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The 6th Annual
Southwestern Showcase Conference
November 20, 2008
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Forward Looking Statements
This presentation may contain forward-looking statements. 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 the uncertainties associated with the timing of transaction
closings, changes in interest rates, availability of transactions, the future operating results of our
portfolio companies, changes in regional, national, or international economic conditions and their
impact on the industries in which we invest, or changes in the conditions of the industries in which we
invest, and other factors enumerated in our filings with the Securities and Exchange Commission.
Words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may” and similar
expressions may be used to identify forward-looking statements. 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. We do not undertake to update our forward-looking statements unless required by law.
Persons considering an investment in NGP Capital Resources Company should consider the investment
objectives, risks, and charges and expenses of the company carefully before investing. Such
information and other information about the company is available in our annual report on Form 10-K,
our quarterly reports on Form 10-Q and in prospectuses we issue from time to time in connection with
our offering of securities. Such materials are filed with the SEC and copies are available on the SEC's
website, www.sec.gov. Prospective investors should read such materials carefully before investing.
Past performance is not indicative of future results.
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The NGPC Story
NGPC Business Rationale
The energy industry requires constant investment to maintain
and grow capacity
Our Company
A specialty finance company providing capital to small and mid-sized
energy companies
The Opportunity
Participation in a growing portfolio of attractive, energy investments
that meet our rigorous criteria and generate superior risk adjusted
returns
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Agenda
NGPC overview
Business philosophy
Performance highlights
Profitability drivers
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NGPC at a Glance
Equity market cap ~$315 million1
Number of portfolio companies: 181
Total Return Orientation
current yield plus
capital gains
Since 2004 IPO
investments of $604 million1; realizations and repayments of
$303 million1; current portfolio of $301 million1
Based in Houston
8 investment professionals1
Note 1: As of 09-30-08
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A Range of Financing Products
Combined senior &
subordinated debt
Subordinated debt
Preferred equity
Portfolio Total Return Target: 15%-25%
Convertible debt
Project equity
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Positioned in the Mezzanine Investment Space
IRR
Equity
Cash Flow Producing Risk Developing Risk Finding/Buying Risk
30% +
20%
15%
10%
5%
Sr. Sub Loans
Senior Loans
Mezzanine
NGP Capital Resources
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NGPC is an Active Participant
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Composition of Investment Portfolio
As of September 30, 2008
Note 1: Overriding royalty interests, warrants, puts and similar assets
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NGPC is a Business Development Company
Result: Compelling yield and tax attributes
No corporate Federal Income Tax
Distributes at least 90% of taxable income
1099 reporting
No unrelated business taxable income
Tax rules impose various asset diversification requirements
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NGPC is Uniquely Positioned as a Mezzanine Provider
Company
Structure
Public
Private
Wide range of players
Mezzanine providers are
generally divisions of larger
companies/private funds
General
Energy
Capital Providers
25 Business Development
Companies of size
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Ken Hersh (NGPECM)
Billy Quinn (NGPECM)
Dick Covington (NGPECM)
John Homier
NGPC is an Externally Managed BDC
Board of Directors
Ken Hersh (NGPECM)
Jim Latimer (Ind.)
David Albin (NGPECM)
Edward Blessing (Ind.)
Lon Kile (Ind.)
John Homier
President/CEO
Steve Gardner
CFO/Treasurer
Kelly Plato
Sr. VP & Managing Director
Executive Officers
NGP Investment
Advisor, LP
Investment
Advisory
Agreement
John Homier
Steve Gardner
Kelly Plato
&
14 Employees
Investment Committee
Executive Officers & Employees
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Agenda
NGPC overview
Business philosophy
Performance highlights
Profitability drivers
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Our Business Philosophy
2. Disciplined
investment
approach
3. Attractive
vehicle for
investors
4. Solid
results
1. Clear
industry
focus
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1. Focus
A Clear Industry Focus
Small and mid-size companies in energy and related businesses
Private companies
Need capital for growth
Investments range from $5 to $100 million
Target investment size is $25 to $45 million
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Est. 2008 is 43%
46%
27%
Percent Production from Unconventional Resources (Bcfpd)
Est. 2008 is 24.7 Bcfpd
24.3
13.8
Production from Unconventional Resources (Bcfpd)
Est. 2008 is 1.0 Bcfpd
2.1
0.1
Total U.S. LNG Imports (Bcfpd)
Est. 2008 is 8.1 Bcfpd
10.4
7.8
Total Net U.S. Natural Gas Imports (Bcfpd)
Est. 2008 is 56.7 Bcfpd
52.8
51.8
Total U.S. Natural Gas Production (Bcfpd)
Est. 2008 is 66.2 Bcfpd
63.2
62.3
Total U.S. Natural Gas Consumption (Bcfpd)
Est. 2008 Is 11.7 MMBopd
12.3
8.9
Total Net U.S. Crude Oil & Products Imports (MMBopd)
Est. 2008 is 7.2 MMBopd
7.3
8.6
Total U.S. Crude Oil & Products Production (MMBopd)
Est. 2008 is 19.7 MMBopd
20.7
18.6
Total U.S. Crude Oil & Products Consumption (MMBopd)
Comments
2007
1997
1. Focus
Energy Industry Dynamics
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~400
~650
Average Reserve Adds per Well Drilled in
U.S.(MBoe)
Estimated 2008 is 1,873
1,763
941
Total U. S. Drilling Rig Count
$1,673 was the cost per well drilled
in 2004 (last data available)
$1,673
$604
Average Cost per Well in U. S. ($M)
Estimated 2008 is ~53,000 wells
48,501
27,586
Total U. S. Wells Drilled
$80,481
$25,078
E&P Capital Spent in U. S. ($MM)
FYE 08E $8.93, 4Q 08E $6.59
$ 7.12
$ 2.48
Average Henry Hub Natural Gas Price ($/Mcf)
FYE 08E $100.92, 4Q 08E $64.83
$72.34
$20.61
Average WTI Crude Oil Price ($/Bbl)
Comments
2007
1997
1. Focus
Energy Industry Dynamics
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2. Disciplined Investment Approach
Conservative Underwriting and Investment Philosophy
We look at 30 deals to do 1
Rigorous Screening Process
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Strong management
Engineering oriented
Collateral security
Appropriate return for the risk assumed
Exit strategy
Emphasis on total return with current yield
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Producer with existing assets desired to purchase an asset package
having significant redevelopment potential (PDNP, PUD, operational
improvements)
Purchase price was approximately $120 million
Senior debt capacity was approximately $60 million
Solution: NGPC provided a $50 million subordinated debt facility and a
$10 million bridge loan
Conclusion: Our client completed the acquisition, successfully
developed its assets and ultimately refinanced our debt with
conventional senior debt
Subordinated Debt Solution
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Producer desired to purchase producing properties with significant
development potential
The Company needed to approximately $105 million of capital to fund
the acquisition and to fund capital expenditures for development of
the properties
Senior debt capacity was approximately $25 million
Solution: In addition to $15 million of equity, NGPC arranged capital
for the acquisition and development through the issuance of three
securities: (i) $70 million Term Loan A, (ii) $15 million Term Loan B
and (iii) $10 million Convertible Sub-Debt
Conclusion: NGPC’s financing enabled our client to complete the
acquisition and begin development of the properties. In 3Q08, the
Company successfully completed an IPO on the London Stock
Exchange’s Alternative Investment Market and retired our investments
Combined Senior and Sub Debt Solution
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Engineering and management team needed $30 million to acquire and
develop several producing oil and gas fields
The team needed additional equity to complete the transaction and
wanted a one-stop financing source
Senior debt capacity was approximately $17 million
Solution: In 3Q06, NGPC provided a $22 million combined senior and
subordinated facility and made a $4 million common equity investment in
the new company
Conclusion: Our client completed the acquisition, made follow-on
acquisitions, successfully developed its assets and ultimately refinanced
our debt facility with conventional senior debt. In 3Q08, the Company
sold its assets and distributed the proceeds to its members, resulting in a
4.5x return on equity
Integrated Balance Sheet Solution
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3. Attractive Vehicle
Many Advantages for Investors
Energy-specific focus
Attractive fee structure
20% over 8% hurdle and no catch-up provision
20% of realized capital gains net of realized and unrealized
capital losses
Liquid Investment
Total return investment with meaningful current yield
Efficient tax structure
regulated investment company no corporate federal
income tax
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Without Catch-Up
With Catch-Up
1.6% Improvement in Total Yield w/o Catch-Up
3. Attractive Vehicle – A Closer Look
No “Catch Up” Provision Increases Yield
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3. Attractive Vehicle – A Closer Look
Strong Management Team
Strong brand name, expertise and deal flow
An affiliate of NGP Energy Capital Management
Eight investment professionals
Energy, engineering, and financial experience and expertise
for this specialized investment focus
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Agenda
NGPC overview
Business philosophy
Performance highlights
Profitability drivers
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Strong Portfolio of Targeted Investments…
$M
Committed & Available
Outstanding
Excellent Credit Quality
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… Driving Profitability
Net income per share
Net Investment Income
Realized Capital Gain
Unrealized Capital Gain
Unrealized Capital Loss
Full Year 2005
Full Year 2007
Full Year 2006
Realized Capital Loss
9 Months 2008
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… and Dividends
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Agenda
NGPC overview
Business philosophy
Performance highlights
Profitability drivers
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Robust need for capital
Strong deal pipeline
Portfolio momentum and realizations
Profitability Drivers
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Realignment of mezzanine marketplace
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Portfolio growth and diversification
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NGPC – The Next Steps
$500 to $750 million portfolio
Originate $100 to $200 million per year
Continue investment discipline and diversification for
best risk adjusted returns
Continue focus on total return
Continue long term growth of earnings and dividends
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Why Invest in NGPC
Uniquely positioned BDC in attractive energy market segment
continual financing needs, large market
Successful business model
clear focus, unique capabilities, disciplined approach,
proven results
Momentum building as company completes
fourth year of operations
well positioned, strong pipeline, maturing investments, portfolio
growth
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www.ngpcrc.com
713-752-0062
John Homier Steve Gardner Kelly Plato
Dan Schockling Hans Hubbard Chris Ryals Robert Sheffey
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