Tortoise Capital Resources Corp. Releases Fiscal 2009 Third Quarter Financial Results

http://www.businesswire.com/news/home/20091012006103/en

LEAWOOD, Kan.--(Business Wire)--
Tortoise Capital Resources Corp. (NYSE: TTO) (the company) today announced that
on Friday, Oct. 9, 2009 it filed its Form 10-Q for its third quarter ended Aug.
31, 2009.

Recent Highlights

* Net assets of $79.1 million or $8.76 per share as of Aug. 31, 2009
* Total assets of $85.8 million as of Aug. 31, 2009
* Distributable cash flow (DCF) of $1.2 million for the fiscal quarter ended
Aug. 31, 2009
* Third quarter 2009 distribution of $0.13 per share paid Sept. 1, 2009
* Credit facility balance of $4.6 million as of Oct. 12, 2009

Performance Review

On Sept. 1, 2009, the company paid a distribution of $0.13 per common share, the
same amount paid last quarter. The company determines the amount of
distributions paid to stockholders based on DCF which is distributions received
from investments less total expenses. Two portfolio companies, High Sierra
Energy, LP (High Sierra) and EV Energy Partners, L.P., increased their cash
distributions to common unitholders this quarter. VantaCore Partners LP
(VantaCore) reduced its cash distribution this quarter by approximately 5
percent to its minimum quarterly distribution rate.

Leverage

On Aug. 20, 2009, the company entered into a six-month extension of its amended
credit facility through Feb. 20, 2010. The balance outstanding on the credit
facility at Oct. 12, 2009 was $4.6 million. The company does not expect any
future leverage reductions to materially impact its distribution paying
capacity.

Net Asset Value

At Aug. 31, 2009, the company`s net asset value was $8.76 per share compared to
$8.91 per share at May 31, 2009. The decrease in net asset value is primarily
the result of an overall net decrease in the fair value of the company`s private
investments.

Portfolio Review

As of Aug. 31, 2009, the fair value of the company`s investment portfolio
(excluding short-term investments) totaled $78.3 million, including equity
investments of $69.5 million and debt investments of $8.8 million. The portfolio
consists of 61 percent midstream and downstream investments, 5 percent upstream
investments, and 34 percent in aggregates and coal. The weighted average
yield-to-cost on the investment portfolio (excluding short-term investments) as
of Aug. 31, 2009 was 6.5 percent.

The fair value of High Sierra and International Resource Partners LP increased
this quarter due in part to improved operating performance and/or peer
multiples. The fair value of Mowood, LLC also increased this quarter and it
continues to explore strategic alternatives based on growth opportunities at its
Timberline subsidiary. The fair value of Abraxas Energy Partners, L.P. (Abraxas
Energy), Quest Midstream Partners, L.P. (Quest Midstream) and VantaCore declined
this quarter due to company and/or market-specific issues. VantaCore`s fair
value was adversely affected by its decision to reduce its quarterly cash
distribution to common unitholders and to suspend its distribution to certain
subordinated unitholders in light of reduced distributable cash flow projections
in 2009. Quest Midstream and Abraxas Energy announced intentions to merge or
recombine with their respective affiliated public entities, which would likely
provide liquidity for the company`s investments in the future. On Oct. 6, 2009,
Quest Resources Corp. (NASDAQ: QRCP) and Quest Energy Partners L.P. (NASDAQ:
QELP) filed a Form S-4 Registration Statement to recombine with Quest Midstream
as the newly-formed PostRock Energy Corporation, which is expected to be listed
on the NASDAQ under the symbol "PSTR." The recombination is subject to the
satisfaction of a number of conditions. On Oct. 5, 2009, Abraxas Petroleum Corp.
(NASDAQ: AXAS) (Abraxas Petroleum) closed its merger with Abraxas Energy. Under
the terms of the merger agreement, the company will receive 4.25 shares of
Abraxas Petroleum in exchange for each common unit of Abraxas Energy it owns,
which equates to approximately 1,946,377 Abraxas Petroleum shares. These shares
are subject to an initial 90 day lock-up period followed by a multi-year
staggered lock-up period.

Earnings Call

The company will host a conference call at 4 p.m. CDT on Monday, Oct. 12, 2009
to discuss its financial results for the fiscal quarter ended Aug. 31, 2009.
Please dial-in approximately five to 10 minutes prior to the scheduled start
time.

U.S./Canada: 866-225-8754

The call will also be webcast in a listen-only format. A link to the webcast
will be accessible at www.tortoiseadvisors.com.

A replay of the call will be available beginning at 7 p.m. CDT on Oct. 12, 2009
and continuing until 11:59 p.m. CDT Oct. 26, 2009, by dialing 800-406-7325
(U.S./Canada). The replay access code is 4075823#. A replay of the webcast will
also be available on the company's Web site at www.tortoiseadvisors.com through
Oct. 12, 2010.

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 and coal/aggregate segments, of the U.S. energy
infrastructure sector.

About Tortoise Capital Advisors

Tortoise is an investment manager specializing in listed energy infrastructure,
such as pipeline and power companies. As of Sept. 30, 2009, the adviser had
approximately $2.4 billion of assets under management in five NYSE-listed
investment companies and private accounts. For more information, visit our Web
site at www.tortoiseadvisors.com.

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.

Forward-Looking Statement

This press release contains certain statements that may include "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements, other than
statements of historical fact, included herein are "forward-looking statements."
Although the company and Tortoise Capital Advisors believe that the expectations
reflected in these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may prove to be
incorrect. Actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of factors, including
those discussed in the company`s reports that are filed with the Securities and
Exchange Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Other than as required by law, the company and Tortoise Capital
Advisors do not assume a duty to update this forward-looking statement. Any
distribution paid in the future to our stockholders will depend on the actual
performance of the company`s investments, its costs of leverage and other
operating expenses and will be subject to the approval of the company`s Board
and compliance with asset coverage requirements of the Investment Company Act of
1940 and the leverage covenants.

Tortoise Capital Resources Corporation
STATEMENTS OF ASSETS & LIABILITIES

August 31, 2009 November 30, 2008
(Unaudited)
Assets
Investments at fair value, control (cost $28,735,949 and $30,418,802, respectively) $ 32,818,564 $ 30,213,280
Investments at fair value, affiliated (cost $53,091,607 and $56,662,500, respectively) 39,230,799 48,016,925
Investments at fair value, non-affiliated (cost $15,176,862 and $49,760,304, respectively) 8,439,970 27,921,025
Total investments (cost $97,004,418 and $136,841,606, respectively) 80,489,333 106,151,230
Income tax receivable - 212,054
Receivable for investments sold 65,104 -
Receivable for Adviser expense reimbursement 53,596 88,925
Interest receivable from control investments 68,200 76,609
Dividends receivable 255 696
Deferred tax asset, net 5,067,908 5,683,747
Prepaid expenses and other assets 43,966 107,796
Total assets 85,788,362 112,321,057

Liabilities
Base management fees payable to Adviser 321,578 533,552
Distribution payable to common stockholders 1,173,679 -
Accrued expenses and other liabilities 216,398 362,205
Short-term borrowings 5,000,000 22,200,000
Total liabilities 6,711,655 23,095,757
Net assets applicable to common stockholders $ 79,076,707 $ 89,225,300

Net Assets Applicable to Common Stockholders Consist of:
Warrants, no par value; 945,594 issued and outstanding at August 31, 2009 and November 30, 2008 (5,000,000 authorized) $ 1,370,700 $ 1,370,700
Capital stock, $0.001 par value; 9,028,301 shares issued and outstanding at August 31, 2009 and 8,962,147 issued and outstanding at November 30, 2008 (100,000,000 shares authorized) 9,028 8,962
Additional paid-in capital 102,817,178 106,869,132
Accumulated net investment loss, net of income taxes (3,728,613 ) (2,544,267 )
Accumulated realized gain (loss), net of income taxes (14,316,148 ) 6,364,262
Net unrealized depreciation of investments, net of income taxes (7,075,438 ) (22,843,489 )
Net assets applicable to common stockholders $ 79,076,707 $ 89,225,300

Net Asset Value per common share outstanding (net assets applicable to common stock, divided by common shares outstanding) $ 8.76 $ 9.96

For the three months ended For the three months ended For the nine months ended For the nine months ended
Distributable Cash Flow August 31, 2009 August 31, 2008 August 31, 2009 August 31, 2008

Total from Investments
Distributions from investments $ 1,635,662 $ 2,734,812 $ 6,179,444 $ 8,129,460
Distributions paid in stock (1) - 621,122 - 1,558,842
Interest income from investments 201,918 269,235 605,916 884,588
Dividends from money market mutual funds 304 3,643 1,449 6,770
Other income 15,000 - 45,000 28,987
Total from Investments 1,852,884 3,628,812 6,831,809 10,608,647

Operating Expenses Before Leverage Costs
Advisory fees (net of expense reimbursement by Adviser) 267,982 504,109 877,111 1,483,483
Other operating expenses (excluding capital gain incentive fees) 266,601 253,236 720,196 766,032
Total Operating Expenses 534,583 757,345 1,597,307 2,249,515
Distributable cash flow before leverage costs 1,318,301 2,871,467 5,234,502 8,359,132
Leverage Costs 134,987 395,791 562,945 1,329,289
Distributable Cash Flow $ 1,183,314 $ 2,475,676 $ 4,671,557 $ 7,029,843

Distributions paid on common stock $ 1,173,679 $ 2,356,874 $ 4,405,226 $ 6,901,553

Payout percentage for period (2) 99 % 95 % 94 % 98 %

DCF/GAAP Reconciliation
Distributable Cash Flow $ 1,183,314 $ 2,475,676 $ 4,671,557 $ 7,029,843
Adjustments to reconcile to Net Investment Income, before Income Taxes
Distributions paid in stock (1) - (621,122 ) 56,514 (1,558,842 )
Pro Forma distribution on new investment (3) - (254,215 ) - (254,215 )
Return of capital on distributions received from equity investments (1,075,398 ) (2,306,739 ) (5,792,784 ) (6,497,044 )
Capital gain incentive fees - 340,369 - (747,134 )
Net Investment Income (Loss), before Income Taxes $ 107,916 $ (366,031 ) $ (1,064,713 ) $ (2,027,392 )

(1) The only distributions paid in stock for the nine months ended August 31, 2009 were from Abraxas Energy Partners, L.P. which were paid in stock as a result of credit constraints and therefore were not included in DCF. Distributions paid in stock for the three and nine months ended August 31, 2008 include shares received from High Sierra Energy, LP as a distribution received in lieu of cash.
(2) Distributions paid as a percentage of Distributable Cash Flow.
(3) Consists of $254,215 as pro forma distribution on new investment in VantaCore Partners, LP common units.

Tortoise Capital Resources Corporation
STATEMENTS OF OPERATIONS (Unaudited)

For the three months For the three months For the nine months For the nine months
ended August 31, ended August 31, ended August 31, ended August 31,
2009 2008 2009 2008
Investment Income
Distributions from investments
Control investments $ 555,879 $ 347,500 $ 1,714,309 $ 975,001
Affiliated investments 856,891 1,139,402 2,522,267 4,499,082
Non-affiliated investments 222,892 993,695 1,999,382 2,401,162
Total distributions from investments 1,635,662 2,480,597 6,235,958 7,875,245
Less return of capital on distributions (1,075,398) (2,306,739) (5,792,784) (6,497,044)
Net distributions from investments 560,264 173,858 443,174 1,378,201
Interest income from control investments 201,918 269,235 605,916 884,588
Dividends from money market mutual funds 304 3,643 1,449 6,770
Fee income 15,000 - 45,000 -
Other income - - - 28,987
Total Investment Income 777,486 446,736 1,095,539 2,298,546

Operating Expenses
Base management fees 321,578 604,930 1,052,533 1,780,179
Capital gain incentive fees (Note 4) - (340,369) - 747,134
Professional fees 176,947 153,157 451,056 469,039
Administrator fees 15,007 27,930 49,118 82,488
Directors' fees 22,080 22,181 65,817 66,927
Reports to stockholders 15,409 13,057 45,890 39,028
Fund accounting fees 8,032 8,652 24,772 25,690
Registration fees 7,891 7,458 23,501 22,292
Custodian fees and expenses 5,315 5,545 13,075 14,914
Stock transfer agent fees 3,556 3,403 10,140 10,172
Other expenses 12,364 11,853 36,827 35,482
Total Operating Expenses 588,179 517,797 1,772,729 3,293,345
Interest expense 134,987 395,791 562,945 1,329,289
Total Expenses 723,166 913,588 2,335,674 4,622,634
Less expense reimbursement by Adviser (53,596) (100,821) (175,422) (296,696)
Net Expenses 669,570 812,767 2,160,252 4,325,938
Net Investment Income (Loss), before Income Taxes 107,916 (366,031) (1,064,713) (2,027,392)
Deferred tax benefit (expense) (26,733) 139,090 (119,633) 770,408
Net Investment Income (Loss) 81,183 (226,941) (1,184,346) (1,256,984)

Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments, before income taxes (10,756,469) 2,224,706 (18,591,444) 2,224,706
Deferred tax expense (1,468,249) (845,388) (2,088,966) (845,388)
Net realized gain (loss) on investments (12,224,718) 1,379,318 (20,680,410) 1,379,318
Net unrealized appreciation of control investments 1,130,654 234,767 4,288,137 238,103
Net unrealized appreciation (depreciation) of affiliated investments (311,350) 641,373 (5,215,233) 10,390,990
Net unrealized appreciation (depreciation) of non-affiliated investments 9,907,190 (3,309,808) 15,102,387 (5,065,454)
Net unrealized appreciation (depreciation), before income taxes 10,726,495 (2,433,668) 14,175,291 5,563,639
Deferred tax benefit (expense) 1,319,533 924,795 1,592,760 (2,114,182)
Net unrealized appreciation (depreciation) of investments 12,046,028 (1,508,873) 15,768,051 3,449,457
Net Realized and Unrealized Gain (Loss) on Investments (178,690) (129,555) (4,912,359) 4,828,775

Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations $ (97,507) $ (356,496) $ (6,096,705) $ 3,571,791

Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations Per Common Share:
Basic and Diluted $ (0.01) $ (0.04) $ (0.68) $ 0.40

Weighted Average Shares of Common Stock Outstanding:
Basic and Diluted 9,014,094 8,893,866 8,997,031 8,876,079

Tortoise Capital Advisors, LLC
Pam Kearney, 866-362-9331
Investor Relations
pkearney@tortoiseadvisors.com

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