8-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report (Date of earliest event reported): January 31, 2001 (January 22, 2001) BLUE DOLPHIN ENERGY COMPANY (Exact name of registrant as specified in its charter) DELAWARE 0-15905 73-1268729 (State of Incorporation) (Commission File Number) (IRS Employer Identification No.) 801 TRAVIS, SUITE 2100 HOUSTON, TEXAS 77002 (Address of Registrant's principal executive offices) (713) 227-7660 (Registrant's telephone number, including area code) (NOT APPLICABLE) (Former name or former address, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On January 22, 2001, Blue Dolphin Energy Company (the "Company") issued a press release announcing that it sold its 50% interest in the Black Marlin Pipeline System to affiliates of the Williams Companies, Inc. for approximately $4.625 million. The Black Marlin Pipeline System includes a 75-mile natural gas and condensate gathering line with related shore facilities servicing the High Island Area, offshore Texas (the "Black Marlin Pipeline") and the recently constructed 3-mile lateral pipeline extending from High Island Block A-5 to an interconnection into the Black Marlin Pipeline in High Island Block A-6 ("the A-5 Lateral"). This disposition was consummated, in part, through a sale of all of the outstanding capital stock of Black Marlin Pipeline Company (formerly an indirect wholly owned subsidiary of the Company) the owner of a 50% interest in the Black Marlin Pipeline, pursuant to a Purchase and Sale Agreement dated January 12, 2001 (the "Stock Purchase Agreement") among Black Marlin Energy Company, a wholly owned subsidiary of the Company, MCNIC Offshore Pipeline & Processing Company ("MCNIC"), WBI Southern, Inc. ("WBI") and Williams Field Services Group, Inc. The Company received $3.625 million for the outstanding capital stock of Black Marlin Pipeline Company The remaining part of this disposition was consummated through the sale of the A-5 Lateral owned 50% by Blue Dolphin Pipe Line Company, a wholly owned subsidiary of the Company ("BDPL"), pursuant to a Purchase and Sale Agreement dated January 12, 2001 (the "Asset Purchase Agreement") among BDPL, MCNIC, WBI and Williams Field Services - Gulf Coast Company, L.P. The Company received $1.0 million for the A-5 Lateral. The Stock Purchase Agreement, Asset Purchase Agreement and press release are filed as exhibits hereto and are incorporated by reference. The description of the Stock Purchase Agreement and Asset Purchase Agreement set forth above do not purport to be complete and are qualified in their entirety by reference to the provisions of such agreements. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Pro Forma Information Introduction The pro forma financial information is presented for illustrative purposes only and does not purport to represent what the Company's results actually would have been if such event had occurred at the date indicated. The pro forma condensed financial information should be read in conjunction with the notes thereto together with the Company's financial statements and the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations," all appearing in the Company's Report on Form 10-K for the year ended December 31, 1999, and in the Company's report on form 10-Q for the quarter ended September 30, 2000. 2 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET - UNAUDITED September 30, 2000
SALE OF BLACK PRO HISTORICAL MARLIN FORMA ------------ ------------ ------------ (Unaudited) ASSETS Current Assets: Cash ......................................... $ 1,871,282 4,625,000 (1) 6,496,282 Trade accounts receivable .................... 2,176,399 2,176,399 Funds Escrowed for abandonment ............... 1,466,857 1,466,857 Prepaid expenses ............................. 931,878 (4,763)(1) 927,115 ------------ ------------ ------------ Total Current Assets .................. 6,446,416 4,620,237 11,066,653 Property and Equipment, at cost, using full cost method for oil and gas properties ........... 34,331,212 (3,613,166)(1) 30,718,046 Accumulated depletion, depreciation and amortization ............................ (29,931,631) 316,248 (1) (29,615,383) ------------ ------------ ------------ 4,399,581 (3,296,918) 1,102,663 Land ............................................ 930,500 (80,500)(1) 850,000 Acquisition and development costs - Petroport ... 1,871,543 1,871,543 Other Assets .................................... 498,793 498,793 ------------ ------------ ------------ Total Assets .......................... $ 14,146,833 1,242,819 15,389,652 ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses ........ $ 3,650,044 3,650,044 Current portion of long term-debt ............ 218,412 218,412 Notes payable - related parties .............. 1,400,000 1,400,000 ------------ ------------ Total Current Liabilities .............. 5,268,456 5,268,456 Minority interest ............................... 1,177,744 1,177,744 Common Stock .................................... 59,749 59,749 Additional Paid-in Capital ...................... 25,784,758 25,784,758 Accumulated (Deficit) ........................... (18,143,874) 1,242,819 (1) (16,901,055) ------------ ------------ ------------ Total Liabilities and Stockholders' Equity ................ $ 14,146,833 1,242,819 15,389,652 ============ ============ ============
3 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED BALANCE SHEET - UNAUDITED September 30, 2000 (1) To reflect the sale of the Company's 50% interest in the Black Marlin Pipeline System as of September 30, 2000, for $4,625,000 cash. 4 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED For the Nine Months Ended September 30, 2000
SALE OF BLACK PRO HISTORICAL MARLIN FORMA ------------ ------------ ------------ Revenue from operations: Pipeline operations ............................. $ 1,716,102 (1,018,976)(1) 697,126 Oil and gas sales ............................... 3,810,333 3,810,333 Operating fees ................................. 234,338 234,338 ------------ ------------ ------------ REVENUE FROM OPERATIONS ......... 5,760,773 (1,018,976) 4,741,797 Cost of operations: Pipeline operating expenses ..................... 753,726 (394,359)(1) 359,367 Lease operating expenses ........................ 951,068 951,068 Depletion, depreciation, and amortization ....... 1,441,694 (149,802)(1) 1,291,892 Impairment of oil and gas properties ............ 10,654,976 10,654,976 General and administrative ...................... 1,583,151 1,583,151 ------------ ------------ ------------ COST OF OPERATIONS .............. 15,384,615 (544,161) 14,840,454 ------------ ------------ ------------ LOSS FROM OPERATIONS ............ (9,623,842) (474,815) (10,098,657) Other income (expense): Interest and other expense ...................... (140,405) 15,750 (1) (124,655) Interest and other income ....................... 77,418 77,418 ------------ ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF A CHANGE IN AN ACCOUNTING PRINCIPLE (9,686,829) (459,065) (10,145,894) Minority interest ................................... (219,223) (219,223) Provision for income taxes .......................... -- -- ------------ ------------ Net income (loss) ................................... $ (9,906,052) (10,365,117) ============ ============ Earnings per common share-basic Net income ...................................... $ (1.66) (1.74) ============ ============ Earnings per common share-diluted Net income ...................................... $ (1.66) (1.74) ============ ============ Weighted average number of common shares outstanding and dilutive potential common shares: Basic ........................................... 5,955,645 5,955,645 ============ ============ Diluted ......................................... 5,955,645 5,955,645 ============ ============
5 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED STATEMENT OF OPERATIONS -UNAUDITED For the Nine Months Ended September 30, 2000 (1) To eliminate the revenues, direct operating expenses and depreciation associated with the Black Marlin Pipeline System. 6 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED Year Ended December 31, 1999
SALE OF BLACK PRO HISTORICAL MARLIN FORMA ------------ ------------ ------------ Revenue from operations: Pipeline operations ................................... $ 1,875,716 (701,144) (1) 1,174,572 Oil and gas sales ..................................... 567,103 567,103 Operating fees ........................................ 314,237 314,237 ------------ ------------ ------------ Revenue from operations ........................ 2,757,056 (701,144) 2,055,912 ------------ ------------ ------------ Cost of operations: Pipeline operating expenses ........................... 1,102,998 (411,873) (1) 691,125 Lease operating expenses .............................. 1,100,549 1,100,549 Depletion, depreciation and amortization .............. 595,286 (199,017) (1) 396,269 General and administrative expenses ................... 2,061,805 2,061,805 ------------ ------------ ------------ Cost of operations ............................. 4,860,638 (610,890) 4,249,748 ------------ ------------ ------------ Income (loss) from operations .................. (2,103,582) (90,254) (2,193,836) Other income (expense): Interest and other expense ............................ (238,322) 14,665 (1) (223,657) Gain on sale of assets ................................ 2,052,920 2,052,920 Interest and other income ............................. 80,722 80,722 ------------ ------------ ------------ Income (loss) before income taxes .............. (208,262) (104,919) (313,181) Minority interest ........................................ (882) (882) Income tax benefit (expense) ............................. (1,797,033) (1,797,033) ------------ ------------ Income (loss) before cumulative effect of a change in an accounting principle............. (2,006,177) (2,111,096) Change in accounting principal (net of $41,480 income tax) (80,334) (80,334) ------------ ------------ Net income (loss) .............................. $ (2,086,511) (2,191,430) ============ ============ Earnings per common share-basic Income before accounting change ...................... $ (0.41) (0.43) Cumulative effect of a change in accounting principle (0.02) (0.02) ------------ ------------ Net income ........................................... $ (0.43) (0.45) ============ ============ Earnings per common share-diluted Income before accounting change ...................... $ (0.41) (0.43) Cumulative effect of a change in accounting principle (0.02) (0.02) ------------ ------------ Net income ........................................... $ (0.43) (0.45) ============ ============ Weighted average number of common shares outstanding and dilutive potential common shares: Basic ................................................. 4,837,504 4,837,504 ============ ============ Diluted ............................................... 4,837,504 4,837,504 ============ ============
7 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED STATEMENT OF OPERATIONS - UNAUDITED Year Ended December 31, 1999 (1) To eliminate the revenues, direct operating expenses and depreciation associated with the Black Marlin Pipeline System. 8 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (CONTINUED) (b) Exhibit 99.1 Purchase and Sale Agreement by and between Williams Field Services Group. Inc. and Black Marlin Energy Company 99.2 Purchase and Sale Agreement by and between Williams Field Services - Gulf Coast Company, L.P. and Blue Dolphin Pipeline Company 99.3 Press release dated January 22, 2001 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BLUE DOLPHIN ENERGY COMPANY Date: January 31, 2001 By: /s/ G. BRIAN LLOYD G. Brian Lloyd Vice President, Treasurer 10 INDEX TO EXIBITS EXHIBIT DESCRIPTION OF EXHIBIT 99.1 Purchase and Sale Agreement by and between Williams Field Services Group. Inc. and Black Marlin Energy Company 99.2 Purchase and Sale Agreement by and between Williams Field Services - Gulf Coast Company, L.P. and Blue Dolphin Pipeline Company 99.3 Press release dated January 22, 2001 11