UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 
 FORM
10-Q/A
 (Mark One)
 þ
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the quarterly period ended March 31, 2009
  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
                  incorporation or organization)
                (I.R.S. Employer
                  Identification No.)1221 McKinney Street, Suite 2975
                  Houston, Texas
                77010(Address of principal executive offices)
                (Zip Code)
  (713)
752-0062
 (Registrant’s
telephone number, including area code)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
 Yes þ  No o
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes  ̈ No  ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large
      accelerated filer     o
                    Accelerated
      filer     þ
                    Non-accelerated
      filer     o
                    Smaller
      reporting company     o(Do
      not check if smaller reporting
company)
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 Yes o   No þ
 
 As of May
7, 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
                29Item
      3. Quantitative and Qualitative Disclosures About Market
      Risk
                34Item
      4. Controls and Procedures
                34PART
      II – OTHER INFORMATION
                35Item
      1. Legal Proceedings
                35Item
      1A. Risk Factors
                35Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                35Item
      3. Defaults Upon Senior Securities
                35Item
      4. Submission of Matters to a Vote of Security Holders
                35Item
      5. Other Information
                35Item
      6. Exhibits
                36
  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 three month
period ended March 31, 2009, which we refer to as the Amended Filing, to restate
our unaudited consolidated financial statements and related disclosures for the
three-month period ended March 31, 2009, as discussed in Note 2 to the
accompanying restated unaudited consolidated financial
statements.  Our original Quarterly Report on Form 10-Q for the
quarter ended March 31, 2009, which we refer to as the Original Filing, was
filed with the Securities and Exchange Commission on May 11, 2009.
 
 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.
 
 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.  With the filing of this
Amended Filing, we are concurrently filing amendments to our Quarterly Reports
on Form 10−Q for each of the quarters ended March 31, in the Affected Periods
and
plan to subsequently file amendments to our Quarterly Reports on Form 10-Q for
each of the other quarters in 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 May 11, 2009, 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)March 31,
      2009
                
                
                December 31,
      2008(As
      Restated)
                
                
                (As
      Restated)AssetsInvestments in portfolio
      securities at fair valueControl
      investments - majority owned(cost:  $31,646,472
      and $30,570,810, respectively)
                
                $
                21,570,000
                
                
                $
                24,570,000Affiliate
      investments(cost:  $51,398,512
      and $46,558,058, respectively)
                
                
                49,462,688
                
                
                
                44,416,490Non-affiliate
      investments(cost:  $216,520,754
      and $217,303,347, respectively)
                
                
                157,185,107
                
                
                
                175,243,078Investments in corporate notes at
      fair value(cost:  $11,575,262
      and $11,586,899, respectively)
                
                
                6,113,300
                
                
                
                6,350,000Investments in commodity
      derivatives at fair value(cost:  $480,130
      and $774,095, respectively)
                
                
                4,729,234
                
                
                
                8,212,872Investments in U.S. Treasury
      Bills, at amortized costwhich
      approximates fair value
                
                
                76,134,101
                
                
                
                -Total
      investments
                
                
                315,194,430
                
                
                
                258,792,440Cash and cash
      equivalents
                
                
                26,916,388
                
                
                
                133,805,575Accounts receivable and other
      current assets
                
                
                203,844
                
                
                
                233,549Interest
      receivable
                
                
                2,730,634
                
                
                
                2,410,360Prepaid
    assets
                
                
                1,426,983
                
                
                
                1,898,905Deferred tax
      assets
                
                
                3,811,831
                
                
                
                1,853,612Total
      current assets
                
                
                35,089,680
                
                
                
                140,202,001Total
assets
                
                $
                350,284,110
                
                
                $
                398,994,441Liabilities and stockholders'
      equity (net assets)Current
      liabilitiesAccounts payable and accrued
      expenses
                
                $
                328,843
                
                
                $
                512,926Management and incentive fees
      payable
                
                
                1,833,848
                
                
                
                2,016,214Dividends
      payable
                
                
                4,325,640
                
                
                
                8,867,563Income taxes
      payable
                
                
                163,569
                
                
                
                3,529,308Current portion of long-term
      debt
                
                
                75,000,000
                
                
                
                75,000,000Total current
      liabilities
                
                
                81,651,900
                
                
                
                89,926,011Deferred tax
      liabilities
                
                
                1,753,861
                
                
                
                1,231,829Long-term debt, less current
      portion
                
                
                27,000,000
                
                
                
                45,000,000Total
      liabilities
                
                
                110,405,761
                
                
                
                136,157,840Commitments and
      contingencies  (Note 9)Stockholders’ equity (net
      assets)Common
      stock, $.001 par value, 250,000,000 shares
    authorized;21,628,202 shares issued and
      outstanding
                
                
                21,628
                
                
                
                21,628Paid-in
      capital in excess of par
                
                
                309,648,033
                
                
                
                309,648,033Undistributed
      net investment income (loss)
                
                
                (3,080,654
                )
                
                
                (3,296,608
                )Undistributed
      net realized capital gain (loss)
                
                
                2,038,312
                
                
                
                2,038,312Net
      unrealized appreciation (depreciation) of portfolio
      securities,corporate
      notes and commodity derivative instruments
                
                
                (68,748,970
                )
                
                
                (45,574,764
                )Total stockholders’ equity (net
      assets)
                
                
                239,878,349
                
                
                
                262,836,601Total liabilities and
      stockholders' equity (net assets)
                
                $
                350,284,110
                
                
                $
                398,994,441Net asset value per
      share
                
                $
                11.09
                
                
                $
                12.15
 
 (See
accompanying notes to consolidated financial statements)
  1
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (Unaudited)
  For the Three Months
      EndedMarch 31,
    2009
                
                
                March 31,
    2008(As
    Restated)
                
                
                (As
    Restated)Investment
      incomeInterest
      incomeControl
      investments - majority owned
                
                $
                -
                
                
                $
                120,914Affiliate
                
                
                1,356,076
                
                
                
                194,779Non-affiliate
      investments
                
                
                4,838,463
                
                
                
                8,636,423Royalty income
      (loss), net of amortizationControl
      investments - majority owned
                
                
                23,336
                
                
                
                28,015Non-affiliate
      investments
                
                
                (917,638
                )
                
                
                517,835Commodity
      derivative income, net of expired options
                
                
                3,173,852
                
                
                
                -Other
      income
                
                
                58,800
                
                
                
                40,370Total
      investment income
                
                
                8,532,889
                
                
                
                9,538,336Operating
      expensesManagement
      fees
                
                
                1,833,848
                
                
                
                1,800,206Professional
      fees
                
                
                166,727
                
                
                
                208,979Insurance
      expense
                
                
                200,221
                
                
                
                198,817Interest expense
      and fees
                
                
                997,842
                
                
                
                2,441,076State and excise
      taxes
                
                
                -
                
                
                
                9,516Other general
      and administrative expenses
                
                
                796,948
                
                
                
                738,600Total
      operating expenses
                
                
                3,995,586
                
                
                
                5,397,194Net investment income before
      income taxes
                
                
                4,537,303
                
                
                
                4,141,142Benefit (provision) for income
      taxes
                
                
                4,291
                
                
                
                22,202Net investment
      income
                
                
                4,541,594
                
                
                
                4,163,344Net increase (decrease) in
      unrealized appreciation(depreciation)
      on portfolio securities, corporate notes
                  and commodity
      derivative instrumentsControl
      investments- majority owned
                
                
                (4,075,662
                )
                
                
                63Affiliate
      investments
                
                
                205,744
                
                
                
                -Non-affiliate
      investments
                
                
                (20,690,114
                )
                
                
                (1,746,225
                )Benefit
      (provision) for taxes on unrealized gain
                
                
                1,385,826
                
                
                
                -Total
      net unrealized gain (loss) on investments
                
                
                (23,174,206
                )
                
                
                (1,746,162
                )Net increase (decrease) in
      stockholders' equity(net assets)
      resulting from operations
                
                $
                (18,632,612
                )
                
                $
                2,417,182Net increase (decrease) in
      stockholders' equity (net assets)resulting from
      operations per common share
                
                $
                (0.86
                )
                
                $
                0.14
 
 (See
accompanying notes to consolidated financial statements)
  2
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (NET ASSETS)
  Common
      Stock
                
                
                Paid-in
      Capitalin
      Excess
                
                
                UndistributedNet
      Investment
                
                
                UndistributedNet RealizedCapital
      Gain
                
                
                Net
      Unrealized Appreciation (Depreciation) of Portfolio Securities, Corporate
      Notes and Commodity Derivative
                
                
                TotalStockholders'EquityShares
                
                
                Amount
                
                
                of
      Par
                
                
                Income
      (Loss)
                
                
                (Loss)
                
                
                Instruments
                
                
                (Net
      Assets)Balance at
      December 31, 2008 (as restated)
                
                
                21,628,202
                
                
                $
                21,628
                
                
                $
                309,648,033
                
                
                $
                (3,296,608
                )
                
                $
                2,038,312
                
                
                $
                (45,574,764
                )
                
                $
                262,836,601Net increase
      (decrease) instockholders'
      equity(net
      assets)resulting
      from operations
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,541,594
                
                
                
                -
                
                
                
                (23,174,206
                )
                
                
                (18,632,612
                )Dividends
      declared
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (4,325,640
                )
                
                
                -
                
                
                
                -
                
                
                
                (4,325,640
                )Balance at March
      31, 2009 (unaudited & as restated)
                
                
                21,628,202
                
                
                $
                21,628
                
                
                $
                309,648,033
                
                
                $
                (3,080,654
                )
                
                $
                2,038,312
                
                
                $
                (68,748,970
                )
                
                $
                239,878,349
 
 (See
accompanying notes to consolidated financial statements)
  3
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (Unaudited)
 
 For
      the Three Months EndedMarch
      31, 2009
                    
                    
                    March
      31, 2008(As
      Restated)
                    
                    
                    (As
      Restated)Cash
      flows from operating activitiesNet
      increase (decrease) in stockholders' equity (net assets) resulting from
      operations
                    
                    $
                    (18,632,612
                    )
                    
                    $
                    2,417,182Adjustments
      to reconcile net increase (decrease) in stockholders' equity (net
      assets)resulting
      from operations to net cash provided by (used in) operating
      activitiesPayment-in-kind
      interest
                    
                    
                    (912,526
                    )
                    
                    
                    (1,728,817
                    )Net
      amortization of premiums, discounts and fees
                    
                    
                    1,445,811
                    
                    
                    
                    (301,353
                    )Change
      in unrealized (appreciation) depreciation on portfolio
      securities,corporate
      notes and commodity derivative instruments
                    
                    
                    24,560,032
                    
                    
                    
                    1,746,162Effects
      of changes in operating assets and liabilitiesAccounts
      receivable and other current assets
                    
                    
                    29,705
                    
                    
                    
                    (11,804
                    )Interest
      receivable
                    
                    
                    (320,274
                    )
                    
                    
                    (229,571
                    )Prepaid
      assets
                    
                    
                    471,922
                    
                    
                    
                    306,502Current
      portion of deferred income taxes
                    
                    
                    (1,958,219
                    )
                    
                    
                    -Non-current
      deferred income taxes
                    
                    
                    522,032
                    
                    
                    
                    -Accounts
      payable and accrued expenses
                    
                    
                    (366,449
                    )
                    
                    
                    (301,232
                    )Income
      taxes payable
                    
                    
                    (3,365,739
                    )
                    
                    
                    -Non-current
      portion of deferred income taxes
                    
                    
                    -
                    
                    
                    
                    (22,202
                    )Purchase
      of investments in portfolio securities, corporate
    notesand
      commodity derivative instruments
                    
                    
                    (11,136,736
                    )
                    
                    
                    (25,776,473
                    )Redemption
      of investments in portfolio securities, corporate
    notesand
      commodity derivative instruments
                    
                    
                    5,775,530
                    
                    
                    
                    28,024,331Net
      sale (purchase) of investments in U.S. Treasury
    Bills
                    
                    
                    (76,134,101
                    )
                    
                    
                    19,947,405Net
      cash provided by (used in) operating activities
                    
                    
                    (80,021,624
                    )
                    
                    
                    24,070,130Cash
      flows from financing activitiesBorrowings
      under revolving credit facility
                    
                    
                    27,000,000
                    
                    
                    
                    10,000,000Repayments
      on revolving credit facility
                    
                    
                    (45,000,000
                    )
                    
                    
                    (34,750,000
                    )Dividends
      paid
                    
                    
                    (8,867,563
                    )
                    
                    
                    (9,012,671
                    )Net
      cash used in financing activities
                    
                    
                    (26,867,563
                    )
                    
                    
                    (33,762,671
                    )Net
      increase (decrease) in cash and cash equivalents
                    
                    
                    (106,889,187
                    )
                    
                    
                    (9,692,541
                    )Cash
      and cash equivalents, beginning of period
                    
                    
                    133,805,575
                    
                    
                    
                    18,437,115Cash
      and cash equivalents, end of period
                    
                    $
                    26,916,388
                    
                    
                    $
                    8,744,574
 
 (See
accompanying notes to consolidated financial statements)
  4
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 March
31, 2009
 (Unaudited)
  Portfolio
      Company
                Energy Industry
      Segment
                Investment (1) (2)
      (4)
                
                Principal
                
                
                Cost
                
                
                Fair Value
    (3)TARGETED INVESTMENTS
      (22)Control Investments- Majority
      Owned (50% to 100% owned)DeanLake Operator,
      LLC
                Oil & Natural
      Gas
                Class A Preferred Units
      (5)
                
                
                
                
                $
                13,900,255
                
                
                $
                10,000,000Production and
      Development
                Overriding Royalty
      Interest
                
                
                
                
                
                18,705
                
                
                
                20,000Rubicon Energy
      Partners,
                Oil & Natural
      Gas
                LLC Units (4,000 units)
      (5)
                
                
                
                
                
                -
                
                
                
                750,000LLC
                Production and
      DevelopmentTierraMar Energy
      LP
                Oil & Natural
      Gas
                Class A Preferred LP Units
      (5)
                
                
                
                
                
                17,710,788
                
                
                
                10,500,000Production and
      Development
                Overriding Royalty
      Interest
                
                
                
                
                
                16,724
                
                
                
                300,000Total Control Investments-
      Majority Owned (50% to 100% owned)
                
                
                
                
                
                
                31,646,472
                
                
                
                21,570,000Affiliate Investments- (5% to 25%
      owned)BioEnergy Holding,
      LLC
                Alternative Fuels
      and
                Senior Secured
      Notes
                
                
                11,402,395
                
                
                
                10,573,392
                
                
                
                10,573,392Specialty
      Chemicals
                (15.00%, due
      3/06/2015)BioEnergy International Warrants
      (5) (15)
                
                
                
                
                
                
                595,845
                
                
                
                595,845BioEnergy Holding Units
      (5)
                
                
                
                
                
                
                376,687
                
                
                
                376,687Bionol Clearfield,
      LLC
                Alternative Fuels
      and
                Senior Secured Tranche
      C
                
                
                5,000,000
                
                
                
                5,000,000
                
                
                
                5,000,000Specialty
      Chemicals
                Construction
      Loan(LIBOR + 7.00%, due
      9/06/2016)Resaca Exploitation
      Inc.
                Oil & Natural
      Gas
                Senior
    Secured
                
                
                32,000,000
                
                
                
                31,617,332
                
                
                
                31,617,332Production and
      Development
                Multiple-Advance Term
      Loan(The greater of 10.0% or LIBOR +
      6.00%,due
    5/01/2012)Common Stock (6,574,216 shares)
      (5) (18)
                
                
                
                
                
                
                3,235,256
                
                
                
                1,299,432Total Affiliate Investments- (5%
      to 25% owned)
                
                
                
                
                
                
                
                51,398,512
                
                
                
                49,462,688Non-Affiliate Investments- (less
      than 5% owned)Alden Resources, LLC
      (19)
                Coal
    Production
                Senior
    Secured
                
                
                36,497,815
                
                
                
                34,097,802
                
                
                
                28,609,205Multiple-Advance Term
      Loan(LIBOR + 8.00% cash, LIBOR +
      11.0%default, due
      1/05/2013)Royalty
      Interest
                
                
                
                
                
                
                2,565,017
                
                
                
                7,500,000Warrants (5)
      (13)
                
                
                
                
                
                
                100,000
                
                
                
                -Anadarko Petroleum
      Corporation
                Oil & Natural
      Gas
                Multiple-Advance Net Profits
      Interest
                
                
                33,105,305
                
                
                
                33,196,620
                
                
                
                33,196,6202007-III
      Drilling Fund
                Production and
      Development
                (Due
    4/23/2032)ATP Oil & Gas
      Corporation
                Oil & Natural
      Gas
                Limited Term Royalty
      Interest
                
                
                
                
                
                
                22,533,099
                
                
                
                10,084,371Production and
      DevelopmentBlack Pool
      Energy
                Oil & Natural
      Gas
                Senior
    Secured
                
                
                5,137,635
                
                
                
                4,862,450
                
                
                
                4,862,450Partners,
      LLC
                Production and
      Development
                Multiple-Advance Term
      Loan(The greater of 12.00% or LIBOR
      +8.00 % cash, 14.00% or LIBOR
      +10.00% PIK, due
      10/24/2011)Overriding Royalty Interest
      (5)
                
                
                
                
                
                
                10,000
                
                
                
                10,000Warrants (5)
      (20)
                
                
                
                
                
                
                10,000
                
                
                
                10,000BSR Loco Bayou, LLC
      (8)
                Oil & Natural
      Gas
                Senior
    Secured
                
                
                2,844,820
                
                
                
                2,369,720
                
                
                
                1,507,631Production and
      Development
                Multiple-Advance Term
      Loan(LIBOR + 5.50% cash, LIBOR +
      8.50%default, due
      8/15/2009) (7)Overriding Royalty
      Interest
                
                
                
                
                
                
                19,294
                
                
                
                20,000Warrants (5)
      (10)
                
                
                
                
                
                
                10,000
                
                
                
                -Chroma Exploration
      &
                Oil & Natural
      Gas
                9,711 Shares Series A
      Participating
                
                
                
                
                
                
                2,221,710
                
                
                
                -Production,
      Inc.
                Production and
      Development
                Convertible Preferred Stock
      (7)8,868 Shares Series AA
      Participating
                
                
                
                
                
                
                2,089,870
                
                
                
                1,000,000Convertible Preferred Stock
      (7)8.11 Shares Common Stock
      (5)
                
                
                
                
                
                
                -
                
                
                
                -Warrants (5)
      (9)
                
                
                
                
                
                
                -
                
                
                
                -
  (See
accompanying notes to consolidated financial statements)
 
 5
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 March
31, 2009
 (Unaudited)
 (Continued)
 
 Portfolio
      Company
                                                                                                              Energy Industry
      Segment
                                                                                                              Investment (1) (2)
      (4)
                                                                                                              
                                                                                                              Principal
                                                                                                              
                                                                                                              
                                                                                                              Cost
                                                                                                              
                                                                                                              
                                                                                                              Fair Value
    (3)TARGETED INVESTMENTS (22) -
      ContinuedNon-Affiliate Investments- (less
      than 5% owned)- ContinuedCrossroads Energy,
      LP
                                                                                                              Oil & Natural
      Gas
                                                                                                              Senior
    Secured
                                                                                                              
                                                                                                              
                                                                                                              5,186,941
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              5,167,097
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              5,167,097Production and
      Development
                                                                                                              Multiple-Advance Term
      Loan(The greater of 10.0% or LIBOR +
      5.50%,due
      6/29/2009)Overriding Royalty
      Interest
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              4,726
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              250,000Formidable, LLC
      (17)
                                                                                                              Oil & Natural
      Gas
                                                                                                              Senior
    Secured
                                                                                                              
                                                                                                              
                                                                                                              37,949,866
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              37,949,866
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              5,600,000Production and
      Development
                                                                                                              Multiple-Advance Term
      Loan(LIBOR + 5.50% cash, LIBOR +
      8.50%default, due 5/31/2008)
      (7)Warrants (5)
      (14)
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              500,000
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              -Greenleaf Investments,
      LLC
                                                                                                              Oil & Natural
      Gas
                                                                                                              Senior
    Secured
                                                                                                              
                                                                                                              
                                                                                                              12,229,693
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              11,977,877
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              11,977,877Production and
      Development
                                                                                                              Multiple-Advance Term
      Loan(The greater of 10.50% or LIBOR +
      6.50%,due
    4/30/2011)Overriding Royalty
      Interest
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              77,984
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              300,000Nighthawk Transport I,
      LP
                                                                                                              Energy
    Services
                                                                                                              Second Lien
                                                                                                              
                                                                                                              
                                                                                                              12,957,853
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              12,334,854
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              8,929,131Term Loan B(The greater of 21.0% or LIBOR +
      16.50%,w/ PIK option available up to
      6.0%,due
    10/03/2010)LP Units
(5)
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              224
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              -Warrants (5)
      (12)
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              850,000
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              -Second Lien
                                                                                                              
                                                                                                              
                                                                                                              1,450,404
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              1,430,208
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              1,075,842Delayed Draw Term Loan
      B(The greater of 21.0% or LIBOR +
      16.50%,w/ PIK option available up to
      6.0%,due
    10/03/2010)Sonoran Energy,
      Inc.
                                                                                                              Oil & Natural
      Gas
                                                                                                              Warrants (5)
      (11)
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              10,000
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              -Production and
      DevelopmentTammany Oil & Gas,
      LLC
                                                                                                              Oil & Natural
      Gas
                                                                                                              Senior
    Secured
                                                                                                              
                                                                                                              
                                                                                                              30,197,804
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              29,994,883
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              29,994,883Production and
      Development
                                                                                                              Multiple-Advance Term
      Loan(The greater of 11.0% or LIBOR +
      6.00%,due
      3/21/2010)Overriding Royalty Interest
      (5)
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              200,000
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              550,000Venoco,
Inc.
                                                                                                              Oil & Natural
      Gas
                                                                                                              Senior Notes
      (6)
                                                                                                              
                                                                                                              
                                                                                                              12,000,000
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              11,937,453
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              6,540,000Production and
      Development
                                                                                                              (8.75%, due
      12/15/2011)Total Non-Affiliate Investments-
      (less than 5% owned)
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              216,520,754
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              157,185,107Subtotal
      Targeted Investments (66.7% of total investments)
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              299,565,738
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              228,217,795
 (See
accompanying notes to consolidated financial statements)
  6
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 March
31, 2009
 (Unaudited)
 (Continued)
 
 Portfolio
      Company
                                                                                                                                                  Energy Industry
      Segment
                                                                                                                                                  Investment (1) (2)
      (4)
                                                                                                                                                  
                                                                                                                                                  Principal
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Cost
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Fair Value
    (3)CORPORATE NOTES
      (22)Pioneer Natural Resources
      Co.
                                                                                                                                                  Oil & Natural
      Gas
                                                                                                                                                  Senior Notes, 7.2%, due
      2028
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  10,000,000
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  11,575,262
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  6,113,300Production and
      DevelopmentSubtotal
      Corporate Notes ( 1.79% of total investments)
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  11,575,262
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  6,113,300COMMODITY DERIVATIVE INSTRUMENTS
      (22)Put Options
      (16)
                                                                                                                                                  
                                                                                                                                                  Put Options with BP Corporation
      North America, Inc. to sell up to 615,000 MMBtu of natural gas at a
      strike price of $10.00 per MMBtu. 12 monthly contracts beginning on
      July 1, 2008 and expiring on June 30,
      2009.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  54,405
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  586,229Put Options with BP Corporation
      North America, Inc. to sell up to 237,750 Bbls of crude oil at a
      strike price of $101.00 per Bbl. 15 monthly contracts beginning on July 1,
      2008 and expiring on September 30,
      2009.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  284,900
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  3,164,568Put Options with BP Corporation
      North America, Inc. to
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  140,825
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  978,437sell
      up to 32,750 Bbls of crude oil at a
      strike price of $85.00 per Bbl. 4 monthly contracts beginning
      on October 1, 2009 and expiring on January 31,
      2010.Subtotal
      Commodity Derivatives ( 1.39% of total investments)
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  480,130
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  4,729,234GOVERNMENT SECURITIES
      (21)U.S. Treasury
      Bills
                                                                                                                                                  U.S. Treasury Bills, 0.13%, due
      05/07/2009
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  50,000,000
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  49,993,500
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  49,993,500U.S. Treasury
      Bills
                                                                                                                                                  U.S. Treasury Bills, 0.13%, due
      05/07/2009
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  26,144,000
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  26,140,601
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  26,140,601Subtotal
      Government Securities (22.25% of total investments)
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  76,134,101
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  76,134,101CASHSubtotal Cash
      (7.87% of total investments)
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  26,916,388
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  26,916,388TOTAL INVESTMENTS, CASH AND CASH
      EQUIVALENTS
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  414,671,619
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  342,110,818LIABILITIES IN EXCESS OF OTHER
      ASSETS (23)
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  (102,232,469
                                                                                                                                                  )NET ASSETS
    (23)
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  239,878,349
 (See
accompanying notes to consolidated financial statements)
  7
 
 NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 March
31, 2009
 (Unaudited)
 (Continued)
 
 NOTES TO CONSOLIDATED
SCHEDULE OF INVESTMENTS
  (1)
                All
      investments are pledged as collateral for obligations uder the Company's
      credit facilities.
 (2)
                Percentages
      represent interest rates in effect at the end of the period 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)
                Non-accrual
      status.
 (8)
                BSR
      Loco Bayou was issued a written notice of
  default.
 (9)
                Chroma
      warrants expire on April 5, 2012 and provide the Company the right to
      purchase 2,462 shares of common stock at a purchase price of $75.00 per
      share.
 (10)
                BSR
      Loco Bayou warrants expire on August 15, 2013 and provide the Company the
      right to purchase 10,000 investor units at the exercise price of $160.00
      per investor unit.
 (11)
                Sonoran
      warrants expire on November 28, 2014 and provide the Company the right to
      purchase shares of common stock up to 2.87 million shares, on a fully
      diluted basis with anti-dilution provisions, at the exercise price of
      $0.20 per share.
 (12)
                Nighthawk
      warrants expire on May 13, 2017 and provide the Company the right to
      purchase approximately 7.1% of limited partnership units at the exercise
      price of $0.001 per unit.
 (13)
                Alden
      warrants provide the Company the right to purchase 23% of class C units at
      an exercise price of $0.739 per unit, expiring in December 2013 and the
      right to purchase 10% of class C units at an exercise price of $0.739 per
      unit, expiring in July 2014.
 (14)
                Formidable
      warrants expire on March 31, 2015 and provide the Company the right to
      purchase membership interest representing 30% of all distributions at an
      exercise price of $1,000 per percentage
point.
 (15)
                BioEnergy
      International, LLC warrants expire on August 15, 2010 and provide the
      Company the right to purchase  648,000 units, representing
      membership interests of BioEnergy International, LLC, at
      the  purchase price of $10.00 per
  unit.
 (16)
                Put
      Options are related to the limited term royalty interest purchased from
      ATP Oil & Gas Corporation.
 (17)
                Formidable
      was issued a written notice of default on February 13,
    2009.
 (18)
                Resaca
      stock is listed on the Alternative Investment Market of the London Stock
      Exchange, denominated in British pounds and its reported fair value at
      March 31, 2009 has been converted to U.S. dollars at the exchange rate
      effective on March 31, 2009.
 (19)
                Alden
      was issued a written notice of default on February 5, 2009 and entered
      into a forbearance agreement on April 16,
2009.
 (20)
                Black
      Pool warrants expire seven years after repayment of principal and interest
      and provide the Company the right to purchase approximately 25% of
      membership interest at the exercise price of $0.01 per
    unit.
 (21)
                Investments
      in U.S. Treasury instruments are level 1 securities per SFAS No. 157
      hierarchy.
 (22)
                All
      investments in portfolio securities, corporate notes and commodity
      derivative instruments are level 3 securities per SFAS
      No. 157 hierarchy.
 (23)
                As
      restated.
 (See
accompanying notes to consolidated financial statements)
  8
  NGP CAPITAL RESOURCES
COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 December
31, 2008
 Portfolio
      Company
                  Energy Industry
      Segment
                  Investment (1) (2)
      (4)
                  
                  Principal
                  
                  
                  Cost
                  
                  
                  Fair Value
    (3)TARGETED INVESTMENTS
      (22)Control Investments - Majority
      Owned (50% to 100% owned)DeanLake Operator,
      LLC
                  Oil & Natural
      Gas
                  Class A Preferred Units - 100% of
      outstanding
                  
                  
                  
                  
                  $
                  13,900,255
                  
                  
                  $
                  10,000,000Production and
      Development
                  units representing 100% ownership
      ofDeanLake Operator, LLC until
      payout,80% after payout
      (5)Overriding Royalty
      Interest
                  
                  
                  
                  
                  
                  18,897
                  
                  
                  
                  20,000Rubicon Energy
      Partners,
                  Oil & Natural
      Gas
                  LLC Units (4,000 units)
      representing
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  750,000LLC
                  Production and
      Development
                  50% ownership of the assets
      ofRubicon Energy Partners, LLC
      (5)TierraMar Energy
      LP
                  Oil & Natural
      Gas
                  Class A Preferred LP Units - 100%
      of
                  
                  
                  
                  
                  
                  16,634,830
                  
                  
                  
                  13,500,000Production and
      Development
                  outstanding units representing
      100% ownershipof TierraMar Energy LP until
      payout,67% after payout
      (5)Overriding Royalty
      Interest
                  
                  
                  
                  
                  
                  16,828
                  
                  
                  
                  300,000Total Control Investments -
      Majority Owned (50% to 100% owned)
                  
                  
                  
                  
                  
                  30,570,810
                  
                  
                  
                  24,570,000Affiliate Investments - (5% to 25%
      owned)BioEnergy Holding,
      LLC
                  Alternative Fuels
      and
                  Senior Secured
      Notes
                  
                  
                  10,606,557
                  
                  
                  
                  9,757,613
                  
                  
                  
                  9,757,613Specialty
      Chemicals
                  (15.00%, due
      3/06/2015)BioEnergy International Warrants
      (5) (15)
                  
                  
                  
                  
                  
                  
                  595,845
                  
                  
                  
                  595,845BioEnergy Holding Units - 11.54%
      of outstanding
                  
                  
                  
                  
                  
                  
                  376,687
                  
                  
                  
                  376,687units of BioEnergy Holdings, LLC
      (5)Bionol Clearfield, LLC
      (21)
                  Alternative Fuels
      and
                  Senior Secured Tranche
      C
                  
                  
                  5,000,000
                  
                  
                  
                  5,000,000
                  
                  
                  
                  5,000,000Specialty
      Chemicals
                  Construction
      Loan(LIBOR + 7.00%, due
      9/06/2016)Resaca Exploitation
      Inc.
                  Oil & Natural
      Gas
                  Senior
    Secured
                  
                  
                  28,000,000
                  
                  
                  
                  27,592,657
                  
                  
                  
                  27,592,657Production and
      Development
                  Multiple-Advance Term
      Loan(The greater of 10.0% or LIBOR +
      6.00%,due
    5/01/2012)Common Stock (6,574,216 shares) -
      representing
                  
                  
                  
                  
                  
                  
                  3,235,256
                  
                  
                  
                  1,093,6887.13% of outstanding common stock
      ofResaca Exploitation Inc. (5)
      (18)Total Affiliate Investments - (5%
      to 25% owned)
                  
                  
                  
                  
                  
                  
                  
                  46,558,058
                  
                  
                  
                  44,416,490Non-affiliate Investments - (Less
      than 5% owned)Alden Resources, LLC
      (19)
                  Coal
    Production
                  Senior
    Secured
                  
                  
                  36,285,168
                  
                  
                  
                  33,772,038
                  
                  
                  
                  28,283,440Multiple-Advance Term
      Loan(LIBOR + 8.00% cash, due
      1/05/2013)Royalty
      Interest
                  
                  
                  
                  
                  
                  
                  2,565,017
                  
                  
                  
                  7,500,000Warrants (5)
      (13)
                  
                  
                  
                  
                  
                  
                  100,000
                  
                  
                  
                  -Anadarko Petroleum
      Corporation
                  Oil & Natural
      Gas
                  Multiple-Advance Net Profits
      Interest
                  
                  
                  37,255,948
                  
                  
                  
                  37,352,982
                  
                  
                  
                  37,352,9822007-III
      Drilling Fund
                  Production and
      Development
                  (Due
    4/23/2032)ATP Oil & Gas
      Corporation
                  Oil & Natural
      Gas
                  Limited Term Royalty
      Interest
                  
                  
                  
                  
                  
                  
                  24,319,585
                  
                  
                  
                  12,219,000Production and
      DevelopmentBlack Pool
      Energy
                  Oil & Natural
      Gas
                  Senior
    Secured
                  
                  
                  302,497
                  
                  
                  
                  12,498
                  
                  
                  
                  12,498Partners,
      LLC
                  Production and
      Development
                  Multiple-Advance Term
      Loan(The greater of 12.00% or LIBOR
      +8.00 % cash, 14.00% or LIBOR
      +10.00% PIK, due
      10/24/2011)Overriding Royalty Interest
      (5)
                  
                  
                  
                  
                  
                  
                  10,000
                  
                  
                  
                  10,000Warrants (5)
      (20)
                  
                  
                  
                  
                  
                  
                  10,000
                  
                  
                  
                  10,000
 
 (See
accompanying notes to consolidated financial statements)
  9
  NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 December
31, 2008
 (continued)
 Portfolio
      Company
                  Energy Industry
      Segment
                  Investment (1) (2)
      (4)
                  
                  Principal
                  
                  
                  Cost
                  
                  
                  Fair Value
    (3)TARGETED INVESTMENTS (22) -
      ContinuedNon-affiliate Investments - (Less
      than 5% owned) - ContinuedBSR Loco Bayou, LLC
      (8)
                  Oil & Natural
      Gas
                  Senior
    Secured
                  
                  
                  2,888,986
                  
                  
                  
                  2,401,884
                  
                  
                  
                  1,539,795Production and
      Development
                  Multiple-Advance Term
      Loan(LIBOR + 5.50% cash, LIBOR +
      8.50%default, due
      8/15/2009) (7)Overriding Royalty
      Interest
                  
                  
                  
                  
                  
                  
                  19,372
                  
                  
                  
                  20,000Warrants (5)
      (10)
                  
                  
                  
                  
                  
                  
                  10,000
                  
                  
                  
                  -Chroma Exploration
      &
                  Oil & Natural
      Gas
                  9,711 Shares Series A
      Participating
                  
                  
                  
                  
                  
                  
                  2,221,710
                  
                  
                  
                  -Production,
      Inc.
                  Production and
      Development
                  Convertible Preferred Stock
      (7)8,868 Shares Series AA
      Participating
                  
                  
                  
                  
                  
                  
                  2,089,870
                  
                  
                  
                  1,000,000Convertible Preferred Stock
      (7)8.11 Shares Common Stock
      (5)
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  -Warrants (5)
      (9)
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  -Crossroads Energy,
      LP
                  Oil & Natural
      Gas
                  Senior
    Secured
                  
                  
                  4,820,204
                  
                  
                  
                  4,781,487
                  
                  
                  
                  4,781,487Production and
      Development
                  Multiple-Advance Term
      Loan(The greater of 10.0% or LIBOR +
      5.50%,due
      6/29/2009)Overriding Royalty
      Interest
                  
                  
                  
                  
                  
                  
                  5,120
                  
                  
                  
                  250,000Formidable, LLC
      (17)
                  Oil & Natural
      Gas
                  Senior
    Secured
                  
                  
                  37,299,054
                  
                  
                  
                  37,299,054
                  
                  
                  
                  22,500,000Production and
      Development
                  Multiple-Advance Term
      Loan(LIBOR + 5.50% cash, LIBOR +
      8.50%default, due 5/31/2008)
      (7)Warrants (5)
      (14)
                  
                  
                  
                  
                  
                  
                  500,000
                  
                  
                  
                  -Greenleaf Investments,
      LLC
                  Oil & Natural
      Gas
                  Senior
    Secured
                  
                  
                  12,229,693
                  
                  
                  
                  11,951,818
                  
                  
                  
                  11,951,818Production and
      Development
                  Multiple-Advance Term
      Loan(The greater of 10.50% or LIBOR +
      6.50%,due
    4/30/2011)Overriding Royalty
      Interest
                  
                  
                  
                  
                  
                  
                  86,263
                  
                  
                  
                  300,000Nighthawk Transport I,
      LP
                  Energy
    Services
                  Second Lien
                  
                  
                  12,895,524
                  
                  
                  
                  12,184,611
                  
                  
                  
                  8,929,131Term Loan B(The greater of 15.0% or LIBOR +
      10.50%,due
    10/03/2010)LP Units
(5)
                  
                  
                  
                  
                  
                  
                  224
                  
                  
                  
                  -Warrants (5)
      (12)
                  
                  
                  
                  
                  
                  
                  850,000
                  
                  
                  
                  -Second Lien
                  
                  
                  1,443,427
                  
                  
                  
                  1,420,362
                  
                  
                  
                  1,075,842Delayed Draw Term Loan
      B(The greater of 15.0% or LIBOR +
      10.50%,due
    10/03/2010)Sonoran Energy,
      Inc.
                  Oil & Natural
      Gas
                  Warrants (5)
      (11)
                  
                  
                  
                  
                  
                  
                  10,000
                  
                  
                  
                  -Production and
      Development
 (See
accompanying notes to consolidated financial statements)
  10
  NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 December
31, 2008
 (continued)
  Issuing
    Company
                  Energy Industry
      Segment
                  Investment (1) (2)
      (4)
                  
                  Principal
                  
                  
                  Cost
                  
                  
                  Fair Value
    (3)TARGETED INVESTMENTS (22) -
      ContinuedNon-affiliate Investments - (Less
      than 5% owned) - ContinuedTammany Oil & Gas,
      LLC
                  Oil & Natural
      Gas
                  Senior
    Secured
                  
                  
                  31,447,804
                  
                  
                  
                  31,197,085
                  
                  
                  
                  31,197,085Production and
      Development
                  Multiple-Advance Term
      Loan(The greater of 11.0% or LIBOR +
      6.00%,due
      3/21/2010)Overriding Royalty Interest
      (5)
                  
                  
                  
                  
                  
                  
                  200,000
                  
                  
                  
                  550,000Venoco,
Inc.
                  Oil & Natural
      Gas
                  Senior Notes
      (6)
                  
                  
                  12,000,000
                  
                  
                  
                  11,932,367
                  
                  
                  
                  5,760,000Production and
      Development
                  (8.75%, due
      12/15/2011)Total Non-affiliate Investments -
      (Less than 5% owned)
                  
                  
                  
                  
                  
                  
                  $
                  217,303,347
                  
                  
                  $
                  175,243,078Subtotal
      Targeted Investments (58.76% of total investments)
                  
                  
                  
                  
                  
                  
                  $
                  294,432,215
                  
                  
                  $
                  244,229,568CORPORATE NOTES
      (22)Pioneer Natural Resources
      Co.
                  Oil & Natural
      Gas
                  Senior Notes, 7.2%, due
      2028
                  
                  $
                  10,000,000
                  
                  
                  $
                  11,586,899
                  
                  
                  $
                  6,350,000Production and
      DevelopmentSubtotal
      Corporate Notes ( 1.62% of total investments)
                  
                  
                  
                  
                  
                  
                  $
                  11,586,899
                  
                  
                  $
                  6,350,000COMMODITY DERIVATIVE INSTRUMENTS
      (22)Put Options
      (16)
                  
                  Put Options with BP Corporation
      North America, Inc. to sell up to
                  
                  
                  $
                  141,570
                  
                  
                  $
                  933,484615,000 MMBtu of natural gas at a
      strike price of $10.00 per MMBtu.12 monthly contracts beginning on
      July 1, 2008 and expiring on June 30, 2009.Put Options with BP Corporation
      North America, Inc. to sell up to
                  
                  
                  
                  491,700
                  
                  
                  
                  6,146,906237,750 Bbls of crude oil at a
      strike price of $101.00 per Bbl. 15 monthlycontracts beginning on July 1,
      2008 and expiring on September 30, 2009.Put Options with BP Corporation
      North America, Inc. to sell up to
                  
                  
                  
                  140,825
                  
                  
                  
                  1,132,48232,750 Bbls of crude oil at a
      strike price of $85.00 per Bbl. 4 monthlycontracts beginning on October 1,
      2009 and expiring on January 31, 2010.Subtotal
      Commodity Derivatives ( 2.1% of total investments)
                  
                  
                  
                  
                  
                  
                  $
                  774,095
                  
                  
                  $
                  8,212,872CASHSubtotal Cash
      (34.08% of total investments)
                  
                  
                  
                  
                  
                  
                  $
                  133,805,575
                  
                  
                  $
                  133,805,575TOTAL INVESTMENTS, CASH AND CASH
      EQUIVALENTS
                  
                  
                  
                  
                  
                  
                  $
                  440,598,784
                  
                  
                  $
                  392,598,015LIABILITIES IN EXCESS OF OTHER
      ASSETS (23)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  $
                  (129,761,414
                  )NET ASSETS
    (23)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  $
                  262,836,601
  (See
accompanying notes to consolidated financial statements)
  11
  NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
SCHEDULE OF INVESTMENTS
 December
31, 2008
 (continued)
  Notes
to Consolidated Schedule of Investments
 
 (1)
                All
      investments are pledged as collateral for obligations under the Company's
      credit facility.
  (2)
                Percentages
      represent interest rates in effect at the end of the period 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)
                Non-accrual
      status.
  (8)
                Portfolio
      company was issued a written notice of
default.
  (9)
                Chroma
      warrants expire on April 5, 2012 and provide the Company the right to
      purchase 2,462 shares of common stock at a purchase price of $75.00 per
      share.
  (10)
                BSR
      Loco Bayou warrants expire on August 15, 2013 and provide the Company the
      right to purchase 10,000 investor units at the exercise price of $160.00
      per investor unit.
  (11)
                Sonoran
      warrants expire on November 28, 2014 and provide the Company the right to
      purchase shares of common stock up to 2.87 million shares, on a fully
      dilutedbasis
      with anti-dilution provisions, at the exercise price of $0.20 per
      share.
  (12)
                Nighthawk
      warrants expire on May 13, 2017 and provide the Company the right to
      purchase approximately 2.5% of limited partnership units at the exercise
      priceof
      $0.001 per unit.
  (13)
                Alden
      warrants provide the Company the right to purchase 23% of class C units at
      an exercise price of $0.739 per unit, expiring in December 2013 and the
      right to purchase 10% of class C units at an exercise price of $0.739 per
      unit, expiring in July 2014.
  (14)
                Formidable
      warrants expire on March 31, 2015 and provide the Company the right to
      purchase membership interest representing 30% of all distributions at an
      exercise price of $1,000 per percentage
point.
  (15)
                BioEnergy
      International, LLC warrants expire on August 15, 2010 and provide the
      Company the right to purchase  648,000 units, representing
      membership interests of BioEnergy International, LLC, at
      the  purchase price of $10.00 per
  unit.
  (16)
                Put
      Options are related to the limited term royalty interest purchased from
      ATP Oil & Gas Corporation.
  (17)
                Portfolio
      company was issued a written notice of default on February 13,
      2009.
  (18)
                Resaca
      stock is listed on the Alternative Investment Market of the London Stock
      Exchange, denominated in British pounds and its reported fair value at
      December 31, 2008 has been converted to U.S. dollars at the exchange rate
      effective on December 31,
2008.
  (19)
                Portfolio
      company was issued a written notice of default on February 5,
      2009.
  (20)
                Black
      Pool warrants expire seven years after repayment of principal and interest
      and provide the Company the right to purchase approximately 25% of
      membership interest at the exercise price of $0.01 per
      unit.
  (21)
                Bionol
      Clearfield, LLC is owned 100% by BioEnergy Holdings,
      LLC.
  (22)
                Level
      3 security.
  (23)
                As
      restated.
  (See
accompanying notes to consolidated financial statements)
 12
  NGP
CAPITAL RESOURCES COMPANY
 CONSOLIDATED
FINANCIAL HIGHLIGHTS
 (Unaudited)
  For the Three
      Months EndedMarch 31,
      2009
                      
                      
                      March 31,
      2008(As
      Restated)
                      
                      
                      (As
      Restated)Per Share
      Data  (1)Net asset value, beginning of
      period
                      
                      $
                      12.15
                      
                      
                      $
                      14.14Net investment
      income
                      
                      
                      0.21
                      
                      
                      
                      0.24Net realized and unrealized gain
      (loss) on portfolio securities,corporate notes
      and commodity derivative instruments (3)
                      
                      
                      (1.07
                      )
                      
                      
                      (0.10
                      )Net increase (decrease) in
      stockholders' equity (net assets)resulting from
      operations
                      
                      
                      (0.86
                      )
                      
                      
                      0.14Dividends
      declared
                      
                      
                      (0.20
                      )
                      
                      
                      (0.40
                      )Net asset value, end of
      period
                      
                      $
                      11.09
                      
                      
                      $
                      13.88Market value, beginning of
      period
                      
                      $
                      8.37
                      
                      
                      $
                      15.63Market value, end of
      period
                      
                      $
                      4.97
                      
                      
                      $
                      16.42Market value
      return  (2)
                      
                      
                      (38.75
                      %)
                      
                      
                      7.68
                      %Net asset value return
      (2)
                      
                      
                      (5.85
                      %)
                      
                      
                      0.62
                      %Ratios and Supplemental
      Data($ and shares in
      thousands)Net assets, end of
      period
                      
                      $
                      239,878
                      
                      
                      $
                      242,833Average net
      assets
                      
                      $
                      251,357
                      
                      
                      $
                      245,124Common shares outstanding at end
      of period
                      
                      
                      21,628
                      
                      
                      
                      17,500Total operating expenses/average
      net assets (4)
                      
                      
                      6.45
                      %
                      
                      
                      8.86
                      %Total operating expenses less
      management andincentive fees and
      interest expense/average net assets (4)
                      
                      
                      1.88
                      %
                      
                      
                      1.90
                      %Total operating expenses less
      managementand incentive
      fees/average net assets (4)
                      
                      
                      3.49
                      %
                      
                      
                      5.90
                      %Net investment income/average net
      assets (4)
                      
                      
                      7.33
                      %
                      
                      
                      6.83
                      %Net increase (decrease) in net
      assets resulting fromoperations/average
      net assets (4)
                      
                      
                      (30.06
                      %)
                      
                      
                      3.97
                      %Portfolio turnover
      rate
                      
                      
                      2.30
                      %
                      
                      
                      11.43
                      %
 (1)
                  Per Share Data is based on common
      shares outstanding at end of
period.
 (2)
                  Return calculations assume
      reinvestment of dividends and are not
  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.
 (4)
                  Annualized.
 (See
accompanying notes to consolidated financial
statements)
  13
  NGP
CAPITAL RESOURCES COMPANY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 March
31, 2009
 (Unaudited)
  Note
      1:
              Organization
 
 NGP
Capital Resources Company (together with its consolidated subsidiaries, where
applicable, “NGPC”, or the “Company,” which may also be referred to as “we,”
“us,” or “our”) was organized as a Maryland corporation in July 2004. The
Company has elected to be regulated as a business development company (“BDC”)
under the Investment Company Act of 1940, as amended (the “1940
Act”).  In addition, for federal income 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”).  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 consolidated
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 II”); NGPC Asset Holdings
III, LP, a Texas limited partnership and NGPC Asset Holdings V, LP, a Texas
limited partnership.  Effective May 28, 2008, NGPC Asset Holdings IV,
LP merged with and into NGPC II.  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’s investment objective is to generate both current income and capital
appreciation through debt investments with certain equity
components.
  The
Company is managed and advised, subject to the overall supervision of the
Company’s board of directors (the “Board of Directors”), by NGP Investment
Advisor, LP (the “Manager”), a Delaware limited partnership owned by NGP Energy
Capital Management, L.L.C., 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.
 
 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.
  14
  The
effects of the restatement on the unaudited consolidated balance sheets at March
31, 2009 and December 31, 2008 are summarized in the following
table:
 As
      Previously
                  
                  
                  
                  
                  
                  AsReported
                  
                  
                  Reclassifications
                  
                  
                  Reclassified
                  
                  
                  Restatement
                  
                  
                  As
      RestatedConsolidated
      Balance Sheets:For
      the Three Months Ended March 31, 2009Investments
      in portfolio securities at fair value
                  
                  $
                  228,217,795
                  
                  
                  $
                  (228,217,795
                  )
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Control
      investments - majority owned
                  
                  
                  -
                  
                  
                  
                  21,570,000
                  
                  
                  
                  21,570,000
                  
                  
                  
                  -
                  
                  
                  
                  21,570,000Affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  49,462,688
                  
                  
                  
                  49,462,688
                  
                  
                  
                  -
                  
                  
                  
                  49,462,688Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  157,185,107
                  
                  
                  
                  157,185,107
                  
                  
                  
                  -
                  
                  
                  
                  157,185,107Accounts
      receivable and other current assets
                  
                  
                  11,672
                  
                  
                  
                  -
                  
                  
                  
                  11,672
                  
                  
                  
                  192,172
                  
                  
                  
                  203,844Deferred
      tax assets - current portion
                  
                  
                  6,252,617
                  
                  
                  
                  -
                  
                  
                  
                  6,252,617
                  
                  
                  
                  (2,440,786
                  )
                  
                  
                  3,811,831Total
      current assets
                  
                  
                  37,338,294
                  
                  
                  
                  -
                  
                  
                  
                  37,338,294
                  
                  
                  
                  (2,248,614
                  )
                  
                  
                  35,089,680Deferred
      tax assets - non-current
                  
                  
                  797,835
                  
                  
                  
                  -
                  
                  
                  
                  797,835
                  
                  
                  
                  (797,835
                  )
                  
                  
                  -Total
      assets
                  
                  
                  353,330,559
                  
                  
                  
                  -
                  
                  
                  
                  353,330,559
                  
                  
                  
                  (3,046,449
                  )
                  
                  
                  350,284,110Deferred
      tax liabilities - non-current
                  
                  
                  1,868,009
                  
                  
                  
                  -
                  
                  
                  
                  1,868,009
                  
                  
                  
                  (114,148
                  )
                  
                  
                  1,753,861Total
      liabilities
                  
                  
                  110,519,909
                  
                  
                  
                  -
                  
                  
                  
                  110,519,909
                  
                  
                  
                  (114,148
                  )
                  
                  
                  110,405,761Paid-in
      capital in excess of par
                  
                  
                  315,184,191
                  
                  
                  
                  -
                  
                  
                  
                  315,184,191
                  
                  
                  
                  (5,536,158
                  )
                  
                  
                  309,648,033Undistributed
      net investment income (loss)
                  
                  
                  (1,872,680
                  )
                  
                  
                  -
                  
                  
                  
                  (1,872,680
                  )
                  
                  
                  (1,207,974
                  )
                  
                  
                  (3,080,654
                  )Net
      unrealized appreciation (depreciation) of
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  -portfolio
      securities, corporate notes
                  
                  
                  (72,560,801
                  )
                  
                  
                  -
                  
                  
                  
                  (72,560,801
                  )
                  
                  
                  3,811,831
                  
                  
                  
                  (68,748,970
                  )Total
      stockholders’ equity (net assets)
                  
                  
                  242,810,650
                  
                  
                  
                  -
                  
                  
                  
                  242,810,650
                  
                  
                  
                  (2,932,301
                  )
                  
                  
                  239,878,349Total
      liabilities and stockholders' equity (net assets)
                  
                  
                  353,330,559
                  
                  
                  
                  -
                  
                  
                  
                  353,330,559
                  
                  
                  
                  (3,046,449
                  )
                  
                  
                  350,284,110Net
      asset value per share
                  
                  
                  11.23
                  
                  
                  
                  -
                  
                  
                  
                  11.23
                  
                  
                  
                  (0.14
                  )
                  
                  
                  11.09For
      the Year Ended December 31, 2008Investments
      in portfolio securities at fair value
                  
                  $
                  244,229,568
                  
                  
                  $
                  (244,229,568
                  )
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Control
      investments - majority owned
                  
                  
                  -
                  
                  
                  
                  24,570,000
                  
                  
                  
                  24,570,000
                  
                  
                  
                  -
                  
                  
                  
                  24,570,000Affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  44,416,490
                  
                  
                  
                  44,416,490
                  
                  
                  
                  -
                  
                  
                  
                  44,416,490Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  175,243,078
                  
                  
                  
                  175,243,078
                  
                  
                  
                  -
                  
                  
                  
                  175,243,078Accounts
      receivable and other current assets
                  
                  
                  41,377
                  
                  
                  
                  -
                  
                  
                  
                  41,377
                  
                  
                  
                  192,172
                  
                  
                  
                  233,549Deferred
      tax assets - current
                  
                  
                  200,000
                  
                  
                  
                  -
                  
                  
                  
                  200,000
                  
                  
                  
                  1,653,612
                  
                  
                  
                  1,853,612Total
      current assets
                  
                  
                  138,356,217
                  
                  
                  
                  -
                  
                  
                  
                  138,356,217
                  
                  
                  
                  1,845,784
                  
                  
                  
                  140,202,001Deferred
      tax assets - non-current
                  
                  
                  3,600,000
                  
                  
                  
                  -
                  
                  
                  
                  3,600,000
                  
                  
                  
                  (3,600,000
                  )
                  
                  
                  -Total
      assets
                  
                  
                  400,748,657
                  
                  
                  
                  -
                  
                  
                  
                  400,748,657
                  
                  
                  
                  (1,754,216
                  )
                  
                  
                  398,994,441Deferred
      tax liabilities - non-current
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,231,829
                  
                  
                  
                  1,231,829Total
      liabilities
                  
                  
                  134,926,011
                  
                  
                  
                  -
                  
                  
                  
                  134,926,011
                  
                  
                  
                  1,231,829
                  
                  
                  
                  136,157,840Paid-in
      capital in excess of par
                  
                  
                  315,184,191
                  
                  
                  
                  -
                  
                  
                  
                  315,184,191
                  
                  
                  
                  (5,536,158
                  )
                  
                  
                  309,648,033Undistributed
      net investment income (loss)
                  
                  
                  (3,420,716
                  )
                  
                  
                  -
                  
                  
                  
                  (3,420,716
                  )
                  
                  
                  124,108
                  
                  
                  
                  (3,296,608
                  )Net
      unrealized appreciation (depreciation) of portfolio
      securities, corporate notes and commodity derivative
      instruments
                  
                  
                  (48,000,769
                  )
                  
                  
                  -
                  
                  
                  
                  (48,000,769
                  )
                  
                  
                  2,426,005
                  
                  
                  
                  (45,574,764
                  )Total
      stockholders’ equity (net assets)
                  
                  
                  265,822,646
                  
                  
                  
                  -
                  
                  
                  
                  265,822,646
                  
                  
                  
                  (2,986,045
                  )
                  
                  
                  262,836,601Total
      liabilities and stockholders' equity (net assets)
                  
                  
                  400,748,657
                  
                  
                  
                  -
                  
                  
                  
                  400,748,657
                  
                  
                  
                  (1,754,216
                  )
                  
                  
                  398,994,441Net
      asset value per share
                  
                  
                  12.29
                  
                  
                  
                  -
                  
                  
                  
                  12.29
                  
                  
                  
                  (0.14
                  )
                  
                  
                  12.15
  15
  The
effects of the restatement on the unaudited consolidated statements of
operations for the three month periods ended March 31, 2009 and March 31, 2008
are summarized in the following table:
  As
      Previously
                  
                  
                  
                  
                  
                  AsReported
                  
                  
                  Reclassifications
                  
                  
                  Reclassified
                  
                  
                  Restatement
                  
                  
                  As
      RestatedConsolidated
      Statements of Operations:For
      the Three Months Ended March 31, 2009Investment
      incomeInterest
      income:
                  
                  $
                  6,194,539
                  
                  
                  $
                  (6,194,539
                  )
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  1,356,076
                  
                  
                  
                  1,356,076
                  
                  
                  
                  -
                  
                  
                  
                  1,356,076Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  4,838,463
                  
                  
                  
                  4,838,463
                  
                  
                  
                  -
                  
                  
                  
                  4,838,463Royalty
      income (loss), net of amortization:
                  
                  
                  (894,302
                  )
                  
                  
                  894,302
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Control
      investments - majority owned
                  
                  
                  -
                  
                  
                  
                  23,336
                  
                  
                  
                  23,336
                  
                  
                  
                  -
                  
                  
                  
                  23,336Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  (917,638
                  )
                  
                  
                  (917,638
                  )
                  
                  
                  -
                  
                  
                  
                  (917,638
                  )State
      and excise taxes
                  
                  
                  5,619
                  
                  
                  
                  -
                  
                  
                  
                  5,619
                  
                  
                  
                  (5,619
                  )
                  
                  
                  -Other
      general and administrative expenses
                  
                  
                  796,949
                  
                  
                  
                  -
                  
                  
                  
                  796,949
                  
                  
                  
                  (1
                  )
                  
                  
                  796,948Total
      operating expenses
                  
                  
                  4,001,206
                  
                  
                  
                  -
                  
                  
                  
                  4,001,206
                  
                  
                  
                  (5,620
                  )
                  
                  
                  3,995,586Net
      investment income before income taxes
                  
                  
                  4,531,683
                  
                  
                  
                  -
                  
                  
                  
                  4,531,683
                  
                  
                  
                  5,620
                  
                  
                  
                  4,537,303Benefit
      (provision) for income taxes
                  
                  
                  1,341,993
                  
                  
                  
                  -
                  
                  
                  
                  1,341,993
                  
                  
                  
                  (1,337,702
                  )
                  
                  
                  4,291Net
      investment income
                  
                  
                  5,873,676
                  
                  
                  
                  -
                  
                  
                  
                  5,873,676
                  
                  
                  
                  (1,332,082
                  )
                  
                  
                  4,541,594Net
      unrealized gain (loss) on investmentsNet
      increase (decrease) in unrealized appreciation(depreciation)
      on portfolio securities, corporate notes:
                  
                  
                  (24,560,032
                  )
                  
                  
                  24,560,032
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Control
      investments - majority owned
                  
                  
                  -
                  
                  
                  
                  (4,075,662
                  )
                  
                  
                  (4,075,662
                  )
                  
                  
                  -
                  
                  
                  
                  (4,075,662
                  )Affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  205,744
                  
                  
                  
                  205,744
                  
                  
                  
                  -
                  
                  
                  
                  205,744Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  (20,690,114
                  )
                  
                  
                  (20,690,114
                  )
                  
                  
                  -
                  
                  
                  
                  (20,690,114
                  )Benefit
      (provision) for taxes on unrealized gain
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,385,826
                  
                  
                  
                  1,385,826Total
      net unrealized gain (loss) on investments
                  
                  
                  (24,560,032
                  )
                  
                  
                  -
                  
                  
                  
                  (24,560,032
                  )
                  
                  
                  1,385,826
                  
                  
                  
                  (23,174,206
                  )Net
      increase (decrease) in stockholders' equity(net
      assets) resulting from operations
                  
                  
                  (18,686,356
                  )
                  
                  
                  -
                  
                  
                  
                  (18,686,356
                  )
                  
                  
                  53,744
                  
                  
                  
                  (18,632,612
                  )For
      the Three Months Ended March 31, 2008Investment
      incomeInterest
      income:
                  
                  $
                  8,952,116
                  
                  
                  $
                  (8,952,116
                  )
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Control
      investments - majority owned
                  
                  
                  -
                  
                  
                  
                  120,914
                  
                  
                  
                  120,914
                  
                  
                  
                  -
                  
                  
                  
                  120,914Affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  194,779
                  
                  
                  
                  194,779
                  
                  
                  
                  -
                  
                  
                  
                  194,779Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  8,636,423
                  
                  
                  
                  8,636,423
                  
                  
                  
                  -
                  
                  
                  
                  8,636,423Royalty
      income:
                  
                  
                  545,850
                  
                  
                  
                  (545,850
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Control
      investments - majority owned
                  
                  
                  -
                  
                  
                  
                  28,015
                  
                  
                  
                  28,015
                  
                  
                  
                  -
                  
                  
                  
                  28,015Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  517,835
                  
                  
                  
                  517,835
                  
                  
                  
                  -
                  
                  
                  
                  517,835Benefit
      (provision) for income taxes
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  22,202
                  
                  
                  
                  22,202Net
      investment income
                  
                  
                  4,141,142
                  
                  
                  
                  -
                  
                  
                  
                  4,141,142
                  
                  
                  
                  22,202
                  
                  
                  
                  4,163,344Net
      unrealized gain (loss) on investmentsNet
      increase (decrease) in unrealized appreciation(depreciation)
      on portfolio securities, corporate notes:
                  
                  
                  (1,746,162
                  )
                  
                  
                  1,746,162
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Control
      investments - majority owned
                  
                  
                  -
                  
                  
                  
                  63
                  
                  
                  
                  63
                  
                  
                  
                  -
                  
                  
                  
                  63Non-affiliate
      investments
                  
                  
                  -
                  
                  
                  
                  (1,746,225
                  )
                  
                  
                  (1,746,225
                  )
                  
                  
                  -
                  
                  
                  
                  (1,746,225
                  )Net
      increase (decrease) in stockholders' equity(net
      assets) resulting from operations
                  
                  
                  2,394,980
                  
                  
                  
                  -
                  
                  
                  
                  2,394,980
                  
                  
                  
                  22,202
                  
                  
                  
                  2,417,182
  16
 
 The
effects of the restatement on the unaudited consolidated statements of cash
flows for the three-month periods ended March 31, 2009 and March 31, 2008 are
summarized in the following table:
  As
      Previously
                  
                  
                  
                  
                  
                  AsReported
                  
                  
                  Reclassifications
                  
                  
                  Reclassified
                  
                  
                  Restatement
                  
                  
                  As
      RestatedConsolidated
      Statements of Cash Flows:For
      the Three Months Ended March 31, 2009Cash
      flows from operating activitiesNet
      increase (decrease) in stockholders' equity (net assets) resulting from
      operations
                  
                  $
                  (18,686,356
                  )
                  
                  $
                  -
                  
                  
                  $
                  (18,686,356
                  )
                  
                  $
                  53,744
                  
                  
                  $
                  (18,632,612
                  )Effects
      of changes in operating assets and liabilitiesCurrent
      portion of deferred income taxes
                  
                  
                  (6,052,617
                  )
                  
                  
                  -
                  
                  
                  
                  (6,052,617
                  )
                  
                  
                  4,094,398
                  
                  
                  
                  (1,958,219
                  )Non-current
      deferred income taxes
                  
                  
                  4,670,174
                  
                  
                  
                  -
                  
                  
                  
                  4,670,174
                  
                  
                  
                  (4,148,142
                  )
                  
                  
                  522,032For
      the Three Months Ended March 31, 2008Cash
      flows from operating activitiesNet
      increase (decrease) in stockholders' equity (net assets) resulting from
      operations
                  
                  $
                  2,394,980
                  
                  
                  $
                  -
                  
                  
                  $
                  2,394,980
                  
                  
                  $
                  22,202
                  
                  
                  $
                  2,417,182Effects
      of changes in operating assets and liabilitiesNon-current
      portion of deferred income taxes
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (22,202
                  )
                  
                  
                  (22,202
                  )
 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 in consolidation. 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 (the “SEC”).  Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) 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, 2008.  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
GAAP that require management to make estimates and assumptions that affect the
amounts reported in the interim consolidated financial statements and the
accompanying notes to the interim consolidated financial
statements.  Actual results could differ from these
estimates.
  17
  Cash
and Cash Equivalents
  Cash and
cash equivalents include short-term, liquid investments in accounts such as
demand deposit accounts, money market accounts, certain overnight investment
sweep accounts and money market fund accounts.  Cash and cash
equivalents are carried at cost, which approximates fair value.
 
 Prepaid
Assets
  Prepaid
assets consist of premiums paid for directors’ and officers’ insurance and
fidelity bonds with a policy term of one year and fees associated with the
establishment of the policy or 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.  On September 15, 2008, Lehman Brothers
Holdings Inc. (“Lehman Holdings”) filed for protection under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court in the
Southern District of New York. Subsidiaries of Lehman Holdings were not included
in the filing. The business of Lehman Brothers Private Investment Management
(“PIM”), including the Company’s money market and bond holdings, was transferred
during September 2008 to Barclays Wealth, the wealth management division of
Barclays Bank PLC (“Barclays”), which operates in the United States as Barclays
Capital Inc. As of March 31, 2009, the Company’s Barclays money market account
balance was approximately $60,000 and the fair market value of our senior notes
and corporate notes were $6.54 million and $6.11 million, respectively. The
Company currently believes that the transfer of its Lehman Brothers account to
Barclays will not have a material adverse effect on its financial position,
results of operations or cash flows.
  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 investment team of the Manager
prepares valuations for all of the assets in the Company’s portfolio and
presents the valuations to the Company’s valuation committee (the “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 investment team of the Manager prepares
valuation analyses, as generally described below.
 
 Using the
most recently available financial statements, forecasts and, when applicable,
comparable transaction data, the investment team of 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 and third
party valuations of the portfolio company’s assets, such as engineering reserve
reports of oil and natural gas properties.  The investment team of 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 a portfolio company and also on the methodologies used for asset
valuations.  The investment team of the Manager considers some or all
of the above valuation methods to determine the estimated enterprise value of a
portfolio company.
 
 The
methodologies for determining estimated current market values of comparable
securities include estimates based on: recent initial offerings of comparable
securities of public and private companies; recent secondary market sales of
comparable securities of public and private companies; current market implied
interest rates for comparable securities in general; and current market implied
interest rates for non-comparable securities in general, with adjustments for
such things as size of issue, tenor and liquidity. The investment team of the
Manager considers some or all of the above valuation methods to determine the
estimated current market value of a comparable security.
  18
  Debt Securities: The Company
records its investments in non-convertible debt securities at fair value which
generally approximates cost  plus amortized original issue discount
(“OID”) to the extent that the estimated asset or enterprise value of the
portfolio company exceeds the outstanding debt of the portfolio company, subject
to comparison to the estimated current market values of comparable securities.
The Company records its investment in convertible debt securities at fair value
which generally approximates 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, both subject to comparison to the estimated current
market values of comparable securities. 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 the debt investment
beginning with the junior-most debt investment such that the asset or enterprise
value less the value of the outstanding pari passu or senior debt is
zero, subject to comparison to the estimated current market values of comparable
securities.  Investments in debt 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.
 
 Equity Securities: The
Company records its  investments in preferred and common equity
securities (including warrants or options to acquire equity securities) at fair
value based on its pro rata share of the residual equity value available after
deducting all outstanding debt from the estimated enterprise value, subject to
comparison to the estimated current market values of comparable
securities.
 
 Property-Based Equity Participation
Rights: The Company records its investments in overriding royalty and net
profits interests at fair value 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
natural gas properties.
 
 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.
 
 Valuation
of Commodity Derivative Instruments
 
 Current
accounting rules require that all derivative instruments, other than those that
meet specific exclusions, be recorded at fair value. Quoted market prices are
the best evidence of fair value. If quotations are not available, management’s
best estimate of fair value is based on the quoted market price of derivatives
with similar characteristics or on valuation techniques.  The
Company’s derivative instruments are either exchange traded or transacted in an
over-the-counter market. Valuation is determined by reference to readily
available public data. Option fair values for the natural gas option
transactions are based on the Black-Scholes pricing model and the crude oil
transactions are based on the Turnbull-Wakeman pricing model and verified
against the applicable counterparty’s fair values.
 
 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
amortization using the units of production 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. Collectability 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 portfolio company’s assets.
  19
 
 Payment-in-Kind
Interest and Dividends
 
 The
Company may have investments in its portfolio that contain payment-in-kind
(“PIK”) provisions. PIK interest or dividends, computed at the contractual rate
specified in each investment agreement, are added to the principal balance of
the investment and recorded as interest or dividend income.  For
investments with PIK interest or dividends, the Company bases income accruals on
the principal balance including any PIK.  To maintain the Company’s
RIC status, this non-cash source of income must be paid out to stockholders in
the form of dividends, even though the Company has not yet collected the
cash.  For the quarters ended March 31, 2009 and 2008, PIK interest
income was $0.9 million and $1.7 million, respectively.  No PIK
dividend income was recorded for the quarters ended March 31, 2009 and
2008.  If the portfolio company’s asset valuation is not sufficient to
cover the contractual interest, the Company will not accrue interest income or
dividend income on the investment.
 
 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.
 
 Derivative
accounting rules require that fair value changes of derivative instruments that
do not qualify for hedge accounting be reported in the current period, rather
than in the period the derivatives are settled and/or the hedged transaction is
settled. This can result in significant earnings volatility.  The
Company has decided not to designate these instruments as hedging instruments
for financial accounting purposes. Net unrealized appreciation or
depreciation reflects the change in derivative values during the reporting
period including the reversal of previously-recorded unrealized appreciation or
depreciation, when settled 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 period
the commitment is outstanding. Prepayment and loan administration fees are
recognized as they are received.  For the quarters ended March 31,
2009 and 2008, the Company accreted approximately $0.3 million of fee income
into interest income.
  Dividends
  Dividends
to stockholders are recorded on the ex-dividend date. The Company currently
intends that its distributions each year will be sufficient to maintain the
Company’s status as a RIC for federal income tax purposes and to eliminate
excise tax liability.  The Company currently intends to make
distributions to stockholders on a quarterly basis of substantially all of its
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
such capital gains for investment and designate such retained amount as a deemed
distribution.  The amount to be paid out as a dividend, if any, 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.
  20
  Prior to
2005, the Company was treated as a “C” corporation, had no taxable income and
therefore did not declare a dividend for that period.  The following
table summarizes the Company’s dividends for the year 2008 and for the quarter
ended March 31, 2009:
 
 Dividend HistoryDeclaration Date
                      
                      Amount
                      
                      Record Date
                      
                      Payment DateMarch
      19, 2008
                      
                      $
                      0.40
                      
                      March
      31, 2008
                      
                      April
      11, 2008June
      9, 2008
                      
                      $
                      0.40
                      
                      June
      30, 2008
                      
                      July
      11, 2008September
      10, 2008
                      
                      $
                      0.40
                      
                      September
      30, 2008
                      
                      October
      10, 2008December
      19, 2008
                      
                      $
                      0.41
                      
                      December
      29, 2008
                      
                      January
      5, 2009March
      10, 2009
                      
                      $
                      0.20
                      
                      March
      31, 2009
                      
                      April
      10, 2009
 
 The
Company has established an “opt out” dividend reinvestment plan for its common
stockholders. As a result, if the Company declares a dividend, then 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. As of April 10, 2009, the date of the most recent dividend
payment, holders of 2,179,204 shares, or approximately 10.1% of outstanding
shares, were participants in the Company’s dividend reinvestment
plan.
 
 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.
 
 The table
below summarizes participation in the Company’s dividend reinvestment plan for
the year 2008 and for the quarter ended March 31, 2009:
 
 Dividend
      Reinvestment Plan ParticipationPercentage
      of
                    
                    
                    
                    
                    
                    
                    
                    
                    Common Stock DividendsParticipating
                    
                    
                    Outstanding
                    
                    
                    Total
                    
                    
                    
                    
                    
                    Purchased
      in
                    
                    
                    Newly Issued SharesDividend
                    
                    Shares
                    
                    
                    Shares
                    
                    
                    Distribution
                    
                    
                    Cash Dividends
                    
                    Open Market
                    
                    
                    Amount
                    
                    
                    SharesMarch
      2008
                    
                    
                    1,693,284
                    
                    
                    
                    9.7
                    %
                    
                    $
                    7,000,133
                    
                    
                    $
                    6,322,815
                    
                    
                    $
                    -
                    
                    
                    $
                    677,318
                    
                    
                    
                    41,482June
      2008
                    
                    
                    1,655,552
                    
                    
                    
                    9.4
                    %
                    
                    $
                    8,651,281
                    
                    
                    $
                    7,989,060
                    
                    
                    $
                    662,221
                    
                    
                    $
                    -
                    
                    
                    
                    -September
      2008
                    
                    
                    1,739,829
                    
                    
                    
                    8.0
                    %
                    
                    $
                    8,651,281
                    
                    
                    $
                    7,955,350
                    
                    
                    $
                    695,931
                    
                    
                    $
                    -
                    
                    
                    
                    -December
      2008
                    
                    
                    1,749,954
                    
                    
                    
                    8.1
                    %
                    
                    $
                    8,867,563
                    
                    
                    $
                    8,150,082
                    
                    
                    $
                    717,481
                    
                    
                    $
                    -
                    
                    
                    
                    -March
      2009
                    
                    
                    2,179,204
                    
                    
                    
                    10.1
                    %
                    
                    $
                    4,325,640
                    
                    
                    $
                    3,889,799
                    
                    
                    $
                    435,841
                    (1)
                    
                    $
                    -
                    
                    
                    
                    -
 
 (1)  Shares
were purchased on April 13, 2009 for the March 2009 dividend.  See
above and Note 4 for futher detail.
 
 Note 4:
              Credit
      Facilities and Borrowings
  Under the
terms of the Company’s Treasury Secured Revolving Credit Agreement (as amended,
the “Treasury Facility”), the lenders party thereto and SunTrust Bank, as
administrative agent for the lenders, have extended credit available under the
Treasury Facility to an amount not to exceed $175 million by obtaining
additional commitments from existing lenders or new lenders. The total amount
committed and outstanding under the Treasury Agreement as of March 31, 2009 and
as of December 31, 2008 was $75.0 million. Proceeds from the Treasury Facility
are used to facilitate the growth of the Company’s investment portfolio and
provide flexibility in the sizing of its portfolio investments. The Treasury
Facility has a three-year term, maturing August 31, 2009, and bears interest, at
the Company’s option, at either (i) LIBOR plus 25 basis points or (ii) the base
rate. On September 29, 2008, the required lenders exercised their option to
convert pricing of the Treasury Facility from LIBOR-based to prime-based. The
prime rate as of December 31, 2008 and as of March 31, 2009 was
3.25%.
  21
  The
obligations under the Treasury Facility are collateralized by certain securities
and are guaranteed by the Company’s existing and future subsidiaries, other than
special purpose subsidiaries and certain other subsidiaries. The Treasury
Facility 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 cash
collateral) plus interest, taxes, depreciation and amortization expenses
(“EBITDA”) to interest expense (excluding interest on loans under the Treasury
Facility) 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 Facility 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.
  Under the
terms of the Company’s Amended and Restated Revolving Credit Agreement (as
amended, the “Investment Facility”), the lenders have agreed to extend revolving
credit to the Company in an amount not to exceed $87.5 million, with the ability
to increase the credit available to an amount not to exceed $175 million by
obtaining additional commitments from existing lenders or new lenders. The total
amount committed was $87.5 million and $27.0 million was outstanding under the
Investment Facility as of March 31, 2009. By comparison, the total amount
committed as of December 31, 2008 was $87.5 million and $45.0 million was
outstanding under the Investment Facility. The Investment Facility has a
four-year term, maturing on August 31, 2010, and bears interest, at the
Company’s option, at either (i) LIBOR plus 150 to 250 basis points, based on the
degree of leverage of the Company or (ii) the base rate plus 0 to 75 basis
points, based on the degree of leverage of the Company. Proceeds from the
Investment Facility will be used to supplement the Company’s equity capital to
make portfolio investments. As of March 31, 2009, the interest rate was 3.50% on
$27.0 million (prime rate plus 25 basis points).
  The
obligations under the Investment Facility are collateralized by substantially
all of the Company’s assets, except certain assets that collateralize the
Treasury Facility and are guaranteed by the Company’s existing and future
subsidiaries, other than special purpose subsidiaries and certain other
subsidiaries. The Investment Facility 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 collateral under the Treasury Facility) to interest
expense (excluding interest on loans under the Treasury Facility) 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. From time to time, certain of the lenders may provide customary
commercial and investment banking services to the Company.
  In
addition to the Company’s Investment Facility, the Company may also fund a
portion of its investments with issuances of equity or senior debt securities.
The Company may also securitize a portion of its investments in mezzanine or
senior secured loans or other assets. The Company expects its primary use of
funds to be investments in portfolio companies, cash distributions to holders of
its common stock and payment of fees and other operating expenses.
  Note 5:
              Issuance
      of Common Stock
  On August
6, 2004, the Company, in its initial capitalization transaction, sold 100 shares
of common stock to NGP Energy Capital Management, L.L.C. (formerly known as
Natural Gas Partners, L.L.C.) for $15.00 per share. On November 9, 2004, the
Company’s Registration Statement on Form N-2 (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 covered by the
registration statement, 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 this offering, after deducting expenses of approximately $2,308,000 and
underwriting discounts and commissions of $0.825 per share, were approximately
$244,337,000.
 
 On
February 6, 2008, the Company’s shelf registration statement on Form N-2
(Registration No. 333-146715) registering the offering, from time to time, of up
to $250,000,000 in aggregate offering price of the Company’s common stock was
declared effective by the SEC.  On April 10, 2008, the Company
commenced a public offering of 3,700,000 shares of common stock (plus up to
550,000 additional shares of common stock subject to the underwriters’
over-allotment option) of which 4,086,388 shares were sold to the public at a
price of $16.00 per share.  The net proceeds from this offering, after
deducting expenses of approximately $781,000 and underwriting discounts and
commissions of $0.80 per share, were approximately
$61,330,000.
  22
  The
Company has established a dividend reinvestment plan for the Company’s common
stockholders, which provides for reinvestment of distributions paid by the
Company, on behalf of each plan participant, by the Company’s transfer agent, in
accordance with the plan terms. The purpose of the plan is to provide
stockholders of record of the Company’s common stock, par value $.001 per share,
with a method of investing cash dividends and distributions in additional shares
at the current market price without charges for record-keeping, custodial, and
reporting services. However, the plan is an “opt-out” plan. This means, if the
Company declares a cash dividend, a stockholder’s cash dividend will be
automatically reinvested in additional shares of its common stock unless the
stockholder specifically “opts out” of the dividend reinvestment plan in
writing, and elects to receive cash dividends. Any stockholder of record may
elect to partially participate in the plan, or begin or resume participation at
any time, by providing the plan agent with written notice. It is customary
practice for many brokers to “opt out” of dividend reinvestment plans on behalf
of their clients unless specifically instructed otherwise.
 
 The Company has issued a total of
141,714 shares of common stock to participants in the dividend reinvestment plan
since the inception of the plan.  See Dividends in Note
2.
 
 Note 6:
              Investment
      Management
 
 Investment
Advisory Agreement
 
 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.
  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.
  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, and is payable quarterly in arrears.  The Manager
has agreed to waive permanently, subsequent to September 30, 2007, that portion
of the management fee attributable to U.S. Treasury securities or other short
term investments acquired with borrowings under the Company’s credit facilities
to the extent the amount of such securities exceeds $100 million.  All
of the $1,833,848 management and incentive fees payable to the Manager as of
March 31, 2009 is attributable to the base management fee for the quarter ended
March 31, 2009.  The base management fee for the quarter ended March
31, 2008 was $1,800,206.
 
 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).  Accordingly, the Company may pay an incentive fee based partly
on accrued interest, the collection of which is uncertain or
deferred.  Net investment income includes, in the case of investments
with a deferred interest feature (such as original issue 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 or losses, or unrealized capital
appreciation or depreciation.
 
 The
incentive fees due in any fiscal quarter will be 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 first quarters of 2009
and 2008.
  23
  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) 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.  No Capital Gains Fees were earned for the first quarters of
2009 and 2008.
 
 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, 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.  Pursuant to this voluntary agreement, with respect to the
capital gains incentive fees earned for 2007, the Manager previously purchased
approximately $105,000 of the Company’s stock.  Any sales of such
stock will comply with any applicable six-month holding period under Section
16(b) of the Securities Act of 1933 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.
 
 The
investment advisory agreement was originally approved by the Company’s Board of
Directors on November 9, 2004. The investment advisory agreement provides that
unless terminated earlier as described below, the agreement shall remain in
effect from year-to-year after November 9, 2006, provided continuation is
approved at least annually by the Company’s 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 Board of Directors who are not interested persons.  On
October 30, 2008, the Company’s Board of Directors, including all of the
independent directors, approved an extension of the investment advisory
agreement through November 9, 2009.
 
 The
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).  The agreement may be terminated by either party without penalty
upon not more than 60 days written notice to the other.
 
 The
investment advisory agreement provides that, absent willful misfeasance, bad
faith or gross negligence in the performance of its duties or the reckless
disregard of its duties and obligations, the Manager and its officers, manager,
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 from the rendering of the
Manager’s services under the investment advisory agreement or otherwise as the
Company’s Manager.
 
 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 its
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.
 
 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.
  24
  Administration  Agreement
 
 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.  Under the administration agreement, the Administrator
also performs, or oversees the performance by third parties of, the Company’s
required 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 Administrator 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.  To the extent permitted under the 1940 Act, the
Administrator may also provide on the Company’s behalf, significant managerial
assistance to the Company’s portfolio companies.  Payments under the
agreement are equal to amounts based upon the allocable portion of the
Administrator’s costs and expenses incurred in connection with administering the
Company’s business.  The Administrator bills the Company for charges
under the administration agreement monthly in arrears.  The agreement
may be terminated by either party without penalty upon 60 days’ written notice
to the other party and will automatically terminate in the event of its
“assignment” (as defined in the 1940 Act).
 
 Of the
$328,843 in accounts payable as of March 31, 2009, $98,617 was due to the
Administrator for expenses incurred on the Company’s behalf for the month of
March 2009.  By comparison, $206,265 was due to the Administrator for
expenses incurred on the Company’s behalf for the month of March
2008.
 
 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 the agreement will continue in effect until November 9,
2006, and from year-to-year thereafter provided such continuance is approved at
least annually by (i) the Company’s Board of Directors and (ii) a
majority of the members of the Company’s Board of Directors who are not parties
to the administration agreement or “interested persons” of any such
party.  On October 30, 2008, the Company’s Board of Directors,
including a majority of the independent directors, approved the continuation of
the administration agreement through November 9, 2009.
 
 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:
                FederalIncome
      Taxes
  The
Company intends to qualify for tax purposes as a RIC under Subchapter M of
Chapter 1 of the Code, 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.
  The
Company met all RIC requirements and distributed substantially all of its
investment company taxable income for the years ended December 31, 2006, 2007
and 2008.  Thus, the Company did not incur any federal income tax
liability for any of these periods.
  The
Company’s consolidated subsidiaries, NGPC Asset Holdings, LP, NGPC Asset
Holdings II, LP, NGPC Asset Holdings III, LP, NGPC Asset Holdings V, LP and NGPC
Nevada, LLC, collectively (“NGPCAH”), are subject to federal income taxes for
the period ended March 31, 2009.  The difference between the effective
income tax rate of 6.94% and the statutory federal tax rate of 34% for
the three months ended March 31, 2009 is attributable to RIC investment
company taxable income that generally will not be subject to federal income
tax.
  Note 8:
              Reclassifications
  GAAP
requires adjustments to certain components of net assets to reflect permanent
differences between financial and tax reporting. These reclassifications have no
effect on total net assets or net asset value per share. The table below
summarizes the reclassifications from undistributed net investment income
(loss), undistributed net realized capital gain (loss), and paid-in capital in
excess of par for the year ended December 31, 2008, as restated.  These
reclassifications are primarily due to non-deductible meal expenses,
non-deductible excise taxes and income and expenses from wholly owned
subsidiaries.
 
 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.
  Undistributed
                
                
                Undistributed
                
                
                Paid-in
    CapitalNet
    Investment
                
                
                Net
Realized
                
                
                in ExcessYear
                
                Income
    (Loss)
                
                
                Capital Gain
      (Loss)
                
                
                of Par2008, as
      restated
                
                $
                5,457,699
                
                
                $
                (7,415,573
                )
                
                $
                1,957,874
  25
  Note 9:
              Commitments
      and Contingencies
 
 As of
March 31, 2009, the Company had investments in or commitments to fund
investments to nineteen portfolio companies totaling $349.6 million, on which
$300.5 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 10:
              Fair
      Value
 
 Statement on
Financial Accounting Statement 157, Fair Value Measurements
(“Statement 157”) establishes a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value into the following three
broad categories:
 
 ·
                Level 1— Quoted unadjusted prices for identical instruments in active
      markets to which the Company has access at the date of
      measurement.
 
 ·
                Level 2— Quoted prices for similar instruments in active markets;
      quoted prices for identical or similar instruments in markets that are not
      active; and model-derived valuations in which all significant inputs and
      significant value drivers are observable in active markets. Level 2
      inputs are those in markets for which there are few transactions, the
      prices are not current, little public information exists or instances
      where prices vary substantially over time or among brokered market
      makers.
 
 ·
                Level 3— Model derived valuations in which one or more significant
      inputs or significant value drivers are unobservable.  Unobservable
      inputs are those inputs that reflect the Company’s own assumptions that
      market participants would use to price the asset or liability based on the
      best available information.
 
 The
following table sets forth by level within the fair value hierarchy the
Company's financial assets that were accounted for at fair value on a
recurring basis as of March 31, 2009.  As required by Statement 157,
financial assets and liabilities are classified in their entirety based on the
lowest level of input that is significant to the fair value
measurement.  The Company's assessment of the significance of a
particular input to the fair value measurement requires judgment, and may affect
the valuation of fair value assets and liabilities and their placement within
the fair value hierarchy levels. The fair value of the crude oil and
natural gas options are estimated using a combined income and market-based
valuation methodology based upon forward commodity price and volatility
curves.  The curves are obtained from independent pricing services
reflecting broker market quotes.
 
 The
following table presents the Company’s assets measured at fair value on a
recurring basis at March 31, 2009:
 
 Prices
      withQuoted
      Prices
                    
                    
                    Observablein
      Active
                    
                    
                    Market
                    
                    
                    UnobservableMarkets
                    
                    
                    Inputs
                    
                    
                    InputsAssets at Fair Value
                    
                    Total
                    
                    
                    (Level 1)
                    
                    
                    (Level 2)
                    
                    
                    (Level 3)Long
      Term Investments
                    
                    $
                    234,331,095
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    234,331,095Short
      Term Investments
                    
                    
                    76,134,101
                    
                    
                    
                    76,134,101
                    
                    
                    
                    -
                    
                    
                    
                    -Crude
      Oil Put Options
                    
                    
                    4,143,005
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4,143,005Natural
      Gas Put Options
                    
                    
                    586,229
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    586,229Total
      Assets at Fair Value
                    
                    $
                    315,194,430
                    
                    
                    $
                    76,134,101
                    
                    
                    $
                    -
                    
                    
                    $
                    239,060,329
  26
  The
Company did not have any liabilities that were measured at fair value on a
recurring basis at March 31, 2009.
 
 The
following table presents the Company’s assets measured at fair value on a
recurring basis using significant unobservable inputs (Level 3) at
December 31, 2008 and at March 31, 2009.
 
 Long
      TermAssets at Fair Value Using Unobservable Inputs
      (Level 3)
                        
                        InvestmentsBalance
      as of December 31, 2008
                        
                        $
                        258,792,440Transfers
      in (out) of Level 3
                        
                        
                        -Net
      amortization of premiums, discounts and fees
                        
                        
                        (1,445,811
                        )Net
      realized gains (losses)
                        
                        
                        -Net
      unrealized gains (losses)
                        
                        
                        (24,560,032
                        )Purchases,
      sales and  redemptions
                        
                        
                        6,273,732Balance
      as of March 31, 2009
                        
                        $
                        239,060,329
 
 Of the
$24,560,032 in net unrealized losses presented in the table above, $2,998,809
relates to reversals of unrealized gains on commodity derivative instruments
recognized in 2008 and offset by realized gains during the first quarter of
2009.  The remaining balance of $21,561,223 relates to unrealized
losses on investments that are still held at March 31, 2009.  The
Company presents net unrealized losses on the Consolidated Statement of
Operations as net increase (decrease) in unrealized appreciation (depreciation)
on portfolio securities, corporate notes and commodity derivative
instruments.
 
 Note 11:
              Commodity
      Derivative Instruments
 
 The Company may periodically enter into
commodity derivative instruments to manage our exposure to commodity price
fluctuations.  All of our derivatives are used for risk management
purposes and are not held for speculative or trading purposes.  These
contracts generally consists of options contracts on underlying
commodities.
 
 The
Company acquired a limited term royalty interest from ATP Oil & Gas
Corporation (“ATP”) and will receive royalty payments from this investment that
are based on crude oil and natural gas production and prices.  As a
result, the Company is exposed to fluctuations in crude oil and natural gas
prices.  As of June 4, 2008, the Company had entered into option
contracts to manage the price risk associated with these royalty
payments.  The Company accounts for derivative instruments and hedging
activities in accordance with SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities.  The Company has decided
not to designate these instruments as hedging instruments for financial
accounting purposes, and as a result, we recognize the change in the
instruments’ fair value currently on the Consolidated Statement of Operations as
net increase (decrease) in unrealized appreciation (depreciation) on portfolio
securities, corporate notes and commodity derivative
instruments.
 
 Investments
in derivative instruments represent future commitments or options to purchase or
sell other financial instruments or commodities at specific prices at specified
future dates, which expose the Company to market risk if the market value of the
contract is higher or lower than the contract price at the maturity
date.  Additionally, these derivative instruments expose the Company
to credit risk arising from the potential inability of counterparties to perform
under the terms of the contracts.
 
 The
components of gains (losses) on commodity derivative instruments are as
follows:
 
 For
      the Three Months EndedMarch 31, 2009
                      
                      
                      March 31, 2008Unrealized
      gains (losses) on commodity derivatives
                      
                      $
                      (3,189,673
                      )
                      
                      $
                      -Realized
      gains (losses) on commodity derivatives
                      
                      
                      3,173,852
                      
                      
                      
                      -Net
      gains (losses) on commodity derivative instruments
                      
                      $
                      (15,821
                      )
                      
                      $
                      -
 
 The
unrealized gains (losses) on commodity derivatives are included in net increase
(decrease) in unrealized appreciation (depreciation) on portfolio securities,
corporate notes and commodity derivatives instruments.
  27
  The
realized gains (losses) on commodity derivatives are composed of revenues
received on favorable expired options less the cost of the related expired
positions and are included in total investment income.
 
 Below is
a summary of the Company’s commodity derivative instruments as of March 31,
2009.
 
 Weightedaverage
      strikeVolumes
                      
                      
                      price
      per
                      
                      
                      Fair
      Value atBbls/Mmbtus
                      
                      
                      Bbl/Mmbtu
                      
                      
                      March 31, 2009Oil:Put
      Options:2009
                      
                      
                      90,500
                      
                      
                      $
                      96.45
                      
                      
                      $
                      3,939,3492010
                      
                      
                      7,000
                      
                      
                      $
                      85.00
                      
                      
                      
                      203,656Total
      Oil
                      
                      
                      97,500
                      
                      
                      
                      
                      
                      
                      
                      4,143,005Natural
      Gas:Put
      Options:2009
                      
                      
                      93,000
                      
                      
                      $
                      10.00
                      
                      
                      
                      586,229Total
      Natural Gas
                      
                      
                      93,000
                      
                      
                      
                      
                      
                      
                      
                      586,229Total
      Oil & Natural Gas Put Options
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      $
                      4,729,234
 
 Note 12:
              Recent
      Accounting Pronouncements
 
 In
March 2008, FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, (“SFAS No. 161”).  SFAS
No. 161 requires enhanced disclosure about the fair value of derivative
instruments and their gains or losses in tabular format and information about
credit risk related contingent features in derivative agreements,
counterparty credit risk, and the company’s strategies and objectives for using
derivative instruments.  SFAS No. 161 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
as such, was adopted by the Company on January 1, 2009.  The
principal impact was to require the expansion of our disclosure regarding our
derivative instruments.  See Note 10 for additional disclosures
required by  SFAS No. 161.
  In
September 2006, FASB issued Statement 157, Fair Value Measurements,
which establishes a framework for measuring fair value and requires additional
disclosures about fair value measurements.  Beginning January 1,
2008, the Company partially applied Statement 157 as allowed by FASB Staff
Position (FSP) 157-2, which delayed the effective date of Statement 157 for
nonrecurring fair value measurements associated with the Company’s nonfinancial
assets and liabilities.  As of January 1, 2008, the Company has
applied the provisions of Statement 157 to its recurring fair value measurements
and the impact was not material.  See Note 9 for disclosure of fair
value measurements for the Company’s financial instruments.  Under FSP
157-2, the Company is required to apply Statement 157 to its nonrecurring fair
value measurements associated with its non-financial assets and liabilities
beginning January 1, 2009.  As of January 1, 2009, the Company
has considered the provisions of FSP 157-2 and there is no impact to our
financial statements, as we do not have non-financial assets or
liabilities.
  In May
2008, FASB issued Statement 162, The Hierarchy of Generally Accepted
Accounting Principles (“SFAS No. 162”), which identifies a consistent
framework for selecting accounting principles to be used in preparing financial
statements for nongovernmental entities that are presented in conformity with
United States GAAP.  The current GAAP hierarchy was criticized due to
its complexity, ranking position of FASB Statements of Financial Accounting
Concepts, and the fact that it is directed at auditors rather than
entities.  SFAS No. 162 is effective November 15, 2008.  The
FASB does not expect that SFAS No. 162 will cause a change in current practice,
and the Company does not believe that SFAS No. 162 will have an impact on its
financial statements, financial position, and results of operations or cash
flows.
  In April
2009, FASB issued FSP SFAS No. 107-1 and Accounting Principles Board No. 28-1,
Interim Disclosures about Fair
Value of Financial Instruments.  This statement requires
disclosures about the fair value of financial instruments to be made in interim
reporting periods where summarized financial information is
issued.  FSP SFAS No. 107-1 and Accounting Principles Board No. 28-1
will be effective for interim reporting periods ending after June 15,
2009.  The adoption of this statement is not expected to have an
effect on our disclosures, as we do not issue summarized financial
statements.
  Note
      13:
                Subsequent
      Events
 
 In May
2009, the Company amended its $30.2 million Senior Secured Multiple-Advance Term
Loan to Tammany Oil & Gas, LLC.   Terms of the amendment
included increasing the interest rate on the note from the greater of 11% or
LIBOR plus 6% to the greater of 13% or LIBOR plus 8%.  In addition,
the overriding royalty interest, which was previously scheduled to begin
accruing payment obligations at the earlier of repayment or maturity, began
accruing payment obligations effective March 1, 2009.  The terms of
the amendment modified the required amortization prior to the maturity of the
note, March 21, 2010, which did not change.
  28
  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-month period ended March 31, 2009,
including comparative prior year financial results.  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;
 ·
              continued
      disruption of credit and capital markets, such as the events that have
      occurred since the third quarter of
2008;
 ·
              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.  On July 21, 2008, the
Securities and Exchange Commission expanded the definition of eligible portfolio
companies to include domestic operating companies with securities listed on a
national securities exchange so long as the company has a market capitalization
of less than $250 million. We have elected to be regulated as a BDC 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,” including securities of private U.S.
companies, cash, cash equivalents, U.S. government securities and high-quality
debt investments that mature in one year or less. In addition, for federal
income 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. 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 II”); NGPC Asset Holdings III, LP, a
Texas limited partnership and NGPC Asset Holdings V, LP, a Texas limited
partnership. Effective May 28, 2008, NGPC Asset Holdings IV, LP merged with and
into NGPC II. The Company consolidates the results of its subsidiaries for
financial reporting purposes. The Company does not consolidate the financial
results of its portfolio companies.
 
 Our
investment objective is to generate both current income and capital appreciation
primarily through debt investments with certain equity components.  A
key focus area for our targeted investments in the energy industry is domestic
upstream businesses that produce, develop, acquire and explore for oil and
natural gas. We also evaluate investment opportunities in such businesses as
coal, power, electricity, energy services and alternative energy. Our
investments generally range in size from $10 million to $50 million, however, we
may invest more or less depending on market conditions and our Manager’s view of
a particular investment opportunity. Our targeted investments primarily consist
of debt instruments, including senior and subordinated loans combined in one
facility, sometimes with an equity component, and subordinated loans, sometimes
with equity components. We may also invest in preferred stock and other equity
securities on a stand-alone basis.
  29
  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
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.
 
 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 and competitive environment for the types of investments we
make, and our own ability to raise capital, both through issuance of debt and
equity securities, to fund our investments.  We believe that the
recent dislocation in the credit markets and decline in energy commodity prices
should favorably impact the competitive environment, in that it has reduced the
debt capital available to energy companies from other sources.  Though
the same macro economic factors also make our access to new debt and equity
capital less certain, we have recently extended the maturity of our Investment
Facility to August 2010.  While we currently have capital available to
invest, it is not unlimited.  We remain committed to our underwriting
and investment disciplines in selectively investing in appropriate risk-reward
opportunities within the energy sector.
 
 Portfolio
and Investment Activity
 
 During
the quarter ended March 31, 2009, we funded $12.0 million to existing portfolio
companies and received $7.6 million in repayments.  We did not add any
new companies to our portfolio during the first quarter of 2009.
 
 In
February 2009, we accelerated and demanded immediate repayment of our $37.3
million Senior Secured Note from Formidable, LLC (“Formidable”). We also made
demand on a partial guaranty from the principal owner of Formidable. At this
time, we are pursuing a number of options with respect to Formidable, including
an outright sale of the properties, a negotiated deed-in-lieu of foreclosure on
the properties and foreclosure on the properties.
 
 Also in
February 2009, we notified Alden Resources LLC (“Alden”) of certain defaults
under their credit facility with us, namely, their failure to make interest,
principal and royalty interest payments. We have permitted Alden to defer
its interest and royalty payments during the first quarter of 2009. We are
working with Alden’s management to restructure the credit facility and such
restructuring is expected to result in the curing of the payment
defaults.  Subsequent to the restructuring, we expect Alden to be able
to make its required payments going forward.
 
 In March
2009, we restructured our $14 million Second Lien Term Loan B from Nighthawk
Transport I, LP (“Nighthawk”). Terms of the restructuring include increasing the
interest rate on the notes from 15% to 21%, with the additional 6% interest
payable in kind at the option of Nighthawk. In addition, the warrant position
granted to the lenders increased from 15% to 40% of the equity of Nighthawk,
increasing our warrant position from 2.5% to 7.1% of the outstanding equity of
Nighthawk. The maturity of the notes, set at October 3, 2010, did not
change.
 
 Following
these transactions, as of March 31, 2009, our investment portfolio consisted of
nineteen portfolio companies invested as follows: 42.1% in senior secured term
loans, 4.8% in senior subordinated secured notes, 0.3% in participating
convertible preferred stock, 0.4% in common stock, 1.8% in corporate notes, 6.3%
in membership and partnership units, 9.7% in net profits interests, 3.0% in
limited term royalty interests, and 1.5% in other investments.  The
balance of our investment portfolio (as a percentage of the whole portfolio) was
comprised 22.3% of U.S. Treasury Bills and 7.8% of cash and cash
equivalents.
 
 Results
of Operations
  Investment
Income
 
 Investment
income for the quarter ended March 31, 2009 was $8.5 million with $6.0 million
attributable to interest from targeted investments in eleven portfolio
companies, $3.2 million attributable to income from commodity derivative
instruments, a $0.9 million net loss attributable to royalty income net of
amortization, and $0.2 million from corporate notes and investments in cash
equivalents. This compares to investment income for the quarter ended March 31,
2008 of $9.5 million with $7.7 million attributable to interest from targeted
investments in thirteen portfolio companies, $0.5 million attributable to
royalty income net of amortization, $0.2 million from corporate notes and $1.1
million attributable to investments in cash equivalents.
  30
  While our
total targeted portfolio balance increased on a cost basis by approximately
$21.8 million from March 31, 2008 to March 31, 2009, the balance of non-accruing
and non-income producing investments increased from approximately $25.1 million
at March 31, 2008 to approximately $77.8 million at March 31,
2009.  Additional discussion concerning non-accrual investments is
provided in Portfolio Credit Quality below.  Although LIBOR rates
dropped significantly from the first quarter of 2008 compared to the first
quarter of 2009, this had a minimal effect on our targeted investment income
because of LIBOR floors established for new portfolio companies and certain
other existing portfolio companies during 2008.  Conversely,
significantly lower U.S. Treasury Bill rates during 2008 and the first quarter
of 2009 reduced interest from cash and cash equivalents.
 
 At March
31, 2009, the weighted average yield on targeted portfolio investments,
exclusive of capital gains, was 6.51%.  The weighted average yield of
our corporate notes was 5.82%. The weighted average yield of our U.S. Treasury
Bills and cash equivalents was 0.13% and 0.31%, respectively.  The
weighted average yield on our total capital invested at March 31, 2009 was
6.05%.  The primary cause of the decline in the weighted average yield
on targeted portfolio investments as of March 31, 2009 is that the calculation
includes a negative yield on our investment in the ATP Limited Term Royalty,
which had a cost basis of $22.5 million as of quarter end.  The
negative yield is the result of amortization on the investment being
substantially higher than the income earned for the month of March 2009 due to
lower oil and natural gas prices.  In addition, though the investment
is substantially hedged and such hedges produced substantial income for the
month of March 2009, such income is not included in the yield calculation for
targeted portfolio investments as the investment in commodity hedges is not
included in the targeted investment portfolio.  Further, we continue
to maintain our investments in Formidable ($37.9 million cost basis), BSR Loco
Bayou, LLC ($2.4 million cost basis) and Chroma Exploration & Production,
Inc. ($4.2 million cost basis) on non-accrual status.
 
 At March
31, 2008, the weighted average yield on targeted portfolio investments,
exclusive of capital gains, was 10.7%.  The weighted average yield of
our corporate notes was 5.8%. The weighted average yield of our U.S. Treasury
Bills and cash equivalents was 2.72%.  The weighted average yield on
our total capital invested at March 31, 2008 was 7.82%.
 
 Yields on
investments 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, royalty interest income, net profits income and other
similar investment income, weighted by their respective costs when
averaged.
 
 Operating
Expenses
 
 For the
quarter ended March 31, 2009, as restated, operating expenses were $4.0 million
compared to $5.4 million for the quarter ended March 31, 2008 as restated. The
2009 amount consisted of investment advisory and management fees of $1.8
million, insurance expenses, administrative services fees, professional fees,
directors’ fees and other general and administrative expenses of $1.2 million
and credit facility interest and fees of $1.0 million.  In comparison,
for the quarter ended March 31, 2008, as restated, investment advisory and
management fees were $1.8 million, insurance expenses, administrative services
fees, professional fees, directors’ fees and other general and administrative
expenses were $1.2 million and credit facility interest and fees were $2.4
million. See Note 6 for Discussion on the effects of the restatement on
management fees.
 
 Operating
expenses for the three month periods include our allocable portion of the total
organizational and operating expenses incurred by us, the Manager and the
Administrator, as determined by our Board of Directors and representatives of
the Manager and the Administrator.  According to the terms of the
investment advisory agreement, the base management fee is calculated quarterly
as 0.45% of the average of our total assets as of the end of the two previous
quarters.  Other general and administrative expenses include allocated
share of  employee, facilities and stockholder services and marketing
costs.
 
 Net
Investment Income Before Income Taxes
 
 For the
quarter ended March 31, 2009, as restated, net investment income before income
taxes was $4.5 million compared to $4.1 million for the quarter ended March 31,
2008.  The 9.6% increase was primarily due to lower credit facility
interest expense and fees on our reduced debt balance.
 
 Net
Realized Gains
 
 There
were no realized capital gains or losses for the quarters ended March 31, 2009
or 2008.
  31
  Unrealized
Appreciation or Depreciation on Investments
 
 For the
quarter ended March 31, 2009, as restated, the increase in net unrealized
depreciation before income taxes of $1.4 million was $24.6 million,
comprised of a $21.2 million decrease in targeted portfolio fair value, a
decrease of  $3.2 million in commodity derivative instruments fair
value and a decrease of $0.2 million in corporate notes fair
value.  The decrease in targeted portfolio fair value was largely a
result of changes in the estimated current market values of underlying
assets.  The decrease in the fair value of commodity derivative
instruments was a result of the reversal of 2008 unrealized appreciation due to
realizations in the first quarter of 2009.
 
 For the
quarter ended March 31, 2008, as restated, the increase in net unrealized
depreciation was $1.7 million, comprised of a $1.4 million decrease in targeted
portfolio fair value and a $0.3 million decrease in the fair value of corporate
notes.
 
 In light
of the recent disruption in the credit and equity capital markets and the
downward volatility of energy commodity prices, it has become more difficult to
predict the timing and amount of future realized capital gains.  In
addition, recent capital markets volatility has impacted our unrealized capital
appreciation and unrealized depreciation.  For example, since
September 30, 2008, the price of Resaca common stock as traded on the London AIM
has fallen by approximately 81% from £1.24 to £0.23 as of April 21, 2009 while
the U.S. dollar has strengthened against the British pound.  Also,
corporate bond prices have generally declined since September 30,
2008.
 
 Net
Increase or Decrease in Stockholders’ Equity from Operations
 
 For the
quarter ended March 31, 2009, as restated, we had a net decrease in
stockholders’ equity (net assets) resulting from operations of $18.6 million, or
$0.86 per share, compared to a net increase of $2.4 million, or $0.14 per share
for the quarter ended March 31, 2008 as restated.  The $21.0 million,
or $1.00 per share net decrease is attributable to the $22.8 million increase in
unrealized depreciation on our investments during the first quarter of 2009,
compared to the first quarter of 2008.
 
 Financial
Condition, Liquidity and Capital Resources
 
 During
the quarter ended March 31, 2009, we generated cash from operations, including
interest earned on our portfolio securities, as well as our investments in
corporate notes and U.S. government securities.  We received cash
redemptions of investments in portfolio securities and commodity derivative
instruments of $5.8 million.  At March 31, 2009, we had cash and cash
equivalents of $26.9 million, investments in U.S. Treasury Bills of $76.1
million and investments in corporate notes of $6.1 million.  Our
Treasury Credit Facility, which as of March 31, 2009 had $75 million drawn, will
mature on August 31, 2009.  On or before the maturity, we expect to
retire the facility in full with the proceeds of the sale of our U.S. Treasury
Bills.As of March
31, 2009, we had investments in or commitments to fund loan facilities to
nineteen portfolio companies totaling $349.6 million, of which $300.5 million
was drawn.  We expect to fund our investments in 2009 from income
earned on our portfolio and temporary investments, repayments or realizations of
existing investments and from borrowings under our Investment
Facility.  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 in mezzanine or senior secured
loans or other assets.  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.
 
 Commodity
Derivative Instruments
 
 We use
commodity derivative instruments to manage our exposure to commodity price
fluctuations.  We do not designate these instruments as hedging instruments
for financial accounting purposes, and, as a result, we recognize the change in
the instruments’ fair value currently on the Consolidated Statement of
Operations as net increase (decrease) in unrealized appreciation (depreciation)
on portfolio securities, corporate notes and commodity derivative
instruments.
 
 We
acquired a limited term royalty interest from ATP and the royalty payments
associated with this investment are subject to fluctuations in natural gas and
oil prices.  To manage this risk, we purchased oil and natural gas put
options on approximately 93% of our royalty interest.  These
transactions limit exposure to declines in oil and natural gas
prices.  See “Note 10: Commodity Derivative Instruments” in the
accompanying notes to the consolidated financial statements for further
description of our put options.
  32
  Contractual
Obligations
  A summary
of our contractual payment obligations at March 31, 2009 is as
follows:
 
 Less
      than
                    
                    
                    
                    
                    
                    
                    
                    
                    More
      thanContractual Obligations
                    
                    Total
                    
                    
                    1 Year
                    
                    
                    1-3 Years
                    
                    
                    3-5 Years
                    
                    
                    5 YearsMarch
      31, 2009:Long-term
      debt obligations— revolving credit facilities (1)
                    
                    $
                    102,000,000
                    
                    
                    $
                    75,000,000
                    
                    
                    $
                    27,000,000
                    
                    
                    $
                    -
                    
                    
                    $
                    -Total
                    
                    $
                    102,000,000
                    
                    
                    $
                    75,000,000
                    
                    
                    $
                    27,000,000
                    
                    
                    $
                    -
                    
                    
                    $
                    -
 
 (1)  Excludes
accrued interest amounts.
  Off-Balance
Sheet Arrangements
  Currently,
we do not engage in any off-balance sheet arrangements, including any risk
management of commodity pricing or other hedging practices.
 
 Dividends
 
 We have
elected to operate our business so as to be taxed as a RIC under Subchapter M of
the Code.  To maintain our RIC status, we must distribute at least 90%
of our “investment company taxable income” (which generally consists of ordinary
income and realized net short-term gains in excess of realized net long-term
capital losses, if any, reduced by deductible expenses) and net tax-exempt
interest.  In order to avoid certain excise taxes imposed on RICs, we
will be required to distribute at least 98% of our ordinary income and net
capital gains, and 100% of any income realized, but not distributed or deemed
distributed, in preceding years.  We currently intend to make
sufficient distributions to satisfy the annual distribution requirement and to
avoid the excise taxes.
 
 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 BDC 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 RIC. We cannot assure stockholders that they will receive any distributions
or distributions at a particular level.
 
 Portfolio
Credit Quality
 
 Virtually
all of our portfolio investments are in negotiated, and often illiquid,
securities of energy companies. We maintain a system to evaluate the credit
quality of these investments. While incorporating quantitative analysis, this
system is a qualitative assessment. This system is intended to reflect the
overall, long term performance of a portfolio company’s business, the collateral
coverage of an investment, and other relevant factors. Based on this system, as
of March 31, 2009, our investments in portfolio companies are generally
performing satisfactorily. As a consequence of the general economic downturn and
associated weakness in the energy markets, some of our investments may
experience stress in the near term; however, we believe that they generally have
cost structures that should tolerate it. Of the twenty-two rated investments in
nineteen portfolio companies, compared to the prior quarter end, none improved
in rating, five declined in rating and seventeen retained the same
rating.  Twelve investments approximating $142.9 million, or
approximately 48% of the $300.0 million in targeted investments and commodity
derivative instruments, on a cost basis, are carried on our watch list due to
slower than expected development of the assets supporting the investments,
deterioration in asset coverage, or the downturn in general economic and
commodity market conditions.  While restructuring of some of these
watch list investments may be required, subject to general economic and
commodity market conditions in the long term, we do not currently foresee
significant permanent long-term deterioration in the existing
portfolio.
  The
combined decrease in targeted portfolio and commodity derivative instrument fair
value of $24.4 million is primarily due to changes in the estimated current
market values of underlying assets of $21.3 million, and the reversal of prior
year unrealized appreciation of commodity derivative instruments, due to first
quarter 2009 realizations.  The $21.2 million decrease in targeted
portfolio fair value consisted primarily of increases on TierraMar Energy
LP preferred LP units, $4.1 million, and Formidable Senior Secured Note, $17.5
million. The increase in unrealized depreciation on TierraMar’s preferred
LP units was primarily due to changes in our forecast of oil and natural gas
prices.  The increase in unrealized depreciation on the Formidable
Senior Secured Note is primarily due to deterioration in the market for Powder
River Basin natural gas assets.
  33
  Recently
Issued Accounting Pronouncements
 
 See
“Note 11: Recent Accounting Pronouncements” in the accompanying notes to
consolidated financial statements for details of recently issued accounting
pronouncements and their expected impact on our 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 our
Annual Report on Form 10-K for the year ended December 31, 2008.
 
 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, as of the
end of the fiscal period covered by this Quarterly Report on Form 10-Q (March
31, 2009), 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 March 31, 2009, 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.
  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.
 34
  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 March 31, 2009 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, 2008.
 
 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.
 
 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.
  Not
applicable.
 
 Item 5.
              Other
      Information.
  Not
applicable.
  35
  Item 6.
              Exhibits.
 
 No.
              Exhibit
 
 Exhibits
      No.
                  
                  Exhibit3.1
                  
                  Articles
      of Amendment and Restatement (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)3.2
                  
                  Bylaws
      (filed as Exhibit (b) to the Company’s Registration Statement on Form
      N-2 filed on August 16, 2004 (Registration No. 333-118279) and
      incorporated herein by reference)4.1
                  
                  Form
      of Stock Certificate (filed as Exhibit (d) to the Company’s Pre-Effective
      Amendment No. 2 to Registration Statement on Form N-2 filed on October 7,
      2004 (Registration No. 333-118279) and incorporated herein by
      reference)4.2
                  
                  Dividend
      Reinvestment Plan (filed as Exhibit (e) to the Company’s Registration
      Statement on Form N-2 filed on August 16, 2004 (Registration No.
      333-118279) and incorporated herein by reference)10.1
                  
                  Investment
      Advisory Agreement between the 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 between the 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 between the Company and NGP Energy Capital Management, L.L.C.
      (formerly known as Natural Gas Partners, L.L.C.)(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
                  
                  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)10.5
                  
                  Amended
      and Restated Revolving Credit Agreement, dated as of August 31, 2006,
      between the Company, the lenders from time to time party thereto and
      SunTrust Bank, as administrative agent for the lenders (filed as Exhibit
      10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
      September 30, 2006 and incorporated herein by
reference)10.6
                  
                  Treasury
      Secured Revolving Credit Agreement, dated as of August 31, 2006, between
      the Company, the lenders from time to time party thereto and SunTrust Bank
      as administrative agent for the lenders (filed as Exhibit 10.7 to the
      Company’s Quarterly Report on Form 10-Q for the quarter ended September
      30, 2006 and incorporated herein by reference)10.7
                  
                  Custody
      Agreement between the Company and Wells Fargo Bank, N.A. (filed as Exhibit
      (j)(1) to the Company’s Pre-Effective Amendment No. 1 to Registration
      Statement on Form N-2 filed September 24, 2004 (Registration No.
      333-118279) and incorporated herein by reference)10.8
                  
                  Amendment
      No. 1 to Custody Agreement between the Company and Wells Fargo Bank, N.A.
      (filed as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the
      year ended December 31,  2007 and incorporated herein by
      reference)10.9
                  
                  Amendment
      No. 2 to Custody Agreement between the Company and Wells Fargo Bank, N.A.
      (filed as Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the
      year ended December 31, 2007 and incorporated herein by
      reference)10.10
                  
                  First
      Amendment to Amended and Restated Revolving Credit Agreement effective as
      of August 31, 2006, between the 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 quarter ended September 30, 2007 and
      incorporated herein by reference)10.11
                  
                  First
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      August 31, 2006, between the Company, the lenders from time to time party
      thereto and SunTrust Bank (filed as Exhibit 10.9 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and
      incorporated herein by reference)10.12
                  
                  Second
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      September 28, 2007, between the Company, the lenders from time to time
      party thereto and SunTrust Bank (filed as Exhibit 10.1 to the Company’s
      Current Report on Form 8-K on October 24, 2007 and incorporated herein by
      reference)10.13
                  
                  Second
      Amendment to Amended and Restated Revolving Credit Agreement effective as
      of March 13, 2008, between the Company, the lenders from time to time
      party thereto and SunTrust Bank (filed as Exhibit 10.11 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and
      incorporated herein by
reference)
  36
 
 Exhibits
      No.
                
                Exhibit10.14
                
                Third
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      March 13, 2008, between the Company, the lenders from time to time party
      thereto and SunTrust Bank (filed as Exhibit 10.12 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and
      incorporated herein by reference)10.15
                
                Third
      Amendment to Amended and Restated Revolving Credit Agreement effective as
      of September 29, 2008, between the Company, the lenders from time to time
      party thereto and SunTrust Bank (filed as Exhibit 10.13 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and
      incorporated herein by reference)10.16
                
                Fourth
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      September 29, 2008, between the Company, the lenders from time to time
      party thereto and SunTrust (filed as Exhibit 10.14 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 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
  37
 
 SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
  NGP
      CAPITAL RESOURCES COMPANYDate:
      May 10, 2010
                                  
                                  By:
                                  /s/ John H. HomierJohn
      H. HomierPresident
      and Chief Executive
Officer
 
 
 NGP
      CAPITAL RESOURCES COMPANYDate:
      May 10, 2010
                              
                              By:
                              /s/ Stephen K. GardnerStephen
      K. GardnerChief
      Financial Officer, Treasurer and
Secretary
 
   
 
 Index
to Exhibits
 
 Exhibits
      No.
                
                Exhibit3.1
                
                Articles
      of Amendment and Restatement (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)3.2
                
                Bylaws
      (filed as Exhibit (b) to the Company’s Registration Statement on Form N-2
      filed on August 16, 2004 (Registration No. 333-118279) and incorporated
      herein by reference)4.1
                
                Form
      of Stock Certificate (filed as Exhibit (d) to the Company’s Pre-Effective
      Amendment No. 2 to Registration Statement on Form N-2 filed on October 7,
      2004 (Registration No. 333-118279) and incorporated herein by
      reference)4.2
                
                Dividend
      Reinvestment Plan (filed as Exhibit (e) to the Company’s Registration
      Statement on Form N-2 filed on August 16, 2004 (Registration No.
      333-118279) and incorporated herein by reference)10.1
                
                Investment
      Advisory Agreement between the 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 between the 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 between the Company and NGP Energy Capital Management,
      L.L.C.(formerly known as Natural Gas Partners, L.L.C.)(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
                
                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)10.5
                
                Amended
      and Restated Revolving Credit Agreement, dated as of August 31, 2006,
      between the Company, the lenders from time to time party thereto and
      SunTrust Bank, as administrative agent for the lenders (filed as Exhibit
      10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
      September 30, 2006 and incorporated herein by
reference)10.6
                
                Treasury
      Secured Revolving Credit Agreement, dated as of August 31, 2006, between
      the Company, the lenders from time to time party thereto and SunTrust Bank
      as administrative agent for the lenders (filed as Exhibit 10.7 to the
      Company’s Quarterly Report on Form 10-Q for the quarter ended September
      30, 2006 and incorporated herein by reference)10.7
                
                Custody
      Agreement between the Company and Wells Fargo Bank, N.A. (filed as Exhibit
      (j)(1) to the Company’s Pre-Effective Amendment No. 1 to Registration
      Statement on Form N-2 filed September 24, 2004 (Registration No.
      333-118279) and incorporated herein by reference)10.8
                
                Amendment
      No. 1 to Custody Agreement between the Company and Wells Fargo Bank, N.A.
      (filed as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the
      year ended December 31,  2007 and incorporated herein by
      reference)10.9
                
                Amendment
      No. 2 to Custody Agreement between the Company and Wells Fargo Bank, N.A.
      (filed as Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the
      year ended December 31, 2007 and incorporated herein by
      reference)10.10
                
                First
      Amendment to Amended and Restated Revolving Credit Agreement effective as
      of August 31, 2006, between the 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 quarter ended September 30, 2007 and
      incorporated herein by reference)10.11
                
                First
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      August 31, 2006, between the Company, the lenders from time to time party
      thereto and SunTrust Bank (filed as Exhibit 10.9 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and
      incorporated herein by reference)10.12
                
                Second
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      September 28, 2007, between the Company, the lenders from time to time
      party thereto and SunTrust Bank (filed as Exhibit 10.1 to the Company’s
      Current Report on Form 8-K on October 24, 2007 and incorporated herein by
      reference)10.13
                
                Second
      Amendment to Amended and Restated Revolving Credit Agreement effective as
      of March 13, 2008, between the Company, the lenders from time to time
      party thereto and SunTrust Bank (filed as Exhibit 10.11 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and
      incorporated herein by
reference)
  
 
 Exhibits
      No.
                
                Exhibit10.14
                
                Third
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      March 13, 2008, between the Company, the lenders from time to time party
      thereto and SunTrust Bank (filed as Exhibit 10.12 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and
      incorporated herein by reference)10.15
                
                Third
      Amendment to Amended and Restated Revolving Credit Agreement effective as
      of September 29, 2008, between the Company, the lenders from time to time
      party thereto andSunTrust
      Bank (filed as Exhibit 10.13 to the Company’s Quarterly Report on Form
      10-Q for the quarter ended September 30, 2008 and incorporated herein by
      reference)10.16
                
                Fourth
      Amendment to Treasury Secured Revolving Credit Agreement effective as of
      September 29, 2008, between the Company, the lenders from time to time
      party thereto and SunTrust (filed as Exhibit 10.14 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 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