net
Increase in Stockholders’ Equity from Operations





For
the quarter ended June 30, 2007, as restated, we had a net increase in
stockholders’ equity (net assets) resulting from operations of $11.9 million, or
$0.70 per share, compared to $2.5 million, or $0.15 per share for the quarter
ended June 30, 2006.  For the six months ended June 30, 2007, as
restated, the net increase in stockholders’ equity (net assets) resulting
from operations was $19.3 million, or $1.12 per share, compared to $4.4 million,
or $0.25 per share for the six months ended  June 30,
2006.





Financial
Condition, Liquidity and Capital Resources





During
the first six months of this fiscal year, we generated cash from operations,
including interest earned on our portfolio securities, as well as our
investments in corporate notes, U.S. government securities and other high
quality debt securities that mature in one year or less.  At June 30,
2007, we had cash and cash equivalents of $19.7 million, investments in U.S.
Treasury Bills of $101.5 million and investments in corporate notes of $14.9
million.





As of
June 30, 2007, we had investments in or commitments to fund loan facilities to
15 portfolio companies totaling $338.0 million, of which $220.0 million was
drawn.  We expect to fund our investments in 2007 from income earned
on our portfolio and temporary investments and from borrowings under our Credit
Facilities.  (See description under “Note 4: Credit Facility”
above.)  In the future, we may also fund a portion of our investments
with issuances of equity or senior debt securities. We may also securitize a
portion of our investments.  We expect our primary use of funds to be
investments in portfolio companies, cash distributions to holders of our common
stock and payment of fees and other operating expenses.





On August
31, 2006, we simultaneously repaid our original credit facility and entered into
two new syndicated credit facilities totaling $180 million, with SunTrust Bank
as the administrative agent, each with a three year term. The first facility,
the Senior Secured Revolving Credit Facility (the “Investment Facility”) has an
initial availability of $80 million with the ability to increase availability to
$175 million over time.  Proceeds from the Investment Facility will be
used to supplement the Company’s equity capital in making portfolio
investments.  Interest on the Investment Facility will be charged at
either (i) LIBOR plus 125 to 225 basis points, based on the Company’s
outstanding borrowings, or (ii) the higher of the lender prime rate plus 25 to
75 basis points or the federal funds rate plus 50 basis points. The second
facility, the Senior Treasury Secured Revolving Credit Facility (the “Treasury
Facility”) permits the Company to borrow up to $100 million.  Proceeds
from the Treasury Facility will be used to facilitate the growth of the
Company’s investment portfolio and provide flexibility in the sizing of its
portfolio investments.  Interest on the Treasury Facility will be
charged at either (i) LIBOR plus 25 basis points, or (ii) the higher of the
lender prime rate or the federal funds rate plus 50 basis points.  The
credit facilities are collateralized by substantially all of our
assets.  As of June 30, 2007, the Company had $100 million outstanding
under the Treasury Facility and no balance outstanding under the Investment
Facility.





Dividends





We intend
to be taxed as a regulated investment company under Subchapter M of the Code for
2005 and later years. As a RIC, we will be required to distribute annually at
least 90% of our investment company taxable income and at least 98% of our
capital gain net income to avoid excise tax. We intend to make distributions to
our stockholders on a quarterly basis of amounts required to maintain our status
as a RIC. We also currently intend to make distributions of net realized capital
gains, if any, at least annually. However, we may in the future decide to retain
capital gains for investment and designate such retained dividends as a deemed
distribution.





We may
not be able to achieve operating results that will allow us to make
distributions at a specific level or to increase the amount of these
distributions from time to time. In addition, we may be limited in our ability
to make distributions due to the asset coverage test for borrowings when
applicable to us as a business development company under the 1940 Act and due to
provisions in our credit facilities. If we do not distribute a certain
percentage of our income annually, we will suffer adverse tax consequences,
including possible loss of our status as a regulated investment company. We
cannot assure stockholders that they will receive any distributions or
distributions at a particular level.





28




Portfolio
Credit Quality





We
maintain a system to evaluate the credit quality of our loans. This system is
intended to reflect the performance of a portfolio company’s business, the
collateral coverage of a loan, and other factors considered relevant. As of June
30, 2007, all of our investments in portfolio companies were performing
satisfactorily.  Investments approximating $14 million, or
approximately 6% of the $225.9 million in targeted investments, have been placed
on the Company’s watch list due to slower than expected development of the
assets supporting the investments.  We expect the assets to eventually
perform as planned and believe there is adequate collateral coverage and little
to no risk of loss of capital.





Recently
Issued Accounting Pronouncements





See
Note 11: New Accounting Interpretations and Standards in the accompanying
notes to consolidated financial statements for details of recently issued
accounting pronouncements and their expected impact on the Company’s financial
statements.





Item
3.  Quantitative and Qualitative Disclosures About Market
Risk.





There
have been no material changes from the information provided in Item 7A of the
Company’s Annual Report on Form 10-K for the year ended December 31,
2006.





Item
4. Controls and Procedures.





Disclosure
Controls and Procedures





We
maintain disclosure controls and procedures (as defined in 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended, which we refer to
as the Exchange Act), designed to ensure that information required to be
disclosed in our reports under the Exchange Act is recorded, processed,
summarized and reported on a timely basis and accumulated and made known to
management, including our Chief Executive Officer and our Chief Financial
Officer, to allow timely decisions regarding required disclosures.





In
connection with the preparation of this Quarterly Report on Form 10-Q/A, as of
the end of the fiscal period covered by this Quarterly Report on Form 10-Q/A
(June 30, 2007), the Company performed an evaluation, under the supervision and
with the participation of the Company’s management, including our Chief
Executive Officer and our Chief Financial Officer, of the effectiveness of the
design and operation of the Company’s disclosure controls and procedures
pursuant to Rules 13a-15(b) and 15d-15(b) under the Exchange Act.




After
giving effect to the restatement referred to below and based on an evaluation of
our disclosure controls and procedures as of the end of the period covered by
this Form 10-Q/A conducted by our management, with the participation of our
Chief Executive Officer and our Chief Financial Officer, our Chief Executive
Officer and our Chief Financial Officer concluded that our disclosure controls
and procedures were ineffective in providing reasonable assurance that
information required to be disclosed in the reports we file or submit under the
Exchange Act is recorded, processed, summarized and reported when required and
that such information is accumulated and communicated to management in a manner
that allows timely decisions regarding required disclosure. In light of this
material weakness, the Company performed additional analysis and post-closing
procedures to ensure the Company’s financial statements were prepared in
accordance with generally accepted accounting principles. After giving effect to
the restatements referred to below, and subject to the statements below
regarding our inability to maintain effective controls over the determination
and reporting of the provision for income taxes, the Company’s management has
concluded that the financial statements included in this Form 10-Q/A present
fairly in all material respects the Company’s financial condition, results of
operations and cash flows for the periods presented.





The
certifications of our Chief Executive Officer and our Chief Financial Officer
required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 are
attached as exhibits to this Form 10-Q/A. The disclosures set forth in this Item
4 contain information concerning (i) the evaluation of our disclosure controls
and procedures referred to in paragraph 4 of the certifications, and (ii)
material weaknesses in the design or operation of our internal control over
financial reporting referred to in paragraph 5 of those certifications. Those
certifications should be read in conjunction with this Item 4 for a more
complete understanding of the matters covered by the
certifications.





Discussion
of Material Weakness





Management’s
assessment identified a material weakness in the Company’s internal control over
financial reporting. As of June 30, 2007, the Company did not maintain effective
controls over the determination and reporting of the provision for income taxes.
This material weakness was initially disclosed in Item 9A of our Annual Report
on Form 10-K for the year ended December 31, 2008. As of December 31, 2009, our
management concluded that we had not yet remediated this previously disclosed
material weakness in our internal control over financial reporting.
Specifically, management did not perform a sufficiently precise review of the
2007, 2008 and 2009 financial statements to ensure the completeness and accuracy
of the Company’s calculation of its income tax provision and deferred income tax
assets and liabilities. This deficiency resulted in the restatement of the
Company’s consolidated financial statements for the years ended December 31,
2007 and 2008 (and the unaudited selected quarterly data for each of the
quarters in 2007 and 2008 and the first three quarters in 2009), and results in
a reasonable possibility that a material misstatement of the Company’s annual or
interim financial statements would not be prevented or detected on a timely
basis.





29





Remediation
Efforts





The
remediation efforts, as outlined below, are designed to address the material
weakness identified by management and to strengthen the Company’s internal
control over financial reporting.





Beginning
in the first quarter of 2009, the Company implemented the following remediation
steps to address this material weakness discussed above and to improve its
internal controls over financial reporting:





·
            improved
      procedures for the calculation and reconciliation process of our deferred
      income tax assets and liabilities, including validation of underlying
      supporting data;


·
            engaged
      external tax experts to support the Company’s financial closing and
      reporting process; and


·
            enhanced
      quarterly management review of the calculation of the deferred income tax
      assets and liabilities and underlying supporting
  data.





We
believe that these remediation actions will represent ongoing improvement
measures. While we have taken steps to remediate the material weakness,
additional measures may be required. The Company anticipates that it will
complete its testing of the additional internal control processes designed to
remediate the previously disclosed material weakness in 2010. We will continue
to assess the effectiveness of our remediation efforts in connection with our
management’s tests of internal control over financial reporting in conjunction
with our annual and quarterly reports.




Changes
in Internal Control Over Financial Reporting





There
were no changes in internal control over financial reporting during the quarter
ended June 30, 2007 that have materially affected or are reasonably likely to
materially affect, the Company’s internal control over financial
reporting.




PART II – OTHER
INFORMATION





Item
1. Legal Proceedings.





We are
not currently a defendant in any material legal proceeding, nor to our
knowledge, is any material legal proceeding threatened against us.





Item
1A.  Risk Factors.





Except as
provided below, there have been no material changes to the risk factors
disclosed under Part I, Item 1A, “Risk Factors” in our Annual Report on Form
10-K for the fiscal year ended December 31, 2006.





We
reported a material weakness in our internal control over financial reporting,
which resulted in material misstatements in our financial statements for the
years ended December 31, 2007 and December 31, 2008 and each of the quarters in
2007 and 2008 and the first three quarters of 2009 that required us to restate
certain of our historical financial statements. If we fail to improve our
internal control over financial reporting, we may not be able to accurately
report our financial results, which could have a material adverse effect on our
operations, investor confidence in our reported financial information and the
trading price of our securities.




Our Board
of Directors, and the members of our Audit Committee, upon management’s
recommendation, determined to restate certain of our historical financial
statements, including the financial statements for the period of this report.
Our management concluded that the accounting errors that necessitated the
restatement resulted from a control deficiency in our internal control over
financial reporting constituting a material weakness. Specifically, our
management concluded that we did not maintain effective controls over the
determination and provision for income taxes. See Note 2, Restatement of
Consolidated Financial Statements in “Part I – Item 1. Consolidated Financial
Statements” and “Part I – Item 4. Controls and Procedures.”





Management’s
assessment of our internal control over financial reporting as of December 31,
2008 identified a material weakness in our internal control over financial
reporting. As described in “Part I – Item 4. Controls and Procedures,” while the
Company has taken steps to remediate the previously disclosed material weakness,
the material weakness existed throughout the quarterly periods of 2009, and at
December 31, 2009, the Company had not yet completed its assessment as to
whether the material weakness had been fully remediated. The Company anticipates
that it will complete its testing of the additional internal control processes
designed to remediate the previously disclosed material weakness in 2010. Until
it is fully remediated, this material weakness could lead to errors in our
reported financial results and could have a material adverse effect on our
operations, investor confidence in our reported financial information and the
trading price of our securities.





30





Further,
we cannot assure you that additional significant deficiencies or material
weaknesses in our internal control over financial reporting will not be
identified in the future. Any failure to maintain or implement required new or
improved controls, or any difficulties we encounter in their implementation,
could result in additional significant deficiencies or material weaknesses, and
cause us to fail to meet our periodic reporting obligations or result in
material misstatements in our financial statements. Any such failure could also
adversely affect the results of periodic management evaluations and annual
auditor attestation reports regarding the effectiveness of our internal control
over financial reporting required under Section 404 of the Sarbanes-Oxley Act of
2002 and the rules promulgated thereunder. The existence of a material weakness
could result in errors in our financial statements that could result in a
restatement of financial statements, cause us to fail to meet our reporting
obligations and cause investors to lose confidence in our reported financial
information, leading to a decline in our stock price.




Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





Not
applicable.




Item
3. Defaults Upon Senior Securities.





Not
applicable.




Item
4. Submission of Matters to a Vote of Security Holders.




(a)           Our
annual meeting of stockholders was held on Wednesday, May 16, 2007.
 
 (b)           Proxies
were solicited by our Board of Directors pursuant to Regulation 14A under the
Securities and Exchange Act of 1934. There was no solicitation in opposition to
the Board of Directors’ nominees for directors as listed in the proxy statement,
and such nominees were duly elected as reported below.
 
 (c)           Out
of a total of 17,422,268 shares of our common stock outstanding and entitled to
vote, 16,138,105 shares were present in person or by proxy, representing
approximately 92.63% of the outstanding shares.
 
 (d)           Our
Board of Directors is divided into three classes, which we refer to as Class I,
Class II and Class III directors. The only matter voted on by the stockholders
at the 2007 annual meeting, as fully described in the proxy statement for the
annual meeting, was the election of two Class III directors. The following table
presents the number of shares voted for and withheld for each nominee for
director.
 
 Nominees
      for Director
                  
                  Number
      of Votes For
                  
                  Number
      of Votes WithheldKenneth
      A. Hersh
                  
                  15,086,589
                  
                  1,051,516James
      R. Latimer, III
                  
                  15,395,130
                  
                  742,975


Item
5. Other Information.





Not
applicable.





31




Item
6. Exhibits.




No.
            
            Exhibit3.1
            -
            Articles
      of Incorporation of NGP Capital Resources Company dated as of July 15,
      2004 (filed as Exhibit (a)(1) to the Company’s Registration Statement on
      Form N-2 dated November 9, 2004 (Registration No. 333-118279) and
      incorporated herein by reference)3.2
            -
            Articles
      of Amendment and Restatement of NGP Capital Resources Company dated as of
      October 29, 2004 (filed as Exhibit 3.2 to the Company’s Annual Report on
      Form 10-K for the year ended December 31, 2004, and incorporated herein by
      reference)3.3
            -
            Bylaws
      of NGP Capital Resources Company (filed as Exhibit (b) to the Company’s
      Registration Statement on Form N-2 dated August 16, 2004 (Registration No.
      333-118279) and incorporated herein by reference)10.1
            -
            Investment
      Advisory Agreement dated as of November 9, 2004, between NGP Capital
      Resources Company and NGP Investment Advisor, LP (filed as Exhibit 10.1 to
      the Company’s Annual Report on Form 10-K for the year ended December 31,
      2004, and incorporated herein by reference)10.2
            -
            Administration
      Agreement dated as of November 9, 2004, by and between NGP Capital
      Resources Company and NGP Administration, LLC (filed as Exhibit 10.2 to
      the Company’s Annual Report on Form 10-K for the year ended December 31,
      2004, and incorporated herein by reference)10.3
            -
            License
      Agreement dated as of November 9, 2004, by and between NGP Capital
      Resources Company and Natural Gas Partners, LLC (filed as Exhibit 10.3 to
      the Company’s Annual Report on Form 10-K  for the year ended
      December 31, 2004, and incorporated herein by reference)10.4
            -
            Joint
      Code of Ethics (filed as Exhibit (r) to the Company’s Registration
      Statement on Form N-2 dated November 9, 2004 (Registration No. 333-118279)
      and incorporated herein by reference)10.5
            -
            Form
      of Indemnity Agreement (filed as Exhibit 10.5 to the Company’s Annual
      Report on Form 10-K for the year ended December 31, 2004, and incorporated
      herein by reference)10.6
            -
            Revolving
      Credit Agreement dated as of May 16, 2005, by and between NGP Capital
      Resources Company, the lenders from time to time party thereto and
      SunTrust Bank (filed as Exhibit 10.4 to the Company’s Quarterly Report on
      Form 10-Q for the quarterly period ended June 30, 2005, and incorporated
      herein by reference)10.7
            -
            Amended
      and Restated Revolving Credit Agreement dated as of August 31, 2006, by
      and between NGP Capital Resources Company, the lenders from time to time
      party thereto and SunTrust Bank (filed as Exhibit 10.6 to the Company’s
      Quarterly Report on Form 10-Q for the quarterly period ended September 30,
      2006, and incorporated herein by reference)10.8
            -
            Treasury
      Secured Revolving Credit Agreement dated as of August 31, 2006, by and
      between NGP Capital Resources Company, the lenders from time to time party
      thereto and SunTrust Bank (filed as Exhibit 10.7 to the Company’s
      Quarterly Report on Form 10-Q for the quarterly period ended September 30,
      2006, and incorporated herein by reference)31.1*
            -
            Certification
      required by Rule 13a-14(a)/15d-14(a) by the Chief Executive
      Officer31.2*
            -
            Certification
      required by Rule 13a-14(a)/15d-14(a) by the Chief Financial
      Officer32.1*
            -
            Section
      1350 Certification by the Chief Executive Officer32.2*
            -
            Section
      1350 Certification by the Chief Financial Officer








32




SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.




NGP
      CAPITAL RESOURCES COMPANYDate:
      June 24, 2010
                                    
                                    By:
                                    /s/
      John H. HomierJohn
      H. HomierPresident
      and Chief Executive OfficerDate:
      June 24, 2010
                                    
                                    By:
                                    /s/
      Stephen K. GardnerStephen
      K. GardnerChief
      Financial Officer, Treasurer and Secretary










Index
to Exhibits




No.
                
                Exhibit3.1
                -
                Articles
      of Incorporation of NGP Capital Resources Company dated as of July 15,
      2004 (filed as Exhibit (a)(1) to the Company’s Registration Statement on
      Form N-2 dated November 9, 2004 (Registration No. 333-118279) and
      incorporated herein by reference)3.2
                -
                Articles
      of Amendment and Restatement of NGP Capital Resources Company dated as of
      October 29, 2004 (filed as Exhibit 3.2 to the Company’s Annual Report on
      Form 10-K for the year ended December 31, 2004, and incorporated herein by
      reference)3.3
                -
                Bylaws
      of NGP Capital Resources Company (filed as Exhibit (b) to the Company’s
      Registration Statement on Form N-2 dated August 16, 2004 (Registration No.
      333-118279) and incorporated herein by reference)10.1
                -
                Investment
      Advisory Agreement dated as of November 9, 2004, between NGP Capital
      Resources Company and NGP Investment Advisor, LP (filed as Exhibit 10.1 to
      the Company’s Annual Report on Form 10-K for the year ended December 31,
      2004, and incorporated herein by reference)10.2
                -
                Administration
      Agreement dated as of November 9, 2004, by and between NGP Capital
      Resources Company and NGP Administration, LLC (filed as Exhibit 10.2 to
      the Company’s Annual Report on Form 10-K for the year ended December 31,
      2004, and incorporated herein by reference)10.3
                -
                License
      Agreement dated as of November 9, 2004, by and between NGP Capital
      Resources Company and Natural Gas Partners, LLC (filed as Exhibit 10.3 to
      the Company’s Annual Report on Form 10-K  for the year ended
      December 31, 2004, and incorporated herein by reference)10.4
                -
                Joint
      Code of Ethics (filed as Exhibit (r) to the Company’s Registration
      Statement on Form N-2 dated November 9, 2004 (Registration No. 333-118279)
      and incorporated herein by reference)10.5
                -
                Form
      of Indemnity Agreement (filed as Exhibit 10.5 to the Company’s Annual
      Report on Form 10-K for the year ended December 31, 2004, and incorporated
      herein by reference)10.6
                -
                Revolving
      Credit Agreement dated as of May 16, 2005, by and between NGP Capital
      Resources Company, the lenders from time to time party thereto and
      SunTrust Bank (filed as Exhibit 10.4 to the Company’s Quarterly Report on
      Form 10-Q for the quarterly period ended June 30, 2005, and incorporated
      herein by reference)10.7
                -
                Amended
      and Restated Revolving Credit Agreement dated as of August 31, 2006, by
      and between NGP Capital Resources Company, the lenders from time to time
      party thereto and SunTrust Bank (filed as Exhibit 10.6 to the Company’s
      Quarterly Report on Form 10-Q for the quarterly period ended September 30,
      2006, and incorporated herein by reference)10.8
                -
                Treasury
      Secured Revolving Credit Agreement dated as of August 31, 2006, by and
      between NGP Capital Resources Company, the lenders from time to time party
      thereto and SunTrust Bank (filed as Exhibit 10.7 to the Company’s
      Quarterly Report on Form 10-Q for the quarterly period ended September 30,
      2006, and incorporated herein by reference)31.1*
                -
                Certification
      required by Rule 13a-14(a)/15d-14(a) by the Chief Executive
      Officer31.2*
                -
                Certification
      required by Rule 13a-14(a)/15d-14(a) by the Chief Financial
      Officer32.1*
                -
                Section
      1350 Certification by the Chief Executive Officer32.2*
                -
                Section
      1350 Certification by the Chief Financial Officer