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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[ √ ]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Delaware
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73-1268729
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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801 Travis Street, Suite 2100, Houston, Texas
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77002
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(Address
of principal executive offices)
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(Zip
Code)
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713-568-4725
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(Registrant’s
telephone number, including area code)
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Title of Each Class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common
Stock
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BDCO
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OTCQX
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Large
accelerated filer
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☐
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Accelerated
filer
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☐
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Non-accelerated
filer
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☐
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Smaller
reporting company
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☒
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Emerging
growth company
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☐
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Blue
Dolphin Energy Company
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June
30, 2020
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Table of Contents
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Affiliate
. Refers, either individually or collectively, to
certain related parties including Jonathan Carroll, Chairman and
Chief Executive Officer of Blue Dolphin, and his affiliates
(including C&C, Ingleside, and Lazarus Capital) and/or LEH and
its affiliates (including Lazarus Midstream, LMT, and LTRI).
Together, Jonathan Carroll and LEH own approximately 82% of Blue
Dolphin’s Common Stock.
AMT
. Alternative Minimum Tax.
Amended Pilot Line of Credit
. Line of Credit Agreement dated
May 3, 2019, between Pilot and NPS and subsequently amended on May
9, 2019 and May 10, 2019 and September 3, 2019, the last amendment
being Amendment No. 1; original line of credit amount was $13.0
million.
Amended and Restated Operating Agreement
. Affiliate
agreement dated April 1, 2020 between Blue Dolphin, LE, LRM, NPS,
BDPL, BDPC, BDSC and LEH governing LEH’s operation and
management of those companies’ assets.
ARO
. Asset retirement obligations.
ASU
. Accounting Standards Update.
AGO
. Atmospheric gas oil, which is the heaviest product
boiled by a crude distillation tower operating at atmospheric
pressure. This fraction ordinarily sells as distillate fuel oil,
either in pure form or blended with cracked stocks. Certain
ethylene plants, called heavy oil crackers, can take AGO as
feedstock.
bbl
. Barrel; a unit of volume equal to 42 U.S.
gallons.
BDPC
. Blue Dolphin Petroleum Company, a wholly owned
subsidiary of Blue Dolphin.
BDPL
. Blue Dolphin Pipe Line Company, a wholly owned
subsidiary of Blue Dolphin.
BDSC
. Blue Dolphin Services Co., a wholly owned subsidiary
of Blue Dolphin.
bpd
. Barrel per day; a measure of the bbls of daily output
produced in a refinery or transported through a
pipeline.
Board
. Board of Directors of Blue Dolphin Energy
Company.
BOEM
. Bureau of Ocean Energy Management.
BSEE
. Bureau of Safety and Environmental
Enforcement.
C&C
. Carroll & Company Financial Holdings, L.P., an
affiliate of Jonathan Carroll.
Capacity utilization rate
. A percentage measure that
indicates the amount of available capacity that is being used in a
refinery or transported through a pipeline. With respect to the
crude distillation tower, the rate is calculated by dividing total
refinery throughput or total refinery production on a bpd basis by
the total capacity of the crude distillation tower (currently
15,000 bpd).
CAA
. Clean Air Act.
CDC
. Centers for Disease Control and
Prevention.
CERLA
. Comprehensive Environmental Response, Compensation,
and Liability Act of 1980.
CIP
. Construction in progress.
COVID-19
. An infectious disease first identified
in 2019 in Wuhan, the capital of
China's Hubei province; the disease has since spread
globally, resulting in the ongoing 2019–2020 coronavirus
pandemic.
CWA
. Clean Water Act.
Common Stock
. Blue Dolphin common stock, par value $0.01 per
share. Blue Dolphin has 20,000,000 shares of Common Stock
authorized.
Complexity
. A numerical score that denotes, for a given
refinery, the extent, capability, and capital intensity of the
refining processes downstream of the crude distillation tower.
Refinery complexities range from the relatively simple crude
distillation tower (“topping unit”), which has a
complexity of 1.0, to the more complex deep conversion
(“coking”) refineries, which have a complexity of
12.0.
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Condensate
.
Liquid hydrocarbons that are produced in conjunction with natural
gas. Although condensate is sometimes like crude oil, it is usually
lighter.
Cost of goods sold
. Reflects the cost of crude oil and
condensate, fuel use, and chemicals.
Crude distillation tower
. A tall column-like vessel in which
crude oil and condensate is heated and its vaporized components are
distilled by means of distillation trays. This process turns crude
oil and other inputs into intermediate and finished petroleum
products. (Commonly referred to as a crude distillation unit or an
atmospheric distillation unit; also referred to herein as the Nixon
refinery.)
Crude oil
. A mixture of thousands of chemicals and
compounds, primarily hydrocarbons. Crude oil quality is measured in
terms of density (light to heavy) and sulfur content (sweet to
sour). Crude oil must be broken down into its various components by
distillation before these chemicals and compounds can be used as
fuels or converted to more valuable products.
Depropanizer unit
. A distillation column that is used to
isolate propane from a mixture containing butane and other heavy
components.
Distillates
. The result of crude distillation and therefore
any refined oil product. Distillate is more commonly used as an
abbreviated form of middle distillate. There are mainly four (4)
types of distillates: (i) very light oils or light distillates
(such as naphtha), (ii) light oils or middle distillates (such as
our jet fuel), (iii) medium oils, and (iv) heavy oils (such as our
low-sulfur diesel and HOBM, reduced crude, and AGO).
Distillation
. The first step in the refining process whereby
crude oil and condensate is heated at atmospheric pressure in the
base of a distillation tower. As the temperature increases, the
various compounds vaporize in succession at their various boiling
points and then rise to prescribed levels within the tower per
their densities, from lightest to heaviest. They then condense in
distillation trays and are drawn off individually for further
refining. Distillation is also used at other points in the refining
process to remove impurities.
Downtime
. Scheduled and/or unscheduled periods in which the
crude distillation tower is not operating. Downtime may occur for a
variety of reasons, including bad weather, power failures, and
preventive maintenance.
EIA
. Energy Information Administration.
EPA
. Environmental Protection Agency.
Eagle Ford Shale
. A
hydrocarbon-producing geological
formation extending across South Texas from the Mexican border into
East Texas.
Exchange Act
. Securities
Exchange Act of 1934, as amended.
FASB
. Financial Accounting Standards Board.
FDIC
.
Federal Deposit Insurance
Corporation.
Feedstocks
. Crude oil and other hydrocarbons, such as
condensate and/or intermediate products, that are used as basic
input materials in a refining process. Feedstocks are transformed
into one or more finished products.
Finished petroleum products
. Materials or products which
have received the final increments of value through processing
operations, and which are being held in inventory for delivery,
sale, or use.
Freeport facility
. Encompasses processing units for: (i)
crude oil and natural gas separation and dehydration, (ii) natural
gas processing, treating, and redelivery, and (iii) vapor recovery;
also includes two onshore pipelines and 162 acres of land in
Freeport, Texas.
GEL
. GEL Tex Marketing, LLC, a Delaware limited liability
company and an affiliate of Genesis Energy, LLC.
GEL Final Arbitration Award
.
Damages and attorney fees and related
expenses awarded to GEL by an arbitrator on August 11,
2017.
GEL Interim Payments
. Cash payments of $0.5 million at the
end of each calendar month by the Lazarus Parties to GEL until the
GEL Settlement Payment was made.
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Blue
Dolphin Energy Company
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June
30, 2020
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Glossary of Terms
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GEL Settlement
. When all conditions of the GEL Settlement
Agreement were met by the Lazarus Parties under the GEL Settlement
Agreement, and whereby GEL and the Lazarus Parties agreed to
mutually release all claims against each other and to file a
stipulation of dismissal with prejudice in connection with
arbitration proceedings between LE and GEL related to a contractual
dispute involving a crude oil supply and throughput services
agreement, each between LE and GEL dated August 12,
2011.
GEL Settlement Agreement
. Settlement Agreement dated July
20, 2018, between the Lazarus Parties and GEL outlining the terms
and conditions for a settlement, including: (i) the GEL Settlement
Payment by the GEL Settlement Date and (ii) GEL Interim
Payments.
GEL Settlement Date
. The effective date of the GEL
Settlement.
GEL Settlement Payment
. A lump sum cash payment of $10.0
million as paid by the Lazarus Parties to GEL under the GEL
Settlement Agreement.
Gross profit (deficit)
.
Calculated as total revenue less cost of goods
sold; reflected as a dollar ($) amount.
HOBM
. Heavy oil-based mud blendstock; see also
“distillates.”
HUBZone
. Historically
Underutilized Business Zones program established by the SBA to help
small businesses in both urban and rural
communities.
IBLA
. Interior Board of Land
Appeals.
INC
. Incident of Noncompliance
issued by BOEM and/or BSEE.
Ingleside
. Ingleside Crude,
LLC, an affiliate of Jonathan Carroll.
Intermediate petroleum products
. A petroleum product that
might require further processing before it is saleable to the
ultimate consumer. This further processing might be done by the
producer or by another processor. Thus, an intermediate petroleum
product might be a final product for one company and an input for
another company that will process it further.
IRC Section 382
. Title 26, Internal Revenue Code, Subtitle A
– Income Taxes, Subchapter C – Corporate Distributions
and Adjustments, Part V Carryovers, § 382. Limits NOL
carryforwards and certain built-in losses following ownership
change.
IRS
. Internal Revenue Service.
Jet fuel
. A high-quality kerosene product primarily used in
aviation. Kerosene-type jet fuel (including Jet A and Jet A-1) has
a carbon number distribution between 8 and 16 carbon atoms per
molecule; wide-cut or naphtha-type jet fuel (including Jet B) has
between 5 and 15 carbon atoms per molecule.
Lazarus Capital
. Lazarus Capital, LLC, an affiliate of
Jonathan Carroll.
Lazarus Midstream
. Lazarus Midstream Partners, L.P., an
affiliate of LEH.
Lazarus Parties
.
Blue
Dolphin, C&C, NPS,
LE, LEH, and Jonathan
Carroll.
LE
. Lazarus Energy, LLC, a wholly owned subsidiary of Blue
Dolphin.
LEH
. Lazarus Energy Holdings, LLC, an affiliate of Jonathan
Carroll and controlling shareholder of Blue Dolphin.
LEH Operating Fee
. A management fee paid to LEH under the
Amended and Restated Operating Agreement; calculated as 5% of all
consolidated operating costs, excluding crude costs, depreciation,
amortization and interest, of Blue Dolphin, LE, LRM, NPS, BDPL,
BDPC and BDSC; previously reflected within refinery operating
expenses in our consolidated statements of operations.
Leasehold interest
. The interest of a lessee under an oil
and gas lease.
Light crude
. A liquid petroleum that has a low density and
flows freely at room temperature. It has a low viscosity, low
specific gravity, and a high American Petroleum Institute gravity
due to the presence of a high proportion of light hydrocarbon
fractions.
LMT
. Lazarus Marine Terminal I, LLC, an affiliate of
LEH.
LRM
. Lazarus Refining & Marketing, LLC, a wholly owned
subsidiary of Blue Dolphin.
LTRI
. Lazarus Texas Refinery I, an affiliate of
LEH.
NAAQS
. National Ambient Air Quality Standards.
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Naphtha
.
A refined or partly refined light distillate fraction of crude oil.
Blended further or mixed with other materials it can make
high-grade motor gasoline or jet fuel. It is also a generic term
applied to the lightest and most volatile petroleum
fractions.
Natural gas
. A naturally occurring
hydrocarbon gas mixture consisting primarily of methane,
but commonly including varying amounts of other higher alkanes, and
sometimes a small percentage of carbon dioxide, nitrogen, hydrogen
sulfide, or helium.
Nixon facility
. Encompasses the 15,000-bpd crude
distillation tower, petroleum storage tanks, loading and unloading
facilities, and 56 acres of land in Nixon, Texas.
Nixon refinery
. The 15,000-bpd crude distillation tower and
associated processing units in Nixon, Texas.
NPS
. Nixon Product Storage, LLC, a wholly owned subsidiary
of Blue Dolphin.
NOL
. Net operating losses.
NSR/PSD
. New Source Review/Prevention of Significant
Deterioration.
OPA 90
. Oil Pollution Act of 1990.
Operating days
. Represents the number of days in a period in
which the crude distillation tower operated. Operating days is
calculated by subtracting downtime in a period from calendar days
in the same period.
OPEC
. Organization of Petroleum Exporting
Countries.
OSHA
. Occupational Safety and Health
Administration.
OSRO
. Oil Spill Response Organization.
Other conversion costs
. Represents the combination of direct
labor costs and manufacturing overhead costs. These are the costs
that are necessary to convert our raw materials into refined
products.
Other operating expenses
. Represents costs associated with
our natural gas processing, treating, and redelivery facility, as
well as our pipeline assets and leasehold interests in oil and gas
properties.
PCAOB
. Public Company Accounting Oversight
Board.
Petroleum
. A naturally occurring flammable liquid consisting
of a complex mixture of hydrocarbons of various molecular weights
and other liquid organic compounds. The name petroleum covers both
the naturally occurring unprocessed crude oils and petroleum
products that are made up of refined crude oil.
PHMSA
. Pipeline and Hazardous Materials Safety
Administration of the U.S. Department of
Transportation.
Pilot
. Pilot Travel Centers LLC, a Delaware limited
liability company.
Preferred Stock
. Blue Dolphin preferred stock, par value
$0.10 per share. Blue Dolphin has 2,500,000 shares of Preferred
Stock authorized and no shares of Preferred Stock issued and
outstanding.
Product slate
. Represents type and quality of products
produced.
Propane
. A by-product of natural gas processing and
petroleum refining. Propane is one of a group of liquified
petroleum gases. Others include butane, propylene, butadiene,
butylene, isobutylene and mixtures thereof.
Refined products
. Hydrocarbon compounds, such as jet fuel
and residual fuel, that are produced by a refinery.
Refinery
. Within the oil and gas industry, a refinery is an
industrial processing plant where crude oil, condensate, and
intermediate feeds are separated and transformed into petroleum
products.
Refining gross profit (deficit) per bbl
.
Calculated as refinery operations revenue
less total cost of goods sold divided by the volume, in bbls, of
refined products sold during the period; reflected as a dollar ($)
amount per bbl.
RCRA
. Federal Resource Conservation and Recovery
Act.
RFS2
. Second Renewable Fuels Standard.
ROU
. Right-of-use.
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Blue
Dolphin Energy Company
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June
30, 2020
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Glossary of Terms
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SEC
. Securities and Exchange Commission.
Securities Act
. The Securities Act of 1933, as
amended.
Segment margin (deficit)
. For our refinery operations and
tolling and terminaling business segments, represents net revenues
(excluding intercompany fees and sales) attributable to the
respective business segment less associated intercompany fees and
sales less associated operation costs and expenses.
SEMS
. Safety and Environmental Management
System.
Sour crude
. Crude oil containing sulfur content of more than
0.5%.
Stabilizer unit
. A distillation column intended to remove
the lighter boiling compounds, such as butane or propane, from a
product.
Sweet crude
. Crude oil containing sulfur content of less
than 0.5%.
Sulfur
. Present at various levels of concentration in many
hydrocarbon deposits, such as petroleum, coal, or natural gas.
Also, produced as a by-product of removing sulfur-containing
contaminants from natural gas and petroleum. Some of the most
commonly used hydrocarbon deposits are categorized per their sulfur
content, with lower sulfur fuels usually selling at a higher, or
premium, price and higher sulfur fuels selling at a lower, or
discounted, price.
Topping unit
. A type of petroleum refinery that engages in
only the first step of the refining process -- crude distillation.
A topping unit uses atmospheric distillation to separate crude oil
and condensate into constituent petroleum products. A topping unit
has a refinery complexity range of 1.0 to 2.0.
Throughput
. The volume processed through a unit or a
refinery or transported through a pipeline.
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Total refinery production
. Refers to the volume processed as
output through the crude distillation tower. Refinery production
includes finished petroleum products, such as jet fuel, and
intermediate petroleum products, such as naphtha, HOBM and
AGO.
TMT
. Texas margins tax; a form of business tax imposed on an
entity’s gross profit rather than on its net
income.
Turnaround
. Scheduled large-scale maintenance activity
wherein an entire process unit is taken offline for a week or more
for comprehensive revamp and renewal.
USACOE
. U.S. Army Corps of Engineers.
USDA
. U.S. Department of Agriculture.
U.S. GAAP
. Accounting principles generally accepted in the
United States of America.
Veritex
. Veritex Community Bank, successor in interest to
Sovereign Bank by merger.
WHO
. World Health Organization.
WSJ prime rate
. A measure of the U.S. prime rate as defined
by the Wall Street Journal.
XBRL
. eXtensible Business Reporting Language.
Yield
. The percentage of refined products that is produced
from crude oil and other feedstocks.
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Blue
Dolphin Energy Company
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June
30, 2020
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Important Information Regarding Forward Looking
Statements
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Blue
Dolphin Energy Company
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June
30, 2020
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Financial Statements
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June 30,
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December
31,
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2020
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2019
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(in thousands except
share amounts)
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ASSETS
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CURRENT
ASSETS
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Cash and cash
equivalents
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$
4
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$
72
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Restricted
cash
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49
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49
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Accounts
receivable, net
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138
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446
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Accounts
receivable, related party
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-
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1,364
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Prepaid
expenses and other current assets
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1,912
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2,276
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Deposits
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224
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158
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Inventory
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3,558
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1,645
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Refundable
federal income tax
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100
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65
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Total current
assets
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5,985
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6,075
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LONG-TERM
ASSETS
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Total
property and equipment, net
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63,601
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63,893
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Operating
lease right-of-use assets
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576
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649
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Restricted
cash, noncurrent
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547
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547
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Surety
bonds
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230
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230
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Deferred tax
assets, net
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-
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50
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Total
long-term assets
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64,954
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65,369
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TOTAL
ASSETS
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$
70,939
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$
71,444
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LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
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CURRENT
LIABILITIES
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Long-term
debt less unamortized debt issue costs, current portion (in
default)
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$
33,612
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$
33,836
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Line of
credit payable less unamortized debt issue costs (in
default)
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10,470
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11,464
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Long-term
debt, related party, current portion (in default)
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12,573
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6,001
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Interest
payable (in default)
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4,824
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3,814
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Interest
payable, related party (in default)
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2,494
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2,174
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Accounts
payable
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2,985
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1,877
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Accounts
payable, related party
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149
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149
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Current
portion of lease liabilities
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313
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251
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Asset
retirement obligations, current portion
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2,436
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2,565
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Accrued
expenses and other current liabilities
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2,775
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3,333
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Total current
liabilities
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72,631
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65,464
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LONG-TERM
LIABILITIES
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Long-term
lease liabilities, net of current
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470
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564
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Deferred
revenues
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1,748
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1,930
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Total
long-term liabilities
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2,218
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2,494
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TOTAL
LIABILITIES
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74,849
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67,958
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Commitments
and contingencies (Note 16)
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STOCKHOLDERS'
EQUITY (DEFICIT)
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Common stock
($0.01 par value, 20,000,000 shares authorized; 12,693,514 and
12,327,365
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shares issued
at June 30, 2020 and December 31, 2019, respectively)
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127
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123
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Additional
paid-in capital
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38,457
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38,275
|
|
Accumulated
deficit
|
(42,494
)
|
(34,912
)
|
|
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
(3,910
)
|
3,486
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
70,939
|
$
71,444
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Financial Statements
|
|
|
|
|
Three Months
Ended June 30,
|
Six Months
Ended June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
(in thousands, except share and per-share
amounts)
|
|||
|
REVENUE
FROM OPERATIONS
|
|
|
|
|
|
Refinery
operations
|
$
17,359
|
$
77,257
|
$
78,256
|
$
145,115
|
|
Tolling
and terminaling
|
1,110
|
1,088
|
2,213
|
2,157
|
|
Total
revenue from operations
|
18,469
|
78,345
|
80,469
|
147,272
|
|
|
|
|
|
|
|
COST
OF GOODS SOLD
|
|
|
|
|
|
Crude
oil, fuel use, and chemicals
|
16,783
|
76,364
|
76,503
|
139,551
|
|
Other
conversion costs
|
2,893
|
2,192
|
5,261
|
4,521
|
|
Total
cost of goods sold
|
19,676
|
78,556
|
81,764
|
144,072
|
|
|
|
|
|
|
|
Gross profit (deficit)
|
(1,207
)
|
(211
)
|
(1,295
)
|
3,200
|
|
|
|
|
|
|
|
COST
OF OPERATIONS
|
|
|
|
|
|
LEH
operating fee
|
190
|
183
|
337
|
333
|
|
Other
operating expenses
|
47
|
56
|
106
|
113
|
|
General
and administrative expenses
|
531
|
579
|
1,175
|
1,249
|
|
Depletion,
depreciation and amortization
|
669
|
633
|
1,302
|
1,223
|
|
|
|
|
|
|
|
Total
cost of operations
|
1,437
|
1,451
|
2,920
|
2,918
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
(2,644
)
|
(1,662
)
|
(4,215
)
|
282
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
Easement,
interest and other income
|
80
|
1
|
100
|
1
|
|
Interest
and other expense
|
(1,678
)
|
(1,638
)
|
(3,452
)
|
(2,835
)
|
|
Total
other expense
|
(1,598
)
|
(1,637
)
|
(3,352
)
|
(2,834
)
|
|
|
|
|
|
|
|
Loss
before income taxes
|
(4,242
)
|
(3,299
)
|
(7,567
)
|
(2,552
)
|
|
|
|
|
|
|
|
Income
tax expense
|
-
|
-
|
(15
)
|
-
|
|
|
|
|
|
|
|
Net
loss
|
$
(4,242
)
|
$
(3,299
)
|
$
(7,582
)
|
$
(2,552
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per common share:
|
|
|
|
|
|
Basic
|
$
(0.34
)
|
$
(0.30
)
|
$
(0.61
)
|
$
(0.23
)
|
|
Diluted
|
$
(0.34
)
|
$
(0.30
)
|
$
(0.61
)
|
$
(0.23
)
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding:
|
|
|
|
|
|
Basic
|
12,580,853
|
10,975,514
|
12,454,109
|
10,975,514
|
|
Diluted
|
12,580,853
|
10,975,514
|
12,454,109
|
10,975,514
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Financial Statements
|
|
|
|
|
Six Months
Ended June 30,
|
|
|
|
2020
|
2019
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
Net
loss
|
$
(7,582
)
|
$
(2,552
)
|
|
Adjustments
to reconcile net loss to net cash
|
||
|
used
in operating activities:
|
|
|
|
Depletion,
depreciation and amortization
|
1,302
|
1,223
|
|
Deferred
income tax
|
15
|
-
|
|
Amortization
of debt issue costs
|
284
|
189
|
|
Guaranty
fees paid in kind
|
305
|
-
|
|
Deferred
revenues and expenses
|
(182
)
|
-
|
|
Gain
on issuance of shares
|
(80
)
|
-
|
|
Changes
in operating assets and liabilities
|
|
|
|
Accounts
receivable
|
308
|
209
|
|
Accounts
receivable, related party
|
1,364
|
(492
)
|
|
Prepaid
expenses and other current assets
|
364
|
503
|
|
Deposits
and other assets
|
(66
)
|
-
|
|
Inventory
|
(1,913
)
|
(287
)
|
|
Accrued
arbitration award
|
-
|
(11,600
)
|
|
Accounts
payable, accrued expenses and other liabilities
|
1,807
|
1,211
|
|
Accounts
payable, related party
|
-
|
302
|
|
Net
cash used in operating activities
|
(4,074
)
|
(11,294
)
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
Capital
expenditures
|
(908
)
|
(494
)
|
|
Net
cash used in investing activities
|
(908
)
|
(494
)
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
Proceeds
from line of credit
|
-
|
12,402
|
|
Payments
on debt
|
(1,501
)
|
(541
)
|
|
Net
activity on related-party debt
|
6,415
|
229
|
|
Net
cash provided by financing activities
|
4,914
|
12,090
|
|
Net
change in cash, cash equivalents, and restricted cash
|
(68
)
|
302
|
|
CASH,
CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF
PERIOD
|
668
|
1,665
|
|
CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD
|
$
600
|
$
1,967
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
Financing of
capital expenditures via accounts payable and finance
leases
|
$
-
|
$
86
|
|
Issuance of shares
to extinguish debt
|
$
120
|
$
-
|
|
Conversion of
related-party notes to common stock
|
$
148
|
$
-
|
|
Line of credit
closing costs included in principal balance
|
$
-
|
$
398
|
|
Interest
paid
|
$
1,608
|
$
1,174
|
|
Income taxes
paid
|
$
-
|
$
-
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Notes to Consolidated Financial Statements
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Agreement/Transaction
|
Parties
|
Type
|
Effective Date
|
Interest Rate
|
Key Terms
|
|
Amended
and Restated Guaranty Fee Agreement
(1)
|
Jonathan
Carroll - LE
|
Debt
|
04/01/2017
|
2.00%
|
Tied to
payoff of LE $25 million Veritex loan; payments 50% cash, 50%
Common Stock
|
|
Amended
and Restated Guaranty Fee Agreement
(1)
|
Jonathan
Carroll - LRM
|
Debt
|
04/01/2017
|
2.00%
|
Tied to
payoff of LRM $10 million Veritex loan; payments 50% cash, 50%
Common Stock
|
|
Refinery
Equipment Purchase
|
LTRI -
LE
|
Operations
|
07/01/2019
|
---
|
LE
purchase of two (2) refurbished heat exchangers for $0.08 million
each
|
|
Dock
Tolling Agreement
|
LMT -
LE
|
Operations
|
05/24/2016
|
---
|
5-year
term cancellable by either party any time; LE paid flat reservation
fee for tolling volumes up to 84,000 gallons per day; excess
tolling volumes subject to increased per gallon rate; terminated
07/01/2019
|
|
Jet
Fuel Sales Agreement
|
LEH -
LE
|
Operations
|
04/01/2020
|
---
|
1-year
term expiring earliest to occur of 03/31/2021 plus 30-day carryover
or delivery of maximum jet fuel quantity; LEH bids on jet fuel
contracts under preferential pricing terms due to a HUBZone
certification
|
|
March
Carroll Note
(in
default)
|
Jonathan
Carroll – Blue Dolphin
|
Debt
|
03/31/2017
|
8.00%
|
Blue
Dolphin working capital; matured 01/01/2019; interest still
accruing
|
|
March
Ingleside Note
(in
default)
|
Ingleside
– Blue Dolphin
|
Debt
|
03/31/2017
|
8.00%
|
Blue
Dolphin working capital; reflects amounts owed to Ingleside under
previous Amended and Restated Tank Lease Agreement; matured
01/01/2019; interest still accruing
|
|
June
LEH Note
(in
default)
|
LEH
– Blue Dolphin
|
Debt
|
03/31/2017
|
8.00%
|
Blue
Dolphin working capital; reflects amounts owed to LEH under the
Amended and Restated Operating Agreement; reflects amounts owed to
Jonathan Carroll under guaranty fee agreements; matured 01/01/2019;
interest still accruing
|
|
Office
Sub-Lease Agreement
|
LEH -
BDSC
|
Operations
|
01/01/2018
|
---
|
68-month
term expiring 08/31/2023; office lease Houston, Texas; includes
6-month rent abatement period; rent approximately $0.02 million per
month
|
|
Amended
and Restated Operating Agreement
|
LEH
– Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and
BDSC
|
Debt
|
04/01/2020
|
---
|
3-year
term; expires 04/01/2023 or notice by either party at any time of
material breach or 90 days Board notice; LEH receives management
fee of 5% of all consolidated operating costs, excluding crude
costs, depreciation, amortization and interest, of Blue Dolphin,
LE, LRM, NPS, BDPL, BDPC and BDSC
|
|
Loan
and Security Agreement
(in
default)
|
LEH -
BDPL
|
Debt
|
08/15/2016
|
16.00%
|
2-year
term; $4.0 million principal amount; $0.5 million annual payment;
proceeds used for working capital; no financial maintenance
covenants; secured by certain BDPL property
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
June 30,
|
December 31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
LEH
|
|
|
|
June
LEH Note (in default)
|
$
6,336
|
$
-
|
|
BDPL
Loan Agreement
|
6,494
|
6,174
|
|
LEH
Total
|
12,830
|
6,174
|
|
Ingleside
|
|
|
|
March
Ingleside Note (in default)
|
1,039
|
1,004
|
|
Jonathan
Carroll
|
|
|
|
March
Carroll Note (in default)
|
1,198
|
997
|
|
|
15,067
|
8,175
|
|
|
|
|
|
Less:
Long-term debt, related party, current portion, in
default
|
(12,573
)
|
(6,001
)
|
|
Less:
Accrued interest payable, related party (in default)
|
(2,494
)
|
(2,174
)
|
|
|
$
-
|
$
-
|
|
|
Three Months
Ended June 30,
|
Six Months Ended
June 30,
|
||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||
|
|
|
|
|
|
|
|
|
|
|
Refinery
operations
|
|
|
|
|
|
|
|
|
|
LEH
|
$
4,587
|
24.8
%
|
$
24,173
|
30.2
%
|
$
22,302
|
27.7
%
|
$
44,982
|
30.2
%
|
|
Third-Parties
|
12,772
|
69.2
%
|
53,084
|
68.3
%
|
55,954
|
69.5
%
|
100,133
|
68.3
%
|
|
Tolling and
terminaling
|
|
|
|
|
|
|
|
|
|
Third-Parties
|
1,110
|
6.0
%
|
1,088
|
1.5
%
|
2,213
|
2.8
%
|
2,157
|
1.5
%
|
|
|
$
18,469
|
100.0
%
|
$
78,345
|
100.0
%
|
$
80,469
|
100.0
%
|
$
147,272
|
100.0
%
|
|
|
Three Months
Ended June 30,
|
Six Months Ended
June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
(in
thousands)
|
|||
|
Jonathan
Carroll
|
|
|
|
|
|
Guaranty Fee
Agreements
|
|
|
|
|
|
First Term Loan Due
2034
|
$
108
|
$
111
|
$
216
|
$
223
|
|
Second Term Loan
Due 2034
|
44
|
46
|
89
|
92
|
|
March Carroll Note
(in default)
|
20
|
28
|
43
|
53
|
|
LEH
|
|
|
|
|
|
BDPL Loan Agreement
(in default)
|
160
|
160
|
320
|
320
|
|
June LEH Note (in
default)
|
117
|
16
|
142
|
23
|
|
Ingleside
|
|
|
|
|
|
March Ingleside
Note (in default)
|
15
|
26
|
35
|
52
|
|
|
$
464
|
$
387
|
$
845
|
$
763
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
(in
thousands)
|
|||
|
Net revenue
(excluding intercompany fees and sales)
|
|
|
|
|
|
Refinery
operations
|
$
17,359
|
$
77,257
|
$
78,256
|
$
145,115
|
|
Tolling and
terminaling
|
1,110
|
1,088
|
2,213
|
2,157
|
|
Total net
revenue
|
18,469
|
78,345
|
80,469
|
147,272
|
|
|
|
|
|
|
|
Intercompany fees
and sales
|
|
|
|
|
|
Refinery
operations
|
(406
)
|
(653
)
|
(1,023
)
|
(1,259
)
|
|
Tolling and
terminaling
|
406
|
653
|
1,023
|
1,259
|
|
Total intercompany
fees
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Operation costs and
expenses
(1)
|
|
|
|
|
|
Refinery
operations
|
(19,418
)
|
(78,376
)
|
(81,251
)
|
(143,528
)
|
|
Tolling and
terminaling
|
(258
)
|
(363
)
|
(513
)
|
(727
)
|
|
Corporate and
other
|
(47
)
|
(56
)
|
(106
)
|
(113
)
|
|
Total operation
costs and expenses
|
(19,723
)
|
(78,795
)
|
(81,870
)
|
(144,368
)
|
|
|
|
|
|
|
|
Segment
contribution margin (deficit)
|
|
|
|
|
|
Refinery
operations
|
(2,465
)
|
(1,772
)
|
(4,018
)
|
328
|
|
Tolling and
terminaling
|
1,258
|
1,378
|
2,723
|
2,689
|
|
Corporate and
other
|
(47
)
|
(56
)
|
(106
)
|
(113
)
|
|
Total segment
contribution margin (deficit)
|
(1,254
)
|
(450
)
|
(1,401
)
|
2,904
|
|
|
|
|
|
|
|
General and
administrative expenses
(2)
|
|
|
|
|
|
Refinery
operations
|
(327
)
|
(274
)
|
(631
)
|
(606
)
|
|
Tolling and
terminaling
|
(68
)
|
(62
)
|
(136
)
|
(105
)
|
|
Corporate and
other
|
(326
)
|
(243
)
|
(745
)
|
(688
)
|
|
Total general and
administrative expenses
|
(721
)
|
(579
)
|
(1,512
)
|
(1,399
)
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
Refinery
operations
|
(294
)
|
(483
)
|
(582
)
|
(948
)
|
|
Tolling and
terminaling
|
(324
)
|
(99
)
|
(618
)
|
(198
)
|
|
Corporate and
other
|
(51
)
|
(51
)
|
(102
)
|
(77
)
|
|
Total depreciation
and amortization
|
(669
)
|
(633
)
|
(1,302
)
|
(1,223
)
|
|
|
|
|
|
|
|
Interest and other
non-operating expenses, net
|
|
|
|
|
|
Refinery
operations
|
(751
)
|
(823
)
|
(1,492
)
|
(1,606
)
|
|
Tolling and
terminaling
|
(616
)
|
(579
)
|
(1,386
)
|
(775
)
|
|
Corporate and
other
|
(231
)
|
(235
)
|
(474
)
|
(453
)
|
|
Total interest and
other non-operating expenses, net
|
(1,598
)
|
(1,637
)
|
(3,352
)
|
(2,834
)
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
|
|
|
|
|
Refinery
operations
|
(3,837
)
|
(3,352
)
|
(6,723
)
|
(2,832
)
|
|
Tolling and
terminaling
|
250
|
638
|
583
|
1,611
|
|
Corporate and
other
|
(655
)
|
(585
)
|
(1,427
)
|
(1,331
)
|
|
Total loss before
income taxes
|
(4,242
)
|
(3,299
)
|
(7,567
)
|
(2,552
)
|
|
|
|
|
|
|
|
Income tax
expense
|
-
|
-
|
(15
)
|
-
|
|
|
|
|
|
|
|
Net
loss
|
$
(4,242
)
|
$
(3,299
)
|
$
(7,582
)
|
$
(2,552
)
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
Capital
expenditures
|
|
|
|
Refinery
operations
|
$
292
|
$
411
|
|
Tolling and
terminaling
|
616
|
83
|
|
Corporate and
other
|
-
|
-
|
|
Total capital
expenditures
|
$
908
|
$
494
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
Identifiable
assets
|
|
|
|
Refinery
operations
|
$
50,341
|
$
51,317
|
|
Tolling and
terminaling
|
18,750
|
18,401
|
|
Corporate and
other
|
1,848
|
1,726
|
|
Total identifiable
assets
|
$
70,939
|
$
71,444
|
|
|
Number
Significant
Customers
|
% Total Revenue
from Operations
|
Portion of
Accounts Receivable at Date
Indicated
|
|
|
|
|
|
|
Three
Months Ended June 30, 2020
|
3
|
69%
|
$0
|
|
|
|
|
|
|
Three
Months Ended June 30, 2019
|
4
|
97%
|
$0.6
million
|
|
|
|
|
|
|
Six
Months Ended June 30, 2020
|
4
|
90%
|
$0.006
million
|
|
|
|
|
|
|
Six
Months Ended June 30, 2019
|
4
|
97%
|
$0.6
million
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
Three Months
Ended June 30,
|
Six Months Ended
Ended June 30,
|
||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||
|
|
(in thousands,
except percent amounts)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
LPG
mix
|
$
-
|
0.0
%
|
$
1
|
0
%
|
$
-
|
0.0
%
|
$
9
|
0
%
|
|
Naphtha
|
3,160
|
18.2
%
|
15,416
|
20.3
%
|
14,675
|
18.8
%
|
29,211
|
20.1
%
|
|
Jet
fuel
|
4,587
|
26.4
%
|
24,173
|
30.7
%
|
22,302
|
28.5
%
|
44,982
|
31.0
%
|
|
HOBM
|
3,691
|
21.3
%
|
16,747
|
23.8
%
|
18,882
|
24.1
%
|
32,907
|
22.7
%
|
|
AGO
|
5,921
|
34.1
%
|
20,920
|
25.2
%
|
22,397
|
28.6
%
|
38,006
|
26.2
%
|
|
|
$
17,359
|
100.0
%
|
$
77,257
|
100.0
%
|
$
78,256
|
100.0
%
|
$
145,115
|
100.0
%
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
Prepaid
insurance
|
$
1,691
|
$
417
|
|
Other
prepaids
|
111
|
87
|
|
Prepaid easement
renewal fees
|
110
|
121
|
|
Prepaid crude oil
and condensate
|
-
|
1,651
|
|
|
$
1,912
|
$
2,276
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
HOBM
|
$
2,833
|
$
-
|
|
Crude oil and
condensate
|
445
|
959
|
|
Chemicals
|
227
|
120
|
|
AGO
|
38
|
440
|
|
Propane
|
12
|
26
|
|
LPG
mix
|
3
|
5
|
|
Naphtha
|
-
|
95
|
|
|
$
3,558
|
$
1,645
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
Refinery and
facilities
|
$
71,254
|
$
66,317
|
|
Land
|
566
|
566
|
|
Other property and
equipment
|
833
|
833
|
|
|
72,653
|
67,716
|
|
|
|
|
|
Less: Accumulated
depletion, depreciation, and amortiation
|
(13,938
)
|
(12,739
)
|
|
|
58,715
|
54,977
|
|
|
|
|
|
CIP
|
4,886
|
8,916
|
|
|
$
63,601
|
$
63,893
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
Insurance
|
$
1,079
|
$
159
|
|
Unearned revenue
from contracts with customers
|
643
|
1,990
|
|
Unearned contract
renewal income
|
500
|
500
|
|
Property, fuel and
other taxes
|
331
|
183
|
|
Other
payable
|
177
|
228
|
|
Board of director
fees payable
|
35
|
263
|
|
Customer
deposits
|
10
|
10
|
|
|
$
2,775
|
$
3,333
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Loan Description
|
Original Principal Amount
(in millions)
|
Maturity Date
|
Monthly Principal and Interest Payment
|
Interest Rate
|
Loan Purpose
|
|
USDA-Guaranteed
Loans
|
|
|
|
|
|
|
First
Term Loan Due 2034 (
in
default
)
|
$25.0
|
Jun
2034
|
$0.2
million
|
WSJ
Prime + 2.75%
|
Refinance
loan; capital improvements
|
|
Second
Term Loan Due 2034 (
in
default
)
|
$10.0
|
Dec
2034
|
$0.1
million
|
WSJ
Prime + 2.75%
|
Refinance
bridge loan; capital improvements
|
|
Notre
Dame Debt (
in
default
)
|
$11.7
(1)
|
Jan
2018
|
No
payments to date; payment rights subordinated
(2)
|
16.00%
|
Working
capital; reduced balance of GEL Final Arbitration
Award
|
|
Loan Description
|
Guarantees
|
Security
|
|
USDA-Guaranteed
Loans
|
|
|
|
First
Term Loan Due 2034
(
in default
)
|
● 100%
USDA-guarantee;
● Jonathan
Carroll personal guarantee
(1)
;
● LEH,
LRM and Blue Dolphin cross-guarantee
|
● first
priority lien on Nixon facility’s business assets (excluding
accounts receivable and inventory);
● assignment
of all Nixon facility contracts, permits, and
licenses;
● absolute
assignment of Nixon facility rents and leases, including tank
rental income;
● $1.0
million payment reserve account held by Veritex; and
● $5.0
million life insurance policy on Jonathan Carroll.
|
|
Second
Term Loan Due 2034
(
in default
)
|
● 100%
USDA-guarantee;
● Jonathan
Carroll personal guarantee
(1)
;
● LEH,
LE and Blue Dolphin cross-guarantee
|
● second
priority lien on rights of LE in crude distillation tower and other
collateral of LE;
● first
priority lien on real property interests of LRM;
● first
priority lien on all LRM fixtures, furniture, machinery and
equipment;
● first
priority lien on all LRM contractual rights, general intangibles
and instruments, except with respect to LRM rights in its leases of
certain specified tanks for which Veritex has second priority lien;
and
● all
other collateral as described in the security
documents.
|
|
Notre
Dame Debt (
in
default
)
|
---
|
● Subordinated
deed of trust that encumbers the crude distillation tower and
general assets of LE
(2).
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
USDA-Guaranteed
Loans
|
|
|
|
First Term Loan Due
2034
(in
default)
|
$
22,006
|
$
21,776
|
|
Second Term Loan
Due 2034
(in
default)
|
9,125
|
9,031
|
|
Notre Dame Debt
(in default)
|
9,015
|
8,617
|
|
|
40,146
|
39,424
|
|
|
|
|
|
Less: Current
portion of long-term debt, net
|
(33,612
)
|
(33,836
)
|
|
Less: Unamortized
debt issue costs
|
(1,813
)
|
(1,877
)
|
|
Less: Accrued
interest payable
(in
default)
|
(4,721
)
|
(3,711
)
|
|
|
$
-
|
$
-
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
USDA-Guaranteed
Loans
|
|
|
|
First Term Loan Due
2034
(in
default)
|
$
1,674
|
$
1,674
|
|
Second Term Loan
Due 2034
(in
default)
|
768
|
768
|
|
|
|
|
|
Less: Accumulated
amortization
|
(629
)
|
(565
)
|
|
|
$
1,813
|
$
1,877
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
Notre Dame Debt
(in default)
|
$
4,037
|
$
3,639
|
|
USDA-Guaranteed
Loans
|
|
|
|
First Term Loan Due
2034
(in
default)
|
461
|
25
|
|
Second Term Loan
Due 2034
(in
default)
|
223
|
47
|
|
|
4,721
|
3,711
|
|
Less: Accrued
interest payable (in default)
|
(4,721
)
|
(3,711
)
|
|
Long-term Interest
Payable, Net of Current Portion
|
$
-
|
$
-
|
|
Line of Credit Description
|
Principal Amount
(in millions)
|
Maturity Date
|
Monthly Principal and Interest Payment
|
Interest Rate
|
Loan Purpose
|
|
|
|
|
|
|
|
|
Amended
Pilot Line of Credit
(
in
default
)
|
$13.0
|
May
2020
|
----
|
14.00%
|
GEL
Settlement Payment, NPS purchase of crude oil from Pilot, and
working capital
|
|
|
|
|
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Loan Description
|
Guarantees
|
Security
|
|
Amended
Pilot Line of Credit
(in default)
|
● Blue
Dolphin pledged its equity interests in NPS to Pilot to secure
NPS’ obligations;
● Blue
Dolphin, LE, LRM, and LEH have each guaranteed NPS’
obligations.
|
● NPS
receivables;
● NPS
assets, including a tank lease (the “Tank
Lease”);
● LRM
receivables.
|
|
|
June 30,
|
December 31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Amended Pilot Line of Credit
(in
default)
|
$
10,573
|
$
11,786
|
|
|
|
|
|
Less:
Unamortized debt issue costs
|
-
|
(219
)
|
|
Less:
Interest payable, short-term
|
(103
)
|
(103
)
|
|
|
$
10,470
|
$
11,464
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
June
30,
|
December
31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
|
|
|
|
AROs,
at the beginning of the period
|
$
2,565
|
$
2,565
|
|
Liabilities
settled
|
(129
)
|
-
|
|
|
2,436
|
2,565
|
|
Less:
AROs, current portion
|
(2,436
)
|
(2,565
)
|
|
Long-term
AROs, at the end of the period
|
$
-
|
$
-
|
|
|
|
June 30,
|
December 31,
|
|
|
Balance Sheet Location
|
2020
|
2019
|
|
|
|
(in
thousands)
|
|
|
Assets
|
|
|
|
|
Operating
lease ROU assets
|
Operating
lease ROU assets
|
$
787
|
$
787
|
|
Less:
Accumulated amortization on operating lease assets
|
Operating
lease ROU assets
|
(211
)
|
(138
)
|
|
|
576
|
649
|
|
|
|
|
|
|
|
Finance
lease assets
|
Property
and equipment, net
|
148
|
180
|
|
Less:
Accumulated amortization on finance lease assets
|
Property
and equipment, net
|
(10
)
|
(34
)
|
|
|
138
|
146
|
|
|
|
|
|
|
|
Total
lease assets
|
|
714
|
795
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Operating
lease
|
Current
portion of lease liabilities
|
185
|
175
|
|
Finance
leases
|
Current
portion of lease liabilities
|
128
|
76
|
|
|
313
|
251
|
|
|
Noncurrent
|
|
|
|
|
Operating
lease
|
Long-term
lease liabilities, net of current
|
470
|
564
|
|
Total
lease liabilities
|
|
$
783
|
$
815
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Weighted
average remaining lease term in years
|
|
|
Operating
lease
|
3.17
|
|
Finance
leases
|
0.68
|
|
Weighted
average discount rate
|
|
|
Operating
lease
|
8.25
%
|
|
Finance
leases
|
8.25
%
|
|
|
Three Months Ended
|
Six Months Ended
|
||
|
|
June 30,
|
June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
lease costs
|
$
51
|
$
51
|
$
103
|
$
77
|
|
Finance
lease costs:
|
|
|
|
|
|
Depreciation
of leased assets
|
4
|
4
|
10
|
8
|
|
Interest
on lease liabilities
|
2
|
1
|
3
|
2
|
|
Total
lease cost
|
$
57
|
$
56
|
$
116
|
$
87
|
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
|
June
30,
|
June
30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
Cash
paid for amounts included in the measurement
|
|
|
|
|
|
of
lease liabilities:
|
|
|
|
|
|
Operating
cash flows for operating lease
|
$
43
|
$
40
|
$
131
|
$
96
|
|
Operating
cash flows for finance leases
|
$
2
|
$
1
|
$
4
|
$
2
|
|
Financing
cash flows for finance leases
|
$
6
|
$
10
|
$
12
|
$
21
|
|
June 30,
|
Operating
Lease
|
Financing
Leases
|
Total
|
|
|
(in
thousands)
|
||
|
|
|
|
|
|
2020
|
$
184
|
$
128
|
$
312
|
|
2021
|
204
|
-
|
204
|
|
2022
|
226
|
-
|
226
|
|
2023
|
41
|
-
|
41
|
|
|
|
|
|
|
|
$
655
|
$
128
|
$
783
|
|
|
Operating
|
|
June 30,
|
Lease
|
|
|
(in thousands)
|
|
2020
|
$
232
|
|
2021
|
235
|
|
2022
|
239
|
|
2023
|
40
|
|
|
$
746
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
Three Months Ended
|
Six Months Ended
|
||
|
|
June 30,
|
June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
Federal
|
$
-
|
$
-
|
$
(15
)
|
$
-
|
|
State
|
-
|
-
|
-
|
-
|
|
Deferred
|
|
|
|
|
|
Federal
|
893
|
800
|
1,591
|
643
|
|
State
|
-
|
|
-
|
|
|
Change
in valuation allowance
|
(893
)
|
(800
)
|
(1,591
)
|
(643
)
|
|
Total
provision for income taxes
|
$
-
|
$
-
|
$
(15
)
|
$
-
|
|
|
June 30,
|
December 31,
|
|
|
2020
|
2019
|
|
|
(in
thousands)
|
|
|
Deferred
tax assets:
|
|
|
|
NOL
and capital loss carryforwards
|
$
13,897
|
$
12,463
|
|
Business
interest expense
|
2,648
|
1,923
|
|
Start-up
costs (crude oil and condensate processing facility)
|
551
|
594
|
|
ARO
liability/deferred revenue
|
511
|
539
|
|
AMT
credit
|
-
|
50
|
|
Other
|
36
|
11
|
|
Total
deferred tax assets
|
17,643
|
15,580
|
|
|
|
|
|
Deferred
tax liabilities:
|
|
|
|
Basis
differences in property and equipment
|
(6,705
)
|
(6,183
)
|
|
Total
deferred tax liabilities
|
(6,705
)
|
(6,183
)
|
|
|
10,938
|
9,397
|
|
|
|
|
|
Valuation
allowance
|
(10,938
)
|
(9,347
)
|
|
|
|
|
|
Deferred
tax assets, net
|
$
-
|
$
50
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
Net
Operating Loss Carryforward
|
|
|
|
|
Pre-Ownership
Change
|
Post-Ownership
Change
|
Total
|
|
|
(in
thousands)
|
||
|
|
|
|
|
|
Balance
at December 31, 2018
|
$
9,614
|
$
37,335
|
$
46,949
|
|
|
|
|
|
|
Net
operating losses
|
-
|
5,723
|
5,723
|
|
|
|
|
|
|
Balance
at December 31, 2019
|
9,614
|
43,058
|
52,672
|
|
|
|
|
|
|
Net
operating losses
|
-
|
6,826
|
6,826
|
|
|
|
|
|
|
Balance at June 30, 2020
|
$
9,614
|
$
49,884
|
$
59,498
|
|
|
Three Months Ended
|
Six Months Ended
|
||
|
|
June 30,
|
June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$
(4,242
)
|
$
(3,299
)
|
$
(7,582
)
|
$
(2,552
)
|
|
|
|
|
|
|
|
Basic
and diluted income (loss) per share
|
$
(0.34
)
|
$
(0.30
)
|
$
(0.61
)
|
$
(0.23
)
|
|
|
|
|
|
|
|
Basic
and Diluted
|
|
|
|
|
|
Weighted
average number of shares of
|
|
|
|
|
|
common
stock outstanding and potential
|
||||
|
dilutive
shares of common stock
|
12,580,853
|
10,975,514
|
12,454,109
|
10,975,215
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
(in
millions)
|
|
Initial payment
(September 2017)
|
$
3.7
|
|
GEL Interim
Payments (July 2018 to April 2019)
|
8.0
|
|
Settlement Payment
(Multiple Payments May 7 to 10, 2019)
|
10.0
|
|
Deferred Interim
Installment Payments (June 2019 to August 2019)
|
0.5
|
|
|
|
|
|
$
22.2
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Property
|
|
Key
Products
Handled
|
|
Operating
Subsidiary
|
|
Location
|
|
|
|
|
|
|
|
|
|
Nixon
facility
● Crude
distillation tower (15,000 bpd)
● Petroleum
storage tanks
● Loading
and unloading facilities
● Land
(56 acres)
|
|
Crude
Oil
Refined
Products
|
|
LE
|
|
Nixon,
Texas
|
|
|
|
|
|
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Property
|
|
Key
Products
Handled
|
|
Operating
Subsidiary
|
|
Location
|
|
|
|
|
|
|
|
|
|
Nixon
facility
● Petroleum
storage tanks
● Loading
and unloading facilities
|
|
Crude
Oil
Refined
Products
|
|
LRM,
NPS
|
|
Nixon,
Texas
|
|
|
|
|
|
|
|
|
|
Property
|
|
Operating
Subsidiary
|
|
|
Location
|
|
|
|
|
|
|
|
|
Freeport
facility
● Crude
oil and natural gas separation and dehydration
● Natural
gas processing, treating, and redelivery
● Vapor
recovery unit
● Two
onshore pipelines
● Land
(162 acres)
|
|
BDPL
|
|
|
Freeport,
Texas
|
|
Offshore
Pipelines (Trunk Line and Lateral Lines)
|
|
BDPL
|
|
|
Gulf of
Mexico
|
|
Oil and
Gas Leasehold Interests
|
|
BDPC
|
|
|
Gulf of
Mexico
|
|
|
|
|
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Three Months Ended June 30, 2020 Versus June 30, 2019(Q2 2020
Versus Q2 2019)
Overview
. Net loss for Q2 2020 was $4.2 million, or a loss
of $0.34 per share, compared to a net loss of $3.3 million, or a
loss of $0.30 per share, in Q2 2019. The increase in net loss was
the result of unfavorable margins per bbl and significantly lower
sales volume.
Total Revenue from Operations
.
Total revenue from operations for Q2
2020 decreased $59.8 million, or 76%, to $18.5 million compared to
$78.3 million for Q2 2019. The significant decrease related to a
decline in refinery operations revenue as a result of lower
commodity pricing per bbl on refined products sold due to market
fluctuations associated with the COVID-19 pandemic and
significantly lower sales volumes in 2020. Tolling and terminaling
revenue remained flat between the periods at approximately $1.1
million.
Total Cost of Goods Sold
.
Total cost of goods sold was $19.7
million for Q2 2020 compared to $78.6 million for Q2 2019. The
$58.9 million decrease related to lower commodity prices per bbl
for crude oil and chemicals due to market fluctuations associated
with the COVID-19 pandemic and significant refinery downtime in
2020, which resulted in lower sales volumes.
Gross Deficit
.
Gross deficit was $1.2 million for Q2
2020 compared to a gross deficit of $0.2 million for Q2 2019. The
significant decrease in gross profit between the periods primarily
related to lower margins per bbl due to market fluctuations
associated with the COVID-19 pandemic in 2020.
General and Administrative Expenses
.
General and administrative expenses
decreased approximately 8%, to $0.5 million compared to $0.6
million for Q2 2019. The decrease primarily related to lower legal
fees in Q2 2020 compared to Q2 2019.
Depletion, Depreciation and Amortization
.
Depletion, depreciation, and
amortization expenses for Q2 2020 totaled approximately $0.7
million compared to approximately $0.6 million in Q2 2019. The
nearly 6% increase primarily related to placing a petroleum storage
tank in service.
Total Other Expense
.
Total
other expense in Q2 2020 was flat compared to Q2 2019 at $1.6
million. Other expense primarily related to interest expense
associated with our secured loan agreements with Veritex,
related-party debt, and the line of credit with
Pilot.
|
|
Six Months Ended June 30, 2020 Versus June 30, 2019(6 Months 2020
Versus 6 Months 2019)
Overview
. Net loss for 6 Months 2020 was $7.6 million, or a
loss of $0.61 per share, compared to a net loss of $2.6 million, or
a loss of $0.23 per share, in 6 Months 2019. The significant
increase in net loss was the result of unfavorable margins per bbl
and significantly lower sales volume.
Total Revenue from Operations
.
Total revenue from operations for 6
Months 2020 decreased $66.8 million, or 45%, to $80.5 million
compared to $147.3 million for 6 Months 2019. The significant
decrease in refinery operations revenue was the result of lower
commodity pricing per bbl on refined products sold due to market
fluctuations associated with the COVID-19 pandemic and
significantly lower sales volumes in 2020. Tolling and terminaling
revenue remained flat between the periods at approximately $2.2
million.
Total Cost of Goods Sold
.
Total cost of goods sold was $81.8
million for 6 Months 2020 compared to $144.1 million for 6 Months
2019. The $62.3 million, or 43%, decrease related to lower
commodity prices per bbl for crude oil and chemicals due to market
fluctuations associated with the COVID-19 pandemic and significant
refinery downtime in 2020, which resulted in lower sales
volumes.
Gross Profit (Deficit)
.
Gross deficit was $1.3 million for 6
Months 2020 compared to gross profit of $3.2 million for 6 Months
2019. The significant decrease in gross profit between the periods
primarily related to lower margins per bbl due to market
fluctuations associated with the COVID-19 pandemic in
2020.
General and Administrative Expenses
.
General and administrative expenses
were relatively flat at approximately $1.2 million for 6 Months
2020 compared to 6 Months 2019. General and administrative expenses
primarily consisted of insurance, taxes, and professional
fees.
Depletion, Depreciation and Amortization
.
Depletion, depreciation, and
amortization expenses for 6 Months 2020 totaled $1.3 million
compared to $1.2 million for 6 Months 2019. The nearly 7% increase
primarily related to placing a petroleum storage tank in
service.
Total Other Expense
.
Total
other expense was $3.4 million in 6 Months 2020 compared to an
expense of $2.8 million in 6 Months 2019, a 20% increase. Interest
expense increased in 6 Months 2020 compared to 6 Months 2019 due to
completion of certain CIP for which interest was no longer being
capitalized and the addition of the line of credit with
Pilot.
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
|
Three Months Ended
|
Six Months Ended
|
||
|
|
June 30,
|
June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
(in
thousands)
|
|||
|
|
|
|
|
|
|
Refined
product sales
|
$
17,359
|
$
77,257
|
$
78,256
|
$
145,115
|
|
Less:
Total cost of goods sold
|
(19,676
)
|
(78,556
)
|
(81,764
)
|
(144,072
)
|
|
Gross
profit (deficit)
|
(2,317
)
|
(1,299
)
|
(3,508
)
|
1,043
|
|
|
|
|
|
|
|
Sales
(Bbls)
|
669
|
1,104
|
1,810
|
2,133
|
|
|
|
|
|
|
|
Gross Profit (Deficit) per Bbl
|
$
(3.46
)
|
$
(1.18
)
|
$
(1.94
)
|
$
0.49
|
|
|
Three Months
Ended
|
Six Months
Ended
|
||
|
|
June
30,
|
June
30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
(in
thousands)
|
|||
|
Net revenue
(1)
|
$
17,359
|
$
77,257
|
$
78,256
|
$
145,115
|
|
Intercompany fees
and sales
|
(406
)
|
(653
)
|
(1,023
)
|
(1,259
)
|
|
Operation costs and
expenses
|
(19,418
)
|
(78,376
)
|
(81,251
)
|
(143,528
)
|
|
Segment
Contribution Margin (Deficit)
|
$
(2,465
)
|
$
(1,772
)
|
$
(4,018
)
|
$
328
|
|
|
Three Months
Ended
|
Six Months
Ended
|
||
|
|
June
30,
|
June
30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
Calendar
|
91
|
91
|
182
|
181
|
|
Operating
|
(68
)
|
(84
)
|
(156
)
|
(163
)
|
|
Refinery
Downtime (Days)
|
23
|
7
|
26
|
18
|
|
|
|
|
|
|
|
Refinery
Throughput
|
|
|
|
|
|
bpd
|
11,447
|
13,501
|
12,578
|
13,381
|
|
bbls
|
778,397
|
1,134,105
|
1,962,143
|
2,181,164
|
|
Capacity
utilization rate
|
76.3
%
|
90.0
%
|
83.9
%
|
89.2
%
|
|
|
|
|
|
|
|
Refinery
Production
|
|
|
|
|
|
bpd
|
11,088
|
13,123
|
12,270
|
13,038
|
|
bbls
|
754,014
|
1,102,340
|
1,914,105
|
2,125,169
|
|
Capacity
utilization rate
|
73.9
%
|
87.5
%
|
81.8
%
|
86.9
%
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
||
|
|
June
30,
|
June
30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
(in
thousands)
|
|||
|
Net revenue
(1)
|
$
1,110
|
$
1,088
|
$
2,213
|
$
2,157
|
|
Intercompany fees
and sales
|
406
|
653
|
1,023
|
1,259
|
|
Operation costs and
expenses
|
(258
)
|
(363
)
|
(513
)
|
(727
)
|
|
Segment
Contribution Margin (Deficit)
|
$
1,258
|
$
1,378
|
$
2,723
|
$
2,689
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Reconciliation of Segment Contribution Margin
(Deficit)
|
|
|
|
Three Months
Ended June 30,
|
|||||||
|
|
2020
|
2019
|
2020
|
2019
|
2020
|
2019
|
2020
|
2019
|
|
|
Refinery
Operations
|
Tolling and
Terminaling
|
Corporate and
Other
|
Total
|
||||
|
|
(in
thousands)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Segment
contribution margin
|
$
(2,465
)
|
$
(1,589
)
|
$
1,258
|
$
1,378
|
$
(47
)
|
$
(56
)
|
$
(1,254
)
|
$
(267
)
|
|
General and
administrative expenses
(1)
|
(327
)
|
(274
)
|
(68
)
|
(62
)
|
(326
)
|
(426
)
|
$
(721
)
|
$
(762
)
|
|
Depreciation and
amortization
|
(294
)
|
(483
)
|
(324
)
|
(99
)
|
(51
)
|
(51
)
|
$
(669
)
|
$
(633
)
|
|
Interest and other
non-operating income (expenses), net
|
(751
)
|
(823
)
|
(616
)
|
(579
)
|
(231
)
|
(235
)
|
$
(1,598
)
|
$
(1,637
)
|
|
Income (loss)
before income taxes
|
(3,837
)
|
(3,169
)
|
250
|
638
|
(655
)
|
(768
)
|
(4,242
)
|
(3,299
)
|
|
Income tax
benefit
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Income
(loss) before income taxes
|
$
(3,837
)
|
$
(3,169
)
|
$
250
|
$
638
|
$
(655
)
|
$
(768
)
|
$
(4,242
)
|
$
(3,299
)
|
|
|
Six Months Ended June 30,
|
|||||||
|
|
2020
|
2019
|
2020
|
2019
|
2020
|
2019
|
2020
|
2019
|
|
|
Refinery Operations
|
Tolling and Terminaling
|
Corporate and Other
|
Total
|
||||
|
|
(in
thousands)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Segment
contribution margin
|
$
(4,018
)
|
$
511
|
$
2,723
|
$
2,689
|
$
(106
)
|
$
(113
)
|
$
(1,401
)
|
$
3,087
|
|
General and administrative
expenses
(1)
|
(631
)
|
(606
)
|
(136
)
|
(105
)
|
(745
)
|
(871
)
|
$
(1,512
)
|
$
(1,582
)
|
|
Depreciation
and amortization
|
(582
)
|
(948
)
|
(618
)
|
(198
)
|
(102
)
|
(77
)
|
$
(1,302
)
|
$
(1,223
)
|
|
Interest
and other non-operating income (expenses), net
|
(1,492
)
|
(1,606
)
|
(1,386
)
|
(775
)
|
(474
)
|
(453
)
|
$
(3,352
)
|
$
(2,834
)
|
|
Income
(loss) before income taxes
|
(6,723
)
|
(2,649
)
|
583
|
1,611
|
(1,427
)
|
(1,514
)
|
(7,567
)
|
(2,552
)
|
|
Income
tax benefit
|
-
|
-
|
-
|
-
|
(15
)
|
-
|
(15
)
|
-
|
|
Income (loss) before income taxes
|
$
(6,723
)
|
$
(2,649
)
|
$
583
|
$
1,611
|
$
(1,442
)
|
$
(1,514
)
|
$
(7,582
)
|
$
(2,552
)
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Total Debt
|
|
|
|
June 30,
|
December 31,
|
|
|
2020
|
2019
|
|
|
(in thousands)
|
|
|
USDA-Guaranteed Loans
|
|
|
|
First Term Loan Due 2034
(in
default)
|
$
22,006
|
$
21,776
|
|
Second Term Loan Due 2034
(in
default)
|
9,125
|
9,031
|
|
Amended Pilot Line of Credit
(in
default)
|
10,573
|
11,786
|
|
Notre Dame Debt
(in
default)
|
9,015
|
8,617
|
|
Related-Party
Debt
|
|
|
|
BDPL Loan Agreement
(in
default)
|
6,494
|
6,174
|
|
March Ingleside Note
(in
default)
|
1,039
|
1,004
|
|
March Carroll Note
(in
default)
|
1,198
|
997
|
|
June LEH Note
(in
default)
|
6,336
|
-
|
|
Total
Debt
|
65,786
|
59,385
|
|
|
|
|
|
Less:
Current portion of long-term debt, net
|
(56,655
)
|
(51,301
)
|
|
Less:
Unamortized debt issue costs
|
(1,813
)
|
(2,096
)
|
|
Less: Accrued interest payable
(in
default)
|
(7,318
)
|
(5,988
)
|
|
|
$
-
|
$
-
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Agreement/Transaction
|
Parties
|
Type
|
Effective Date
|
Interest Rate
|
Key Terms
|
|
Amended
and Restated Guaranty Fee Agreement
|
Jonathan
Carroll - LE
|
Debt
|
04/01/2017
|
2.00%
|
Tied to
payoff of LE $25 million Veritex loan; payments 50% cash, 50%
Common Stock
|
|
Amended
and Restated Guaranty Fee Agreement
|
Jonathan
Carroll - LRM
|
Debt
|
04/01/2017
|
2.00%
|
Tied to
payoff of LRM $10 million Veritex loan; payments 50% cash, 50%
Common Stock
|
|
March
Carroll Note
(in
default)
|
Jonathan
Carroll – Blue Dolphin
|
Debt
|
03/31/2017
|
8.00%
|
Blue
Dolphin working capital; matured 01/01/2019; interest still
accruing
|
|
March
Ingleside Note
(in
default)
|
Ingleside
– Blue Dolphin
|
Debt
|
03/31/2017
|
8.00%
|
Blue
Dolphin working capital; reflects amounts owed to Ingleside under
previous Amended and Restated Tank Lease Agreement; matured
01/01/2019; interest still accruing
|
|
June
LEH Note
(in
default)
|
LEH
– Blue Dolphin
|
Debt
|
03/31/2017
|
8.00%
|
Blue
Dolphin working capital; reflects amounts owed to LEH under the
Amended and Restated Operating Agreement; reflects amounts owed to
Jonathan Carroll under guaranty fee agreements; matured 01/01/2019;
interest still accruing
|
|
Loan
and Security Agreement
(in
default)
|
LEH -
BDPL
|
Debt
|
08/15/2016
|
16.00%
|
2-year
term; $4.0 million principal amount; $0.5 million annual payment;
proceeds used for working capital; no financial maintenance
covenants; secured by certain BDPL property
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Loan Description
|
Original Principal Amount
(in millions)
|
Maturity Date
|
Monthly Principal and Interest Payment
|
Interest Rate
|
Loan Purpose
|
|
USDA-Guaranteed
Loans
|
|
|
|
|
|
|
First
Term Loan Due 2034
(
in default
)
|
$25.0
|
Jun
2034
|
$0.2
million
|
WSJ
Prime + 2.75%
|
Refinance
loan; capital improvements
|
|
Second
Term Loan Due 2034
(
in default
)
|
$10.0
|
Dec
2034
|
$0.1
million
|
WSJ
Prime + 2.75%
|
Refinance
bridge loan; capital improvements
|
|
Notre
Dame Debt
(
in default
)
|
$11.7
(1)
|
Jan
2018
|
No
payments to date; payment rights subordinated
(2)
|
16.00%
|
Working
capital; reduce balance of GEL Final Arbitration Award
|
|
Amended
Pilot Line of Credit
(
in
default
)
|
$13.0
|
May
2020
|
----
|
14.00%
|
GEL
Settlement Payment, NPS purchase of crude oil from Pilot, and
working capital
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis
|
|
|
|
Components of Cash Flows
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
(in
thousands)
|
|||
|
Cash Flows Provided By (Used In):
|
|
|
|
|
|
Operating
activities
|
$
(3,707
)
|
$
(11,421
)
|
$
(4,034
)
|
$
(11,294
)
|
|
Investing
activities
|
(710
)
|
(371
)
|
(908
)
|
(494
)
|
|
Financing
activities
|
4,152
|
12,079
|
4,874
|
12,090
|
|
Increase
(Decrease) in Cash and Cash Equivalents
|
$
(265
)
|
$
287
|
$
(68
)
|
$
302
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Management’s Discussion and Analysis and Internal
Controls
|
|
|
|
●
|
Significant deficiency – There is currently not a process in
place for formal review of manual journal entries.
|
|
●
|
Material weakness – The company currently lacks resources to
handle complex accounting transactions. This can result in errors
related to the recording, disclosure and presentation of
consolidated financial information in quarterly, annual, and other
filings.
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Legal Proceedings
|
|
|
|
|
(in
millions)
|
|
Initial payment
(September 2017)
|
$
3.7
|
|
GEL Interim
Payments (July 2018 to April 2019)
|
8.0
|
|
Settlement Payment
(Multiple Payments May 7 to 10, 2019)
|
10.0
|
|
Deferred Interim
Installment Payments (June 2019 to August 2019)
|
0.5
|
|
|
|
|
|
$
22.2
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Legal Proceedings (Continued) and Risk Factors
|
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Unregistered Sales of Equity Securities and Exhibits
|
|
|
|
No.
|
Description
|
|
31.1
*
|
Jonathan
P. Carroll Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1
*
|
Jonathan
P. Carroll Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002.
|
|
101.INS*
|
XBRL
Instance Document.
|
|
101.SCH*
|
XBRL
Taxonomy Schema Document.
|
|
101.CAL*
|
XBRL
Calculation Linkbase Document.
|
|
101.LAB*
|
XBRL
Label Linkbase Document.
|
|
101.PRE*
|
XBRL
Presentation Linkbase Document.
|
|
101.DEF*
|
XBRL
Definition Linkbase Document.
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
|
Signature Page
|
|
|
|
|
|
BLUE DOLPHIN ENERGY COMPANY
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
14, 2020
|
|
By:
|
/s/
JONATHAN P. CARROLL
|
|
|
|
|
Jonathan
P. Carroll
Chief
Executive Officer, President,
Assistant
Treasurer and Secretary
(Principal
Executive Officer, Principal Financial Officer, and Principal
Accounting Officer)
|
|
Blue
Dolphin Energy Company
|
June
30, 2020
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|