**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  
  **FORM
        10-Q**
 **(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, 2007**
  **OR**
  ** ̈**
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
  **For
        the transition period
             to**
  **Commission
        file number: 814-00672**
  
 **NGP
        Capital Resources Company**
 **(Exact
        name of registrant as specified in its charter)**
  
  **Maryland**
              **20-1371499****(State
                  or other jurisdiction of**
                **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)**
 
 
  Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter period that the registrant was required
        to file such reports), and (2) has been subject to such filing requirements
        for
        the past 90 days.    Yes  x    No   ̈
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
        Act. (Check one):
 
 Large
                  accelerated filer o
              Accelerated x
              Non-accelerated
                  filer o
 
 Indicate
        by a check mark
        whether the registrant is a shell company (as defined in Rule 12b-2 of the
        Act).    Yes   ̈    No  x
 
 The
        number of shares of the registrant’s Common Stock, $.001 par value, outstanding
        as of November 6, 2007 was 17,500,332.
  
 
 
 
 **PART
        I - FINANCIAL INFORMATION**
 **Item
        1. Consolidated
        Financial Statements.**
 **NGP
                    CAPITAL RESOURCES COMPANY****CONSOLIDATED
                    BALANCE SHEETS****(unaudited)**September
                    30, 2007
                
                
                December
                    31, 2006AssetsInvestments
                    in portfolio securities at fair value(cost:  $260,870,948
                    and $170,863,203, respectively)
                
                $
                267,482,387
                
                
                $
                172,025,498Investments
                    in corporate notes at fair value(cost:  $11,642,328
                    and $17,681,646, respectively)
                
                
                8,936,500
                
                
                
                15,116,080Investments
                    in U.S. Treasury Bills, at amortized costwhich
                    approximates fair value
                
                
                127,813,642
                
                
                
                142,669,579Total
                    investments
                
                
                404,232,529
                
                
                
                329,811,157Cash
                    and cash equivalents
                
                
                7,084,798
                
                
                
                12,334,329Accounts
                    receivable
                
                
                5,658
                
                
                
                452,916Interest
                    receivable
                
                
                1,340,766
                
                
                
                1,400,757Prepaid
                    assets
                
                
                933,981
                
                
                
                1,598,501Total
                    assets
                
                $
                413,597,732
                
                
                $
                345,597,660Liabilities
                    and stockholders' equity (net assets)Current
                    liabilitiesAccounts
                    payable
                
                $
                709,406
                
                
                $
                965,105Management
                    and incentive fees payable
                
                
                2,061,266
                
                
                
                1,374,299Dividends
                    payable
                
                
                6,114,379
                
                
                
                -Total
                    current liabilities
                
                
                8,885,051
                
                
                
                2,339,404Long-term
                    debt
                
                
                151,000,000
                
                
                
                100,000,000Total
                    liabilities
                
                
                159,885,051
                
                
                
                102,339,404Commitments
                    and contingencies  (Note 7)Stockholders’
                    equity (net assets)Common
                    stock, $.001 par value, 250,000,000 shares authorized; 17,469,654
                    and17,422,268
                    issued and 17,469,654 and 17,422,268 outstanding,
                    respectively
                
                
                17,470
                
                
                
                17,422Paid-in
                    capital in excess of par
                
                
                245,441,929
                
                
                
                244,660,173Undistributed
                    net investment income (loss)
                
                
                (1,722,214
                )
                
                
                229,791Undistributed
                    net realized capital gain  (loss)
                
                
                6,069,885
                
                
                
                (245,859
                )Net
                    unrealized appreciation (depreciation) ofportfolio
                    securities and corporate notes
                
                
                3,905,611
                
                
                
                (1,403,271
                )Total
                    stockholders’ equity (net assets)
                
                
                253,712,681
                
                
                
                243,258,256Total
                    liabilities and stockholders' equity (net assets)
                
                $
                413,597,732
                
                
                $
                345,597,660Net
                    asset value per share
                
                $
                14.52
                
                
                $
                13.96*(See
                    accompanying notes to consolidated financial
                    statements)*
 **NGP
                    CAPITAL RESOURCES COMPANY****CONSOLIDATED
                    STATEMENTS OF OPERATIONS****(unaudited)**For
                    the Three Months
                
                
                For
                    the Three Months
                
                
                For
                    the Nine Months
                
                
                For
                    the Nine Monthsended
                    September 30, 2007
                
                
                ended
                    September 30, 2006
                
                
                ended
                    September 30, 2007
                
                
                ended
                    September 30, 2006Investment
                    incomeInterest
                    income
                
                $
                9,011,405
                
                
                $
                7,379,320
                
                
                $
                26,940,522
                
                
                $
                18,040,507Dividend
                    income
                
                
                -
                
                
                
                -
                
                
                
                93,710
                
                
                
                60,998Other
                    income
                
                
                47,960
                
                
                
                177,634
                
                
                
                245,704
                
                
                
                451,261Total
                    investment income
                
                
                9,059,365
                
                
                
                7,556,954
                
                
                
                27,279,936
                
                
                
                18,552,766Operating
                    expensesManagement
                    fees
                
                
                1,626,857
                
                
                
                1,128,304
                
                
                
                4,776,860
                
                
                
                3,363,428Incentive
                    fees
                
                
                (531,889
                )
                
                
                -
                
                
                
                522,469
                
                
                
                -Professional
                    fees
                
                
                209,231
                
                
                
                186,132
                
                
                
                537,813
                
                
                
                543,960Insurance
                    expense
                
                
                132,423
                
                
                
                144,234
                
                
                
                397,268
                
                
                
                432,823Interest
                    expense and fees
                
                
                1,737,202
                
                
                
                836,067
                
                
                
                4,913,624
                
                
                
                996,141Other
                    general and administrative expenses
                
                
                627,034
                
                
                
                523,084
                
                
                
                1,944,690
                
                
                
                1,599,028Total
                    operating expenses
                
                
                3,800,858
                
                
                
                2,817,821
                
                
                
                13,092,724
                
                
                
                6,935,380Net
                    investment income
                
                
                5,258,507
                
                
                
                4,739,133
                
                
                
                14,187,212
                
                
                
                11,617,386Net
                    realized capital gain (loss) on portfolio securitiesand
                    corporate notes
                
                
                (351,114
                )
                
                
                (174,401
                )
                
                
                6,315,744
                
                
                
                (174,401
                )Net
                    increase (decrease) in unrealized appreciation(depreciation)
                    on portfolio securities and corporate notes
                
                
                (712,268
                )
                
                
                775,859
                
                
                
                5,308,882
                
                
                
                (1,730,662
                )Net
                    increase in stockholders' equity(net
                    assets) resulting from operations
                
                $
                4,195,125
                
                
                $
                5,340,591
                
                
                $
                25,811,838
                
                
                $
                9,712,323Net
                    increase in stockholders' equity (net assets)resulting
                    from operations per common share
                
                $
                0.24
                
                
                $
                0.31
                
                
                $
                1.49
                
                
                $
                0.56*(See
                    accompanying notes to consolidated financial
                    statements)*
  **NGP
                    CAPITAL RESOURCES COMPANY****CONSOLIDATED
                    STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (NET
                    ASSETS)****(unaudited)**Net
                    UnrealizedAppreciation(Depreciation)Common
                    Stock
                
                
                
                
                
                Undistributed
                
                
                Undistributed
                  Net
                    Realized
                
                
                of
                    Portfolio Securities
                
                
                Total
                      Stockholders'Shares
                
                
                Amount
                
                
                Paid-in
                    Capital
                  in
                    Excess of Par
                
                
                Net
                    Investment Income (Loss)
                
                
                Capital
                    Gain (Loss)
                
                
                and
                    Corporate Notes
                
                
                Equity
                  (Net
                    Assets)Balance
                    at December 31, 2006
                
                
                17,422,268
                
                
                $
                17,422
                
                
                $
                244,660,173
                
                
                $
                229,791
                
                
                $
                (245,859
                )
                
                $
                (1,403,271
                )
                
                $
                243,258,256Net
                    increase instockholders'
                    equity (net assets)resulting
                    from operations
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                14,187,212
                
                
                
                6,315,744
                
                
                
                5,308,882
                
                
                
                25,811,838Dividends
                    declared
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (16,139,217
                )
                
                
                -
                
                
                
                -
                
                
                
                (16,139,217
                )Issuance
                    of common stock underdividend
                    reinvestment plan
                
                
                47,386
                
                
                
                48
                
                
                
                781,756
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                781,804Balance
                    at September 30, 2007
                
                
                17,469,654
                
                
                $
                17,470
                
                
                $
                245,441,929
                
                
                $
                (1,722,214
                )
                
                $
                6,069,885
                
                
                $
                3,905,611
                
                
                $
                253,712,681*(See
                    accompanying notes to consolidated financial
                    statements)*
 
 **NGP
                    CAPITAL RESOURCES COMPANY****CONSOLIDATED
                    STATEMENTS OF CASH FLOWS****(unaudited)**For
                    the Nine Months
                
                
                For
                    the Nine Monthsended
                    September 30, 2007
                
                
                endedSeptember
                    30, 2006Cash
                    flows from operating activitiesNet
                    increase in stockholders' equity (net assets) resulting from
                    operations
                
                $
                25,811,838
                
                
                $
                9,712,323Adjustments
                    to reconcile net increase in stockholders' equity (net
                    assets)resulting
                    from operations to net cash used in operating activitiesPayment-in-kind
                    interest
                
                
                (2,966,423
                )
                
                
                (161,942
                )Payment-in-kind
                    dividend
                
                
                (93,710
                )
                
                
                (60,998
                )Net
                    amortization of premiums, discounts and fees
                
                
                (2,168,463
                )
                
                
                (581,676
                )Unrealized
                    appreciation (depreciation) on portfolio securities and corporate
                    notes
                
                
                (5,308,882
                )
                
                
                1,730,662Effects
                    of changes in operating assets and liabilitiesAccounts
                    receivable
                
                
                447,258
                
                
                
                37,045Interest
                    receivable
                
                
                59,991
                
                
                
                (523,241
                )Prepaid
                    assets
                
                
                664,520
                
                
                
                (740,395
                )Accounts
                    payable
                
                
                431,268
                
                
                
                1,238,078Purchase
                    of investments in portfolio securities
                
                
                (194,255,244
                )
                
                
                (116,814,029
                )Redemption
                    of investments in portfolio securities
                
                
                109,508,043
                
                
                
                12,502,402Sale
                    of investments in corporate notes
                
                
                6,007,370
                
                
                
                2,002,737Net
                    sale of investments in U.S. Treasury Bills
                
                
                14,855,937
                
                
                
                425,709Net
                    cash provided by (used in) operating activities
                
                
                (47,006,497
                )
                
                
                (91,233,325
                )Cash
                    flows from financing activitiesBorrowings
                    under revolving credit facility
                
                
                51,000,000
                
                
                
                100,000,000Dividends
                    paid
                
                
                (9,243,034
                )
                
                
                (10,701,062
                )Net
                    cash provided by (used in) financing activities
                
                
                41,756,966
                
                
                
                89,298,938Net
                    increase (decrease) in cash and cash equivalents
                
                
                (5,249,531
                )
                
                
                (1,934,387
                )Cash
                    and cash equivalents, beginning of the period
                
                
                12,334,329
                
                
                
                13,350,588Cash
                    and cash equivalents, end of period
                
                $
                7,084,798
                
                
                $
                11,416,201*(See
                    accompanying notes to consolidated financial
                    statements)*
 
 
 **NGP
                      CAPITAL RESOURCES COMPANY****CONSOLIDATED
                      SCHEDULE OF INVESTMENTS****September
                      30, 2007****(unaudited)****Portfolio
                      Company**
                  **Energy
                      Industry Segment**
                  **Investment
                      (2) (4)**
                  
                  **Principal**
                  
                  
                  **Cost**
                  
                  
                  **Fair
                      Value (3)****TARGETED
                      INVESTMENTS**Venoco,
                      Inc. (1)
                  Oil
                      & Natural Gas
                  Senior
                      Notes (7)
                  
                  $
                  8,000,000
                  
                  
                  $
                  7,965,691
                  
                  
                  $
                  7,980,000Production
                      and Development
                  (8.75%,
                      due 12/15/2011)Venoco,
                      Inc. (1)
                  Oil
                      & Natural Gas
                  Senior
                      Notes (7)
                  
                  
                  4,000,000
                  
                  
                  
                  3,943,079
                  
                  
                  
                  3,990,000Production
                      and Development
                  (8.75%,
                      due 12/15/2011)Chroma
                      Exploration &
                  Oil
                      & Natural Gas
                  8,887
                      Shares Series A Participating
                  
                  
                  -
                  
                  
                  
                  2,221,710
                  
                  
                  
                  1,221,710Production,
                      Inc. (1)
                  Production
                      and Development
                  Convertible
                      Preferred Stock8,116
                      Shares Series AA Participating
                  
                  
                  -
                  
                  
                  
                  2,029,000
                  
                  
                  
                  2,029,000Convertible
                      Preferred Stock8.11
                      Shares Common Stock (5)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Warrants
                      (5)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Resaca
                      Exploitation, LP (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  26,993,572
                  
                  
                  
                  26,471,808
                  
                  
                  
                  26,471,808Production
                      and Development
                  Multiple-Advance
                      Tranche A Term Loan(LIBOR
                      + 6.00%, due 5/01/2012)Overriding
                      Royalty Interest (5) (6)
                  
                  
                  30,000
                  
                  
                  
                  30,000
                  
                  
                  
                  125,000Senior
                      Secured Tranche B Term Loan
                  
                  
                  6,000,000
                  
                  
                  
                  5,979,752
                  
                  
                  
                  5,979,752(LIBOR
                      + 9.00%, due 11/30/2007)Overriding
                      Royalty Interest (5) (6)
                  
                  
                  30,000
                  
                  
                  
                  30,000
                  
                  
                  
                  125,000Senior
                      Subordinated
                  
                  
                  4,000,000
                  
                  
                  
                  4,000,000
                  
                  
                  
                  4,000,000Secured
                      Convertible Term Loan(6.00%
                      cash, 8.00% PIK, due 5/01/2012)Crossroads
                      Energy, LP (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  3,473,767
                  
                  
                  
                  3,410,615
                  
                  
                  
                  3,410,615Production
                      and Development
                  Multiple-Advance
                      Term Loan(LIBOR
                      + 5.50% cash, +7.50% PIK - until 12/29/07,cash
                      only thereafter, due 6/29/2009)Overriding
                      Royalty Interest (6)
                  
                  
                  10,000
                  
                  
                  
                  8,913
                  
                  
                  
                  150,000Rubicon
                      Energy Partners, LLC (8)
                  Oil
                      & Natural Gas
                  LLC
                      Units (4,000 units) (5)
                  
                  
                  -
                  
                  
                  
                  4,000,000
                  
                  
                  
                  12,000,000Production
                      and DevelopmentBSR
                      Alto, LLC (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  2,431,546
                  
                  
                  
                  2,332,908
                  
                  
                  
                  1,832,908Production
                      and Development
                  Multiple-Advance
                      Term Loan(LIBOR
                      + 5.50% cash, +7.50% PIK - until 8/17/08,cash
                      only thereafter, due 8/17/2009)Overriding
                      Royalty Interest (6)
                  
                  
                  30,000
                  
                  
                  
                  29,102
                  
                  
                  
                  75,000Warrants
                      (5)
                  
                  
                  10,000
                  
                  
                  
                  10,000
                  
                  
                  
                  -BSR
                      Loco Bayou, LLC (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  4,127,191
                  
                  
                  
                  3,862,088
                  
                  
                  
                  3,000,000Production
                      and Development
                  Multiple-Advance
                      Term Loan(LIBOR
                      + 5.50% cash, +7.50% PIK - until 8/15/08,cash
                      only thereafter, due 8/15/2009) (5)Overriding
                      Royalty Interest  (5) (6)
                  
                  
                  20,000
                  
                  
                  
                  20,000
                  
                  
                  
                  20,000Warrants
                      (5)
                  
                  
                  10,000
                  
                  
                  
                  10,000
                  
                  
                  
                  -
   
 **NGP
                      CAPITAL RESOURCES COMPANY****CONSOLIDATED
                      SCHEDULE OF INVESTMENTS****September
                      30, 2007****(unaudited)**(Continued)**Portfolio
                      Company**
                  **Energy
                      Industry Segment**
                  **Investment
                      (2) (4)**
                  
                  **Principal**
                  
                  
                  **Cost**
                  
                  
                  **Fair
                      Value (3)****TARGETED
                      INVESTMENTS - Continued**Nighthawk
                      Transport I, LP (1)
                  Energy
                      Services
                  Second
                      Lien
                  
                  
                  15,474,609
                  
                  
                  
                  14,434,253
                  
                  
                  
                  14,434,253Term
                      Loan B(LIBOR
                      + 8.00%, due 10/03/2010)LP
                      Units (5)
                  
                  
                  -
                  
                  
                  
                  224
                  
                  
                  
                  150,000Warrants
                      (5)
                  
                  
                  -
                  
                  
                  
                  850,000
                  
                  
                  
                  850,000Second
                      Lien
                  
                  
                  1,187,698
                  
                  
                  
                  1,158,349
                  
                  
                  
                  1,158,349Delayed
                      Draw Term Loan B(LIBOR
                      + 8.00%, due 10/03/2010)Sonoran
                      Energy, Inc. (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  6,943,853
                  
                  
                  
                  6,856,475
                  
                  
                  
                  6,856,475Production
                      and Development
                  Multiple-Advance
                      Term Loan(LIBOR
                      + 6.00%, due 2/28/2008)Overriding
                      Royalty Interest (6)
                  
                  
                  100,000
                  
                  
                  
                  95,801
                  
                  
                  
                  100,000Warrants
                      (5)
                  
                  
                  10,000
                  
                  
                  
                  10,000
                  
                  
                  
                  10,000Alden
                      Resources, LLC (1)
                  Coal
                      Production
                  Senior
                      Secured
                  
                  
                  35,000,000
                  
                  
                  
                  31,974,099
                  
                  
                  
                  31,974,099Multiple-Advance
                      Term Loan(LIBOR
                      + 8.00% cash, +10.00% PIK - until 1/05/2008)cash
                      only thereafter, due 1/05/2013)Royalty
                      Interest (6)
                  
                  
                  2,660,000
                  
                  
                  
                  2,639,711
                  
                  
                  
                  2,660,000Warrants
                      (5)
                  
                  
                  100,000
                  
                  
                  
                  100,000
                  
                  
                  
                  100,000Tammany
                      Oil & Gas, LLC (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  25,285,796
                  
                  
                  
                  24,863,242
                  
                  
                  
                  24,863,242Production
                      and Development
                  Multiple-Advance
                      Term Loan(LIBOR
                      + 6.00%, due 3/21/2010)Overriding
                      Royalty Interest (5) (6)
                  
                  
                  200,000
                  
                  
                  
                  200,000
                  
                  
                  
                  300,000TierraMar
                      Energy LP (8)
                  Oil
                      & Natural Gas
                  Overriding
                      Royalty Interest (6)
                  
                  
                  20,000
                  
                  
                  
                  18,359
                  
                  
                  
                  200,000Production
                      and Development
                  Class
                      A Preferred LP Units (5)
                  
                  
                  14,733,857
                  
                  
                  
                  14,733,857
                  
                  
                  
                  14,733,857Anadarko
                      Petroleum Corporation
                  Oil
                      & Natural Gas
                  Multiple-Advance
                      Net Profits Interest
                  
                  
                  49,325,351
                  
                  
                  
                  49,347,154
                  
                  
                  
                  49,347,1542007-III
                      Drilling Fund (1)
                  Production
                      and Development
                  (Due
                      4/23/2032)Formidable,
                      LLC (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  30,218,834
                  
                  
                  
                  29,840,685
                  
                  
                  
                  29,840,685Production
                      and Development
                  Multiple-Advance
                      Term Loan(LIBOR
                      + 5.50% cash, +7.50% PIK due 12/31/2007)Warrants
                      (5)
                  
                  
                  500,000
                  
                  
                  
                  500,000
                  
                  
                  
                  500,000DeanLake
                      Operator, LLC (1)
                  Oil
                      & Natural Gas
                  Senior
                      Secured
                  
                  
                  12,178,910
                  
                  
                  
                  11,913,480
                  
                  
                  
                  11,913,480Production
                      and Development
                  Multiple-Advance
                      Term Loan(LIBOR
                      + 7.00%, due 6/25/2010)Overriding
                      Royalty Interest (5) (6)
                  
                  
                  20,000
                  
                  
                  
                  20,000
                  
                  
                  
                  20,000Warrants
                      (5)
                  
                  
                  10,000
                  
                  
                  
                  10,000
                  
                  
                  
                  10,000Excel
                      Mining Systems, LLC (1)
                  Coal
                      Mining Services
                  Second
                      Lien Term Loan
                  
                  
                  5,000,000
                  
                  
                  
                  4,950,593
                  
                  
                  
                  5,050,000(LIBOR
                      + 7.25%, due 7/30/2015)**Subtotal
                      Targeted Investments (65.07% of total
                      investments)**
                  
                  
                  ****
                  
                  
                  
                  **$**
                  **260,870,948**
                  
                  
                  **$**
                  **267,482,387**
 **NGP
                        CAPITAL RESOURCES COMPANY****CONSOLIDATED
                        SCHEDULE OF INVESTMENTS****September
                        30, 2007****(unaudited)**(Continued)**Issuing
                        Company**
                    **Energy
                        Industry Segment**
                    **Investment
                        (2) (4)**
                    
                    **Principal**
                    
                    
                    **Cost**
                    
                    
                    **Fair
                        Value (3)****CORPORATE
                        NOTES**Pioneer
                        Natural Resources Co.
                    Energy
                    Senior
                        Notes, 7.2%, due 2028
                    
                    $
                    10,000,000
                    
                    
                    $
                    11,642,328
                    
                    
                    $
                    8,936,500**Subtotal
                        Corporate Notes ( 2.17% of total investments)**
                    
                    
                    ****
                    
                    
                    
                    **$**
                    **11,642,328**
                    
                    
                    **$**
                    **8,936,500****GOVERNMENT
                        SECURITIES**
                    
                    
                    
                    ****
                    
                    
                    
                    ****
                    
                    
                    
                    ****U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    $
                    5,991,000
                    
                    
                    $
                    5,944,836
                    
                    
                    $
                    5,944,836U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,534
                    
                    
                    
                    11,907,534U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,534
                    
                    
                    
                    11,907,534U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,533
                    
                    
                    
                    11,907,533U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,533
                    
                    
                    
                    11,907,533U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,533
                    
                    
                    
                    11,907,533U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,533
                    
                    
                    
                    11,907,533U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,533
                    
                    
                    
                    11,907,533U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.890%, due 12/13/2007
                    
                    
                    12,000,000
                    
                    
                    
                    11,907,533
                    
                    
                    
                    11,907,533U.S.
                        Treasury Bills
                    Government
                    U.S.
                        Treasury Bills, 3.524%, due 12/13/2007
                    
                    
                    26,796,000
                    
                    
                    
                    26,608,540
                    
                    
                    
                    26,608,540**Subtotal
                        Government Securities (31.04% of total
                        investments)**
                    
                    
                    ****
                    
                    
                    
                    **$**
                    **127,813,642**
                    
                    
                    **$**
                    **127,813,642******
                    
                    
                    
                    ****
                    
                    
                    
                    ******CASH**
                    
                    
                    
                    ****
                    
                    
                    
                    ****
                    
                    
                    
                    ******Subtotal
                        Cash (1.72% of total investments)**
                    
                    
                    ****
                    
                    
                    
                    **$**
                    **7,084,798**
                    
                    
                    **$**
                    **7,084,798******
                    
                    
                    
                    ****
                    
                    
                    
                    ******TOTAL
                        INVESTMENTS, CASH AND CASH EQUIVALENTS**
                    
                    
                    ****
                    
                    
                    
                    **$**
                    **407,411,716**
                    
                    
                    **$**
                    **411,317,327******
                    
                    
                    
                    ****
                    
                    
                    
                    ******LIABILITIES
                        IN EXCESS OF OTHER ASSETS**
                    
                    
                    ****
                    
                    
                    
                    ****
                    
                    
                    
                    **$**
                    **(157,604,646**
                    **)******
                    
                    
                    
                    
                    
                    
                    
                    ******NET
                        ASSETS**
                    
                    
                    
                    ****
                    
                    
                    
                    ****
                    
                    
                    
                    **$**
                    **253,712,681**(1)  Portfolio
                        company is not 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, 2007,
                        and due dates
                        represent the contractual maturity dates.(3)  Fair
                        value of targeted investments is determined by or under the
                        direction of
                        the Board of Directors.(4)  All
                        investments are in entities with primary operations in the
                        United States
                        of America.(5)  Non-income
                        producing securities.(6)  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 becamecollateralized
                        by second priority liens.(8)  Portfolio
                        company is controlled by us as defined by the Investment
                        Company Act of
                        1940.
                    
                    
                    **
                    
                    
                    
                    **
                    
                    
                    
                    ****
                    
                    
                    
                    **
                    
                    
                    
                    ***(See
                        accompanying notes to consolidated financial
                        statements)***
                    
                    
                    
                    **
                    
                    
                    
                    **
 
 
  **NGP
                          CAPITAL RESOURCES COMPANY****CONSOLIDATED
                          FINANCIAL HIGHLIGHTS****(unaudited)**For
                          the Nine Months
                      
                      
                      For
                          the Nine Monthsended
                          September 30, 2007
                      
                      
                      ended
                          September 30, 2006**Per
                          Share Data**Net
                          asset value, beginning of period
                      
                      $
                      13.96
                      
                      
                      $
                      14.02Net
                          investment income
                      
                      
                      0.82
                      
                      
                      
                      0.67Net
                          realized and unrealized gain (loss) on portfolio
                          securitiesand
                          corporate notes
                      
                      
                      0.67
                      
                      
                      
                      (0.11
                      )Net
                          increase in stockholders' equity (net assets)resulting
                          from operations
                      
                      
                      1.49
                      
                      
                      
                      0.56Dividends
                          declared
                      
                      
                      (0.93
                      )
                      
                      
                      (0.59
                      )Net
                          asset value, end of period
                      
                      $
                      14.52
                      
                      
                      $
                      13.99Market
                          value, beginning of period
                      
                      $
                      16.75
                      
                      
                      $
                      13.13Market
                          value, end of period
                      
                      $
                      16.23
                      
                      
                      $
                      14.59Market
                          value return  (1)
                      
                      
                      2.38
                      %
                      
                      
                      15.83
                      %Net
                          asset value return (1)
                      
                      
                      9.89
                      %
                      
                      
                      4.02
                      %**Ratios
                          and Supplemental Data**($
                          and shares in thousands)Net
                          assets, end of period
                      
                      $
                      253,713
                      
                      
                      $
                      243,345Average
                          net assets
                      
                      $
                      248,485
                      
                      
                      $
                      243,622Common
                          shares outstanding at end of period
                      
                      
                      17,470
                      
                      
                      
                      17,400Total
                          operating expenses less management andincentive
                          fees and interest expense/average net assets (2)
                      
                      
                      1.55
                      %
                      
                      
                      1.41
                      %Total
                          operating expenses less managementand
                          incentive fees/average net assets (2)
                      
                      
                      4.19
                      %
                      
                      
                      1.96
                      %Total
                          operating expenses/average net assets (2)
                      
                      
                      7.04
                      %
                      
                      
                      3.81
                      %Net
                          investment income/average net assets (2)
                      
                      
                      7.63
                      %
                      
                      
                      6.38
                      %Net
                          increase in net assets resulting fromoperations/average
                          net assets (2)
                      
                      
                      13.89
                      %
                      
                      
                      5.33
                      %Portfolio
                          turnover rate
                      
                      
                      44.07
                      %
                      
                      
                      5.13
                      %(1)
                          Return calculations assume reinvestment of dividends and
                          are not
                          annualized.(2)
                          Annualized.*(See
                          accompanying notes to consolidated financial
                          statements)*
 
 **NGP
        CAPITAL RESOURCES COMPANY**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **September
        30, 2007**
 (Unaudited)
  **Note
        1: Organization**
 
 NGP
        Capital Resources Company (the “Company”) was organized as a Maryland
        corporation in July 2004. The Company has elected to be regulated as a business
        development company (“BDC”) under the Investment Company Act of 1940, as amended
        (the “1940 Act”).  In addition, for federal income tax purposes the
        Company has elected to be treated as a regulated investment company (“RIC”)
        under the Internal Revenue Code of 1986, as amended (the “Code”).  The
        Company has several subsidiaries that are single member limited liability
        companies and wholly owned limited partnerships established to hold certain
        portfolio investments or provide services to the Company in accordance with
        specific rules prescribed for a company operating as a RIC.  These
        subsidiaries are: NGPC Funding GP, LLC, a Texas limited liability company;
        NGPC
        Nevada, LLC, a Nevada limited liability company; NGPC Funding, LP, a Texas
        limited partnership; NGPC Asset Holdings GP, LLC, a Texas limited liability
        company; NGPC Asset Holdings, LP, a Texas limited partnership; NGPC Asset
        Holdings II, LP, a Texas limited partnership; NGPC Asset Holdings III, LP,
        a
        Texas limited partnership and NGPC Asset Holdings IV, LP, a Texas limited
        partnership.  The Company consolidates the results of its subsidiaries
        for financial reporting purposes. The Company does not consolidate the financial
        results of its portfolio companies.
 
 The
        Company was created to invest primarily in small and mid-size private energy
        companies, which are generally defined as companies that have net asset values
        or annual revenues of less than $500 million and are not issuers of securities
        listed on a national exchange.  The Company’s investment objective is
        to generate both current income and capital appreciation through debt and
        equity
        investments or a combination thereof.
  The
        Company is managed and advised, subject to the overall supervision of the
        Company’s Board of Directors, by NGP Investment Advisor, LP (the “Manager”), a
        Delaware limited partnership owned by NGP Energy Capital Management, LLC,
        and
        NGP Administration, LLC (the “Administrator”), the Company’s
        administrator.
  **Note
        2: Significant Accounting Policies**
  The
        interim unaudited consolidated financial statements include the accounts
        of the
        Company and its subsidiaries. All significant intercompany accounts and
        transactions have been eliminated. The interim consolidated financial statements
        have been prepared by management of the Company, without audit, pursuant
        to the
        rules and regulations of the Securities and Exchange
        Commission.  Certain information and footnote disclosures normally
        included in financial statements prepared in accordance with accounting
        principles generally accepted in the United States of America have been omitted
        pursuant to such rules and regulations, although the Company believes the
        disclosures included herein are adequate to make the information presented
        not
        misleading.  In the opinion of management, all adjustments which are
        of a normal recurring nature considered necessary for presentation of the
        information have been included.  These unaudited consolidated
        financial statements should be read in conjunction with the consolidated
        financial statements and related notes included in the Company’s Annual Report
        on Form 10-K for the year ended December 31, 2006. Interim results are not
        necessarily indicative of results for a full year.
 
 The
        following is a summary of the significant accounting policies consistently
        applied by the Company in the preparation of its consolidated financial
        statements:
  ***Use
        of Estimates***
  The
        interim consolidated financial statements have been prepared in accordance
        with
        U.S. Generally Accepted Accounting Principles that require management to
        make
        estimates and assumptions that affect the amounts reported in the consolidated
        financial statements and the accompanying notes to the consolidated financial
        statements.  Actual results could differ from these
        estimates.
  ***Cash
        and Cash Equivalents***
  Cash
        and
        cash equivalents consist of demand deposits and highly liquid investments
        with
        original maturities of three months or less when purchased. Cash and cash
        equivalents are carried at cost which approximates fair value.
 
 ***Prepaid
        Assets***
  Prepaid
        assets consist of premiums paid for directors’ and officers’ insurance and
        fidelity bonds with policy terms of one year and fees associated with the
        establishment of the credit facility. Such premiums and fees are amortized
        monthly on a straight line basis over the term of the policy or credit
        facility.
  ***Concentration
        of Credit Risk***
  The
        Company places its cash and cash equivalents with financial institutions
        and, at
        times, cash held in checking accounts may exceed the Federal Deposit Insurance
        Corporation insured limit.
  ***Valuation
        of Investments***
  Investments
        are carried at fair value, as determined in good faith by the Company’s Board of
        Directors.  On a quarterly basis, the investment team of our manager
        prepares valuations for all of the assets in our portfolio companies and
        presents the valuations to the Company’s Valuation Committee and Board of
        Directors.  The valuations are determined and recommended by the
        Valuation Committee to the Board of Directors, which reviews and ratifies
        the
        final portfolio valuations.
 
 Investments
        in securities for which market quotations are readily available are recorded
        in
        the financial statements at such market quotations as of the valuation date
        adjusted for appropriate liquidity discounts, if applicable. For investments
        in
        securities for which market quotations are unavailable, or which have various
        degrees of trading restrictions, the investment team prepares valuation
        analyses, as generally described below.
 
 Using
        the
        most recently available financial statements, forecasts and, when applicable,
        comparable transaction data, the investment team prepares valuation analyses
        for
        the various securities in the Company’s investment portfolio. These valuation
        analyses are prepared using traditional valuation methodologies which rely
        on
        estimates of the asset values and enterprise values of portfolio companies
        issuing securities.
  The
        methodologies for determining asset valuations include estimates based on
        the
        liquidation or sale value of a portfolio company’s assets, the discounted value
        of expected future net cash flows from the assets, third party valuations
        of the
        portfolio company’s assets (such as engineering reserve reports of oil and gas
        properties) or multiples from transactions involving the sale of comparable
        assets.  Some or all of the above valuation methods are considered to
        determine the estimated asset value of a portfolio company.
 
 The
        methodologies for determining enterprise valuations include estimates based
        on
        valuations of comparable public companies, recent sales of comparable companies,
        the value of recent investments in the equity securities of the portfolio
        company and the asset valuation methodologies described in the above
        section.  Some or all of the above valuation methods are considered to
        determine the estimated enterprise value of a portfolio company.
 
 *Debt
        Securities:* The Company values its investments in non-convertible debt
        securities at its original net book value plus amortized original issue
        discount, or OID, to the extent that the estimated asset or enterprise value
        of
        the portfolio company exceeds the outstanding debt of the portfolio company.
        The
        Company values convertible debt securities at the higher of: 1) cost plus
        amortized OID, to the extent that the estimated asset or enterprise value
        of the
        portfolio company equals or exceeds the outstanding debt of the portfolio
        company; and 2) the Company’s pro rata share, upon conversion, of the residual
        equity value of the portfolio company available after deducting all outstanding
        debt from its estimated enterprise value. If the estimated asset or enterprise
        value is less than the sum of the value of the Company’s debt investment and all
        other debt securities of the portfolio company *pari passu* or senior to
        the Company’s debt investment, the Company reduces the value of its debt
        investment beginning with its junior-most debt investment such that the asset
        or
        enterprise value less the value of the outstanding *pari passu* or senior
        debt is zero.
 
 *Equity
        Securities:* The Company values its investments in preferred and common
        equity securities (including warrants or options to acquire equity securities)
        based on its pro rata share of the residual equity value available after
        deducting all outstanding debt from the estimated enterprise value.
  *Property-Based
        Equity Participation Rights:*The Company values
        investments in overriding royalty and net profits interests based on a multiple
        of cash flows generated by such investments, multiples from transactions
        involving the sale of comparable assets and/or the discounted value of expected
        future net cash flows from such investments. The Company derives appropriate
        cash flow multiples from the review of comparable transactions involving
        similar
        assets. The Company derives the discounted value of future net cash flows,
        when
        appropriate, from third party valuations of a portfolio company’s assets, such
        as engineering reserve reports of oil and gas properties.
  Due
        to
        the uncertainty inherent in the valuation process, such estimates of fair
        value
        may differ significantly from the values that would have been used had a
        ready
        market for the securities existed, and the differences could be material.
        Additionally, changes in the market environment and other events that may
        occur
        over the life of the investments may cause the gains or losses ultimately
        realized on these investments to be different from the valuations currently
        assigned.
  ***Securities
        Transactions, Interest and Dividend Income
        Recognition***
 
 All
        securities transactions are accounted for on a trade-date basis. Interest
        income
        is recorded on the accrual basis to the extent that such amounts are expected
        to
        be collected. Premiums and discounts are accreted into interest income using
        the
        effective interest method. Detachable warrants, other equity securities or
        property interests such as overriding royalty interests obtained in conjunction
        with the acquisition of debt securities are recorded separately from the
        debt
        securities at their initial fair value, with a corresponding amount recorded
        as
        a discount to the associated debt security. Income from overriding royalty
        interests is recognized as received and the recorded assets are charged
        depletion using the unit of production depletion method. The portion of the
        loan
        origination fees paid that represent additional yield or discount on a loan
        are
        deferred and accreted into interest income over the life of the loan using
        the
        effective interest method. Upon the prepayment of a loan or debt security,
        any
        unamortized loan origination fees are recorded as interest income and any
        unamortized premium or discount is recorded as a realized gain or loss. Market
        premiums or discounts on acquired loans or fixed income investments are accreted
        into interest income using the effective interest method. Dividend income
        is
        recognized on the ex-dividend date. Accruing interest or dividends on
        investments is deferred when it is determined that the interest or dividend
        is
        not collectible. Collectibility of the interest and dividends is assessed,
        based
        on many factors including the portfolio company’s ability to service its loan
        based on current and projected cash flows, as well as the current valuation
        of
        the company’s assets.
 
 ***Payment-in-Kind
        Interest and Dividends***
 
 The
        Company may have investments in its portfolio that contain a payment-in-kind
        (“PIK”) provision. PIK interest or dividends, computed at the contractual rate
        specified in each investment agreement, are added to the principal balance
        of
        the investment and recorded as interest or dividend income.  For
        investments with PIK interest or dividends, the Company bases income accruals
        on
        the principal balance including any PIK.  If the portfolio company’s
        asset valuation is not sufficient to cover the contractual interest, management
        will not accrue interest or dividend income on the investment.  To
        maintain our RIC status, this non-cash source of income must be paid out
        to
        stockholders in the form of dividends, even though we have not yet collected
        the
        cash.  For the three and nine months ended September 30, 2007, we
        earned approximately $1,030,891 and $2,966,423 in PIK interest income,
        respectively, and $0 and $93,710 in PIK dividend income,
        respectively.
 
 ***Net
        Realized Gains or Losses and Net Change in Unrealized Appreciation or
        Depreciation***
  Realized
        gains or losses are measured by the difference between the net proceeds from
        the
        repayment or sale and the amortized cost basis of the investment, considering
        unamortized fees and prepayment premiums, and without regard to unrealized
        appreciation or depreciation previously recognized, and include investments
        charged off during the year, net of recoveries. Net unrealized appreciation
        or
        depreciation reflects the change in portfolio investment values during the
        reporting period including the reversal of previously recorded unrealized
        appreciation or depreciation, when capital gains or losses are
        realized.
  ***Fee
        Income Recognition***
  Fees
        primarily include financial advisory, transaction structuring, loan
        administration, commitment and prepayment fees. Financial advisory fees
        represent amounts received for providing advice and analysis to companies
        and
        are recognized as earned when such services are performed provided collection
        is
        probable. Transaction structuring fees represent amounts received for
        structuring, financing and executing transactions and are generally payable
        only
        if the transaction closes. Such fees are deferred and accreted into interest
        income over the life of the loan using the effective interest method. Commitment
        fees represent amounts received for committed funding and are generally payable
        whether or not the transaction closes. On transactions that close within
        the
        commitment period, commitment fees are deferred and accreted into interest
        income over the life of the loan using the effective interest method. Commitment
        fees on transactions that do not close are generally recognized over the
        period
        the commitment is outstanding. Prepayment and loan administration fees are
        recognized as they are received.  In the third quarter of 2007, the
        Company accreted approximately $681,000 of fee income into interest income,
        compared to accreted income of approximately $311,000 during the third quarter
        of 2006.  For the nine months ended September 30, 2007, the Company
        accreted approximately $2.2 million of fee income into interest income, compared
        to accreted income of approximately $585,000 during the same period of
        2006.  The increase is primarily due to overall higher fee income
        balances and accelerated recognition due to early transaction
        repayments.
  ***Dividends***
  Dividends
        to stockholders are recorded on the ex-dividend date. For tax purposes, the
        Company intends to continue to qualify as a RIC under the Code for 2005 and
        later years. In order to maintain the Company’s status as a RIC, the Company is
        required to distribute at least 90% of its investment company taxable income.
        In
        addition, the Company must distribute at least 98% of its taxable income
        (both
        ordinary income and net capital gains) to avoid excise tax. The Company intends
        to make distributions to stockholders on a quarterly basis of substantially
        all
        net taxable income.  The Company also intends to make distributions of
        net realized capital gains, if any, at least annually.  However, the
        Company may in the future decide to retain capital gains for investment and
        designate such retained dividends as a deemed distribution.  The
        amount to be paid out as a dividend is determined by the Company’s Board of
        Directors each quarter and is based on the annual taxable earnings estimated
        by
        the Manager. Based on that estimate, a dividend is declared each quarter
        and
        paid shortly thereafter.
 
  For
        the
        period ended December 31, 2004, the Company was treated as a “C” corporation and
        had no taxable income and therefore did not declare a dividend for that
        period.  The following table summarizes the Company’s dividend
        history:
 
 
 Dividend
                    HistoryDeclaration
                    Date
                
                Amount
                
                Record
                    Date
                Payment
                    DateMarch
                    18, 2005
                
                $
                0.120
                
                March
                    31, 2005
                April
                    15, 2005June
                    17, 2005
                
                $
                0.125
                
                June
                    30, 2005
                July
                    15, 2005September
                    19, 2005
                
                $
                0.140
                
                September
                    30, 2005
                October
                    14, 2005December
                    15, 2005
                
                $
                0.275
                
                December
                    27, 2005
                January
                    4, 2006March
                    10, 2006
                
                $
                0.160
                
                March
                    31, 2006
                April
                    17, 2006June
                    14, 2006
                
                $
                0.180
                
                June
                    30, 2006
                July
                    14, 2006September
                    14, 2006
                
                $
                0.250
                
                September
                    29, 2006
                October
                    13, 2006December
                    7, 2006
                
                $
                0.330
                
                December
                    19, 2006
                December
                    29, 2006March
                    19, 2007
                
                $
                0.265
                
                March
                    30, 2007
                April
                    13, 2007June
                    13, 2007
                
                $
                0.310
                
                June
                    29, 2007
                July
                    13, 2007September
                    12, 2007
                
                $
                0.350
                
                September
                    28, 2007
                October
                    12, 2007
 The
        Company has established an “opt out” dividend reinvestment plan, operated by its
        transfer agent, for its common stockholders. As a result, if the Company
        declares a cash dividend, a stockholder’s cash dividend will be automatically
        reinvested in additional shares of the Company’s common stock unless the
        stockholder, or his or her broker, specifically “opts out” of the dividend
        reinvestment plan and elects to receive cash dividends.  It is
        customary practice for many brokers to “opt out” of dividend reinvestment plans
        on behalf of their clients unless specifically instructed
        otherwise.   Stockholders whose shares are registered in his or
        her name are eligible for the dividend reinvestment plan through our stock
        transfer agent.  Stockholders whose shares are held in a brokerage
        account or registered
        in street name can contact their broker regarding drip plan
        eligibility.  As of September 30, 2007, holders of 1,438,143 shares,
        or approximately 8.2% of outstanding shares, were participants in the Company’s
        dividend reinvestment plan.
 
 The
        Company’s plan provides for the plan agent to purchase shares in the open market
        for credit to the accounts of plan participants unless the average of the
        closing sales prices for the shares for the five days immediately preceding
        the
        payment date exceeds 110% of the most recently reported net asset value per
        share. Through the third quarter of 2006, all shares credited to participants’
accounts were purchased in the open market.  The table below
        summarizes participation in the Company’s dividend reinvestment
        plan:
 
 **Dividend
                    Reinvestment Plan Participation****Percentage
                    of**
                
                
                
                
                
                **Common
                    Stock Dividends****Participating**
                
                **Outstanding**
                
                **Total**
                
                
                
                **Purchased
                    in**
                
                **Newly
                    Issued Shares****Dividend**
                
                **Shares**
                
                **Shares**
                
                **Distribution**
                
                **Cash
                    Dividends**
                
                **Open
                    Market**
                
                **Amount**
                
                **Shares**March
                    2005
                
                **-**
                
                0.0%
                
                $                 2,088,012
                
                $                 2,088,012
                
                $                              -
                
                $                      -
                
                -June
                    2005
                
                1,215,870
                
                7.0%
                
                $                 2,175,013
                
                $                 2,023,029
                
                $                   151,984
                
                $                      -
                
                -September
                    2005
                
                1,488,904
                
                8.6%
                
                $                 2,436,014
                
                $                 2,227,567
                
                $                   208,447
                
                $                      -
                
                -December
                    2005
                
                1,660,140
                
                9.5%
                
                $                 4,785,028
                
                $                 4,328,488
                
                $                   456,540
                
                $                      -
                
                -March
                    2006
                
                1,618,940
                
                9.3%
                
                $                 2,784,016
                
                $                 2,524,986
                
                $                   259,030
                
                $                      -
                
                -June
                    2006
                
                1,410,227
                
                8.1%
                
                $                 3,132,018
                
                $                 2,878,177
                
                $                   253,841
                
                $                      -
                
                -September
                    2006
                
                1,270,634
                
                7.3%
                
                $                 4,350,025
                
                $                 4,032,366
                
                $                   317,659
                
                $                      -
                
                -December
                    2006
                
                1,111,045
                
                6.4%
                
                $                 5,742,033
                
                $                 5,375,388
                
                $                              -
                
                $           366,645
                
                22,168March
                    2007
                
                1,355,671
                
                7.8%
                
                $                 4,616,901
                
                $                 4,257,648
                
                $                              -
                
                $           359,253
                
                22,692June
                    2007
                
                1,363,066
                
                7.8%
                
                $                 5,407,938
                
                $                 4,985,387
                
                $                              -
                
                $           422,550
                
                24,694September
                    2007
                
                1,438,143
                
                8.2%
                
                $                 6,114,379
                
                $                 5,611,029
                
                $                              -
                
                $           503,350
                
                30,678
                (1)(1)  Shares
                    were issued on October 12, 2007 for the September 2007
                    dividend.  See above and Note 4 for futher
                    detail.
  ***Income
        Taxes***
 
 The
        Company adopted the Financial Accounting Standards Board’s Interpretation No.
        48, *Accounting for Uncertainty in Income Taxes—an interpretation of FASB
        Statement No. 109 (“FIN 48”),*effective January 1, 2007.**FIN
        48 establishes a single model to address accounting for uncertain tax
        positions.  FIN 48 clarifies the accounting for income taxes by
        prescribing a minimum recognition threshold a tax position is required to
        meet
        before being recognized in the financial statements.  FIN 48 also
        provides guidance on derecognition, measurement classification, interest
        and
        penalties, accounting in interim periods, disclosure and
        transition.  The adoption of FIN 48 did not have a material effect on
        the Company’s consolidated financial position or results of
        operations.  See Note 6 for additional information.
 
 In
        conjunction with the adoption of FIN 48, the Company implemented its policy
        to
        record estimated interest and penalties related to the underpayment of income
        tax as a component of tax expense in the Consolidated Statement of
        Operations.   However, there were no amounts for tax-related
        interest or penalties incurred for the quarter ended September 30,
        2007.
 
 **Note
        3: Credit Facility**
  On
        August
        31, 2007, the Company entered into a First Amendment to Treasury Secured
        Revolving Credit Agreement, effective as of August 31, 2006, which amended
        certain provisions of the Company’s Treasury Secured Revolving Credit Agreement,
        dated as of August 31, 2006 and entered into a First Amendment to Amended
        and
        Restated Revolving Credit Agreement, effective as of August 31, 2006, which
        amended certain provisions of the Company’s Amended and Restated Revolving
        Credit Agreement, dated as of August 31, 2006.  These amendments clarified
        certain (i) covenants relating to the maximum permitted amount of the Company’s
        unfunded commitments to provide loans, advances or guarantees with respect
        to
        certain of its investments, (ii) covenants relating to the Company’s use of
        proceeds under the Amended and Restated Revolving Credit Agreement and (iii)
        defined terms.  The Treasury Credit Agreement was also amended on
        October 18, 2007.  See Note 9 for additional information.
  On
        August
        31, 2006, the Company simultaneously repaid its original credit facility
        and
        entered into an Amended and Restated Revolving Credit Agreement (the “Investment
        Credit Agreement”) among the Company, the syndicated lenders party thereto and
        SunTrust Bank, as administrative agent for the lenders.  Also on
        August 31, 2006, the Company entered into a Treasury Secured Revolving Credit
        Agreement (as amended, restated, supplemented or otherwise modified from
        time to
        time, the “Treasury Credit Agreement”) among the Company, the syndicated lenders
        party thereto and SunTrust Bank, as administrative agent for the
        lenders.
 
 Under
        the
        Investment Credit Agreement, the lenders have agreed to extend revolving
        credit
        to the Company in an amount not to exceed $80 million, which includes a $10
        million letter of credit subfacility; however, the Company has the ability
        to
        increase the credit available under the Investment Credit Agreement to an
        amount
        not to exceed $175 million by obtaining additional commitments from existing
        lenders or new lenders.  The Investment Credit Agreement has a
        three-year term and bears interest, at the Company’s option, at either (i) LIBOR
        plus 125 to 225 basis points, based on the degree of leverage of the Company
        or
        (ii) the base rate plus 0 to 75 basis points, based on the degree of leverage
        of
        the Company.  Proceeds from the Investment Credit Agreement will be
        used to supplement the Company’s equity capital to make portfolio
        investments.  As of September 30, 2007, the Company has borrowed $51
        million under the Investment Credit Agreement.  The interest rates
        were 7.75% (Prime) on $30 million, 6.37875% (LIBOR rate of 5.12875% plus
        125
        basis points) on $11 million, and 7.0025% (LIBOR rate of 5.7525% plus 125
        basis
        points) on $10 million.
 
 The
        obligations under the Investment Credit Agreement are collateralized by
        substantially all of the Company’s assets, except certain assets that
        collateralize the Treasury Credit Agreement and are guaranteed by the Company’s
        existing and future subsidiaries, other than special purpose subsidiaries
        and
        certain other subsidiaries.  The Investment Credit Agreement contains
        affirmative and reporting covenants and certain financial ratio and restrictive
        covenants, including: (a) maintaining a ratio of net asset value to consolidated
        total indebtedness (excluding net hedging liabilities) of the Company and
        its
        subsidiaries, of not less than 2.25:1.0, (b) maintaining a ratio of net asset
        value to consolidated total indebtedness (including net hedging liabilities)
        of
        the Company and its subsidiaries, of not less than 2.0:1.0, (c) maintaining
        a
        ratio of net income (excluding revenue from collateral under the Treasury
        Credit
        Agreement) plus interest, taxes, depreciation and amortization expenses
        (“EBITDA”) to interest expense (excluding interest on loans under the Treasury
        Credit Agreement) of the Company and its subsidiaries of not less than 3.0:1.0,
        (d) limitations on additional indebtedness, (e) limitations on liens, (f)
        limitations on mergers and other fundamental changes, (g) limitations on
        dividends, (h) limitations on disposition of assets other than in the normal
        course of business, (i) limitations on transactions with affiliates, (j)
        limitations on agreements that prohibit liens on properties of the Company
        and
        its subsidiary guarantors, (k) limitations on sale and leaseback transactions,
        (l) limitations on speculative hedging transactions and (m) limitations on
        the
        aggregate amount of unfunded commitments. From time to time, certain of the
        lenders may provide customary commercial and investment banking services
        to the
        Company.
 
 Under
        the
        Treasury Credit Agreement, the lenders have agreed to extend revolving credit
        loans to the Company in an amount not to exceed $100 million.  See
        Note 9 for additional information.  Proceeds from the Treasury Credit
        Agreement have been used to facilitate the growth of the Company’s investment
        portfolio and provide flexibility in the sizing of its portfolio
        investments.  The Treasury Credit Agreement has a three-year term and
        bears interest, at the Company’s option, at either (i) LIBOR plus 25 basis
        points or (ii) the base rate.  As of September 30, 2007, the interest
        rate was 6.0025% (LIBOR rate of 5.7525% plus 25 basis points) on the Company’s
        $100 million outstanding balance under the Treasury Credit
        Agreement.  Prepayments of loans under the Treasury Credit Agreement
        made during the first year are subject to a premium equal to 1% of the amount
        so
        prepaid.
 
 The
        obligations under the Treasury Credit Agreement are collateralized by certain
        securities account assets and are guaranteed by the Company’s existing and
        future subsidiaries, other than special purpose subsidiaries and certain
        other
        subsidiaries.  The Treasury Credit Agreement contains affirmative and
        reporting covenants and certain financial ratio and restrictive covenants,
        including: (a) maintaining a ratio of net asset value to consolidated total
        indebtedness (excluding net hedging liabilities) of the Company and its
        subsidiaries, of not less than 2.25:1.0, (b) maintaining a ratio of net asset
        value to consolidated total indebtedness (including net hedging liabilities)
        of
        the Company and its subsidiaries, of not less than 2.0:1.0, (c) maintaining
        a
        ratio of EBITDA (excluding revenue from cash collateral) to interest expense
        (excluding interest on loans under the Treasury Credit Agreement) of the
        Company
        and its subsidiaries of not less than 3.0:1.0, (d) maintaining a ratio of
        collateral to the aggregate principal amount of loans under the Treasury
        Credit
        Agreement of not less than 1.01:1.0, (e) limitations on additional indebtedness,
        (f) limitations on liens, (g) limitations on mergers and other fundamental
        changes, (h) limitations on dividends, (i) limitations on disposition of
        assets
        other than in the normal course of business, (j) limitations on transactions
        with affiliates, (k) limitations on agreements that prohibit liens on properties
        of the Company and its subsidiary guarantors, (l) limitations on sale and
        leaseback transactions, (m) limitations on speculative hedging transactions
        and
        (n) limitations on the aggregate amount of
        unfunded commitments.  From time to time, certain of the lenders may
        provide customary commercial and investment banking services to the
        Company.
  **Note
        4: Issuance of Common Stock**
  On
        August
        6, 2004, the Company, in its initial capitalization transaction, sold 100
        shares
        of common stock to Natural Gas Partners, LLC for $15.00 per share. On November
        9, 2004, the Company’s Registration Statement (Registration No. 333-118279) was
        declared effective by the SEC in connection with the public offering of
        16,000,000 shares of common stock (plus up to 2,400,000 additional shares
        of
        common stock upon the exercise of the underwriters’ over-allotment option),
        which commenced on November 10, 2004. The number of securities registered,
        including the shares of common stock subject to the underwriters’ over-allotment
        option, was 18,400,000, of which 17,400,000 were sold to the public at a
        price
        of $15.00 per share.
 
 The
        net
        proceeds from the initial public offering of the shares of common stock,
        after
        deducting expenses of approximately $2,308,000 and underwriting discounts
        and
        commissions of $0.825 per share, were approximately $244,337,000.
 
 The
        Company’s dividend reinvestment plan provides for the plan agent to purchase
        shares in the open market for credit to the accounts of plan participants
        unless
        the average of the closing sales prices for the shares for the five days
        immediately preceding the payment date exceeds 110% of the most recently
        reported net asset value per share. Through the third quarter of 2006, all
        shares credited to participants’ accounts were purchased in the open
        market.  See Note 2, Dividends, for a table summary
        of  Dividend Reinvestment Plan Participation.
  **Note
        5: Investment Management**
  The
        Company has entered into an investment advisory agreement with the Manager
        under
        which the Manager, subject to the overall supervision of the Company’s Board of
        Directors, manages the day-to-day operations of, and provides investment
        advisory services to, the Company.  The investment advisory agreement
        was originally approved by the Company’s Board of Directors on November 9, 2004,
        and on October 25, 2006, the Company’s Board of Directors, including all of the
        independent directors, approved an extension of the investment advisory
        agreement through November 9, 2007.   The investment advisory
        agreement provides that unless terminated earlier as described below, the
        agreement shall remain in effect from year-to-year provided such continuance
        is
        approved at least annually by the Board of Directors or by the affirmative
        vote
        of the holders of a majority of the Company’s outstanding voting securities,
        including, in either case, approval by a majority of the Company’s directors who
        are not interested persons.  See Note 9 for additional
        information.
 
 For
        providing these services, the Manager receives a fee from the Company,
        consisting of two components, a base management fee and an incentive
        fee.
  Under
        the
        investment advisory agreement, the base management fee is calculated quarterly
        as 0.45% of the average of total assets of the Company as of the end of the
        two
        previous quarters.  The base management fee is payable quarterly in
        arrears.  Of the $2,061,266 management and incentive fees payable as
        of September 30, 2007, $1,626,857 was payable to the Manager for the base
        management fee for the third quarter of 2007.  See Note 9 for
        additional information.
 
 The
        incentive fee under the investment advisory agreement consists of two parts.
        The
        first part, which is calculated and payable quarterly in arrears, equals
        20% of
        the excess, if any, of the Company’s net investment income for the quarter that
        exceeds a quarterly hurdle rate equal to 2% (8% annualized) of the Company’s net
        assets.
  For
        this
        purpose, net investment income means interest income, dividend income and
        any
        other income (including any other fees, such as commitment, origination,
        syndication, structuring, diligence, managerial assistance, monitoring and
        consulting fees or other fees that the Company receives from portfolio
        companies) accrued during the fiscal quarter, minus the Company’s operating
        expenses for the quarter (including the base management fee, expenses payable
        under the administration agreement, any interest expense and dividends paid
        on
        issued and outstanding preferred stock, if any, but excluding the incentive
        fee). Net investment income includes, in the case of investments with a deferred
        interest feature (such as premium and discount, debt instruments with
        payment-in-kind interest and zero coupon securities), accrued income that
        the
        Company has not yet received in cash. Net investment income does not include
        any
        realized capital gains, realized capital losses or unrealized capital
        appreciation or depreciation.
  The
        incentive fees due in any fiscal quarter are calculated as follows:
  •
              no
                  incentive fee in any fiscal quarter in which the Company’s net investment
                  income does not exceed the hurdle
                  rate.
  •
              20%
                  of the amount of the Company’s net investment income, if any, that exceeds
                  the hurdle rate in any fiscal
                  quarter.
 
 There
        were no investment income incentive fees earned for the third quarter of
        2006
        and 2007.  Investment income incentive fees were $88,060 and $0 for
        the nine months ended September 30, 2007 and 2006, respectively.
 
 The
        second part of the incentive fee (the “Capital Gains Fee”) is determined and
        payable in arrears as of the end of each fiscal year (or upon termination
        of the
        investment advisory agreement, as of the termination date), and equals (1)
        20%
        of (a) the Company’s net realized capital gain (realized capital gains less
        realized capital losses, but not less than zero) on a cumulative basis from
        the
        closing date of the Company’s initial public offering to the end of such fiscal
        year, less (b) any unrealized capital depreciation at the end of such fiscal
        year, less (2) the aggregate amount of all Capital Gains Fees paid to the
        Manager in prior fiscal years. Capital Gains Fees are estimated as of the
        end of
        the each fiscal quarter based on the gains realized during such quarter and
        the
        unrealized losses as of the end of such quarter.  To the extent that
        Capital Gains Fees are earned by the Manager, an accrual is made in the amount
        of the estimated Capital Gains Fee.  Because unrealized losses may
        fluctuate from quarter to quarter, the accrual, if any, may fluctuate as
        well.  There were no Capital Gains Fees earned or accrued for the
        three and nine month periods ended September 30, 2006.   The
        balance of the estimated Capital Gains Fee accrual account as of September
        30,
        2007 was $434,409.
  Realized
        capital gains on a security are calculated as the excess of the net amount
        realized from the sale or other disposition of such security over the amortized
        cost for the security. Realized capital losses on a security are calculated
        as
        the amount by which the net amount realized from the sale or other disposition
        of such security is less than the amortized cost of such security. Unrealized
        capital depreciation on a security is calculated as the amount by which the
        original cost of such security exceeds the fair value of such security at
        the
        end of a fiscal year. All period-end valuations are determined by the Company
        in
        accordance with GAAP and the 1940 Act.
  The
        Manager has agreed that, beginning on November 9, 2006, and to the extent
        permissible under federal securities laws and regulations, including Regulation
        M, it will utilize 30% of the fees it receives from the capital gains portion
        of
        the incentive fee (up to a maximum of $5 million of fees received in the
        aggregate) to purchase shares of the Company’s common stock in open market
        purchases through an independent trustee or agent. Any sales of such stock
        will
        comply with any applicable six-month holding period under Section 16(b) of
        the
        Securities Act of 1933, as amended, and all other restrictions contained
        in any
        law or regulation, to the fullest extent applicable to any such sale. Any
        change
        in this voluntary agreement will not be implemented without at least 90 days’
prior notice to stockholders and compliance with all applicable laws and
        regulations.  No shares have been repurchased under this
        agreement.
 
 The
        investment advisory agreement may be terminated at any time, without the
        payment
        of any penalty, by a vote of the Company’s Board of Directors or the holders of
        a majority of the Company’s shares on 60 days’ written notice to the Manager,
        and would automatically terminate in the event of its “assignment” (as defined
        in the 1940 Act).
 
 The
        investment advisory agreement provides that, absent willful misfeasance,
        bad
        faith or gross negligence in the performance of its duties or by reason of
        the
        reckless disregard of its duties and obligations, the Manager, its partners
        and
        the Managers’ and its partners’ respective officers, managers, partners, agents,
        employees, controlling persons, members and any other person or entity
        affiliated with it are entitled to indemnification from the Company for any
        damages, liabilities, costs and expenses (including reasonable attorneys’ fees
        and amounts reasonably paid in settlement) arising out of or otherwise based
        upon any of the Manager’s duties or obligations under the investment advisory
        agreement or otherwise as the Company’s investment adviser.
 
 Pursuant
        to the investment advisory agreement, the compensation and routine overhead
        expenses of the investment professionals of the Company’s management team and
        their respective staffs, when and to the extent engaged in providing management
        and investment advisory services to the Company, will be paid for by the
        Manager. The Company will bear all other costs and expenses of the Company’s
        operations and transactions.
 
 The
        Manager, NGP Investment Advisor, LP, was formed in 2004 and maintains an
        office
        at 1221 McKinney Street, Suite 2975, Houston, Texas 77010. The Manager’s sole
        activity is to perform management and investment advisory services for the
        Company. The Manager is a registered investment adviser under the Investment
        Advisers Act of 1940, as amended.
  The
        foregoing description of the investment advisory agreement is qualified in
        its
        entirety by reference to the full text of the document, a copy of which was
        filed as Exhibit 10.1 to the Company’s Form 10-K for the year ended
        December 31, 2004, and is incorporated herein by reference.
  The
        Company has entered into an administration agreement with the Administrator,
        under which the Administrator furnishes the Company with office facilities,
        equipment and clerical, bookkeeping and record keeping services at such
        facilities and performs, or oversees the performance of, administrative
        services, which include being responsible for the financial records that
        the
        Company is required to maintain and preparing reports to the Company’s
        stockholders and reports filed with the SEC.
  In
        addition, the Administrator assists in determining and publishing the Company’s
        net asset value, oversees the preparation and filing of the Company’s tax
        returns and the printing and dissemination of reports to the Company’s
        stockholders and generally oversees the payment of the Company’s expenses and
        the performance of administrative and professional services rendered to the
        Company by others. Payments under the administration agreement are equal
        to
        amounts based upon the allocable portion of the Administrator’s costs and
        expenses in performing its obligations under the administration agreement.
        The
        Administrator bills the Company for charges under the administration agreement
        monthly in arrears.
  Of
        the
        $709,406 in accounts payable as of September 30, 2007, $208,611 is due to
        the
        Administrator for expenses incurred on the Company’s behalf for the month of
        September 2007. As of September 30, 2006, $156,041 of the $916,528 in accounts
        payable was due to the Administrator for expenses incurred on the Company’s
        behalf for the month of September 2006.
 
 The
        administration agreement was originally approved by the Company’s Board of
        Directors on November 9, 2004. The administration agreement provides that
        unless
        terminated earlier as described below, the agreement will continue in effect
        from year-to-year provided such continuance is approved at least annually
        by
        (i) the Company’s Board of Directors and (ii) a majority of the
        Company’s directors who are not parties to the administration agreement or
“interested persons” of any such party. On October 25, 2006, the Board of
        Directors, including all of the independent directors, approved an extension
        of
        the administration agreement through November 9, 2007.   See Note
        9 for additional information.
 
 The
        foregoing description of the administration agreement is qualified in its
        entirety by reference to the full text of the document, a copy of which was
        filed as Exhibit 10.2 to the Company’s Form 10-K for the year ended
        December 31, 2004, and is incorporated herein by reference.
  **Note
        6: Federal Income Taxes**
  The
        Company adopted FIN 48,**effective January 1,
        2007.**The adoption of FIN 48 did not have a material effect on the
        Company’s consolidated financial position or results of
        operations.   As a result, there was no cumulative effect related
        to adopting FIN 48.  For federal income tax purposes, as of September
        30, 2007, the tax years ended December 31, 2004, 2005 and 2006 remain subject
        to
        examination.
 
 The
        Company intends to qualify for tax purposes as a RIC under the Code for 2005
        and
        later years. As a RIC, the Company generally will not be subject to federal
        income tax on the portion of its investment company taxable income and gains
        distributed to stockholders. To qualify as a RIC, the Company is required,
        among
        other things, to distribute to its stockholders at least 90% of investment
        company taxable income, as defined by the Code, and to meet certain asset
        diversification requirements.  At December 31, 2004, the Company’s
        temporary investments included commercial paper of certain issuers that exceeded
        5% of the value of its total assets. These investments were classified as
        cash
        equivalents for financial statement purposes. The Company was advised, however,
        that for purposes of the federal income tax rules governing RIC status, these
        commercial paper investments could not be classified as cash items, in which
        case the Company did not meet the RIC asset diversification requirements
        at
        December 31, 2004 and was instead treated as a “C” corporation for tax purposes
        for 2004.
  For
        the
        years ended December 31, 2005 and 2006, the Company met all RIC requirements.
        The Company distributed substantially all of its investment company taxable
        income for 2005 and for 2006. Thus, the Company did not incur any federal
        income
        tax liability for either period.
  Differences
        between the effective income tax rate and the statutory federal tax rate
        for the
        periods ended September 30, 2007 and September 30, 2006 were as
        follows:
 
 For
                    the Nine Months
                
                
                For
                    the Nine Monthsended
                    September 30, 2007
                
                
                ended
                    September 30, 2006(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
                %
 The
        tax
        effects of temporary differences that give rise to the deferred tax assets
        and
        liabilities are as follows:
 
 For
                    the period
                
                
                Year
                    endedended
                    September 30, 2007
                
                
                December
                    31, 2006(unaudited)
                
                
                (audited)Deferred
                    tax assetsNet
                    operating loss carryforwards
                
                $
                156,674
                
                
                $
                156,674Net
                    organization costs
                
                
                87,866
                
                
                
                123,811Total
                    gross deferred tax assets
                
                
                244,540
                
                
                
                280,485Less
                    valuation allowance
                
                
                (244,540
                )
                
                
                (280,485
                )Net
                    deferred tax assets
                
                
                -
                
                
                
                -Deferred
                    tax liabilitiesUnrealized
                    gains, net
                
                
                -
                
                
                
                -Prepaid
                    expenses
                
                
                -
                
                
                
                -Total
                    gross deferred tax liabilities
                
                
                -
                
                
                
                -Net
                    deferred tax assets
                
                $
                -
                
                
                $
                -
 
 When
        a
“C” corporation qualifies to be taxed as a RIC, it is subject to corporate-level
        tax on appreciation inherent in its assets on the date it becomes a RIC (i.e.,
        built-in gain) that it recognizes within the first 10 years of its RIC status.
        A
        RIC generally may use loss carryforwards arising in taxable years while it
        was a
“C” corporation to reduce its net recognized built-in gain, although a RIC is
        not otherwise allowed to utilize such loss carryforwards. Because the Company
        intends to qualify as a RIC under Subchapter M of the Code for 2005 and later
        years, it is uncertain whether the Company will fully utilize the tax benefit
        of
        its loss carryforward of approximately $142,000 at December 31, 2004. The
        valuation allowance for deferred tax assets for the period August 6, 2004
        (commencement of operations) through December 31, 2004 was primarily included
        to
        reflect this uncertainty.  The loss carryforward will expire in the
        year 2024.
 
 The
        Company’s consolidated subsidiaries, NGPC Asset Holdings, LP, NGPC Asset
        Holdings II, LP, NGPC Asset Holdings III, LP, and NGPC Asset Holdings IV,
        LP,
        collectively (“NGPCAH”), are subject to federal income taxes.  For the
        period ended September 30, 2007, NGPCAH operated at a
        profit.  However, as management believes that NGPCAH will not generate
        taxable income for the tax year ending December 31, 2007, no provision for
        income taxes has been recorded for the period ended September 30,
        2007.  For the period ended December 31, 2006, NGPCAH operated at a
        small profit. However, management believes that the realization of the net
        deferred tax liability is not likely based on expectations as to future taxable
        income and, accordingly, NGPCAH recorded no provision for income taxes for
        the
        period ended December 31, 2006.
 
 **Note
        7: Commitments and Contingencies**
  As
        of
        September 30, 2007, the Company had investments in or commitments to fund
        loan
        facilities to 16 portfolio companies totaling $331 million, on which $262
        million was drawn. In addition, the Company has continuing obligations under
        the
        investment advisory agreement with the Manager and the administration agreement
        with the Administrator. The agreements provide that, absent willful misfeasance,
        bad faith or gross negligence in the performance of
        its
        duties or by reason of the reckless disregard of its duties and obligations,
        the
        Manager, the Administrator and its officers, managers, agents, employees,
        controlling persons, members and any other person or entity affiliated with
        them
        will be entitled to indemnification from the Company for any damages,
        liabilities, costs and expenses (including reasonable attorneys’ fees and
        amounts reasonably paid in settlement) arising from the rendering of the
        Manager’s or Administrator’s services under the agreements or otherwise as the
        Company’s investment adviser or administrator. The agreements also provide that
        the Manager, the Administrator and their affiliates will not be liable to
        the
        Company or any stockholder for any error of judgment, mistake of law, any
        loss
        or damage with respect to any of the Company’s investments or any action taken
        or omitted to be taken by the Manager or the Administrator in connection
        with
        the performance of any of their duties or obligations under the agreements
        or
        otherwise as investment adviser or administrator to the Company, except to
        the
        extent specified in Section 36(b) of the 1940 Act concerning loss resulting
        from
        a breach of fiduciary duty with respect to the receipt of compensation for
        services. In the normal course of business, the Company enters into a variety
        of
        undertakings containing a variety of representations that may expose the
        Company
        to some risk of loss. The amount of future loss, if any, arising from such
        undertakings, while not quantifiable, is not expected to be
        significant.
 
 **Note
        8: Reclassifications**
  GAAP
        requires that certain components of net assets be adjusted to reflect permanent
        differences between financial and tax reporting. These reclassifications
        have no
        effect on total net assets or net asset value per share. For the years ended
        December 31, 2006 and December 31, 2005, $15,710 and $586,225 respectively,
        were
        reclassified to Undistributed net investment income (loss) from
        Paid-in capital in excess of par.  These reclassifications were
        primarily due to non-deductible meal expenses, organization costs, and income
        and expenses from a wholly owned subsidiary.
  **Note
        9: Subsequent Events**
 
 On
        October 18, 2007, the Company entered into a Second Amendment to Treasury
        Secured Revolving Credit Agreement (the “Second Amendment”), among the Company,
        the lenders party thereto and SunTrust Bank, as administrative agent for
        the
        lenders.  Pursuant to the Second Amendment, the Company has the
        ability to increase the credit available under the Treasury Credit Agreement
        to
        an amount not to exceed $175 million by obtaining additional commitments
        from
        existing lenders or new lenders.  The Second Amendment was made
        effective as of September 28, 2007.  The Company has borrowed $126.25
        million as of November 9, 2007 under the Treasury Secured Revolving Credit
        Agreement.  The Manager has agreed to waive permanently, subsequent to
        September 30, 2007, that portion of the management fee attributable to U.S.
        Treasury securities acquired with borrowings under our credit facilities
        to the
        extent the amount of such securities exceeds $100 million.
 
 Also
        on
        October 18, 2007, commitments on the Company’s Amended and Restated Revolving
        Credit Agreement increased from $80 million to $100
        million.   The Company has borrowed $34.75 million as of November
        9, 2007 under the Amended and Restated Revolving Credit Agreement.
 
 On
        October 26, 2007, Excel Mining Systems LLC (“Excel”) redeemed in its entirety
        the Company’s $5 million investment in the Second Lien Term Loan.  The
        redemption included a prepayment premium and acceleration of OID totaling
        $149,000, which will be recognized in the fourth quarter of 2007.
 
 On
        November 1, 2007, the Company’s Board of Directors, including all of the
        independent directors, approved an extension of the investment advisory
        agreement and the administration agreement through November 9,
        2008.
 
 **Note
        10: New Accounting Interpretations and Standards**
 
 In
        September 2006, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 157*, Fair Value Measurements*(“SFAS
        157”), which defines fair value, establishes a framework for measuring fair
        value in generally accepted accounting principles (GAAP), and expands
        disclosures about fair value measurements.  SFAS 157 is effective for
        financial statements issued for fiscal years beginning after November 15,
        2007,
        although earlier application is encouraged.  The Company is currently
        reviewing the requirements of SFAS 157 to determine the effect, if any, on
        its
        financial position or results of operations.
 
 In
        February 2007, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 159, *The Fair Value Options for Financial
        Assets and Financial Liabilities*(“SFAS 159”),**which gives
        entities the option to measure eligible financial assets and financial
        liabilities at fair value on an instrument by instrument basis that are
        otherwise not permitted to be accounted for at fair value under other accounting
        standards.  The election to use the fair value option is available
        when an entity first recognizes a financial asset or financial
        liability.  Subsequent changes in fair
        value must be recorded in earnings.  SFAS 159 is effective as of the
        beginning of a company’s first fiscal year after November 15,
        2007.  The Company is currently reviewing the requirements of SFAS 159
        to determine the effect, if any, on its consolidated financial position or
        results of operations.
 
 **Item2.
        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**
  Certain
        statements in this report that relate to estimates or expectations of our
        future
        performance or financial condition may constitute “forward-looking statements”
as defined under the Private Securities Litigation Reform Act of 1995. These
        forward-looking statements are subject to various risks and uncertainties,
        which
        could cause actual results and conditions to differ materially from those
        projected, including, but not limited to,
 
 ·
              uncertainties
                  associated with the timing of transaction
                  closings;
 ·
              changes
                  in the prospects of our portfolio
                  companies;
 ·
              changes
                  in interest rates;
 ·
              changes
                  in regional, national or international economic conditions and
                  their
                  impact on the industries in which we
                  invest;
 ·
              the
                  future operating results of our portfolio companies and their ability
                  to
                  achieve their objectives;
 ·
              changes
                  in the conditions of the industries in which we
                  invest;
 ·
              the
                  adequacy of our cash resources and working
                  capital;
 ·
              the
                  timing of cash flows, if any, from the operations of our portfolio
                  companies;
 ·
              the
                  ability of our Manager to locate suitable investments for us and
                  to
                  monitor and administer the investments;
                  and
 ·
              other
                  factors enumerated in our filings with the
                  SEC.
 
 We
        may
        use words such as “anticipates,” “believes,” “expects,” “intends,” “will,”
“should,” “may” and similar expressions to identify forward-looking statements.
        Such statements are based on currently available operating, financial and
        competitive information and are subject to various risks and uncertainties
        that
        could cause actual results to differ materially from our historical experience
        and present expectations. Undue reliance should not be placed on such
        forward-looking statements, as such statements speak only as of the date
        on
        which they are made. Additional information regarding these and other risks
        and
        uncertainties is contained in our periodic filings with the SEC.
  **Overview**
  We
        are a
        financial services company created to invest primarily in debt securities of
        small and mid-size private energy companies, which we generally define as
        companies that have net asset values or annual revenues of less than $500
        million and are not issuers of publicly traded securities. We have elected
        to be
        regulated as a business development company, or BDC under the 1940 Act and,
        as
        such, we are required to comply with certain regulatory requirements. For
        instance, we generally have to invest at least 70% of our total assets in
        “qualifying assets,” which are securities of private or thinly traded public
        U.S. companies, cash, cash equivalents, U.S. government securities and
        high-quality debt investments that mature in one year or less. In addition,
        for
        federal income tax purposes we operate so as to be treated as a RIC under
        the
        Code. Pursuant to these elections, we generally will not have to pay
        corporate-level taxes on any income and capital gains we distribute to our
        stockholders.
 
 Our
        investment objective is to generate both current income and capital appreciation
        primarily through debt and equity investments with certain equity or property
        components.  A key focus area for our targeted investments in the
        energy industry is domestic exploration and production businesses and midstream
        businesses that gather, process and transport oil and natural gas. We also
        evaluate investment opportunities in such businesses as coal, power,
        electricity, energy services and alternative energy. Our investments will
        generally range in size from $10 million to $50 million; however, we may
        invest
        more or less depending on market conditions and our manager’s view of a
        particular investment opportunity.  Our targeted investments primarily
        consist of debt instruments, including senior and subordinated loans combined
        in
        one facility, sometimes with an equity component, and subordinated loans
        with
        equity or property components.  We may also invest in preferred stock
        and other equity securities.
  Our
        level
        of investment activity can and does vary substantially from period to period
        depending on many factors, including the amount of debt and equity capital
        available to energy companies, the level of acquisition and divestiture activity
        for such companies, the level and volatility of energy commodity prices,
        the
        general economic environment and the competitive environment for the types
        of
        investments we make. We believe that, for energy companies, the availability
        of
        debt capital from banks, mezzanine providers and alternative investment vehicles
        such as hedge funds continues to be readily available.  Competition for
        deals remains strong with continued downward pressure on spreads. However,
        we do
        not expect this intensely competitive market to impair our ability to make
        good
        long-term investment decisions with our capital.   We remain
        committed to our underwriting and investment disciplines in selectively
        investing in appropriate risk-reward opportunities within the energy
        sector.
  We
        generate revenue in the form of interest income on the debt securities that
        we
        own, dividend income on any common or preferred stock that we own, and capital
        gains or losses on any debt or equity securities that we acquire in portfolio
        companies and subsequently sell. Our investments, if in the form of debt
        securities, typically have a term of three to seven years and bear interest
        at a
        fixed or floating rate. To the extent achievable, we seek to collateralize
        our
        investments by obtaining security interests in our portfolio companies' assets.
        We also may acquire minority or majority equity interests in our portfolio
        companies, which may pay cash or in-kind dividends on a recurring or otherwise
        negotiated basis. In addition, we may generate revenue in other forms including
        commitment, origination, structuring, administration or due diligence fees;
        fees
        for providing managerial assistance; and possibly consultation
        fees.  Any such fees generated in connection with our investments are
        recognized as earned.
 
 **Portfolio
        and Investment Activity**
  During
        the three months ended September 30, 2007, we added one company to our
        portfolio.  On August 1, 2007, the Company purchased $5 million of the
        $85 million Second Lien Term Loan (the “Second Lien TL”) for Excel Mining
        Systems LLC (“Excel”), a private company headquartered in Bowerston,
        Ohio.  The Second Lien TL earns interest at LIBOR plus 725 basis
        points and is secured by second liens on substantially all of Excel’s
        assets.    Proceeds from the Second Lien TL will be used
        primarily to refinance existing indebtedness and pay a dividend.  See
        Note 9 for additional information.
 
 Following
        this transaction, as of September 30, 2007, our investment portfolio consisted
        of 16 portfolio companies invested as follows: 36.5% in senior secured term
        loans, 9.2% in senior subordinated secured notes, 0.8% in participating
        convertible preferred stock, 2.2% in corporate notes, 6.6% in member and
        partnership units and  12.0% in net profits interests.  The
        balance of our investment portfolio (as a percentage of the whole portfolio)
        was
        comprised 31.0% in U.S. Treasury Bills, and 1.7% in cash and cash equivalents.
        At September 30, 2007, the weighted average yield on targeted portfolio
        investments, exclusive of capital gains, was 12.2%.  The weighted
        average yield of our corporate notes was 5.8%. The weighted average yield
        of our
        U.S. Treasury Bills and cash equivalents was 3.9%.  The weighted
        average yield on our total capital invested at September 30, 2007 was
        9.3%.  Yields are computed using interest rates as of the balance
        sheet date and include amortization of loan discount points, original issue
        discount and market premium or discount, weighted by their respective costs
        when
        averaged.
  **Results
        of Operations**
  ***Investment
        Income***
  Investment
        income for the quarter ended September 30, 2007 was $9.1 million with $7.7
        million attributable to targeted investments in thirteen portfolio companies,
        $0.2 million from corporate notes and $1.2 million attributable to investments
        in cash equivalents. This compares to investment income for the quarter ended
        September 30, 2006 of $7.6 million with $5.7 million attributable to targeted
        investments in fourteen portfolio companies, $0.3 million from corporate
        notes,
        $0.2 million in fee income from third parties and affiliates, and $1.4 million
        attributable to investments in cash equivalents, agency notes and auction
        rate
        securities.
 
 For
        the
        nine months ended September 30, 2007, investment income increased by $8.7
        million, or approximately 47%, to $27.3 million from $18.6 million for the
        same
        period in 2006.  For the nine months ended September 30, 2007, we
        recorded $21.9 million of investment income attributable to targeted investments
        in portfolio companies, $0.7 million from corporate notes, $4.4 million
        attributable to investments in cash equivalents, and $0.3 million in fee
        income
        from third parties and affiliates.  This compares to investment income
        of $13.5 million attributable to targeted investments in portfolio companies,
        $0.9 million from corporate notes, $0.4 million in fee income from third
        parties
        and affiliates, and $3.8 million attributable to investments in cash equivalents
        and auction rate securities for the same period in 2006.  The increase
        in investment income is primarily due to the 58% increase in the average
        quarterly balance of targeted investments as of September 30, 2007 compared
        to
        September 30, 2006.
  ***Operating
        Expenses***
  For
        the
        quarter ended September 30, 2007, operating expenses were $3.8 million compared
        to $2.8 million for the quarter ended September 30, 2006. The 2007 amount
        consisted of investment advisory and management and incentive fees of $1.1
        million, insurance expenses, administrative services fees, professional fees,
        directors’ fees and other general and administrative expenses of $1.0 million
        and credit facility interest and fees of $1.7 million.  In comparison,
        for the quarter ended September 30, 2006, investment advisory and management
        fees were $1.1 million, insurance expenses, administrative services fees,
        professional fees, directors’ fees and other general and administrative expenses
        were $0.9 million and credit facility fees were $0.8 million.
 
 For
        the
        nine months ended September 30, 2007, operating expenses were $13.1 million
        compared to $6.9 million for the same period of 2006. The 2007 amount consisted
        of investment advisory and management and incentive fees of $5.3 million,
        insurance expenses, administrative services fees, professional fees, directors’
fees and other general and administrative expenses of $2.9 million and credit
        facility interest and fees of $4.9 million.  In comparison, for the
        nine months ended September 30, 2006, investment advisory and management
        fees
        were $3.4 million, insurance expenses, administrative services fees,
        professional fees, directors’ fees and other general and administrative expenses
        were $2.5 million and credit facility fees were $1.0 million.  The
        increase in operating expenses from 2006 compared to 2007 is attributable
        to
        higher investment advisory and management fees resulting from higher average
        total assets, increased interest expenses and fees due to higher borrowings,
        and
        increased incentive fees resulting from favorable  portfolio
        performance.
 
 Operating
        expenses for the three and nine month periods include our allocable portion
        of
        the total organizational and operating expenses incurred by us, our Manager,
        and
        our Administrator, as determined by our Board of Directors and representatives
        of our Manager and our Administrator.  According to the terms of the
        investment advisory agreement, the base management fee is calculated quarterly
        as 0.45% of the average of the total assets of the Company as of the end
        of the
        two previous quarters.
 
 ***Net
        Investment Income***
  For
        the
        third quarter of 2007, net investment income was $5.3 million compared to
        $4.7
        million for the third quarter of 2006, primarily due to increased interest
        income on the higher portfolio balances partially offset by higher management
        and incentive fees, general and administrative expenses and interest and
        credit
        facility fees.   Net investment income for the nine months ended
        September 30, 2007 was $14.2 million compared to $11.6 million for nine months
        ended September 30, 2006 primarily due to increased interest income on the
        higher portfolio balances partially offset by higher management and incentive
        fees, general and administrative expenses and interest and credit facility
        fees.
  ***Unrealized
        Appreciation or Depreciation on Investments***
  For
        the
        third quarter of 2007, net unrealized depreciation was $0.7 million, compared
        to
        $0.8 million net unrealized appreciation for the third quarter of
        2006.  The $1.5 million decrease is attributable to a $0.7 million net
        decrease in the fair values of our targeted investments and a $0.8 million
        decrease in market prices of our corporate notes.  For the nine months
        ended September 30, 2007, net unrealized appreciation was $5.3 million, compared
        to $1.7 million net unrealized depreciation for the same period of
        2006.  The $7.0 million increase is attributable to a $6.0 million
        increase in the fair values of our targeted investments and a $1.0 million
        increase in market prices of our corporate notes.
 
 ***Net
        Realized Gains***
 
 ******For
        the quarter ended September 30, 2007, we realized a capital loss of $0.4
        million
        from the sale of $6 million in corporate notes.  For the nine months
        ended September 30, 2007, we realized a net capital gain of $6.3 million
        from
        the sale of client warrants, overriding royalty interests and corporate
        notes.  For the quarter and nine months ended September 30, 2006, we
        realized a capital loss of $174,401 on the sale of $2 million in corporate
        notes.
 
 ***Net
        Increase in Stockholders’ Equity from Operations***
 
 For
        the
        quarter ended September 30, 2007, we had a net increase in stockholders’ equity
        (net assets) resulting from operations of $4.2 million, or $0.24 per share,
        compared to $5.3 million, or $0.31 per share for the quarter ended September
        30,
        2006.  For the nine months ended September 30, 2007 the net increase
        in stockholders’ equity (net assets) resulting from operations was $25.8
        million, or $1.49 per share, compared to $9.7 million, or $0.56 per share
        for
        the nine months ended September 30, 2006.  The $16.1 million, or $0.93
        per share net increase in stockholders’ equity (net assets)
        resulting from operations is attributable to overall increased investment
        income
        and $6.3 million in net realized capital gains during the nine months ended
        September 30, 2007.
  **Financial
        Condition, Liquidity and Capital Resources**
  During
        the first nine months of this fiscal year, we generated cash from operations,
        including interest earned on our portfolio securities, as well as our
        investments in corporate notes, U.S. government securities and other high
        quality debt securities that mature in one year or less.  At September
        30, 2007, we had cash and cash equivalents of $7.1 million, investments in
        U.S.
        Treasury Bills of $127.8 million and investments in corporate notes of $8.9
        million.
  As
        of
        September 30, 2007, we had investments in or commitments to fund loan facilities
        to 16 portfolio companies totaling $331 million, of which $262 million was
        drawn.  We expect to fund our investments in 2007 from income earned
        on our portfolio and temporary investments and from borrowings under our
        Credit
        Facilities.  (See description under “Note 3: Credit Facility”
above.)  In the future, we may also fund a portion of our investments
        with issuances of equity or senior debt securities. We may also securitize
        a
        portion of our investments.  We expect our primary use of funds to be
        investments in portfolio companies, cash distributions to holders of our
        common
        stock and payment of fees and other operating expenses.
 
 On
        August
        31, 2006, we simultaneously repaid our original credit facility and entered
        into
        two new syndicated credit facilities totaling $180 million, with SunTrust
        Bank
        as the administrative agent, each with a three year term. The first facility,
        the Senior Secured Revolving Credit Facility (the “Investment Facility”) has an
        initial availability of $80 million with the ability to increase availability
        to
        $175 million over time.  Proceeds from the Investment Facility will be
        used to supplement the Company’s equity capital in making portfolio
        investments.  Interest on the Investment Facility will be charged at
        either (i) LIBOR plus 125 to 225 basis points, based on the Company’s
        outstanding borrowings, or (ii) the higher of the lender prime rate plus
        0 to 75
        basis points or the federal funds rate plus 50 basis points. The second
        facility, the Senior Treasury Secured Revolving Credit Facility (as amended,
        restated, supplemented or otherwise modified from time to time, the “Treasury
        Facility”) permits the Company to borrow up to $100 million.  See Note
        9 for additional information.  Proceeds from the Treasury Facility
        have been used to facilitate the growth of the Company’s investment portfolio
        and provide flexibility in the sizing of its portfolio
        investments.  Interest on the Treasury Facility will be charged at
        either (i) LIBOR plus 25 basis points, or (ii) the higher of the lender prime
        rate or the federal funds rate plus 50 basis points.  The credit
        facilities are collateralized by substantially all of our assets.  As
        of September 30, 2007, the Company had $100 million outstanding under the
        Treasury Facility and $51 million outstanding under the Investment
        Facility.
 
 **Dividends**
  We
        have
        elected to operate our business so as to be taxed as a RIC under Subchapter
        M of
        the Code.  To maintain our RIC status, we must distribute at least 90%
        of our “investment company taxable income” (which generally consists of ordinary
        income and realized net short-term gains in excess of realized net long-term
        capital losses, if any, reduced by deductible expenses) and net tax-exempt
        interest.  In order to avoid certain excise taxes imposed on RICs, we
        will be required to distribute at least 98% of our ordinary income and net
        capital gains, and 100% of any income realized, but not distributed or deemed
        distributed, in preceding years.  We currently intend to make
        sufficient distributions to satisfy the annual distribution requirement and
        to
        avoid the excise taxes.
  We
        may
        not be able to achieve operating results that will allow us to make
        distributions at a specific level or to increase the amount of these
        distributions from time to time. In addition, we may be limited in our ability
        to make distributions due to the asset coverage test for borrowings when
        applicable to us as a BDC under the 1940 Act and due to provisions in our
        credit
        facilities. If we do not distribute a certain percentage of our income annually,
        we will suffer adverse tax consequences, including possible loss of our status
        as a RIC. We cannot assure stockholders that they will receive any distributions
        or distributions at a particular level.
  **Portfolio
        Credit Quality**
  We
        maintain a system to evaluate the credit quality of our investments. While
        incorporating quantitative analysis, this system is a qualitative
        assessment.  This system is intended to reflect the overall
        performance of a portfolio company’s business, the collateral coverage of an
        investment, and other relevant factors. Based on this system, the overall
        credit
        quality of our targeted investment portfolio remained satisfactory in the
        quarter ended September 30, 2007.  Of the nineteen rated investments
        as of September 30, 2007, six improved in rating, five declined in rating,
        and
        eight retained the same rating when compared to the prior quarter
        end.  Investments approximating $28 million, or approximately
        10% of the $267.5 million in targeted investments, are carried on the Company’s
        watch list due to slower than expected development of the assets supporting
        the
        investments or deterioration in asset coverage.
 
 During
        the quarter ended September 30, 2007, we recorded additional unrealized
        appreciation of $2.1 million on our targeted investments, reflecting the
        fair
        value of expected future income and gains from those
        investments.  Also during the third quarter of 2007, we recorded
        aggregate unrealized depreciation of $2.9 million in the fair value of targeted
        investments to reflect the potential for loss of capital inherent in those
        investments.  We placed one of these investments on non-accrual status
        effective July 1, 2007.  The net change to the value of our portfolio
        resulting from these changes is a $0.8 million increase in unrealized
        depreciation for the quarter ended September 30, 2007.
 
 **Recently
        Issued Accounting Pronouncements**
  See
        Note 10: New Accounting Interpretations and Standards in the accompanying
        notes to consolidated financial statements for details of recently issued
        accounting pronouncements and their expected impact on the Company’s financial
        statements.
 
 **Item3.
        Quantitative and Qualitative Disclosures About Market
        Risk.**
 
 There
        have been no material changes from the information provided in Item 7A of
        the
        Company’s Annual Report on Form 10-K for the year ended December 31,
        2006.
 
 **Item
        4. Controls and Procedures.**
  **Disclosure
        Controls and Procedures**
  We
        maintain controls and procedures designed to ensure that information required
        to
        be disclosed in our reports under the Exchange Act is recorded, processed,
        summarized and reported on a timely basis and accumulated and made known
        to
        management, including the Chief Executive Officer and Chief Financial Officer,
        to allow timely decisions regarding required disclosures. Based on an evaluation
        of our disclosure controls and procedures (as such term is defined in
        Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the
        period covered by this report conducted by our management, with the
        participation of the Chief Executive and Chief Financial Officers, the Chief
        Executive and Chief Financial Officers believe that as of September 30, 2007,
        these controls and procedures are effective to ensure that we are able to
        collect, process and disclose the information we are required to disclose
        in the
        reports we file with the SEC within the required time periods.
 
 In
        evaluating changes in internal control over financial reporting during the
        quarter ended September 30, 2007, management identified no changes in its
        internal control over financial reporting that occurred during the quarter
        ended
        September 30, 2007 that have materially affected, or are reasonably likely
        to
        materially affect, its internal control over financial reporting.
  **PART
        II – OTHER INFORMATION**
  **Item1.
        Legal Proceedings.**
  We
        are
        not currently a defendant in any material legal proceeding, nor to our
        knowledge, is any material legal proceeding threatened against us.
 
 **Item
        1A. Risk Factors.**
 
 There
        have been no material changes to the Company’s risk factors as disclosed in Item
        1A, “Risk Factors”, in the Company’s Annual Report on Form 10-K for the fiscal
        year ended December 31, 2006.
  **Item
        2. Unregistered Sales of Equity Securities and Use of
        Proceeds.**
  Not
        applicable.
  **Item
        3. Defaults Upon Senior Securities.**
  Not
        applicable.
 
 **Item
        4. Submission of Matters to a Vote of Security
        Holders.**
  Not
        applicable.
 
 **Item
        5. Other Information.**
  Not
        applicable.
 
  **Item
        6.
        Exhibits.**
 **No.            Exhibit**
 
 3.1
              -
              Articles
                  of Incorporation of NGP Capital Resources Company dated as of July
                  15,
                  2004 (filed as Exhibit (a)(1) to the Company’s Registration Statement on
                  Form N-2 dated November 9, 2004 (Registration No. 333-118279) and
                  incorporated herein by reference)3.2
              -
              Articles
                  of Amendment and Restatement of NGP Capital Resources Company dated
                  as of
                  October 29, 2004 (filed as Exhibit 3.2 to the Company’s Annual Report on
                  Form 10-K for the year ended December 31, 2004, and incorporated
                  herein by
                  reference)3.3
              -
              Bylaws
                  of NGP Capital Resources Company (filed as Exhibit (b) to the Company’s
                  Registration Statement on Form N-2 dated August 16, 2004 (Registration
                  No.
                  333-118279) and incorporated herein by reference)10.1
              -
              Investment
                  Advisory Agreement dated as of November 9, 2004, between NGP Capital
                  Resources Company and NGP Investment Advisor, LP (filed as Exhibit
                  10.1 to
                  the Company’s Annual Report on Form 10-K for the year ended December 31,
                  2004, and incorporated herein by reference)10.2
              -
              Administration
                  Agreement dated as of November 9, 2004, by and between NGP Capital
                  Resources Company and NGP Administration, LLC (filed as Exhibit
                  10.2 to
                  the Company’s Annual Report on Form 10-K for the year ended December 31,
                  2004, and incorporated herein by reference)10.3
              -
              License
                  Agreement dated as of November 9, 2004, by and between NGP Capital
                  Resources Company and Natural Gas Partners, LLC (filed as Exhibit
                  10.3 to
                  the Company’s Annual Report on Form 10-K  for the year ended
                  December 31, 2004, and incorporated herein by reference)10.4
              -
              Joint
                  Code of Ethics (filed as Exhibit (r) to the Company’s Registration
                  Statement on Form N-2 dated November 9, 2004 (Registration No.
                  333-118279)
                  and incorporated herein by reference)10.5
              -
              Form
                  of Indemnity Agreement (filed as Exhibit 10.5 to the Company’s Annual
                  Report on Form 10-K for the year ended December 31, 2004, and incorporated
                  herein by reference)10.6
              -
              Amended
                  and Restated Revolving Credit Agreement dated as of August 31,
                  2006, by
                  and between NGP Capital Resources Company, the lenders from time
                  to time
                  party thereto and SunTrust Bank (filed as Exhibit 10.6 to the Company’s
                  Quarterly Report on Form 10-Q for the quarterly period ended September
                  30,
                  2006, and incorporated herein by reference)10.7
              -
              First
                  Amendment to Amended and Restated Revolving Credit Agreement effective
                  as
                  of August 31, 2006, by and between NGP Capital Resources Company,
                  the
                  lenders from time to time party thereto and SunTrust Bank10.8
              -
              Treasury
                  Secured Revolving Credit Agreement dated as of August 31, 2006,
                  by and
                  between NGP Capital Resources Company, the lenders from time to
                  time party
                  thereto and SunTrust Bank (filed as Exhibit 10.7 to the Company’s
                  Quarterly Report on Form 10-Q for the quarterly period ended September
                  30,
                  2006, and incorporated herein by reference)10.9
              -
              First
                  Amendment to Treasury Secured Revolving Credit Agreement effective
                  as of
                  August 31, 2006, by and between NGP Capital Resources Company,
                  the lenders
                  from time to time party thereto and SunTrust Bank10.10
              -
              Second
                  Amendment to Treasury Secured Revolving Credit Agreement effective
                  as of
                  September 28, 2007, by and between NGP Capital Resources Company,
                  the
                  lenders from time to time party thereto and SunTrust Bank (filed
                  as
                  Exhibit 10.1 to the Company’s Current Report on Form 8-K on October 24,
                  2007, and incorporated herein by reference)31.1
              -
              Certification
                  required by Rule 13a-14(a)/15d-14(a) by the Chief Executive
                  Officer31.2
              -
              Certification
                  required by Rule 13a-14(a)/15d-14(a) by the Chief Financial
                  Officer
  32.1
              -
              Section
                  1350 Certification by the Chief Executive Officer32.2
              -
              Section
                  1350 Certification by the Chief Financial Officer
 
 
 SIGNATURES
  Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned thereunto
        duly authorized.
  
  NGP
        CAPITAL RESOURCES
        COMPANY
   
  By:
              /s/
                  John H. HomierJohn
                  H. HomierPresident
                  and Chief Executive Officer
 
 
 NGP
        CAPITAL RESOURCES
        COMPANY
 
 
 By:
              /s/
                  Stephen K. GardnerStephen
                  K. GardnerChief
                  Financial Officer, Treasurer and
                  Secretary
 
 
 Date:
        November 9, 2007
 
 
 **Index
        to Exhibits**
 **No.Exhibit**
 3.1
              -
              Articles
                  of Incorporation of NGP Capital Resources Company dated as of July
                  15,
                  2004 (filed as Exhibit (a)(1) to the Company’s Registration Statement on
                  Form N-2 dated November 9, 2004 (Registration No. 333-118279) and
                  incorporated herein by reference)3.2
              -
              Articles
                  of Amendment and Restatement of NGP Capital Resources Company dated
                  as of
                  October 29, 2004 (filed as Exhibit 3.2 to the Company’s Annual Report on
                  Form 10-K for the year ended December 31, 2004, and incorporated
                  herein by
                  reference)3.3
              -
              Bylaws
                  of NGP Capital Resources Company (filed as Exhibit (b) to the Company’s
                  Registration Statement on Form N-2 dated August 16, 2004 (Registration
                  No.
                  333-118279) and incorporated herein by reference)10.1
              -
              Investment
                  Advisory Agreement dated as of November 9, 2004, between NGP Capital
                  Resources Company and NGP Investment Advisor, LP (filed as Exhibit
                  10.1 to
                  the Company’s Annual Report on Form 10-K for the year ended December 31,
                  2004, and incorporated herein by reference)10.2
              -
              Administration
                  Agreement dated as of November 9, 2004, by and between NGP Capital
                  Resources Company and NGP Administration, LLC (filed as Exhibit
                  10.2 to
                  the Company’s Annual Report on Form 10-K for the year ended December 31,
                  2004, and incorporated herein by reference)10.3
              -
              License
                  Agreement dated as of November 9, 2004, by and between NGP Capital
                  Resources Company and Natural Gas Partners, LLC (filed as Exhibit
                  10.3 to
                  the Company’s Annual Report on Form 10-K  for the year ended
                  December 31, 2004, and incorporated herein by reference)10.4
              -
              Joint
                  Code of Ethics (filed as Exhibit (r) to the Company’s Registration
                  Statement on Form N-2 dated November 9, 2004 (Registration No.
                  333-118279)
                  and incorporated herein by reference)10.5
              -
              Form
                  of Indemnity Agreement (filed as Exhibit 10.5 to the Company’s Annual
                  Report on Form 10-K for the year ended December 31, 2004, and incorporated
                  herein by reference)10.6
              -
              Amended
                  and Restated Revolving Credit Agreement dated as of August 31,
                  2006, by
                  and between NGP Capital Resources Company, the lenders from time
                  to time
                  party thereto and SunTrust Bank (filed as Exhibit 10.6 to the Company’s
                  Quarterly Report on Form 10-Q for the quarterly period ended September
                  30,
                  2006, and incorporated herein by reference)10.7
              -
              First
                  Amendment to Amended and Restated Revolving Credit Agreement effective
                  as
                  of August 31, 2006, by and between NGP Capital Resources Company,
                  the
                  lenders from time to time party thereto and SunTrust Bank10.8
              -
              Treasury
                  Secured Revolving Credit Agreement dated as of August 31, 2006,
                  by and
                  between NGP Capital Resources Company, the lenders from time to
                  time party
                  thereto and SunTrust Bank (filed as Exhibit 10.7 to the Company’s
                  Quarterly Report on Form 10-Q for the quarterly period ended September
                  30,
                  2006, and incorporated herein by reference)10.9
              -
              First
                  Amendment to Treasury Secured Revolving Credit Agreement effective
                  as of
                  August 31, 2006, by and between NGP Capital Resources Company,
                  the lenders
                  from time to time party thereto and SunTrust Bank10.10
              -
              Second
                  Amendment to Treasury Secured Revolving Credit Agreement effective
                  as of
                  September 28, 2007, by and between NGP Capital Resources Company,
                  the
                  lenders from time to time party thereto and SunTrust Bank (filed
                  as
                  Exhibit 10.1 to the Company’s Current Report on Form 8-K on October 24,
                  2007, and incorporated herein by reference)31.1
              -
              Certification
                  required by Rule 13a-14(a)/15d-14(a) by the Chief Executive
                  Officer31.2
              -
              Certification
                  required by Rule 13a-14(a)/15d-14(a) by the Chief Financial
                  Officer
 
 32.1
              -
              Section
                  1350 Certification by the Chief Executive Officer32.2
              -
              Section
                  1350 Certification by the Chief Financial Officer