NGP Capital Resources Company (NGPC, Financial) filed Quarterly Report for the period ended 2009-06-30.
NGP Capital Resources Company is a new financial services company organized by Natural Gas Partners to invest primarily in debt securities of small and mid-size energy companies. NGP Capital Resources Company\'s investment objective is to generate both current income and capital appreciation primarily through debt investments with certain equity components. Natural Gas Partners is a leading provider of private equity capital and sponsorship to the energy industry. NGP Capital Resources Company has a market cap of $142.1 million; its shares were traded at around $6.57 with a P/E ratio of 5.3 and P/S ratio of 3.8. The dividend yield of NGP Capital Resources Company stocks is 7.3%.
For the six months ended June 30, 2009, investment income decreased by $3.7 million, or 20.7%, to $14.1 million from $17.7 million for the same period in 2008. For the six months ended June 30, 2009, we recorded $12.1 million attributable to targeted investments in portfolio companies, $5.1 million attributable to income from commodity derivative instruments, a $3.7 million net loss attributable to royalty income net of amortization, $0.6 million from corporate notes, investments in cash and cash equivalents and fee income from third parties and affiliates. This compares to $14.6 million attributable to targeted investments in portfolio companies, $1.1 million attributable to royalty income net of amortization, $2.0 million from corporate notes, investments in cash and cash equivalents and fee income from third parties and affiliates, for the same period in 2008.
For the quarter ended June 30, 2009, operating expenses were $4.0 million compared to $4.4 million for the quarter ended June 30, 2008. The 2009 amount consisted of investment advisory and management fees of $1.6 million, insurance expenses, administrative services fees, professional fees, directors fees and other general and administrative expenses of $1.3 million and credit facility interest and fees of $1.1 million. In comparison, for the quarter ended June 30, 2008, investment advisory and management fees were $1.8 million, insurance expenses, administrative services fees, professional fees, directors fees and other general and administrative expenses were $1.2 million and credit facility interest and fees were $1.4 million.
For the quarter ended June 30, 2009, we had a net decrease in stockholders equity (net assets) resulting from operations of $2.6 million, or $0.12 per share, compared to a net increase of $5.4 million, or $0.25 per share for the quarter ended June 30, 2008. The $8.0 million, or $0.37 per share net decrease is attributable to the $1.9 million decrease in net investment income after income taxes and the $6.1 million increase in unrealized depreciation on our investments during the second quarter of 2009, compared to the second quarter of 2008.
During the quarter ended June 30, 2009, we generated cash from operations, including interest earned on our portfolio securities, as well as our investments in corporate notes and U.S. government securities. We received cash redemptions of investments in portfolio securities and commodity derivative instruments of $39.5 million. At June 30, 2009, we had cash and cash equivalents of $37.7 million, investments in U.S. Treasury Bills of $76.2 million and investments in corporate notes of $7.8 million. Our Investment Facility, with an outstanding balance of $15 million at June 30, 2009, will mature on August 31, 2010. Our Treasury Facility, with an outstanding balance of $75 million at June 30, 2009, will mature on August 31, 2009. As of June 30, 2009, we had investments in or commitments to fund loan facilities to eighteen portfolio companies totaling $280.5 million, of which $274.3 million was drawn. We expect to fund our investments in 2009 from income earned on our portfolio and temporary investments, repayments or realizations of existing investments and from borrowings under our Investment Facility. In the future, we may also fund a portion of our investments with issuances of equity or senior debt securities. We may also securitize a portion of our investments in mezzanine or senior secured loans or other assets. We expect our primary use of funds to be investments in portfolio companies, cash distributions to holders of our common stock and payment of fees and other operating expenses.
For the second quarter of 2009, the combined decrease in the fair value of our portfolio securities, corporate notes and commodity derivative instrument of $4.4 million is due to changes in the estimated current market values of underlying assets totaling $1.3 million, and $3.1 million in reversals of prior year unrealized appreciation of commodity derivative instruments due to second quarter 2009 realizations. The $1.3 million net decrease in fair value was comprised of increases of unrealized depreciation totaling $12.3 million offset by increases in unrealized appreciation of $11.0 million. The $12.3 million increase in unrealized depreciation consisted primarily of Nighthawk, $10.2 million; Rubicon Energy Partners, LLC, $0.7 million; Formidable, $0.6 million; and Chroma, $0.5 million. We also recorded a $0.3 million reversal of prior year unrealized appreciation due to our second quarter realization on our Crossroads overriding royalty interest. The $11.0 million increase in unrealized appreciation consisted primarily of Venoco, Inc. senior notes, $4.3 million; ATP, $3.5 million; corporate notes, $1.7 million; Anadarko Petroleum Corporation, $0.3 million; and increases to various stock and overriding royalty interests, $1.2 million.
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NGP Capital Resources Company is a new financial services company organized by Natural Gas Partners to invest primarily in debt securities of small and mid-size energy companies. NGP Capital Resources Company\'s investment objective is to generate both current income and capital appreciation primarily through debt investments with certain equity components. Natural Gas Partners is a leading provider of private equity capital and sponsorship to the energy industry. NGP Capital Resources Company has a market cap of $142.1 million; its shares were traded at around $6.57 with a P/E ratio of 5.3 and P/S ratio of 3.8. The dividend yield of NGP Capital Resources Company stocks is 7.3%.
Highlight of Business Operations:
Investment income for the quarter ended June 30, 2009 was $5.5 million, with $6.2 million attributable to interest from targeted investments in eleven portfolio companies, $1.9 million attributable to income from commodity derivative instruments, a $2.8 million net loss attributable to royalty income net of amortization, and $0.2 million from corporate notes, investments in cash and cash equivalents and fee income from third parties and affiliates. This compares to investment income for the quarter ended June 30, 2008 of $8.2 million, with $6.9 million attributable to targeted investments in 18 portfolio companies, $0.6 million attributable to royalty income net of amortization, and $0.7 million from corporate notes, investments in cash and cash equivalents and fee income from third parties and affiliates.For the six months ended June 30, 2009, investment income decreased by $3.7 million, or 20.7%, to $14.1 million from $17.7 million for the same period in 2008. For the six months ended June 30, 2009, we recorded $12.1 million attributable to targeted investments in portfolio companies, $5.1 million attributable to income from commodity derivative instruments, a $3.7 million net loss attributable to royalty income net of amortization, $0.6 million from corporate notes, investments in cash and cash equivalents and fee income from third parties and affiliates. This compares to $14.6 million attributable to targeted investments in portfolio companies, $1.1 million attributable to royalty income net of amortization, $2.0 million from corporate notes, investments in cash and cash equivalents and fee income from third parties and affiliates, for the same period in 2008.
For the quarter ended June 30, 2009, operating expenses were $4.0 million compared to $4.4 million for the quarter ended June 30, 2008. The 2009 amount consisted of investment advisory and management fees of $1.6 million, insurance expenses, administrative services fees, professional fees, directors fees and other general and administrative expenses of $1.3 million and credit facility interest and fees of $1.1 million. In comparison, for the quarter ended June 30, 2008, investment advisory and management fees were $1.8 million, insurance expenses, administrative services fees, professional fees, directors fees and other general and administrative expenses were $1.2 million and credit facility interest and fees were $1.4 million.
For the quarter ended June 30, 2009, we had a net decrease in stockholders equity (net assets) resulting from operations of $2.6 million, or $0.12 per share, compared to a net increase of $5.4 million, or $0.25 per share for the quarter ended June 30, 2008. The $8.0 million, or $0.37 per share net decrease is attributable to the $1.9 million decrease in net investment income after income taxes and the $6.1 million increase in unrealized depreciation on our investments during the second quarter of 2009, compared to the second quarter of 2008.
During the quarter ended June 30, 2009, we generated cash from operations, including interest earned on our portfolio securities, as well as our investments in corporate notes and U.S. government securities. We received cash redemptions of investments in portfolio securities and commodity derivative instruments of $39.5 million. At June 30, 2009, we had cash and cash equivalents of $37.7 million, investments in U.S. Treasury Bills of $76.2 million and investments in corporate notes of $7.8 million. Our Investment Facility, with an outstanding balance of $15 million at June 30, 2009, will mature on August 31, 2010. Our Treasury Facility, with an outstanding balance of $75 million at June 30, 2009, will mature on August 31, 2009. As of June 30, 2009, we had investments in or commitments to fund loan facilities to eighteen portfolio companies totaling $280.5 million, of which $274.3 million was drawn. We expect to fund our investments in 2009 from income earned on our portfolio and temporary investments, repayments or realizations of existing investments and from borrowings under our Investment Facility. In the future, we may also fund a portion of our investments with issuances of equity or senior debt securities. We may also securitize a portion of our investments in mezzanine or senior secured loans or other assets. We expect our primary use of funds to be investments in portfolio companies, cash distributions to holders of our common stock and payment of fees and other operating expenses.
For the second quarter of 2009, the combined decrease in the fair value of our portfolio securities, corporate notes and commodity derivative instrument of $4.4 million is due to changes in the estimated current market values of underlying assets totaling $1.3 million, and $3.1 million in reversals of prior year unrealized appreciation of commodity derivative instruments due to second quarter 2009 realizations. The $1.3 million net decrease in fair value was comprised of increases of unrealized depreciation totaling $12.3 million offset by increases in unrealized appreciation of $11.0 million. The $12.3 million increase in unrealized depreciation consisted primarily of Nighthawk, $10.2 million; Rubicon Energy Partners, LLC, $0.7 million; Formidable, $0.6 million; and Chroma, $0.5 million. We also recorded a $0.3 million reversal of prior year unrealized appreciation due to our second quarter realization on our Crossroads overriding royalty interest. The $11.0 million increase in unrealized appreciation consisted primarily of Venoco, Inc. senior notes, $4.3 million; ATP, $3.5 million; corporate notes, $1.7 million; Anadarko Petroleum Corporation, $0.3 million; and increases to various stock and overriding royalty interests, $1.2 million.
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