**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION **

**Washington,      D.C. 20549 **

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**FORM      10-Q **

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**(Mark      One) **

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

**      For      the quarterly period ended      September 30, 2006**

**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 **

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**NGP      Capital Resources Company **

**(Exact      name of registrant as specified in its charter) **

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|                                                                                                |                                                                         |
|-----------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|
| **Maryland**                                                                                        | **20-1371499**                                                               |
| **(State                or other jurisdiction of****incorporation                or organization)** | **(I.R.S.                employer****identification                number)** |
|                                                                                                |                                                                         |
| **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) **

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| Large accelerated filer  ̈ | Accelerated filer x  | Non-accelerated filer  ̈ |
|--------------------------------|---------------------------|------------------------------|

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**PART      I - FINANCIAL INFORMATION **

**Item      1. Consolidated Financial Statements. **

| **NGP                  CAPITAL RESOURCES COMPANY** |
|----------------------------------------------------|
| **CONSOLIDATED                  BALANCE SHEET**    |

|                                                                                   |   | September                  30, 2006(unaudited) |        |  December                31, 2005(audited) |   |
|----------------------------------------------------------------------------------------|--------|------------------------------------------------|-------------|-------------------------------------------------|--------|
| Assets:                                                                                |   |                                           |        |                                            |   |
| Investments                  in portfolio securities at fair value                     |   |                                           |        |                                            |   |
|                      (cost: $196,907,941 and $91,761,111, respectively) |   | $                                              | 197,386,787 |                                            | $      | 92,847,043 |   |
| Investments                  in corporate notes at fair value                          |   |                                           |             |                                            |   |  |   |
|                      (cost: $19,694,652 and $21,727,976, respectively)  |   |                                           | 17,381,000  |                                            |   | 20,537,900 |   |
| Investments                  in U.S. Treasury Bills, at amortized cost                 |   |                                           |             |                                            |   |  |   |
|                      which approximates fair value                      |   |                                           | 121,092,487 |                                            |   | 121,518,196 |   |
| Total                  investments                                                     |   |                                           | 335,860,274 |                                            |   | 234,903,139 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Cash                  and cash equivalents, at cost which                              |   |                                           |             |                                            |   |  |   |
|                      approximates fair value                            |   |                                           | 11,416,201  |                                            |   | 13,350,588 |   |
| Accounts                  receivable                                                   |   |                                           | 13,920      |                                            |   | 50,965 |   |
| Interest                  receivable                                                   |   |                                           | 1,132,786   |                                            |   | 609,545 |   |
| Prepaid                  assets                                                        |   |                                           | 1,316,424   |                                            |   | 576,029 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Total                  assets                                                          |   | $                                              | 349,739,605 |                                            | $      | 249,490,266 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Liabilities                  and stockholders' equity (net assets):                    |   |                                           |             |                                            |   |  |   |
| Current                  Liabilities:                                                  |   |                                           |             |                                            |   |  |   |
| Accounts                  payable                                                      |   | $                                              | 916,528     |                                            | $      | 407,580 |   |
| Management                  and incentive fees payable                                 |   |                                           | 1,128,303   |                                            |   | 399,173 |   |
| Dividends                  payable                                                     |   |                                           | 4,350,025   |                                            |   | 4,785,028 |   |
| Total                  current liabilities                                             |   |                                           | 6,394,856   |                                            |   | 5,591,781 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Long-term                  debt                                                        |   |                                           | 100,000,000 |                                            |   | - |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Total                  liabilities                                                     |   |                                           | 106,394,856 |                                            |   | 5,591,781 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Commitments                  and contingencies (Note 8)                                |   |                                           |             |                                            |   |  |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Stockholders’                  equity (net assets)                               |   |                                           |             |                                            |   |  |   |
| Common                  stock, $.001 par value, 250,000,000 shares                     |   |                                           |             |                                            |   |  |   |
|                      authorized; 17,400,100 issued and outstanding      |   |                                           | 17,400      |                                            |   | 17,400 |   |
| Paid-in                  capital in excess of par                                      |   |                                           | 244,309,260 |                                            |   | 244,309,260 |   |
| Undistributed                  net investment income (loss)                            |   |                                           | 1,027,296   |                                            |   | (324,031 | ) |
| Undistributed                  net realized capital gain (loss)                        |   |                                           | (174,401    | )                                               |   | - |   |
| Net                  unrealized appreciation (depreciation) of                         |   |                                           |             |                                            |   |  |   |
|                      portfolio securities and corporate notes           |   |                                           | (1,834,806  | )                                               |   | (104,144 | ) |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Total                  stockholders’ equity (net assets)                         |   |                                           | 243,344,749 |                                            |   | 243,898,485 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Total                  liabilities and stockholders' equity (net assets)               |   | $                                              | 349,739,605 |                                            | $      | 249,490,266 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |
| Net                  asset value per share                                             |   | $                                              | 13.99       |                                            | $      | 14.02 |   |
|                                                                                   |   |                                           |             |                                            |   |  |   |

| *(See                  accompanying notes to consolidated financial                  statements)* |
|---------------------------------------------------------------------------------------------------|

----

| **NGP                  CAPITAL RESOURCES COMPANY**        |
|-----------------------------------------------------------|
| **CONSOLIDATED                  STATEMENT OF OPERATIONS** |

|                                                                                     |   |  For                  the Three Months Ended  |      |  For                  the Nine Months Ended  |   |
|------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|-----------|--------------------------------------------------------|--------|
|                                                                                     |   |  September                  30, 2006(unaudited)    |      |  September                  30, 2005(unaudited)   |   |  September                  30, 2006(unaudited) |   |  September                  30, 2005(unaudited) |   |
| Investment                  income                                                       |   |                                                    |      |                                                   |   |   |   |   |   |   |   |   |   |
|                     Interest income                                            |   | $                                                       | 7,379,320 |                                                   | $      | 4,338,322 |   | $ | 18,040,507 |   | $ | 12,183,087 |   |
|                     Dividend income                                            |   |                                                    | -         |                                                   |   | - |   |   | 60,998 |   |   | - |   |
|                     Other income                                               |   |                                                    | 177,634   |                                                   |   | 101,000 |   |   | 451,261 |   |   | 101,000 |   |
|                                                                                     |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
|                                                                                     |   |                                                    | 7,556,954 |                                                   |   | 4,439,322 |   |   | 18,552,766 |   |   | 12,284,087 |   |
|                                                                                     |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
| Operating                  expenses                                                      |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
|                     Management fees                                            |   |                                                    | 1,128,304 |                                                   |   | 900,000 |   |   | 3,363,428 |   |   | 2,700,000 |   |
|                     Organization costs                                         |   |                                                    | -         |                                                   |   | - |   |   | - |   |   | 1,111 |   |
|                     Professional fees                                          |   |                                                    | 186,132   |                                                   |   | 151,865 |   |   | 543,960 |   |   | 619,416 |   |
|                     Insurance expense                                          |   |                                                    | 144,234   |                                                   |   | 144,248 |   |   | 432,823 |   |   | 432,407 |   |
|                     Interest expense and fees                                  |   |                                                    | 836,067   |                                                   |   | 79,477 |   |   | 996,141 |   |   | 120,230 |   |
|                     General and administrative expenses                        |   |                                                    | 523,084   |                                                   |   | 346,798 |   |   | 1,599,028 |   |   | 1,108,141 |   |
|                                                                                     |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
|                        Total operating expenses                 |   |                                                    | 2,817,821 |                                                   |   | 1,622,388 |   |   | 6,935,380 |   |   | 4,981,305 |   |
|                                                                                     |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
| Net                  investment income                                                   |   |                                                    | 4,739,133 |                                                   |   | 2,816,934 |   |   | 11,617,386 |   |   | 7,302,782 |   |
|                                                                                     |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
| Net                  realized capital gain (loss) on portfolio securities                |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
|                     and corporate notes                                        |   |                                                    | (174,401  | )                                                      |   | 173,081 |   |   | (174,401 | ) |   | 316,651 |   |
| Net                  increase (decrease) in unrealized appreciation                      |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
|                     (depreciation) on portfolio securities and corporate notes |   |                                                    | 775,859   |                                                   |   | 403,219 |   |   | (1,730,662 | ) |   | (983,221 | ) |
|                                                                                     |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
| Net                  increase in stockholders' equity                                    |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
|                     (net assets) resulting from operations                     |   | $                                                       | 5,340,591 |                                                   | $      | 3,393,234 |   | $ | 9,712,323 |   | $ | 6,636,212 |   |
|                                                                                     |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
| Net                  increase in stockholders' equity (net assets)                       |   |                                                    |           |                                                   |   |  |   |   |  |   |   |  |   |
|                     resulting from operations per common share                 |   | $                                                       | 0.31      |                                                   | $      | 0.20 |   | $ | 0.56 |   | $ | 0.38 |   |

| *(See                  accompanying notes to consolidated financial                  statements)* |
|---------------------------------------------------------------------------------------------------|
|                                                                                              |   |   |   |   |   |   |   |

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| **NGP                  CAPITAL RESOURCES COMPANY**                                                           |
|--------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (NET                  ASSETS)** |
| **(unaudited)**                                                                                              |

|                                                            |   |                          |       |                             |   |                              |   |                           |        |                                     |   | Net                  Unrealized  |   |                          |     |
|-----------------------------------------------------------------|--------|-------------------------------|------------|----------------------------------|--------|-----------------------------------|--------|--------------------------------|-------------|------------------------------------------|--------|---------------------------------------|--------|-------------------------------|----------|
|                                                            |   |                          |       |                             |   |                              |   |                           |        |                                     |   | Appreciation                          |   | Total                         |     |
|                                                            |   |                          |       |                             |   |                              |   | Undistributed                  |        | Undistributed                            |   |  (Depreciation)                  |   | Stockholders'                 |     |
|                                                            |   | Common                  Stock |       | Paid-in                  Capital |   | Net                  Investment   |   | Net                  Realized  |        | of                  Portfolio Securities |   | Equity                                |   |
|                                                            |   | Shares                        |       | Amount                           |   | in                  Excess of Par |   | Income                  (Loss) |        | Capital                  Gain (Loss)     |   | and                  Corporate Notes  |   | (Net                  Assets) |     |
|                                                            |   |                          |       |                             |   |                              |   |                           |        |                                     |   |                                  |   |                          |     |
| Balance                  at December 31, 2005                   |   |                          | 17,400,100 |                             | $      | 17,400                            |   | $                              | 244,309,260 |                                     | $      | (324,031                              | )      | $                             | -        |   | $ | (104,144 | ) | $ | 243,898,485 |   |
|                                                            |   |                          |            |                             |   |                                   |   |                           |             |                                     |   |                                       |   |                          |          |   |   |  |   |   |  |   |
| Net                  increase (decrease) in                     |   |                          |            |                             |   |                                   |   |                           |             |                                     |   |                                       |   |                          |          |   |   |  |   |   |  |   |
|                     stockholders' equity (net assets) |   |                          |            |                             |   |                                   |   |                           |             |                                     |   |                                       |   |                          |          |   |   |  |   |   |  |   |
|                     resulting from operations         |   |                          | -          |                             |   | -                                 |   |                           | -           |                                     |   | 11,617,386                            |   |                          | (174,401 | ) |   | (1,730,662 | ) |   | 9,712,323 |   |
|                                                            |   |                          |       |                             |   |                              |   |                           |        |                                     |   |                                  |   |                          |     |   |   |   |   |   |   |   |
| Dividends                  declared                             |   |                          | -          |                             |   | -                                 |   |                           | -           |                                     |   | (10,266,059                           | )      |                          | -        |   |   | - |   |   | (10,266,059 | ) |
| Balance                  at September 30, 2006                  |   |                          | 17,400,100 |                             | $      | 17,400                            |   | $                              | 244,309,260 |                                     | $      | 1,027,296                             |   | $                             | (174,401 | ) | $ | (1,834,806 | ) | $ | 243,344,749 |   |
|                                                            |   |                          |            |                             |   |                                   |   |                           |             |                                     |   |                                       |   |                          |          |   |   |  |   |   |  |   |
|                                                            |   |                          |            |                             |   |                                   |   |                           |             |                                     |   |                                       |   |                          |          |   |   |  |   |   |  |   |
|                                                            |   |                          |            |                             |   |                                   |   |                           |             |                                     |   |                                       |   |                          |          |   |   |  |   |   |  |   |
|                                                            |   |                          |            |                             |   |                                   |   |                           |             |                                     |   |                                       |   |                          |          |   |   |  |   |   |  |   |

| *(See                  accompanying notes to consolidated financial                  statements)* |
|---------------------------------------------------------------------------------------------------|
|                                                                                              |   |   |   |   |   |   |   |   |   |

----

| **NGP                  CAPITAL RESOURCES COMPANY**        |
|-----------------------------------------------------------|
| **CONSOLIDATED                  STATEMENT OF CASH FLOWS** |

|                                                                                                                                                                                     |   |  For                  the Nine |         |  For                  the Nine       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------------|-------------------------------------------|--------|
|                                                                                                                                                                                     |   |  Months                  Ended |         |  Months                  Ended       |   |
|                                                                                                                                                                                     |   | September                  30, 2006 |         |  September                  30, 2005 |   |
|                                                                                                                                                                                     |   |  (unaudited)                   |         |  (unaudited)                         |   |
| Cash                  flows from operating activities                                                                                                                                    |   |                                |         |                                      |   |
|                                                                                                                                                                                     |   |                                |         |                                      |   |
|                    Net increase (decrease) in stockholders' equity (net assets) resulting                  from operations                                                          |   | $                                   | 9,712,323    |                                      | $      | 6,636,212 |   |
|                    Adjustments to reconcile net increase (decrease) in stockholders'                  equity                  (net assets)                                          |   |                                |              |                                      |   |  |   |
|                       resulting from operations to net cash used in operating                  activities:                                                           |   |                                |              |                                      |   |  |   |
|                          Decrease (increase) in accounts receivable                                                                                   |   |                                | 37,045       |                                      |   | (21,930 | ) |
|                          (Increase) decrease in interest receivable                                                                                   |   |                                | (523,241     | )                                         |   | (318,284 | ) |
|                          Decrease (increase) in investment balance due to payment-in-kind                  interest                                   |   |                                | (161,942     | )                                         |   | - |   |
|                          Decrease (increase) in investment balance due to payment-in-kind                  dividend                                   |   |                                | (60,998      | )                                         |   | - |   |
|                          Decrease (increase) in prepaid assets                                                                                        |   |                                | (740,395     | )                                         |   | 287,232 |   |
|                          Increase (decrease) in accounts payable                                                                                      |   |                                | 1,238,078    |                                      |   | 44,855 |   |
|                          Net amortization of premiums, discounts and fees                                                                             |   |                                | (581,676     | )                                         |   | (494,925 | ) |
|                          Decrease (increase) in unrealized appreciation on portfolio securities                  and                  corporate notes |   |                                | 1,730,662    |                                      |   | 983,221 |   |
|                    Purchase of investments in portfolio securities                                                                                                                  |   |                                | (116,814,029 | )                                         |   | (49,180,033 | ) |
|                    Redemption of investments in portfolio securities                                                                                                                |   |                                | 12,502,402   |                                      |   | 11,020,616 |   |
|                    Net sale (purchase) of investments in agency and auction rate                  securities                                                                        |   |                                | -            |                                      |   | 41,301,002 |   |
|                    Purchase of investments in corporate notes                                                                                                                       |   |                                | -            |                                      |   | (51,167,818 | ) |
|                    Sale of investments in corporate notes                                                                                                                           |   |                                | 2,002,737    |                                      |   | 29,357,422 |   |
|                    Net sale (purchase) of investments in U.S. Treasury Bills                                                                                                        |   |                                | 425,709      |                                      |   | (103,977,809 | ) |
|                                                                                                                                                                                     |   |                                |              |                                      |   |  |   |
|                            Net cash provided by (used in) operating activities                                                              |   |                                | (91,233,325  | )                                         |   | (115,530,239 | ) |
|                                                                                                                                                                                     |   |                                |              |                                      |   |  |   |
| Cash                  flows from financing activities                                                                                                                                    |   |                                |              |                                      |   |  |   |
|                                                                                                                                                                                     |   |                                |              |                                      |   |  |   |
|   Draw                  on revolving credit facility                                                                                                                           |   |                                | 100,000,000  |                                      |   | - |   |
|                    Offering costs from the issuance of common stock                                                                                                                 |   |                                | -            |                                      |   | (7,606 | ) |
|                    Dividends paid                                                                                                                                                   |   |                                | (10,701,062  | )                                         |   | (4,263,025 | ) |
|                                                                                                                                                                                     |   |                                |              |                                      |   |  |   |
|                            Net cash provided by (used in) financing activities                                                              |   |                                | 89,298,938   |                                      |   | (4,270,631 | ) |
|                                                                                                                                                                                     |   |                                |              |                                      |   |  |   |
| Net                  increase (decrease) in cash and cash equivalents                                                                                                                    |   |                                | (1,934,387   | )                                         |   | (119,800,870 | ) |
| Cash                  and cash equivalents, beginning of the period                                                                                                                      |   |                                | 13,350,588   |                                      |   | 136,314,402 |   |
|                                                                                                                                                                                     |   |                                |              |                                      |   |  |   |
| Cash                  and cash equivalents, end of period                                                                                                                                |   | $                                   | 11,416,201   |                                      | $      | 16,513,532 |   |

| *(See                  accompanying notes to consolidated financial                  statements)* |
|---------------------------------------------------------------------------------------------------|
|                                                                                              |   |   |   |   |   |

----

| **NGP                  CAPITAL RESOURCES COMPANY**         |
|------------------------------------------------------------|
| **CONSOLIDATED                  SCHEDULE OF INVESTMENTS**  |
| **September                  30, 2006**                    |
|                                                       |
|                                                       |   |   |   |   |   |   |   |
| **Portfolio                  Company (1)**                 | **Energy                  Industry Segment** | **Investment                  (2) (4)** | **Principal** |   | **Cost** |   | **Fair                  Value (3)** |
|                                                       |   |   |   |   |   |   |   |
| **TARGETED                  INVESTMENTS**                  |   |   |   |   |   |   |   |
| Crescent                  Resources, LLC                   | Oil                  & Gas Production | Senior                  Subordinated- | $  | 48,250,000 |   | $ | 47,618,792 |   | $  | 47,618,792 |
|                                                       | and                  Development | Secured                  Term Loan |   |   |   |   |   |
|                                                       |   | (LIBOR                  + 9.5%, due 12/20/2008) |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |
| Venoco,                  Inc.                              | Oil                  & Gas Production | Senior                  Notes (7) | 8,000,000 |   | 7,959,216 |   | 7,700,000 |
|                                                       | and                  Development | (8.75%,                  due 12/15/2011) |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |
| Venoco,                  Inc.                              | Oil                  & Gas Production | Senior                  Notes (7) | 4,000,000 |   | 3,932,442 |   | 3,850,000 |
|                                                       | and                  Development | (8.75%,                  due 12/15/2011) |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |
| TierraMar                  Energy, LLC                     | Oil                  & Gas Production | Senior                  Secured | 8,992,841 |   | 8,841,761 |   | 8,841,761 |
|                                                       | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                       |   | (LIBOR                  + 6%, due 5/13/2008) |   |   |   |   |   |
|                                                       |   | Overriding                  Royalty Interest (6) | 20,000 |   | 18,691 |   | 200,000 |
|                                                       |   | Warrants                  (5) | 10,000 |   | 10,000 |   | 200,000 |
|                                                       |   |   |   |   |   |   |   |
| C-Gas,                  LLC                                | Oil                  & Gas Production | Senior                  Secured | 21,843,015 |   | 21,531,674 |   | 21,531,674 |
|                                                       | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                       |   | (LIBOR                  + 5.5%, due 4/25/2009) |   |   |   |   |   |
|                                                       |   | Overriding                  Royalty Interest (6) | 45,000 |   | 44,651 |   | 200,000 |
|                                                       |   |   |   |   |   |   |   |
| Atchee                  CBM, LLC                           | Oil                  & Gas Production | Senior                  Secured | 2,083,036 |   | 2,046,181 |   | 2,046,181 |
|                                                       | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                       |   | (LIBOR                  + 5.5%, due 4/25/2009) |   |   |   |   |   |
|                                                       |   | Overriding                  Royalty Interest (5)(6) | 5,000 |   | 5,000 |   | 5,000 |
|                                                       |   |   |   |   |   |   |   |
| Chroma                  Exploration & Production, Inc. | Oil                  & Gas Production | Senior                  Secured | 15,000,000 |   | 14,768,320 |   | 14,768,320 |
|                                                       | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                       |   | (LIBOR                  + 6%, due 9/21/2008) |   |   |   |   |   |
|                                                       |   | Overriding                  Royalty Interest (6) | 87,500 |   | 83,521 |   | 400,000 |
|                                                       |   |   |   |   |   |   |   |
|                                                       |   | 8,377                  Shares Series A Participating | - |   | 2,094,248 |   | 2,094,248 |
|                                                       |   | Convertible                  Preferred Stock |   |   |   |   |   |
|                                                       |   | 8.11                  Shares Common Stock | - |   | - |   | - |
|                                                       |   |   |   |   |   |   |   |
| Piceance                  Basin Properties, LLC            | Oil                  & Gas Production | Senior                  Secured | 5,455,151 |   | 5,499,971 |   | 5,499,971 |
|                                                       | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                       |   | (11.3868%,                  due 10/31/2010) |   |   |   |   |   |
|                                                       |   | LLC                  Units (19,900 units) | - |   | 40,876 |   | 18,243 |
|                                                       |   | Warrants                  (5) | 25,000 |   | 25,000 |   | 25,000 |
|                                                       |   |   |   |   |   |   |   |
| Resaca                  Exploitation, LP                   | Oil                  & Gas Production | Senior                  Secured | 19,880,000 |   | 19,509,463 |   | 19,509,463 |
|                                                       | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                       |   | (LIBOR                  + 6.00%, due 5/01/2012) |   |   |   |   |   |
|                                                       |   | Overriding                  Royalty Interest (6) | 30,000 |   | 30,000 |   | 30,000 |
|                                                       |   |   |   |   |   |   |   |
|                                                       |   | Senior                  Secured Term Loan | 6,000,000 |   | 5,896,967 |   | 5,896,967 |
|                                                       |   | (LIBOR                  + 9.00%, due 8/01/2007) |   |   |   |   |   |
|                                                       |   | Overriding                  Royalty Interest (6) | 30,000 |   | 30,000 |   | 30,000 |
|                                                       |   |   |   |   |   |   |   |
|                                                       |   | Senior                  Subordinated- | 4,000,000 |   | 4,000,000 |   | 4,000,000 |
|                                                       |   | Secured                  Convertible Term Loan |   |   |   |   |   |
|                                                       |   | (6.00%                  Cash, 8.00% PIK, due 05/01/2012) |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |

----

| **NGP                  CAPITAL RESOURCES COMPANY**                                                |
|---------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  SCHEDULE OF INVESTMENTS**                                         |
| **September                  30, 2006**                                                           |
| (Continued)                                                                                       |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
| **Portfolio                  Company (1)**                                                        | **Energy                  Industry Segment** | **Investment                  (2) (4)** | **Principal** |   | **Cost** |   | **Fair                  Value (3)** |
|                                                                                              |   |   |   |   |   |   |   |
| Crossroads                  Energy, LP                                                            | Oil                  & Gas Production | Senior                  Secured | 832,952 |   | 770,348 |   | 770,348 |
|                                                                                              | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                                                              |   | (LIBOR                  + 5.50% Cash, +7.5% PIK, due 6/29/2009) |   |   |   |   |   |
|                                                                                              |   | Overriding                  Royalty Interest (6) | 10,000 |   | 10,000 |   | 10,000 |
|                                                                                              |   |   |   |   |   |   |   |
| Rubicon                  Energy Partners, LLC                                                     | Oil                  & Gas Production | Senior                  Secured | 22,056,616 |   | 21,723,593 |   | 21,723,593 |
|                                                                                              | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                                                              |   | (LIBOR                  + 6.50%, due 7/25/2010) |   |   |   |   |   |
|                                                                                              |   | LLC                  Units (4,000 units ) | - |   | 4,000,000 |   | 4,000,000 |
|                                                                                              |   |   |   |   |   |   |   |
| BSR                  Alto, LLC                                                                    | Oil                  & Gas Production | Senior                  Secured | 1,268,124 |   | 1,112,717 |   | 1,112,717 |
|                                                                                              | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                                                              |   | (LIBOR                  + 5.50% Cash, +7.5% PIK, due 8/17/2009) |   |   |   |   |   |
|                                                                                              |   | Overriding                  Royalty Interest (6) | 30,000 |   | 30,000 |   | 30,000 |
|                                                                                              |   | Warrants                  (5) | 10,000 |   | 10,000 |   | 10,000 |
|                                                                                              |   |   |   |   |   |   |   |
| BSR                  Loco Bayou, LLC                                                              | Oil                  & Gas Production | Senior                  Secured | 2,075,202 |   | 1,872,290 |   | 1,872,290 |
|                                                                                              | and                  Development | Multiple-Advance                  Term Loan |   |   |   |   |   |
|                                                                                              |   | (LIBOR                  + 5.50% Cash, +7.5% PIK, due 8/17/2009) |   |   |   |   |   |
|                                                                                              |   | Overriding                  Royalty Interest (5)(6) | 20,000 |   | 20,000 |   | 20,000 |
|                                                                                              |   | Warrants                  (5) | 10,000 |   | 10,000 |   | 10,000 |
|                                                                                              |   |   |   |   |   |   |   |
| Nighthawk                  Transport I, LP                                                        | Oilfield                  Services | Senior                  Secured | 2,333,333 |   | 2,298,967 |   | 2,298,967 |
|                                                                                              |   | Term                  Loan A |   |   |   |   |   |
|                                                                                              |   | (LIBOR                  + 3.50%, due 6/15/2010) |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   | Second                  Lien | 4,018,519 |   | 3,939,005 |   | 3,939,005 |
|                                                                                              |   | Term                  Loan B |   |   |   |   |   |
|                                                                                              |   | (LIBOR                  + 8.00%, due 6/15/2011) |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   | Second                  Lien | 3,195,844 |   | 3,124,023 |   | 3,124,023 |
|                                                                                              |   | Delayed                  Draw Term Loan B |   |   |   |   |   |
|                                                                                              |   | (LIBOR                  + 8.00%, due 6/15/2011) |   |   |   |   |   |
|                                                                                              |   | Warrants                  (5) | 224 |   | 224 |   | 224 |
|                                                                                              |   |   |   |   |   |   |   |
| Energy                  XXI Gulf Coast, Inc.                                                      | Oil                  & Gas Production | Second                  Lien Term Loan | 14,000,000 |   | 14,000,000 |   | 14,000,000 |
|                                                                                              | and                  Development | (LIBOR                  + 5.50%, due 4/04/2010) |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
| **Subtotal                  Targeted Investments (56.85% of total                  investments)** |   |   | **$ ** | **196,907,941** |   | **$ ** | **197,386,787** |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
| **Issuing                  Company**                                                              | **Industry                  Segment** | **Investment                  (4)** | **Principal** |   | **Cost** |   | **Value** |
|                                                                                              |   |   |   |   |   |   |   |
| **CORPORATE                  NOTES**                                                              |   |   |   |   |   |   |   |
| Pioneer                  Nat Res                                                                  | Energy | Senior                  Notes, 7.2%, due 2028 | 10,000,000 |   | 11,683,941 |   | 9,769,000 |
| XTO                  Energy                                                                       | Energy | Senior                  Notes, 5.0%, due 2015 | 8,000,000 |   | 8,010,711 |   | 7,612,000 |
|                                                                                              |   |   |   |   |   |   |   |
| **Subtotal                  Corporate Notes ( 5% of total investments)**                          |   |   |   | **$ ** | **19,694,652** |   | **$ ** | **17,381,000** |
|                                                                                              |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |

----

| **NGP                  CAPITAL RESOURCES COMPANY**                                                                                                                                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  SCHEDULE OF INVESTMENTS**                                                                                                                            |
| **September                  30, 2006**                                                                                                                                              |
| (Continued)                                                                                                                                                                          |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **Issuing                  Company**                                                                                                                                                 | **Industry                  Segment** | **Investment** | **Principal** |   | **Cost** |   | **Value** |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **GOVERNMENT                  SECURITIES**                                                                                                                                           |   |   |   |   |   |   |   |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 6,156,000 |   | 6,111,215 |   | 6,111,215                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 4.974%, due 11/24/2006 | 12,000,000 |   | 11,912,700 |   | 11,912,700                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 3.399%, due 10/05/2006 | 12,007,000 |   | 12,002,531 |   | 12,002,531                    |
| U.S.                  Treasury Bills                                                                                                                                                 | Government | U.S.                  Treasury Bills, 3.398%, due 10/05/2006 | 7,680,000 |   | 7,677,141 |   | 7,677,141                    |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **Subtotal                  Government Securities (34.86% of total                  investments)**                                                                                   |   |   | **$ ** | **121,092,487** |   | **$ ** | **121,092,487                   ** |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **CASH**                                                                                                                                                                             |   |   |   |   |   |   |   |
| **                    Subtotal Cash (3.29% of total investments)**                                                                                                         |   |   |   | **$ ** | **11,416,201** |   | **$** | **11,416,201                   ** |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **TOTAL                  INVESTMENTS, CASH AND CASH EQUIVALENTS**                                                                                                                    |   |   |   | **$** | **349,111,281** |   | **$ ** | **347,276,475  ** |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **OTHER                  LIABILITIES IN EXCESS OF ASSETS**                                                                                                                           |   |   |   |   |   | **$** | **(103,931,726) ** |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **NET                  ASSETS**                                                                                                                                                      |   |   |   |   |   |   | **$ ** | **243,344,749  ** |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |
| (1)                  None of our portfolio companies are controlled by or affiliated                  with us as                  defined by the Investment Company Act of 1940.     |   |   |   |   |
| (2)                  Percentages represent interest rates in effect at September 30,                  2006, and                  due dates represent the contractual maturity dates. |   |   |   |   |
| (3)                  Fair value of targeted investments is determined by or under the                  direction                  of the Board of Directors.                         |   |   |   |   |   |
| (4)                  All investments are in entities with primary operations in the                  United                  States of America.                                      |   |   |   |   |   |
| (5)                  Non-income producing securities.                                                                                                                                |   |   |   |   |   |   |
| (6)                  Securities are subject to restrictions as to their sale.                                                                                                        |   |   |   |   |   |   |
| (7)                  Upon the March 30, 2006 closing of Venoco, Inc.'s TexCal acquisition,                  Venoco Inc.'s senior notes became                                        |   |   |   |   |   |
|                        secured by second priority liens.                                                                                                    |   |   |   |   |

| *(See                  accompanying notes to consolidated financial                  statements)* |
|---------------------------------------------------------------------------------------------------|

----

| **NGP                  CAPITAL RESOURCES COMPANY**     |
|--------------------------------------------------------|
| **CONSOLIDATED                  FINANCIAL HIGHLIGHTS** |
| **(unaudited)**                                        |

|                                                                                                                                                     |   |  For                  the Nine       |    |  For                  the Nine |   |                               |   | Period                  August                  6, 2004 |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|-------------------------------------|--------|------------------------------------|--------|---------------------------------------------------------|---------|
|                                                                                                                                                     |   |  Months                  Ended       |    | Months                  Ended       |   |                                    |   | (commencement                  of                       |    |
|                                                                                                                                                     |   |  September                  30, 2006 |    | September                  30, 2005 |   | Year                  ended        |   |  operations) through                          |    |
|                                                                                                                                                     |   | (unaudited)                               |    | (unaudited)                         |   | December                  31, 2005 |   |  December                  31, 2004                |    |
| **Per                  Share Data**                                                                                                                      |   |                                      |    |                                |   |                               |   |                                                    |    |
|                                                                                                                                                     |   |                                      |    |                                |   |                               |   |                                                    |    |
| Net                  asset value, beginning of period                                                                                                    |   | $                                         | 14.02   |                                | $      | 14.03                              |   | $                                                       | 14.03   |   | $ | 15.00 |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Underwriting                  discounts, commissions related                                                                                             |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
|                      to initial public offering                                                                                           |   |                                      | -       |                                |   | -                                  |   |                                                    | -       |   |   | (0.82 | ) |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Other                  costs related to initial public offering                                                                                          |   |                                      | -       |                                |   | -                                  |   |                                                    | -       |   |   | (0.13 | ) |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Net                  asset value after initial public offering                                                                                           |   |                                      | 14.02   |                                |   | 14.03                              |   |                                                    | 14.03   |   |   | 14.05 |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Net                  investment income                                                                                                                   |   |                                      | 0.67    |                                |   | 0.42                               |   |                                                    | 0.60    |   |   | (0.03 | ) |
| Net                  realized and unrealized gain (loss) on portfolio securities    and                  corporate                  notes |   |                                      | (0.11   | )                                   |   | (0.04                              | )      |                                                    | 0.05    |   |   | 0.01 |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Net                  increase in net assets resulting from operations                                                                                    |   |                                      | 0.56    |                                |   | 0.38                               |   |                                                    | 0.65    |   |   | (0.02 | ) |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Dividends                  declared                                                                                                                      |   |                                      | (0.59   | )                                   |   | (0.39                              | )      |                                                    | (0.66   | ) |   | - |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Net                  asset value, end of period                                                                                                          |   | $                                         | 13.99   |                                | $      | 14.02                              |   | $                                                       | 14.02   |   | $ | 14.03 |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Market                  value, beginning of period                                                                                                       |   | $                                         | 13.13   |                                | $      | 15.37                              |   | $                                                       | 15.37   |   | $ | 15.00 |   |
| Market                  value, end of period                                                                                                             |   | $                                         | 14.59   |                                | $      | 15.06                              |   | $                                                       | 13.13   |   | $ | 15.37 |   |
| Market                  value return (1)                                                                                                                 |   |                                      | 15.83   | %                                   |   | 0.54                               | %      |                                                    | (10.67  | %) |   | 2.47 | % |
| Net                  asset value return (1)                                                                                                              |   |                                      | 4.02    | %                                   |   | 2.53                               | %      |                                                    | 4.49    | % |   | (6.47 | %) |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| **Ratios                  and Supplemental Data**                                                                                                        |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| ($                  and shares in thousands)                                                                                                             |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| Net                  assets, end of period                                                                                                               |   | $                                         | 243,345 |                                | $      | 243,968                            |   | $                                                       | 243,898 |   | $ | 244,039 |   |
| Average                  net assets                                                                                                                      |   | $                                         | 243,622 |                                | $      | 244,004                            |   | $                                                       | 243,969 |   | $ | 76,367 |   |
| Common                  shares outstanding at end of period                                                                                              |   |                                      | 17,400  |                                |   | 17,400                             |   |                                                    | 17,400  |   |   | 17,400 |   |
| General                  and administrative expenses/average net assets (2)                                                                              |   |                                      | 1.96    | %                                   |   | 1.18                               | %      |                                                    | 1.31    | % |   | 0.37 | % |
| Total                  operating expenses/average net assets (2)                                                                                         |   |                                      | 3.81    | %                                   |   | 2.66                               | %      |                                                    | 2.83    | % |   | 1.89 | % |
| Net                  investment income (loss)/average net assets (2)                                                                                |   |                                      | 6.38    | %                                   |   | 4.00                               | %      |                                                    | 4.27    | % |   | (0.77 | %) |
| Net                  increase (decrease) in net assets resulting from                                                                               |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
|                     operations/average net assets (2)                                                                                          |   |                                      | 5.33    | %                                   |   | 3.64                               | %      |                                                    | 4.65    | % |   | (0.39 | %) |
| Portfolio                  turnover rate                                                                                                                 |   |                                      | 5.13    | %                                   |   | 4.52                               | %      |                                                    | 13.77   | % |   | 0.00 | % |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| (1)                  Return calculations assume reinvestment of dividends and are not                  annualized.                                       |
| (2)                  Annualized for interim periods.                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
|                                                                                                                                                     |   |                                      |         |                                |   |                                    |   |                                                    |         |   |   |  |   |
| *(See                  accompanying notes to consolidated financial                  statements)*                                                        |

----

**NGP      CAPITAL RESOURCES COMPANY**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **

**September      30, 2006 **

**Note      1: Organization **

**Note      2: Significant Accounting Policies **

***Use      of Estimates***
** **

***Cash      and Cash Equivalents***

----

***Prepaid      Assets***

***Concentration      of Credit Risk***

***Valuation      of Investments***

*Debt      Securities:*
*pari      passu*
*pari      passu*

*Equity      Securities:*

*Property-Based      Equity Participation Rights:*

----

***Securities      Transactions, Interest and Dividend Income Recognition***

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

***Fee      Income Recognition***

***Dividends***

----

**Note      3: Credit Facility **

----

**Note      4: Issuance of Common Stock **

----

**Note      5: Investment Management **

| •     | no                  incentive fee in any fiscal quarter in which our 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. |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Note      6: Organizational Expenses and Offering Costs **

**Note      7: Federal Income Taxes **

|                                                                       |   | For                  the Nine Months Ended |      | For                  the Nine Months Ended |
|----------------------------------------------------------------------------|--------|--------------------------------------------|-----------|--------------------------------------------|
|                                                                       |   | September                  30, 2006        |      | September                  30, 2005        |
|                                                                       |   | (unaudited)                                |      | (unaudited)                                |
|                                                                       |   |                                       |      |                                       |
| Statutory                  federal rate on loss from continuing operations | 34%    |                                       | 34%  |
| Effect                  of net deferred tax assets                         |   | (34%)                                      |      | (34%)                                      |
|                                                                       |   |                                       |      |                                       |
| Effective                  tax rate on earnings from continuing operations | 0%     |                                       | 0%   |
|                                                                       |   |                                       |      |                                       |
|                                                                       |   |                                       |      |                                       |

----

|                                                                                              |   | September                  30, 2006 |     |                               |   |
|---------------------------------------------------------------------------------------------------|--------|-------------------------------------|----------|------------------------------------|--------|
|                                                                                              |   | (unaudited)                         |     | December                  31, 2005 |   |
|                                                                                              |   |                                |     |                               |   |
| Deferred                  tax assets:                                                             |   |                                |     |                               |   |
|                       Net operating loss carry forwards                       |   | $                                   | 157,862  |                               | $      | 157,862 |   |
|                       Net organization costs                                  |   |                                | 135,793  |                               |   | 171,739 |   |
|                           Total gross deferred tax assets      |   |                                | 293,655  |                               |   | 329,601 |   |
|                       Less valuation allowance                                |   |                                | (293,655 | )                                  |   | (329,601 | ) |
|                           Net deferred tax assets         |   |                                | -        |                               |   | - |   |
|                                                                                              |   |                                |          |                               |   |  |   |
| Deferred                  tax liabilities:                                                        |   |                                |          |                               |   |  |   |
|                       Unrealized gains, net                                   |   |                                | -        |                               |   | - |   |
|                       Prepaid expenses                                        |   |                                | -        |                               |   | - |   |
|                           Total gross deferred tax liabilities |   |                                | -        |                               |   | - |   |
|                                                                                              |   |                                |          |                               |   |  |   |
|                          Net deferred tax assets               |   | $                                   | -        |                               | $      | - |   |
|                                                                                              |   |                                |          |                               |   |  |   |

**Note      8: Commitments and Contingencies **

**      t**

**Note      9: Reclassifications **

**Note      10: Supplemental Disclosure of Cash Flow Information **

----

**Note      11: Subsequent Event**

**Note      12: New Accounting Pronouncements**

*Accounting      for Uncertainty in Income Taxes—an interpretation of FASB Statement No.      109*

----

**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.*

**Forward-Looking      Statements **

| ·   | uncertainties                associated with the timing of transaction                closings; |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | changes                in the prospects of our portfolio                companies; |
|--------------------|------------------------------------------------------------------------------------|

| ·   | changes                in interest rates; |
|--------------------|-------------------------------------------|

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

| ·   | the                future operating results of our portfolio companies and their ability                to                achieve their objectives; change 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 Securities and Exchange                Commission. |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

**Overview**

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**Portfolio      and Investment Activity **

**Results      of Operations **

***Investment      Income***

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***Operating      Expenses***

***Net      Investment Income***

***Unrealized      Appreciation or Depreciation on Investments***

***Net      Realized Gains***

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***Net      Increase in Stockholders’ Equity from Operations***

**Financial      Condition, Liquidity and Capital Resources **

**Dividends      **

**Portfolio      Credit Quality **

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**Item      3. Quantitative and Qualitative Disclosures About Market      Risk.**

**Item      4. Controls and Procedures. **

**Disclosure      Controls and Procedures**

** **

**PART      II - OTHER INFORMATION **

**Item      1. Legal Proceedings. **

**Item      1A. Risk Factors.**

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

**Item      3. Defaults Upon Senior Securities. **

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**Item      4. Other Information. **

**Item      5. Exhibits.**

|   | **No. ** |   | **Exhibit**                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.1           | -      | Articles                  of Amendment and Restatement of NGP Capital Resources Company dated                  as of                  October 29, 2004  (filed                  as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year                  ended December 31, 2004, and incorporated herein by                  reference)                                                                                               |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.2           | -      | Bylaws                  of NGP Capital Resources Company (filed as Exhibit (b) to the Company’s                  Registration Statement on Form N-2 dated August 16, 2004 (Registration                  No.                  333-118279) and incorporated herein by reference)                                                                                                                                                                             |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.1          | -      | Investment                  Advisory Agreement dated as of November 9, 2004, between NGP Capital                  Resources Company and                  NGP Investment Advisor, LP (filed as Exhibit 10.1 to the Company’s Annual                  Report on Form 10-K for the                  year ended December 31, 2004, and incorporated herein by                  reference)                                                             |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.2          | -      | Administration                  Agreement dated as of November 9, 2004, by and between NGP Capital                  Resources Company and                  NGP Administration, LLC (filed as Exhibit 10.2 to the Company’s Annual                  Report on Form 10-K for the year                  ended December 31, 2004, and incorporated herein by                  reference)                                                              |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.3          | -      | License                  Agreement dated as of November 9, 2004, by and between NGP Capital                  Resources Company and Natural                  Gas Partners, LLC (filed as Exhibit 10.3 to the Company’s Annual Report on                  Form 10-K for the year                  ended December 31, 2004, and incorporated herein by                  reference)                                                                   |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.4          | -      | 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          | -      | Revolving                  Credit Agreement dated as of May 16, 2005, by and between NGP Capital                  Resources Company, the lenders from time to time party thereto                  and                  SunTrust Bank (filed as Exhibit 10.4 to the Company’s Quarterly                  Report on Form 10-Q for the quarterly period ended June 30, 2005,                  and                  incorporated herein by reference) |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.6          | -      | Amended                  and Restated Revolving Credit Agreement dated as of August 31,                  2006, by                  and between NGP Capital Resources Company, the lenders from time                  to time                  party thereto and SunTrust Bank                                                                                                                                                                                     |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10.7          | -      | Treasury                  Secured Revolving Credit Agreement dated as of August 31, 2006,                  by and                  between NGP Capital Resources                  Company, the lenders from time to time party thereto and SunTrust                  Bank                                                                                                                                                                                    |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 31.1          | -      | Certification                  required by Rule 13a-14(a)/15d-14(a) by the Chief Executive                  Officer                                                                                                                                                                                                                                                                                                                                               |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 31.2          | -      | Certification                  required by Rule 13a-14(a)/15d-14(a) by the Chief Financial                  Officer                                                                                                                                                                                                                                                                                                                                               |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 32.1          | -      | Section                  1350 Certification by the Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                        |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 32.2          | -      | Section                  1350 Certification by the Chief Financial                  Officer                                                                                                                                                                                                                                                                                                                                                                       |

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|   |  NGP                CAPITAL RESOURCES                COMPANY                    |
|--------|--------------------------------------------------------------------------------------|
|   |                                                                                 |
|   |  By:                 /s/ John H. Homier                                    |
|   |                                                                                 |
|   |  John                H. Homier                                                  |
|   |                  President and Chief Executive                Officer           |
|   |                                                                                 |
|   |   NGP                CAPITAL RESOURCES COMPANY                             |
|   |                                                                                 |
|   |  By:                 /s/ Stephen K. Gardner                                |
|   |                                                                                 |
|   |  Stephen                K. Gardner                                              |
|   |  Chief                Financial Officer, Treasurer and                Secretary |

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**Index      to Exhibits**
** **

|   | **No. ** |   | **Exhibit**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 3.1           | -      | Articles                    of Amendment and Restatement of NGP Capital Resources Company                    dated as of                    October 29, 2004  (filed                    as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year                    ended December 31, 2004, and incorporated herein by                    reference)                                                                                                                    |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 3.2           | -      | Bylaws                    of NGP Capital Resources Company (filed as Exhibit (b) to the                    Company’s                    Registration Statement on Form N-2 dated August 16, 2004 (Registration                    No.                    333-118279) and incorporated herein by reference)                                                                                                                                                                                   |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.1          | -      | Investment                    Advisory Agreement dated as of November 9, 2004, between NGP                    Capital                    Resources Company and                    NGP Investment Advisor, LP (filed as Exhibit 10.1 to the Company’s Annual                    Report on Form 10-K for the                    year ended December 31, 2004, and incorporated herein by                    reference)                                                               |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.2          | -      | Administration                    Agreement dated as of November 9, 2004, by and between NGP Capital                    Resources Company and                    NGP Administration, LLC (filed as Exhibit 10.2 to the Company’s Annual                    Report on Form 10-K for the year                    ended December 31, 2004, and incorporated herein by                    reference)                                                                                   |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.3          | -      | License                    Agreement dated as of November 9, 2004, by and between NGP Capital                    Resources Company and Natural                    Gas Partners, LLC (filed as Exhibit 10.3 to the Company’s Annual Report on                    Form 10-K for the year                    ended December 31, 2004, and incorporated herein by                    reference)                                                                                        |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.4          | -      | 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          | -      | Revolving                    Credit Agreement dated as of May 16, 2005, by and between NGP                    Capital                    Resources Company, the lenders from time to time party thereto                    and                    SunTrust Bank (filed as Exhibit 10.4 to the Company’s Quarterly                    Report on Form 10-Q for the quarterly period ended June 30, 2005,                    and                    incorporated herein by reference) |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.6          | -      | Amended                    and Restated Revolving Credit Agreement dated as of August 31,                    2006, by                    and between NGP Capital Resources Company, the lenders from time                    to time                    party thereto and SunTrust Bank                                                                                                                                                                                                            |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.7          | -      | Treasury                    Secured Revolving Credit Agreement dated as of August 31, 2006,                    by and                    between NGP Capital Resources                    Company, the lenders from time to time party thereto and SunTrust                    Bank                                                                                                                                                                                                           |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 31.1          | -      | Certification                    required by Rule 13a-14(a)/15d-14(a) by the Chief Executive                    Officer                                                                                                                                                                                                                                                                                                                                                                            |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 31.2          | -      | Certification                    required by Rule 13a-14(a)/15d-14(a) by the Chief Financial                    Officer                                                                                                                                                                                                                                                                                                                                                                            |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 32.1          | -      | Section                    1350 Certification by the Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 32.2          | -      | Section                    1350 Certification by the Chief Financial                    Officer                                                                                                                                                                                                                                                                                                                                                                                                    |

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