SecProbe.io

CORRESP
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filename1.htm

September
26, 2023

Kimberly
Browning

Megan
Miller

United
States Securities

and
Exchange Commission

100
F Street, NE

Washington,
D.C. 20549

 Re: NXG
Cushing Midstream Energy Fund –

Registration Statement on Form N-2 (File No. 333-273954)

Dear
Ms. Browning and Ms. Miller:

We
are in receipt of the telephonic comments of the staff of the Securities and Exchange Commission (the “SEC”) regarding
the Registration Statement on Form N-2 (the “Registration Statement”) of NXG Cushing Midstream Energy Fund (the “Fund”)
that was submitted to the SEC on August 11, 2023.

The
Fund has considered your comments and authorized us to make on its behalf the responses and changes to the Registration Statement
discussed below. For ease of reference, your comments are set forth below in bold font and are followed by the corresponding response.

Changes
to disclosure referenced below are reflected in Pre-Effective Amendment No. 1 to the Registration Statement being filed by the
Fund today via EDGAR. We have included page references where revised disclosure addressing a particular comment may be found.

Capitalized
terms not otherwise defined in this response letter have the meaning given to them in the Registration Statement.

N-2
Cover Page

 1. Please
                                         uncheck the box next to the statement that the filing will become effective “When
                                         declared effective pursuant to Section 8(c) of the Securities Act.”

The
Fund confirms that it has revised the cover page as requested. The Fund also notes that it has added Delaying Amendment language
to the cover page of the Registration Statement.

General
- Incorporation by Reference

 2. Please
                                         confirm that all documents incorporated by reference in the Registration Statement are
                                         hyperlinked.

The
Fund confirms that all documents incorporated by reference in the Registration Statement are hyperlinked.

Cover
Page – “Investment Objective”

 3. The
                                         second sentence in this paragraph reads: “The Fund’s investment objective
                                         is to obtain a high after-tax total return from a combination of capital appreciation
                                         and current income.” Please explain the meaning of “high after tax total
                                         return” and why it is applicable to the Fund, particularly in light of the fact
                                         that the Fund is no longer a “C” Corporation for U.S. federal income tax
                                         purposes.

The
Fund respectfully submits that the reference to “high after-tax” total return in the Fund’s investment objective
is not intended to connote a particular investment strategy beyond that which is disclosed in the prospectus and statement of
additional information, but instead is intended to convey that in seeking total return, the Fund takes into account the tax consequences
of its investments.

While
the conversion of the Fund from a “C” Corporation to a regulated investment company (“RIC”) for U.S. federal
income tax purposes limited the amount the Fund may invest in MLPs, the Fund continues to seek to invest in MLPs, which have a
tax advantaged structure, to the maximum extent permitted consistent with its RIC status. The Fund has added disclosure under
the heading “Investment Objective and Policies—MLPs” to (i) clarify that the Fund’s limitation on investments
in MLPs is required by the Internal Revenue Code to maintain RIC status and that the Fund generally intends to invest in MLPs
up to that limit and (ii) further explain the beneficial tax attributes of investments in MLPs.

The
Fund respectfully submits that its stated investment objective is consistent with its intention to pursue such objective by seeking
to invest in midstream energy companies in accordance with its investment policies and parameters in a tax efficient manner within
the limitations applicable to RICs under the Internal Revenue Code.

Cover
Page – “Investment Strategy”

 4. In
                                         the first sentence of this paragraph, please express the Fund’s 80% policy as a
                                         percentage of “net assets, plus the amount of any borrowings for investment purposes”
                                         consistent with the definition of Assets in Rule 35d-1(d)(2) under the Investment Company
                                         Act of 1940 (the “1940 Act”).

The
Fund has revised the definition of Managed Assets for purposes of the Fund’s 80% policy as requested.

Cover
Page – “Principal Investment Policies”

 5. Please
                                         clarify the constituents of the Fund’s 80% basket, as the 80% policy refers to
                                         “midstream energy investments,” which are “investments that offer economic
                                         exposure to securities of midstream energy companies . . . .” However, elsewhere
                                         in the Prospectus you refer to “midstream energy companies.” If you intend
                                         the 80% basket to include synthetic investments, please so state. And if any of those
                                         constitute principal strategies, please identify such principal strategies and disclose
                                         their risks.

The
Fund has revised the reference to midstream energy companies in the Fund’s disclosure regarding its other 20% investments,
to make it consistent with the 80% policy. The Fund’s 80% policy is intended to include synthetic investments, as noted
elsewhere in the Prospectus, which states that “[a]s an alternative to holding investments directly, the Fund may obtain
investment exposure through derivatives transactions intended to replicate, modify or replace the economic attributes associated
with an investment in securities in which the Fund may invest directly. To the extent that the Fund invests in synthetic investments
with economic characteristics similar to investments in midstream energy investments, the market (or fair) value of such investments
will be counted for purposes of the Fund’s policy of investing at least 80% of its Managed Assets in a portfolio of midstream
energy investments.” The Fund has added a summary of this to the description of the 80% policy, including on the cover page
and in the prospectus summary.

    2

The
Fund has reviewed disclosure through the Prospectus and confirms that all principal strategies and the principal risk factors
associated therewith are disclosed in the Prospectus.

 6. Please
                                         correct a typo in the disclosure that reads “. . . companies that engage provide
                                         midstream services in the energy infrastructure sector . . . .”

The
Fund has revised the disclosure as requested.

 7. Clarify
                                         the types of midstream energy companies in which the Fund invests (i.e. foreign or domestic)?

The
Fund has added the requested disclosure.

 8. With
                                         respect to the 50% test described in the last sentence of the first paragraph of this
                                         section, please delete “or otherwise related to” or, alternatively, further
                                         define what is meant by “otherwise related to midstream energy services.”

The
Fund has deleted “or otherwise related to.”

 9. Please
                                         identify the capitalization sizes of investments in the Fund’s principal investment
                                         strategies.

The
Fund has added the requested disclosure.

 10. As
                                         the Fund will be concentrated pursuant to its fundamental investment restrictions, please
                                         add disclosure regarding concentration. See also the concentration risk paragraphs in
                                         the summary and body of the Prospectus.

The
Fund has added the requested disclosure and reviewed and revised the concentration risk disclosure in the Prospectus.

Cover
Page – “Distributions”

 11. The
                                         penultimate sentence of this paragraph reads: “For the fiscal year ended November
                                         30, 2022, the Fund’s distributions were comprised of approximately 28% ordinary
                                         income and 72% return of capital.” Please make this disclosure more prominent by
                                         bolding the sentence.

The
Fund has revised the disclosure to be more prominent as requested.

    3

 12. Please
                                         review the disclosure throughout the Prospectus regarding return of capital as a possibility
                                         and consider whether any revisions are appropriate in light of the percentage of the
                                         Fund’s distributions that were return of capital.

The
Fund has reviewed and revised its disclosure regarding return of capital disclosure throughout the prospectus.

Prospectus
Summary – “Principal Investment Policies”

 13. Please
                                         revisit the disclosure in this section and update from future tense to present tense
                                         as applicable.

The
Fund has revised disclosure as requested.

 14. Please
                                         confirm supplementally that Fund is not investing principally in other sectors. See Item
                                         8 of Form N-2.

The
Fund confirms that it is not investing principally in any other sectors.

Prospectus
Summary – “Leverage”

 15. Please
                                         confirm whether the Fund contemplates offering preferred shares pursuant to the Registration
                                         Statement.

The
Registration Statement only registered common shares, and therefore the Fund will not offer preferred shares pursuant to the Registration
Statement.

 16. Please
                                         confirm whether Registrant intends to issue preferred shares within one year of the date
                                         of effectiveness of the Registration Statement.

The
Fund has no present intention to issue preferred shares within one year of the date of effectiveness of the Registration Statement.

Prospectus
Summary – “Special Risk Considerations—Concentration Risk”

 17. The
                                         disclosure in this risk factor appears to use the terms “sector” and “industry”
                                         interchangeably. Please reconcile the use of those two terms.

The
Fund has revised the disclosure as requested to reconcile terminology and more clearly explain the Fund’s concentration.

Summary
of Fund Expenses

 18. All
                                         annual expenses should be expressed as a percentage of net assets attributable to common
                                         shares. Please confirm supplementally that this is true of the Fund’s fee table.

The
Fund confirms that all annual expenses are expressed as a percentage of net assets attributable to common shares.

    4

 19. Footnote
                                         3 to the fee table references outstanding leverage of 14%, while the disclosure on the
                                         cover page references outstanding leverage of 17%. Please explain this discrepancy and
                                         confirm the accuracy of the Fund’s expense disclosure.

The
Fund outstanding leverage as of May 31, 2023, is equal to 15% of Managed Assets, which is equal to 17% of the Fund’s net
assets attributable to common shares. The Fund notes that due to typographical or rounding errors, in some instances leverage
as a percentage of Managed Assets was stated as 14% and in other instances was stated as 15%. These have been revised throughout
the prospectus.

 20. Footnote
                                         3 to the fee table references a management fee waiver. Confirm whether the fee table
                                         reflects the fee waiver.

The
Fund has revised the fee table and footnote 3 to reflect the management fee waiver in a separate table within footnote 3.

 21. Please
                                         supplementally confirm that amounts waived are not subject to recoupment by the adviser.

The
Fund confirms that amounts waived are not subject to recoupment by the adviser.

Investment
Objective and Policies – “Principal Investment Policies”

 22. The
                                         final sentence of the penultimate paragraph of this section reads: “To the extent
                                         that the Fund invests in synthetic investments with economic characteristics similar
                                         to investments in midstream energy investments, the market (or fair) value of such investments
                                         will be counted for purposes of the Fund’s policy of investing at least 80% of
                                         its Managed Assets in a portfolio of midstream energy investments.” Please clarify
                                         which investments will be valued at fair value.

The
Fund has revised the disclosure as requested.

Investment
Objective and Policies – “Additional Investment Practices – Temporary Defensive Investments”

 23. Please
                                         clarify in plain English what is meant by the phrase “when market conditions dictate
                                         a more defensive investment strategy.”

The
Fund has revised the disclosure as requested.

Dividend
Reinvestment Plan

 24. Please
                                         include disclosure that reinvested dividends increase the Fund’s Managed Assets
                                         on which fees are paid to the Adviser.

The
Fund has added the requested disclosure.

 25. If
                                         applicable, please disclose that distributions reinvested pursuant to the Dividend Reinvestment
                                         Plan may include return of capital distributions.

The
Fund has added the requested disclosure.

    5

 26. We
                                         note that the Prospectus is silent with respect to whether participants in the dividend
                                         reinvestment plan are subject to a sales load. See Guide 5 to Form N-2. Please clarify
                                         whether the $15 sales fee is a per transaction fee charge and revise the fee table accordingly
                                         with respect to the sales fee. See instruction 4 to Item 3 of Form N-2, which indicates
                                         that the basis on which such fees are charged should be disclosed in a footnote to the
                                         table. The Staff would not object to the disclosure of “dividend reinvestment plan
                                         fees (per sales transaction fee)” of $15 in the fee table with additional explanation
                                         in a footnote.

The
Fund has added the requested disclosure.

 27. The
                                         penultimate paragraph on page 68 states that there is no service charge to participants
                                         in the Plan. Are there