Delaware
(State or Other Jurisdiction
of Incorporation)
|
0-15905
(Commission File Number)
|
73-1268729
(IRS Employer Identification No.)
|
Item 2.02
|
Results of Operations and Financial Condition.
|
(d)
|
Exhibits.
|
99.1
|
Blue Dolphin Energy Company Press Release Issued November 23, 2015.
|
Blue Dolphin Energy Company
|
/s/ JONATHAN P. CARROLL
|
Jonathan P. Carroll
Chief Executive Officer, President,
Assistant Treasurer and Secretary
(Principal Executive Officer)
|
99.1
|
Blue Dolphin Energy Company Press Release Issued November 23, 2015.
|
-
|
EBITDA reflects earnings before: (i) interest income (expense), (ii) income taxes, and (iii) depreciation and amortization. Refinery operations EBITDA reflects EBITDA for our refinery operations business segment. Total EBITDA reflects EBITDA for our refinery operations and pipeline transportation business segments, as well as corporate and other;
|
-
|
Adjusted EBITDA reflects EBITDA plus the Joint Marketing Agreement Profit Share (the “JMA Profit Share”). The JMA Profit Share represents the GEL TEX Marketing, LLC (“GEL”) Profit Share plus the GEL Performance Fee for the period pursuant to the Joint Marketing Agreement. Refinery operations adjusted EBITDA reflects adjusted EBITDA for our refinery operations business segment. Total adjusted EBITDA reflects adjusted EBITDA for our refinery operations and pipeline transportation business segments, as well as corporate and other; and
|
-
|
Refinery operating income reflects refined petroleum product sales less direct operating costs (including cost of refined products sold and refinery operating expenses) and the JMA Profit Share, which is an indirect operating expense.
|
September 30,
|
December 31,
|
|||||||
2015
|
2014
|
|||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 1,518,359 | $ | 1,293,233 | ||||
Restricted cash
|
5,834,197 | 1,008,514 | ||||||
Accounts receivable
|
7,833,519 | 8,340,303 | ||||||
Prepaid expenses and other current assets
|
1,045,893 | 771,458 | ||||||
Deposits
|
420,176 | 68,498 | ||||||
Inventory
|
5,620,827 | 3,200,651 | ||||||
Deferred tax assets, current portion, net
|
2,892,459 | - | ||||||
Total current assets
|
25,165,430 | 14,682,657 | ||||||
Total property and equipment, net
|
46,054,365 | 37,371,075 | ||||||
Restricted cash, noncurrent
|
11,277,441 | - | ||||||
Surety bonds
|
1,667,000 | 1,642,000 | ||||||
Debt issue costs, net
|
1,296,480 | 479,737 | ||||||
Trade name
|
303,346 | 303,346 | ||||||
Deferred tax assets, net
|
387,824 | 5,928,342 | ||||||
Total long-term assets
|
60,986,456 | 45,724,500 | ||||||
TOTAL ASSETS
|
$ | 86,151,886 | $ | 60,407,157 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$ | 16,459,787 | $ | 12,370,179 | ||||
Accounts payable, related party
|
- | 1,174,168 | ||||||
Asset retirement obligations, current portion
|
38,644 | 85,846 | ||||||
Accrued expenses and other current liabilities
|
2,005,206 | 2,783,704 | ||||||
Interest payable, current portion
|
57,140 | 56,039 | ||||||
Long-term debt, current portion
|
1,631,539 | 1,245,476 | ||||||
Deferred tax liabilities, net
|
- | 168,236 | ||||||
Total current liabilities
|
20,192,316 | 17,883,648 | ||||||
Long-term liabilities:
|
||||||||
Asset retirement obligations, net of current portion
|
1,928,371 | 1,780,924 | ||||||
Deferred revenues and expenses
|
561,864 | 691,525 | ||||||
Long-term debt, net of current portion
|
28,948,021 | 10,808,803 | ||||||
Long-term interest payable, net of current portion
|
1,430,371 | 1,274,789 | ||||||
Total long-term liabilities
|
32,868,627 | 14,556,041 | ||||||
TOTAL LIABILITIES
|
53,060,943 | 32,439,689 | ||||||
Commitments and contingencies (Note 21)
|
||||||||
STOCKHOLDERS' EQUITY
|
||||||||
Common stock ($0.01 par value, 20,000,000 shares authorized;10,603,802 and
|
||||||||
10,599,444 shares issued at September 30, 2015 and December 31, 2014, respectively)
|
106,038 | 105,995 | ||||||
Additional paid-in capital
|
36,738,737 | 36,718,781 | ||||||
Accumulated deficit
|
(2,953,832 | ) | (8,057,308 | ) | ||||
Treasury stock, 150,000 shares at cost
|
(800,000 | ) | (800,000 | ) | ||||
Total stockholders' equity
|
33,090,943 | 27,967,468 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 86,151,886 | $ | 60,407,157 |
Three Months Ended September 30, |
Nine Months Ended September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
REVENUE FROM OPERATIONS
|
||||||||||||||||
Refined petroleum product sales
|
$ | 54,924,070 | $ | 87,846,757 | $ | 174,830,292 | $ | 310,938,981 | ||||||||
Tank rental revenue
|
286,892 | 282,516 | 860,676 | 847,548 | ||||||||||||
Pipeline operations
|
45,925 | 56,900 | 119,882 | 178,793 | ||||||||||||
Total revenue from operations
|
55,256,887 | 88,186,173 | 175,810,850 | 311,965,322 | ||||||||||||
COST OF OPERATIONS
|
||||||||||||||||
Cost of refined products sold
|
48,415,627 | 82,781,856 | 151,604,774 | 289,819,720 | ||||||||||||
Refinery operating expenses
|
2,953,528 | 2,496,514 | 8,420,650 | 8,092,738 | ||||||||||||
Joint Marketing Agreement profit share
|
1,435,376 | 1,094,383 | 4,812,674 | 2,334,487 | ||||||||||||
Pipeline operating expenses
|
63,099 | 50,100 | 170,582 | 139,542 | ||||||||||||
Lease operating expenses
|
(1,143 | ) | 7,041 | 20,271 | 21,037 | |||||||||||
General and administrative expenses
|
312,365 | 253,437 | 1,058,267 | 1,049,981 | ||||||||||||
Depletion, depreciation and amortization
|
414,837 | 393,871 | 1,217,005 | 1,175,643 | ||||||||||||
Accretion expense
|
52,720 | 53,731 | 158,655 | 158,264 | ||||||||||||
Total cost of operations
|
53,646,409 | 87,130,933 | 167,462,878 | 302,791,412 | ||||||||||||
Income from operations
|
1,610,478 | 1,055,240 | 8,347,972 | 9,173,910 | ||||||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||||||
Easement, interest and other income
|
724,349 | 1,813 | 856,816 | 253,745 | ||||||||||||
Interest expense
|
(382,191 | ) | (214,407 | ) | (1,322,562 | ) | (675,586 | ) | ||||||||
Loss on disposal of property and equipment
|
- | (4,400 | ) | - | (4,400 | ) | ||||||||||
Total other income (expense)
|
342,158 | (216,994 | ) | (465,746 | ) | (426,241 | ) | |||||||||
Income before income taxes
|
1,952,636 | 838,246 | 7,882,226 | 8,747,669 | ||||||||||||
Income tax expense
|
(688,403 | ) | (22,199 | ) | (2,778,750 | ) | (298,792 | ) | ||||||||
Net income
|
$ | 1,264,233 | $ | 816,047 | $ | 5,103,476 | $ | 8,448,877 | ||||||||
Income per common share
|
||||||||||||||||
Basic
|
$ | 0.12 | $ | 0.08 | $ | 0.49 | $ | 0.81 | ||||||||
Diluted
|
$ | 0.12 | $ | 0.08 | $ | 0.49 | $ | 0.81 | ||||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
10,453,802 | 10,446,218 | 10,451,168 | 10,439,684 | ||||||||||||
Diluted
|
10,453,802 | 10,446,218 | 10,451,168 | 10,439,684 |
Nine Months Ended September 30,
|
||||||||
2015
|
2014
|
|||||||
OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 5,103,476 | $ | 8,448,877 | ||||
Adjustments to reconcile net income to net cash
|
||||||||
provided by operating activities:
|
||||||||
Depletion, depreciation and amortization
|
1,217,005 | 1,175,643 | ||||||
Unrealized loss on derivatives
|
362,750 | 26,150 | ||||||
Deferred taxes
|
2,479,823 | - | ||||||
Amortization of debt issue costs
|
517,652 | 25,350 | ||||||
Accretion expense
|
158,655 | 158,264 | ||||||
Common stock issued for services
|
19,999 | 75,001 | ||||||
Loss on disposal of assets
|
- | 4,400 | ||||||
Changes in operating assets and liabilities
|
||||||||
Accounts receivable
|
506,784 | 2,058,624 | ||||||
Prepaid expenses and other current assets
|
(274,435 | ) | 152,655 | |||||
Deposits and other assets
|
(1,711,073 | ) | (490,838 | ) | ||||
Inventory
|
(2,420,176 | ) | (2,879,729 | ) | ||||
Accounts payable, accrued expenses and other liabilities
|
2,916,973 | (5,144 | ) | |||||
Accounts payable, related party
|
(1,174,168 | ) | (1,857,964 | ) | ||||
Net cash provided by operating activities
|
7,703,265 | 6,891,289 | ||||||
INVESTING ACTIVITIES
|
||||||||
Capital expenditures
|
(9,900,295 | ) | (1,145,720 | ) | ||||
Change in restricted cash for investing activities
|
(13,021,438 | ) | - | |||||
Net cash used in investing activities
|
(22,921,733 | ) | (1,145,720 | ) | ||||
FINANCING ACTIVITIES
|
||||||||
Proceeds from issuance of debt
|
25,000,000 | - | ||||||
Payments on long-term debt
|
(9,474,720 | ) | (6,103,131 | ) | ||||
Proceeds from notes payable
|
3,000,000 | 2,000,000 | ||||||
Payments on notes payable
|
- | (216,182 | ) | |||||
Change in restricted cash for financing activities
|
(3,081,686 | ) | (678,498 | ) | ||||
Net cash provided by (used in) financing activities
|
15,443,594 | (4,997,811 | ) | |||||
Net increase in cash and cash equivalents
|
225,126 | 747,758 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1,293,233 | 434,717 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 1,518,359 | $ | 1,182,475 | ||||
Supplemental Information:
|
||||||||
Non-cash operating activities
|
||||||||
Surety bond funded by seller of pipeline interest
|
$ | - | $ | 850,000 | ||||
Non-cash investing and financing activities:
|
||||||||
New asset retirement obligations
|
$ | - | $ | 300,980 | ||||
Financing of capital expenditures via capital lease
|
$ | - | $ | 536,635 | ||||
Interest paid
|
$ | 959,665 | $ | 1,211,773 | ||||
Income taxes paid
|
$ | 139,500 | $ | 231,552 |
Three Months Ended September 30, 2015
|
Three Months Ended September 30, 2014
|
|||||||||||||||||||||||||||||||
Segment
|
Segment
|
|||||||||||||||||||||||||||||||
Refinery
|
Pipeline
|
Corporate &
|
Refinery
|
Pipeline
|
Corporate &
|
|||||||||||||||||||||||||||
Operations
|
Transportation
|
Other
|
Total
|
Operations
|
Transportation
|
Other
|
Total
|
|||||||||||||||||||||||||
Revenue from operations
|
$ | 55,210,962 | $ | 45,925 | $ | - | $ | 55,256,887 | $ | 88,129,273 | $ | 56,900 | $ | - | $ | 88,186,173 | ||||||||||||||||
Less: cost of operations(1)
|
(51,444,705 | ) | (114,675 | ) | (236,816 | ) | (51,796,196 | ) | (85,261,533 | ) | (110,872 | ) | (274,674 | ) | (85,647,079 | ) | ||||||||||||||||
Other non-interest income(2)
|
- | 62,500 | 660,000 | 722,500 | - | - | - | - | ||||||||||||||||||||||||
Adjusted EBITDA
|
3,766,257 | (6,250 | ) | 423,184 | 4,183,191 | 2,867,740 | (53,972 | ) | (274,674 | ) | 2,539,094 | |||||||||||||||||||||
Less: JMA Profit Share(3)
|
(1,435,376 | ) | - | - | (1,435,376 | ) | (1,094,383 | ) | - | - | (1,094,383 | ) | ||||||||||||||||||||
EBITDA
|
$ | 2,330,881 | $ | (6,250 | ) | $ | 423,184 | $ | 2,747,815 | $ | 1,773,357 | $ | (53,972 | ) | $ | (274,674 | ) | $ | 1,444,711 | |||||||||||||
Depletion, depreciation and amortization
|
(414,837 | ) | (393,871 | ) | ||||||||||||||||||||||||||||
Interest expense, net
|
(380,342 | ) | (212,594 | ) | ||||||||||||||||||||||||||||
Income before income taxes
|
1,952,636 | 838,246 | ||||||||||||||||||||||||||||||
Income tax expense
|
(688,403 | ) | (22,199 | ) | ||||||||||||||||||||||||||||
Net income
|
$ | 1,264,233 | $ | 816,047 |
Nine Months Ended September 30, 2015
|
Nine Months Ended September 30, 2014
|
|||||||||||||||||||||||||||||||
Segment
|
Segment
|
|||||||||||||||||||||||||||||||
Refinery
|
Pipeline
|
Corporate &
|
Refinery
|
Pipeline
|
Corporate &
|
|||||||||||||||||||||||||||
Operations
|
Transportation
|
Other
|
Total
|
Operations
|
Transportation
|
Other
|
Total
|
|||||||||||||||||||||||||
Revenue from operations
|
$ | 175,690,968 | $ | 119,882 | $ | - | $ | 175,810,850 | $ | 311,786,529 | $ | 178,793 | $ | - | $ | 311,965,322 | ||||||||||||||||
Less: cost of operations(1)
|
(160,208,576 | ) | (296,291 | ) | (928,331 | ) | (161,433,198 | ) | (297,956,882 | ) | (355,645 | ) | (973,154 | ) | (299,285,681 | ) | ||||||||||||||||
Other non-interest income(2)
|
- | 187,500 | 660,000 | 847,500 | - | 208,333 | - | 208,333 | ||||||||||||||||||||||||
Adjusted EBITDA
|
15,482,392 | 11,091 | (268,331 | ) | 15,225,152 | 13,829,647 | 31,481 | (973,154 | ) | 12,887,974 | ||||||||||||||||||||||
Less: JMA Profit Share(3)
|
(4,812,674 | ) | - | - | (4,812,674 | ) | (2,334,487 | ) | - | - | (2,334,487 | ) | ||||||||||||||||||||
EBITDA
|
$ | 10,669,718 | $ | 11,091 | $ | (268,331 | ) | $ | 10,412,478 | $ | 11,495,160 | $ | 31,481 | $ | (973,154 | ) | $ | 10,553,487 | ||||||||||||||
Depletion, depreciation and amortization
|
(1,217,005 | ) | (1,175,643 | ) | ||||||||||||||||||||||||||||
Interest expense, net
|
(1,313,247 | ) | (630,175 | ) | ||||||||||||||||||||||||||||
Income before income taxes
|
7,882,226 | 8,747,669 | ||||||||||||||||||||||||||||||
Income tax expense
|
(2,778,750 | ) | (298,792 | ) | ||||||||||||||||||||||||||||
Net income
|
$ | 5,103,476 | $ | 8,448,877 |
(1)
|
Operation cost within the Refinery Operations and Pipeline Transportation segments includes related general, administrative, and accretion expenses. Operation cost within Corporate and Other includes general and administrative expenses associated with corporate maintenance costs, such as accounting fees, director fees, and legal expense.
|
(2)
|
Other non-interest income reflects FLNG Land II, Inc., a Delaware corporation (“FLNG”), easement revenue and recognition of a one-time gain of $660,000 related to settlement proceeds from a nearly two decades-old case involving Jack J. Grynberg and several defendants in the oil and gas industry, including Blue Dolphin Pipe Line Company (the “Grynberg Matter”). See “Part 1, Item 1. Financial Statements - Note (21) Commitments and Contingencies – FLNG Master Easement Agreement and Grynberg Settlement Agreement” of Blue Dolphin’s Form 10-Q for the quarterly period ended September 30, 2015 as filed with the SEC for further discussion related to FLNG and the Grynberg Matter.
|
(3)
|
The JMA Profit Share represents the GEL Profit Share plus the GEL Performance Fee for the period pursuant to the Joint Marketing Agreement. See “Part 1, Item 1. Financial Statements - Note (21) Commitments and Contingencies” and “Part 1, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Relationship with Genesis” of Blue Dolphin’s Form 10-Q for the quarterly period ended September 30, 2015 as filed with the SEC for further discussion related to the Joint Marketing Agreement.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Total refined petroleum product sales
|
$ | 54,924,070 | $ | 87,846,757 | $ | 174,830,292 | $ | 310,938,981 | ||||||||
Less: Cost of refined petroleum products sold
|
(48,415,627 | ) | (82,781,856 | ) | (151,604,774 | ) | (289,819,720 | ) | ||||||||
Less: Refinery operating expenses
|
(2,953,528 | ) | (2,496,514 | ) | (8,420,650 | ) | (8,092,738 | ) | ||||||||
Refinery operating income before JMA Profit Share
|
3,554,915 | 2,568,387 | 14,804,868 | 13,026,523 | ||||||||||||
Less: JMA Profit Share
|
(1,435,376 | ) | (1,094,383 | ) | (4,812,674 | ) | (2,334,487 | ) | ||||||||
Refinery operating income
|
$ | 2,119,539 | $ | 1,474,004 | $ | 9,992,194 | $ | 10,692,036 | ||||||||
Total refined petroleum product sales (bbls)
|
1,035,275 | 823,399 | 2,958,865 | 2,818,270 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Days
|
87 | 78 | 257 | 252 | ||||||||||||
Downtime
|
5 | 14 | 16 | 21 | ||||||||||||
Total refinery throughput
|
||||||||||||||||
bbls
|
1,109,411 | 849,402 | 3,086,749 | 2,909,669 | ||||||||||||
bpd
|
12,752 | 10,890 | 12,011 | 11,546 | ||||||||||||
Total refinery production
|
||||||||||||||||
bbls
|
1,084,246 | 831,771 | 3,024,579 | 2,855,054 | ||||||||||||
bpd
|
12,463 | 10,664 | 11,769 | 11,330 | ||||||||||||
Capacity utilization rate
|
||||||||||||||||
refinery throughput
|
85.0 | % | 72.6 | % | 80.1 | % | 77.0 | % | ||||||||
refinery production
|
83.1 | % | 71.1 | % | 78.5 | % | 75.5 | % |
Note:
|
The difference between total refinery throughput (volume processed as input) and total refinery production (volume processed as output) represents refinery fuel and energy use.
|