Houston, Feb. 20, 2013 (GLOBE NEWSWIRE) -- NGP Capital Resources Company (NASDAQ: NGPC) (the "Company")today announced one new investment, recent restructurings of twoexisting investments in the Company's portfolio, and otherportfolio activity since October 2012. New Investment - Talos On February 6, 2013, the Company purchased $20.0 million of the$300 million 9.75% Senior Notes offering issued by Talos ProductionLLC and Talos Production Finance Inc. (collectively, "Talos") topartially fund Talos's acquisition of Energy Resource TechnologyGOM, Inc., the oil and gas subsidiary of Helix Energy SolutionsGroup, Inc (NYSE: HLX). On February 15, 2013, the Companypurchased an additional $5.0 million face value of the Talos SeniorNotes in the secondary market. Talos is headquartered inHouston, Texas, and its parent company is a portfolio company offunds affiliated with Apollo Global Management, LLC (NYSE: APO) andRiverstone Holdings LLC, which committed up to $600 million inequity to Talos's parent company in February 2012. The TalosSenior Notes mature February 15, 2018, and were issued at 99.025for an effective yield of 10.0% per annum. The new investmentwas funded with borrowings under the Company's revolving creditfacility. The Company participated in a bridge loancommitment with Talos that was never funded, resulting in theCompany receiving a commitment fee totaling $112,500. Spirit Restructuring On January 25, 2013, the Company restructured its $13.5 millionSenior Secured Term Loan (the "Original Term Loan") with SpiritResources, LLC ("Spirit"). Under the terms of therestructuring: (i) $8.0 million of the Original Term Loan wasconverted into Preferred Units, with the remaining $5.5 millionstructured as a Senior Secured Tranche A Term Loan (the "Tranche ATerm Loan"); (ii) the Company provided $4.5 million of additionalborrowing capacity in the form of a Senior Secured Tranche B TermLoan (the "Tranche B Term Loan"); (iii) the Company received a 3%overriding royalty interest in Spirit's oil and gas properties; and(iv) the Company conveyed its 33% penny warrants back toSpirit.
The Tranche A Term Loan matures April 28, 2015 and earnsinterest payable monthly in cash at an annual rate of the greaterof 8% or LIBOR + 4%. The Tranche B Term Loan matures October28, 2015 and initially earns interest payable-in-kind at an annualrate of the greater of 15% or LIBOR + 11%. Beginning inJanuary 2015, interest on the Tranche B Term Loan is payablemonthly in cash at an annual rate of the greater of 13% or LIBOR +9%. Borrowings under the Tranche B Term Loan will be used toexecute development plans at Spirit's oil and gas properties and tosatisfy critical vendor payables. The current balanceoutstanding under the Tranche B Term Loan is approximately $1.4million.The Preferred Units represent a preferred interest on 100% ofany equity distributions from Spirit until certain hurdles are met,after which Spirit management would participate in 25% of any suchdistributions. Pallas Contour Restructuring Effective December 31, 2012, the Company restructured its SeniorSecured Term Loan with Pallas Contour Mining, LLC("Contour"). Under this arrangement, Contour conveyed certainassets, business, payables and other obligations related to anunderperforming surface mine operation of Contour to certain formerowners of Contour, in exchange for their 80% equity interest inContour. The remaining 20% equity interest is owned byContour's founder and president of its highwall coal miningbusiness. The Company restructured the Contour Term Loan, increasing theborrowing capacity from $7.6 million to $11.0 million. Interest under the restructured Term Loan is payable monthly incash at an annual rate of 12%, and the Term Loan matures on October14, 2015. New borrowings under the Term Loan will primarilybe used for working capital purposes for Contour's core highwallmining business. The current balance outstanding under theContour Term Loan is approximately $9.1 million.
Other Fourth Quarter 2012 PortfolioActivityIn October and November 2012, the Company purchased in theaggregate $14.0 million face value of Midstates Petroleum Company,Inc.'s ("Midstates") $600 million private placement of 10.75%Senior Unsecured Notes due 2020 (the "Midstates Notes"). Proceeds from the Midstates Notes offering were primarily used tofund the cash portion of the purchase price for Midstates'acquisition of assets from Eagle Energy Production, LLC. In December 2012, Powder River Acquisitions, LLC fully repaidits Senior Secured Promissory Note in the amount of $2.8 million,which was due September 30, 2011. With interest and fees, thetotal internal rate of return on this promissory note, whichoriginated from the Company's sale of its investments inFormidable, LLC in October 2010, was 11.2% with a return oninvestment of 1.24x. On November 26, 2012, Tammany Oil & Gas LLC ("Tammany")repurchased the Company's overriding royalty interest and warrantsin Tammany for $3.0 million in the aggregate, resulting in arealized capital gain of $2.7 million, or $0.13 per commonshare. The Company's total investment in Tammany, whichoriginated in 2007 and included a $60.0 million Senior SecuredCredit Facility and these equity kickers, generated an internalrate of return of 17.2% with a return on investment of 1.63x. In the fourth quarter of 2012, the Company realized losses onits investments in BioEnergy Holding LLC and its affiliate, BionolClearfield LLC, totaling $21.8 million, or $1.04 per share, whichwere entirely offset by the reversal of previously recorded netunrealized losses recorded in 2011. Other First Quarter 2013 Portfolio Activity On January 25, 2013, Southern Pacific Resource Corp. ("STP")repaid its debt obligations under its $272.2 million Second LienTerm Loan, including the $9.8 million face amount held by theCompany, with a 1% call premium. The Company's investment inthe STP Second Lien Term Loan, which was initially funded in thefirst quarter of 2012, generated an internal rate of return of10.7% with a return on investment of 1.09x.
Also in January 2013, the Company sold its remaining $10.0million face amount of EP Energy, LLC Senior Unsecured Notes at aprice of 113.375 resulting in a realized capital gain of $1.3million, or $0.06 per common share. The Company's totalinvestment in EP Energy, LLC Senior Unsecured Notes, which began asa $25 million participation in their original issuance in April2012, generated an internal rate of return of 36.5% with a returnon investment of 1.16x.Steve Gardner, President and CEO stated, "We are pleased toreport this update in portfolio activity. Like the EP Energyand Midstates investments, the Talos investment represents a highlyliquid security, with a reasonable yield and outstanding creditquality. We have been working closely with Spirit and Contourfor several months now regarding the restructuring of their creditfacilities, and we are happy to report their completion. Inboth cases, I believe we have improved the credit quality of ourinvestments, providing those businesses with the support andcapital they need to be successful, and increasing our opportunityto meaningfully participate in their financial upside. EPEnergy, STP, Powder River and Tammany all represent successfulexits with solid overall returns. We continue to seekopportunities to expand our portfolio and provide superior returnsfor our investors." About NGP Capital Resources Company NGP Capital Resources Company is a closed-end, non-diversifiedmanagement investment company that has elected to be regulated as abusiness development company under the Investment Company Act of1940. We principally invest in private companies and fromtime to time, we may also invest in public companies. Weinvest primarily in senior secured and mezzanine loans according toour business plan and in some instances receive equity interests inportfolio companies in connection with such investments. Ourmanager is NGP Investment Advisor, LP, an affiliate of NGP EnergyCapital Management ("NGP ECM"). Founded in 1988, NGP ECM is apremier investment franchise in the natural resources industry,which together with its affiliates has managed $13 billion incumulative committed capital since inception.
Forward-Looking StatementsThis press release may contain forward-looking statements. We may use words such as "anticipates," "believes," "intends,""plans," "expects," "projects," "estimates," "will," "should,""may" and similar expressions to identify forward-lookingstatements. These forward-looking statements are subject tovarious risks and uncertainties. Certain factors could causeactual results and conditions to differ materially from thoseprojected, including the uncertainties associated with the timingof transaction closings, changes in interest rates, availability oftransactions, the future operating results of our portfoliocompanies, regulatory factors, changes in regional, national, orinternational economic conditions and their impact onthe industries in which we invest, other changes in the conditionsof the industries in which we invest and other factors enumeratedin our filings with the Securities and Exchange Commission (the"SEC"). You should not place undue reliance on such forward-lookingstatements, which speak only as of the date they are made. Weundertake no obligation to update our forward-looking statementsmade herein, unless required by law. Persons considering an investment in NGP Capital ResourcesCompany should consider the investment objectives, risks, andcharges and expenses of the Company carefully beforeinvesting. Such information and other information about us isavailable in our annual report on Form 10-K, in our quarterlyreports on Form 10-Q and in prospectuses we issue from time to timein connection with our offering of securities. Such materialsare filed with the SEC and copies are available on the SEC'swebsite, www.sec.gov, and in theInvestor Relations section of our website at www.ngpcrc.com. Prospectiveinvestors should read such materials carefully beforeinvesting. INVESTMENT CONTACT: Please send investment proposals to: NGP Capital Resources Company 713-752-0062 Steve Gardner (email@example.com), Michael Brown ( firstname.lastname@example.org), Hans Hubbard ( email@example.com), or Chris Ryals ( firstname.lastname@example.org).
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