Tortoise Capital Resources Announces Fiscal 2007 First Quarter Financial Results

OVERLAND PARK, Kan., April 12 /PRNewswire-FirstCall/ -- Tortoise Capital Resources Corp. (NYSE: TTO) today announced its financial results for the three months ended Feb. 28, 2007, its first fiscal quarter-end following its initial public offering.

    Highlights for the Quarter

    --  Completed our IPO
    --  Completed Two Investments
    --  Approximately 60% of Total Assets Invested
    --  Net Unrealized Appreciation of $1.8 million
    --  Net Assets of $122,192,391 or $13.84 per share
    --  Number of Portfolio Companies - Two Public/Four Private

    Portfolio and Investment Activity

As of Feb. 28, 2007, Tortoise Capital Resources' investment portfolio (excluding short-term investments) totaled $74.6 million, including equity investments in six portfolio companies representing approximately $70.0 million and a subordinated debt investment in one portfolio company representing $4.6 million.

    In December 2006, the company made two new investments:

    --  $17.5 million private placement in Millennium Midstream Partners, LP,
        a private limited partnership that owns midstream assets located in
        Texas, Louisiana and the Gulf of Mexico.

    --  $17.5 million private placement of equity in Quest Midstream Partners,
        LP, a private limited partnership that owns and operates a gas
        gathering system in the Cherokee Basin, which is located in
        southeastern Kansas and northern Oklahoma.

"We continue to see a strong pipeline of private transactions in the midstream and downstream sectors of the energy infrastructure area. The upstream sector is also growing with the successful launch of a handful of publicly-traded energy production MLPs, including Legacy Reserves LP," said Tortoise Capital Resources Manager, Edward Russell. "Legacy Reserves joined Eagle Rock as our second holding to complete an IPO, validating our investment strategy."

Operational Highlights

Distributions Received from Investments: For the period ended Feb. 28, 2007, we received $0.6 million in gross distributions from investments, including $0.5 million which was characterized as return of capital, and $0.3 million in dividends from money market mutual funds and interest income from debt investments. The weighted average yield on the company's investment portfolio (excluding short-term investments) as of Feb. 28, 2007 was 9.1 percent.

Operating Expenses: Recurring operating expenses were $0.8 million which consisted of $0.4 million in management fees, $0.3 million in interest expense on our line of credit and preferred dividends, and $0.1 million of other operating expenses. Total operating expenses were $2.1 million, which includes two items that will not be part of the company's recurring distributable cash flow. The company accrued $0.5 million for capital gain incentive fees that are not due until an investment is liquidated, and incurred costs for redemption of previously outstanding Series A Redeemable Preferred Stock. The Series A Redeemable Preferred Stock issuance was utilized as bridge financing to fund portfolio investments and was fully redeemed upon completion of our initial public offering.

Distributable Cash Flow (DCF): DCF for the quarter ended Feb. 28, 2007 was $0.02 million, comprised of $0.87 million received from investments less $0.85 million in expenses. Expenses include $0.2 million in preferred stock dividends and exclude the accrued capital gain incentive fee provision.

Net Income/Loss: Net loss for the period was $1.4 million, which included a deferred tax benefit of $0.3 million.

Net Unrealized Gain: During the period, net unrealized gain was $1.8 million after a deferred tax expense of $1.1 million.

Liquidity and Capital Resources

On Feb. 7, 2007, the company completed an initial public offering (IPO) of 5,740,000 shares of common stock at $15.00 per share for gross proceeds of $86.1 million. After underwriting discount and offering expenses, the company received net proceeds of $79.5 million.

From these net proceeds, approximately $11.6 million was used to repay the full amount then outstanding under the credit facility and $18.5 million to redeem all of the Series A Redeemable Preferred Stock. The company has $49.4 million remaining from the net proceeds of the IPO for investments and $20 million available under its secured revolving credit facility.


On Feb. 7, 2007, we paid a quarterly dividend to our stockholders of record as of Jan. 31, 2007 of $0.10 per common share. The company anticipates its next quarterly distribution will be paid on or about May 31, 2007.

Annual Stockholders' Meeting and First Quarter Results Call

The company will discuss fiscal fourth quarter 2006 and fiscal first quarter 2007 financial results at its annual stockholders' meeting on April 13, 2007 at 11 a.m. CT at the University of Kansas Edwards Campus, Regnier Hall 165, 12600 Quivira Road, Overland Park, Kan. Company leaders will respond to investor questions following the meeting.

For those unable to attend the meeting, a conference call will be provided. Please dial-in approximately five to 10 minutes prior to the scheduled start time.

    U.S./Canada: (800) 218-0204

    International:  (303) 262-2140

The meeting will also be webcast in a listen-only format. The link to the webcast and a supporting slide presentation will be accessible at

A replay of the meeting will be available beginning at 2 p.m. CT on April 13, 2007 and continuing until 12 p.m. CT April 27, 2007, by dialing (800) 405- 2236 (U.S./Canada). The replay access code is 11082820#. A replay of the webcast will also be available on the company's Web site at through April 13, 2008.

About Tortoise Capital Resources Corp.

Tortoise Capital Resources invests primarily in privately-held and micro- cap public companies operating in the midstream and downstream segments, and to a lesser extent the upstream segments of the U.S. energy infrastructure sector. Tortoise Capital Resources seeks to provide stockholders a high level of total return, with an emphasis on dividends and dividend growth.

About Tortoise Capital Advisors, LLC

Tortoise Capital Advisors, LLC, the adviser to Tortoise Capital Resources Corp., is a pioneer in the capital markets for master limited partnership (MLP) investment companies and a leader in closed-end funds and separately managed accounts focused on MLPs in the energy infrastructure sector. As of March 31, 2007, the adviser had approximately $2.7 billion of energy infrastructure investment assets under management.

Safe Harbor Statement

This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.

    Tortoise Capital Resources Corporation

                                              February 28,       November 30,
                                                  2007               2006
     Investments at value, non-affiliated
      (cost $65,842,743 and $21,867,831,
      respectively)                            $68,500,103        $22,196,689
     Investments at value, affiliated
      (cost $49,616,450 and $14,828,825,
      respectively)                             50,076,418         14,828,825
     Investments at value, control (cost
      $5,550,000 and $5,550,000,
      respectively)                              5,683,519          5,550,000
     Total investments (cost $121,009,193
      and $42,246,656, respectively)           124,260,040         42,575,514
     Dividends receivable                          113,682             24,262
     Interest receivable from affiliate             40,950             43,983
     Other receivable from affiliate                    -0             44,487
     Prepaid expenses and other assets              73,781            244,766
     Total assets                              124,488,453         42,933,012

     Management fees payable to Adviser            218,957            112,765
     Accrued capital gain incentive fees
      payable to Adviser (Note 4)                  487,627                 -0
     Accrued expenses and other
      liabilities                                  457,020            155,303
     Current tax liability                          86,386             86,386
     Deferred tax liability                      1,046,072            250,156
     Total liabilities                           2,296,062            604,610
      Net assets applicable to common
       stockholders                           $122,192,391        $42,328,402

    Net Assets Applicable to Common
     Stockholders Consist of
     Warrants, no par value; 957,130
      issued and outstanding at
      February 28, 2007 and 772,124
      issued and outstanding at
      November 30, 2006 (5,000,000
      authorized)                               $1,387,196         $1,104,137
     Capital stock, $0.001 par value;
      8,828,596 shares issued and
      outstanding at February 28, 2007
      and 3,088,596 issued and
      outstanding at November 30, 2006
      (100,000,000 shares authorized)                8,829              3,089
     Additional paid-in capital                120,176,813         41,018,413
     Accumulated net investment loss, net
      of deferred tax benefit                   (1,394,844)                -0
     Accumulated realized loss, net of
      income tax benefit                              (906)              (906)
     Net unrealized appreciation of
      investments, net of deferred tax
      expense                                    2,015,303            203,669
       Net assets applicable to common
       stockholders                           $122,192,391        $42,328,402

     Net Asset Value per common share
      outstanding (net assets applicable
      to common shares, divided by common
      shares outstanding)                           $13.84             $13.70

    Tortoise Capital Resources Corporation

                                                                 Period from
                                              For the three       December 8,
                                              months ended      2005(1)through
                                             February 28, 2007    February 28,

    Investment Income
       Distributions received from
         Non-affiliated investments           $    348,430        $        -
         Affiliated investments                    255,257                 -
       Less return of capital on
         Non-affiliated investments               (286,252)                -
         Affiliated investments                   (193,805)                -
                Net distribution income
                from investments                   123,630                 -
       Dividends from money market mutual
        funds                                      139,533           403,505
       Interest income from control
        investments                                128,472                 -
         Total Investment Income                   391,635           403,505

       Base management fees                        380,067           136,796
       Capital gain incentive fees
        (Note 4)                                   487,627                 -
       Professional fees                            57,381            39,396
       Directors' fees                              23,168            20,614
       Administrator fees                           10,673             6,844
       Reports to stockholders                       4,458            13,743
       Fund accounting fees                          5,849             5,810
       Stock transfer agent fees                     3,600             2,749
       Custodian fees and expenses                   2,600             1,828
       Registration fees                             1,668                 -
       Other expenses                                6,538             6,941
         Total Expenses before Interest
          Expense, Preferred Stock Dividends
          and Loss on Redemption of Preferred
          Stock                                    983,629           234,721
       Interest expense                            123,481                 -
       Preferred stock dividends                   228,750                 -
       Loss on redemption of preferred
        stock                                      765,059                 -
         Total Interest Expense, Preferred
          Stock Dividends and Loss on Redemption
          of Preferred Stock                     1,117,290                 -
         Total Expenses                          2,100,919           234,721
    Net Investment Income (Loss), before
     Income Taxes                               (1,709,284)          168,784
         Current tax expense                             -           (61,100)
         Deferred tax benefit                      314,440                 -
           Total Tax Expense                       314,440           (61,100)
    Net Investment Income (Loss)                (1,394,844)          107,684

    Unrealized Appreciation of Investments
       Net unrealized appreciation of non-
        affiliated investments                   2,328,503                 -
       Net unrealized appreciation of
        affiliated investments                     459,968                 -
       Net unrealized appreciation of
        control investments                        133,519                 -
         Net unrealized appreciation, before
          deferred tax expense                   2,921,990                 -
           Deferred tax expense                 (1,110,356)                -
             Net Unrealized Appreciation of
              Investments                        1,811,634                 -

    Net Increase in Net Assets Applicable
     to Common Stockholders Resulting from
     Operations                               $    416,790        $  107,684

    Net Investment Income (Loss) Per
     Common Share
    Basic and diluted                         $      (0.31)        $    0.03

    Net Increase in Net Assets Applicable
     To Common Stockholders
       Resulting from Operations Per
        Common Share
    Basic and Diluted                         $       0.09        $     0.03

    Weighted Average Shares of Common
     Stock Outstanding:
      Basic and diluted                          4,491,707         3,088,596

    (1) Commencement of Operations.

SOURCE Tortoise Capital Resources Corp.