ADAMS NATURAL RESOURCES FUND, INC. - FORM N-Q - SEPTEMBER 30, 2015

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-02736
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ADAMS NATURAL RESOURCES FUND, INC.
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(Exact name of registrant as specified in charter)

 

 

500 East Pratt Street, Suite 1300, Baltimore, Maryland 21202
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(Address of principal executive offices)

 

 

Lawrence L. Hooper, Jr.
Adams Natural Resources Fund, Inc.
500 East Pratt Street, Suite 1300
Baltimore, Maryland 21202

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(Name and address of agent for service)

 

 

Registrant's telephone number, including area code: (410) 752-5900
Date of fiscal year end: December 31
Date of reporting period: September 30, 2015

Item 1. Schedule of Investments.


SCHEDULE OF INVESTMENTS

 

September 30, 2015 (unaudited)

 

    Shares     Value (A)

Common Stocks — 98.4%

  

 

Energy — 78.6%

Exploration & Production — 24.4%

Anadarko Petroleum Corp.

    275,000      $ 16,607,250

Chesapeake Energy Corp. (B)

    452,000        3,313,160

Cimarex Energy Co.

    108,000        11,067,840

ConocoPhillips

    213,000        10,215,480

Energen Corp.

    129,600        6,461,856

EOG Resources, Inc.

    358,000        26,062,400

EQT Corp.

    140,000        9,067,800

Marathon Oil Corp.

    571,000        8,793,400

Noble Energy, Inc.

    373,500        11,272,230

Occidental Petroleum Corp.

    405,000        26,790,750

Pioneer Natural Resources Co.

    99,500        12,103,180

Whiting Petroleum Corp. (C)

    174,500        2,664,615
   

 

 

      144,419,961
   

 

 

Integrated Oil & Gas — 27.0%

Chevron Corp.

    743,200        58,623,616

Exxon Mobil Corp.

    1,358,430        100,999,271
   

 

 

      159,622,887
   

 

 

   

Oil Equipment & Services — 13.7%

Baker Hughes, Inc.

    160,000        8,326,400

Halliburton Co.

    400,070        14,142,474

National Oilwell Varco, Inc.

    140,000        5,271,000

Oil States International Inc. (C)

    170,000        4,442,100

Schlumberger Ltd.

    626,000        43,175,220

Weatherford International plc (C)

    645,000        5,469,600
   

 

 

      80,826,794
   

 

 

Pipelines — 5.8%

Kinder Morgan Inc.

    541,000        14,974,880

Spectra Energy Corp.

    382,000        10,035,140

Williams Companies, Inc.

    250,000        9,212,500
   

 

 

      34,222,520
   

 

 

Refiners — 7.7%

Marathon Petroleum Corp.

    264,600        12,258,918

Phillips 66

    431,275        33,139,171
   

 

 

      45,398,089
   

 

 

 

 


SCHEDULE OF INVESTMENTS (CONTINUED)

 

September 30, 2015 (unaudited)

 

    Shares/
Principal
    Value (A)

Basic Materials — 19.8%

   

Chemicals — 16.0%

CF Industries Holdings, Inc.

    325,345      $ 14,607,990

Dow Chemical Co.

    492,500        20,882,000

Eastman Chemical Co.

    140,000        9,060,800

LyondellBasell Industries N.V. (Class A)

    285,200        23,774,272

Monsanto Co.

    194,400        16,590,096

PPG Industries, Inc.

    112,000        9,821,280
   

 

 

      94,736,438
   

 

 

General Industrials — 1.6%

Packaging Corp. of America

    156,300        9,403,008
   

 

 

Gold & Precious Metals — 0.8%

SPDR Gold Trust (C)

    45,000        4,808,700
   

 

 

Industrial Metals — 1.4%

Alcoa Inc.

    614,000        5,931,240

Freeport-McMoRan Inc.

    248,000        2,403,120
   

 

 

      8,334,360
   

 

 

Total Common Stocks
(Cost $455,683,178)

   

    581,772,757
   

 

 

Short-Term Investments — 1.6%

  

 

Money Market Account — 0.6%

  

 

M&T Bank, 0.10%

  $ 3,633,667        3,633,667
   

 

 

Money Market Funds — 1.0%

  

 

Fidelity Institutional Money Market – Money Market Portfolio (Institutional Class), 0.17% (D)

    5,755,224        5,755,224
   

 

 

   

Total Short-Term Investments
(Cost $9,388,891)

      9,388,891
   

 

 

Securities Lending Collateral — 0.5%
(Cost $3,005,800)

   

Money Market Funds — 0.5%

Invesco Short-Term Investment Trust – Liquid Assets Portfolio (Institutional Class), 0.16% (D)

    3,005,800        3,005,800
   

 

 

Total Investments — 100.5% of Net Assets
(Cost $468,077,869)

    $ 594,167,448
   

 

 

 

Notes:

(A) Common stocks are listed on the New York Stock Exchange or the NASDAQ and are valued at the last reported sale price on the day of valuation.
(B) A portion of shares held are on loan.
(C) Presently non-dividend paying.
(D) Rate presented is as of period-end and represents the annualized yield earned over the previous seven days.

 

 

See accompanying notes.

 

NOTES TO SCHEDULES OF INVESTMENTS (Unaudited)

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1. SIGNIFICANT ACCOUNTING POLICIES

Adams Natural Resources Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940 as a non-diversified investment company. The Fund is an internally-managed closed-end fund specializing in energy and other natural resources stocks. The investment objectives of the Fund are preservation of capital, the attainment of reasonable income from investments, and an opportunity for capital appreciation.

Investment Transactions - The Fund's investment decisions are made by the portfolio management team with recommendations from the research staff. The Fund is subject to changes in the value of equity securities held in the normal course of pursuing its investment objectives. Investment transactions are accounted for on the trade date.

Valuation - The Fund's financial instruments are reported at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments in securities traded on national security exchanges are valued at the last reported sale price on the day of valuation. Over-the-counter and listed securities for which a sale price is not available are valued at the last quoted bid price. Short-term investments (excluding money market funds) are valued at amortized cost, which approximates fair value. Money market funds are valued at net asset value.

GAAP establishes the following fair value hierarchy that categorizes inputs used to measure fair value:

At September 30, 2015, the Fund's financial instruments were classified as follows:

 

Level 1

 

Level 2

 

Level 3

 

Total

Assets:              

Common stocks

$581,772,757

 

$--

 

$--

 

$581,772,757

Short-term investments

9,388,891

 

--

 

--

 

9,388,891

Securities lending collateral

3,005,800

 

--

 

--

 

3,005,800

Total investments

$594,167,448

 

$--

 

$--

 

$594,167,448

There were no transfers between levels during the nine months ended September 30, 2015.

2. FEDERAL INCOME TAXES

As of September 30, 2015, the identified cost of securities for federal income tax purposes was $468,077,869 and net unrealized appreciation aggregated $126,089,579, consisting of gross unrealized appreciation of $195,303,811 and gross unrealized depreciation of $69,214,232.

3. PORTFOLIO SECURITIES LOANED

The Fund makes loans of securities to approved brokers to earn additional income. It receives as collateral cash deposits, U.S. Government securities, or bank letters of credit valued at 102% of the value of the securities on loan. The market value of the loaned securities is calculated based upon the most recent closing prices and any additional required collateral is delivered to the Fund on the next business day. Cash deposits are placed in a registered money market fund. The Fund accounts for securities lending transactions as secured financing and receives compensation in the form of fees or retains a portion of interest on the investment of any cash received as collateral. The Fund also continues to receive interest or dividends on the securities loaned. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Fund. At September 30, 2015, the Fund had securities on loan of $3,147,502 and held cash collateral of $3,005,800; additional collateral was delivered the next business day in accordance with the procedure described above. The Fund is indemnified by the Custodian, serving as lending agent, for loss of loaned securities and has the right under the lending agreement to recover the securities from the borrower on demand.

Item 2. Controls and Procedures.

(a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report.

(b) There have been no significant changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits.

The certifications of the principal executive officer and principal financial officer pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 are attached hereto as Form N-Q Certifications.

                                                                              
SIGNATURES
 
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act 
of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto  
duly authorized. 
 
Adams Natural Resources Fund, Inc.
 
By:  /s/ Mark E. Stoeckle 
  Mark E. Stoeckle 
  Chief Executive Officer
  (Principal Executive Officer) 
 
Date:  October 21, 2015
 
 
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act 
of 1940, this report has been signed below by the following persons on behalf of the registrant and in the 
capacities and on the dates indicated. 
 
 
 
By:  /s/ Mark E. Stoeckle 
  Mark E. Stoeckle 
  Chief Executive Officer
  (Principal Executive Officer) 
 
Date:  October 21, 2015
 
 
 
By:  /s/ Brian S. Hook 
  Brian S. Hook 
  Vice President, Chief Financial Officer and Treasurer 
  (Principal Financial Officer) 
 
Date:  October 21, 2015