OHA Investment — NGP Capital Resources — EnerCom – The Oil & Gas Conference 2012
27 slides from OHA Investment's conference presentation, Aug 15, 2012
Slide 1: NGP Capital Resources Company – EnerCom Oil & Gas Conference 2012
NGP Capital Resources Company (NASDAQ: NGPC) EnerCom – The Oil & Gas Conference 2012 NGPC P ROVIDING G ROWTH C APITAL FOR D IVERSE I NDUSTRIES
Slide 2: Forward Looking Statements
Forward Looking Statements NGPC NGP Capital Resources Company Page 2 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 project
Slide 3: Agenda
Agenda NGPC NGP Capital Resources Company Page 3 Company Overview Investment Criteria Financial / Investor Update Partnering with NGPC
Slide 4: Company Overview: Description and Brief History
Company Overview NGPC NGP Capital Resources Company Page 4 Description and Brief History • Publicly - traded business development company focused on providing debt and equity capital to companies within the energy sector as well as various sectors within the broader middle market • Established in No
Slide 5: Company Overview: Global Platform
Company Overview NGPC NGP Capital Resources Company Page 5 Global Platform Founded in 1988, NGP Energy Capital Management is a premier investment franchise in the natural resources industry NGP Natural Resources X, L.P. Private equity for the energy and natural resources sector Growth equity for the
Slide 6: Company Overview: Governance Structure
Company Overview NGPC NGP Capital Resources Company Page 6 Governance Structure NGP Investment Adviser, LP Ken Hersh ( NGP ECM ) David Albin ( NGP ECM ) Edward Blessing ( Ind.) Lon Kile (Ind .) Jim Latimer (Ind.) Board of Directors NGPC Ken Hersh ( NGP ECM ) Billy Quinn (NGP ECM ) Dick Covington (NG
Slide 7: Company Overview: Why Invest in a BDC?
Company Overview NGPC NGP Capital Resources Company Page 7 Why Invest in a BDC? • Business Development Companies (“BDC’s”) were created by Congress in 1980 as lenders to small and mid - sized private companies • Regulated under the Investment Company Act of 1940 – Asset diversification tests – Limit
Slide 8: Company Overview: BDC Growth Model
Company Overview NGPC NGP Capital Resources Company Page 8 BDC Growth Model • Sources of Capital: – Bank facilities – “Baby” bonds – Convertible debt – SBIC debt – Equity offering Raise Equity Invest, Earn, Distribute Leverage Invest, Earn, Distribute
Slide 9: Company Overview: Why Invest in NGPC?
Company Overview NGPC NGP Capital Resources Company Page 9 Why Invest in NGPC? • Only BDC with energy industry focus • 7+ year track record of energy investing • Affiliation with NGP Energy Capital Management • 30 consecutive quarterly dividend payments (since inception) • Diversified $225 million p
Slide 10: Agenda
Agenda NGPC NGP Capital Resources Company Page 10 Company Overview Investment Criteria Financial / Investor Update Partnering with NGPC
Slide 11: Risk vs. Reward
NGPC NGP Capital Resources Company Page 11 Risk vs. Reward 30 %+ 20% 15% 10% NGPC 5% Sr. Sub Loans Senior Loans Mezzanine Equity Risk Return Investment Criteria
Slide 12: Investment Criteria: Key Metrics and Business Characteristics
Investment Criteria NGPC NGP Capital Resources Company Page 12 Key Metrics and Business Characteristics • Structure: Debt and/or equity – Often a loan with equity kickers; high single - digit to low - teens coupon rate – Second lien, subordinated debt, preferred equity • Target Market: Small to mid
Slide 13: Investment Criteria: Key Metrics and Business Characteristics (cont.)
Investment Criteria NGPC NGP Capital Resources Company Page 13 Key Metrics and Business Characteristics (cont.) • Geography: North American focus / U.S. based headquarters – Company can have international assets / operations • Transaction Size : $5 – $ 100+ million • Target Investment S ize: $10 – $
Slide 14: Investment Criteria: Customized Financing Solutions
Investment Criteria NGPC NGP Capital Resources Company Page 14 Customized Financing Solutions (1) Includes overriding royalty interests, warrants, and similar securities. Senior Debt 2 nd Lien Debt Subordinated Debt Convertible Debt Preferred Equity Convertible Preferred Common Equity Mezzanine Capi
Slide 15: Investment Criteria: Capital for a Broad Range of Purposes
Investment Criteria NGPC NGP Capital Resources Company Page 15 Capital for a Broad Range of Purposes Uses of NGPC Funds Acquisitions & Buyouts Growth & Development Monetizations Structured Vehicles Project Finance Restructurings / Recaps. Special Situations Our financings enable companies to develop
Slide 16: Agenda
Agenda NGPC NGP Capital Resources Company Page 16 Company Overview Investment Criteria Financial / Investor Update Partnering with NGPC
Slide 17: Statement of Operations – Q2 2012 vs. Q1 2012
Financial / Investor Update NGPC NGP Capital Resources Company Page 17 Statement of Operations – Q2 2012 vs. Q1 2012 (in $000’s) Q2 Q1 Variance Investment income $5,311 $5,619 $(308) Operating expenses 2,658 2,641 (17) Income taxes 11 12 1 Net investment income 2,642 2,966 (324) Net investment incom
Slide 18: Balance Sheet – Q2 2012 vs. Q4 2011
NGPC NGP Capital Resources Company Page 18 Balance Sheet – Q2 2012 vs. Q4 2011 Financial / Investor Update
Slide 19: Investment Portfolio at June 30, 2012
NGPC NGP Capital Resources Company Page 19 Investment Portfolio at June 30, 2012 Financial / Investor Update
Slide 20: Weighted Average Yield on Targeted Investments
Weighted Average Yield on Targeted Investments NGPC NGP Capital Resources Company Page 20 Financial / Investor Update 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Weighted Average Yield
Slide 21: Capital Invested
NGPC NGP Capital Resources Company Page 21 Capital Invested (1) Through 7/10/12. $925 Million of Total Capital Invested (since inception) $- $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 2009 2010 2011 2012 (1) Total Capital Invested (excludes PIK) Targeted Investments Balance (at
Slide 22: NGPC Historical Performance
$14.03 $14.02 $13.96 $14.14 $12.15 $11.10 $10.90 $9.26 $9.29 $0.66 $1.58 $3.02 $4.63 $5.27 $5.96 $6.68 $6.93 $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 2004 2005 2006 2007 2008 2009 2010 2011 2012 (1) Total Return (NAV plus distributions) NAV / Share Cumulative Distributions / Share NGPC NGP Capital Res
Slide 23: NGPC Historical Stock Performance
$8.37 $8.13 $9.20 $7.19 $7.08 $0.64 $1.33 $2.05 $2.30 $- $2 $4 $6 $8 $10 $12 2008 2009 2010 2011 2012 (1) Total Return (Stock movements plus distributions) Price / Share Cumulative Distributions / Share NGPC NGP Capital Resources Company Page 23 NGPC Historical Stock Performance (1) Through 6/30/12.
Slide 24: Peer Group / Other BDC Comps
NGPC NGP Capital Resources Company Page 24 Peer Group / Other BDC Comps Company Market Cap ($MM’s) Price / NAV (a) Current Dividend Yield NGP Capital (NGPC) $156 78% 7.1% Gladstone (GLAD) $176 94% 10.0% Hercules (HTGC) $547 115% 8.7% KCAP Financial (KCAP) $207 100% 12.2% Main Street (MAIN) $781 147%
Slide 25: Agenda
Agenda NGPC NGP Capital Resources Company Page 25 Company Overview Investment Criteria Financial / Investor Update Partnering with NGPC
Slide 26: Partnering with NGPC: Why Partner with NGPC?
Partnering with NGPC NGPC NGP Capital Resources Company Page 26 Why Partner with NGPC? • Actively seeking to deploy permanent and established capital • Long - term capital partner • Depth of energy, engineering, and financial experience and expertise • Customized financing solutions – “One - Stop Sh
Slide 27: Investment Team Contact Information
Partnering with NGPC NGPC NGP Capital Resources Company Page 27 Investment Team Contact Information Steve Gardner Office: (713) 425 - 7723 Chief Executive Officer and President Email: [email protected] R. Kelly Plato Office: (713) 425 - 7742 Chief Investment Officer Email: [email protected] Scott
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