UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 23, 2002 (July 9, 2002)
BLUE DOLPHIN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Delaware 0-15905 73-1268729
(State or other jurisdiction of Commission File Number: (I.R.S. Employer
incorporation or organization) Identification No.)
801 Travis, Suite 2100, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 227-7660
(Registrant's telephone number, including area code)
15
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 9, 2002, Blue Dolphin Energy Company (the "Company") issued a press
release announcing the sale by American Resources Offshore, Inc., a wholly owned
subsidiary of the Company ("American Resources"), of its working interest in the
South Timbalier Block 148 property to Newfield Exploration Company ("Newfield"),
the operator of the field. Pursuant to the terms of the Purchase and Sale
Agreement, American Resources received $2.3 million for its working interest in
the South Timbalier Block 148 property.
As of December 31, 2001, the Company recorded 1,354 Mmcfe of proved reserves
attributable to the South Timbalier Block 148 property. These proved reserves
accounted for approximately 36% of the Company's total net proved reserves on a
Mmcfe basis and 37% of the discounted present value of estimated future net
revenues from proved reserves. Production from this field accounted for 19% of
the Company's oil and gas sales revenues and 16% of the Company's total revenues
for the year ended December 31, 2001. Production from this field accounted for
21% of the Company's oil and gas sales revenues and 13% of the Company's total
revenues for the three months ended March 31, 2002.
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
The Pro Forma Consolidated Balance Sheet at March 31, 2002, Pro Forma
Consolidated Statement of Operations for the year ended December 31, 2001 and
Pro Forma Consolidated Statement of Operations for the three months ended March
31, 2002 (collectively the "Financial Statements") are presented assuming that
the sale of the Company's interest in the South Timbalier Block 148 property
occurred as of the date of the Pro Forma Balance Sheet and at the beginning of
the period for each respective Statement of Operations presented. The Financial
Statements have been prepared based on the historical financial statements as of
the same date or for the same period indicated.
Index to Pro Forma Financial Statements: Page
Pro Forma Consolidated Balance Sheet, at March 31, 2002...................... 3
Pro Forma Consolidated Statement of Operations, for the year
ended December 31, 2001................................................... 5
Pro Forma Consolidated Statement of Operations, for the three
months ended March 31, 2002............................................... 7
2
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
March 31, 2002
Adjustments
Assets Unaudited Debit Credit Pro Forma
------ ------------ ------------ ------------ ------------
Current assets:
Cash and cash equivalents $ 2,345,880 2,300,000 4,645,880
Trade accounts receivable 1,060,318 1,060,318
Prepaid expenses and other assets 278,111 278,111
------------ ------------
Total current assets 3,684,309 5,984,309
------------ ------------
Property and equipment, at cost:
Oil and gas properties (full-cost method) 27,126,133 1,966,784 25,159,349
Onshore seperation and handling facilities 1,664,128 1,664,128
Land 860,275 860,275
Pipelines 3,580,910 3,580,910
Other property and equipment 272,091 272,091
------------ ------------
33,503,537 31,536,753
Less accumulated depletion, depreciation
and amortization 27,117,808 1,030,221 26,087,587
------------ ------------
6,385,729 5,449,166
Deferred federal income tax 244,444 244,444
Other assets 463,189 463,189
------------ ------------
Total Assets $ 10,777,671 12,141,108
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 818,555 818,555
Accrued expenses and other liabilities 4,983,527 4,983,527
------------ ------------
Total current liabilities 5,802,082 5,802,082
Note payable 750,000 750,000
Common Stock 63,720 63,720
Additional paid-in capital 26,107,139 26,107,139
Accumulated deficit (21,945,270) 1,363,437 (20,581,833)
------------ ------------
Total Liabilities and
Stockholders' Equity $ 10,777,671 12,141,108
============ ============
3
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
March 31, 2002
To reflect the recording of the sale of the Company's interest in the South
Timbalier Block 148 property effective as of March 31, 2002.
4
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
Year ended December 31, 2001
Adjustments
Audited Debit Credit Pro Forma
----------- ----------- ----------- -----------
Revenue from operations:
Oil and gas sales $ 4,694,202 886,954(1) 3,807,248
Pipeline operations 991,823 991,823
----------- -----------
Revenue from operations 5,686,025 4,799,071
----------- -----------
Cost of operations:
Lease operating expenses 1,155,549 157,212(1) 998,337
Pipeline operating expenses 517,054 517,054
Impairment of assets 2,940,464 2,940,464
Depletion, depreciation and amortization 1,817,770 252,713(1) 1,565,057
General and administrative expenses 2,845,459 2,845,459
----------- -----------
Cost of operations 9,276,296 8,866,371
----------- -----------
Loss from operations (3,590,271) (4,067,300)
Other income (expense):
Interest and other expense (243,591) (243,591)
Gain on sale of assets 1,417,626 524,824(2) 1,942,450
Interest and other income 116,417 116,417
Equity in losses of affiliates (245,201) (245,201)
----------- -----------
Loss before minority interest (2,545,020) (2,497,225)
Minority interest (104,122) 5,574(1) (98,548)
----------- -----------
Net loss $(2,649,142) (2,595,773)
=========== ===========
Loss per share
Basic and Diluted $ (0.44) (0.43)
=========== ===========
Weighted average number of common shares 6,004,019 6,004,019
=========== ===========
5
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
Year ended December 31, 2001
1. To record reductions in revenues, lease operating expenses, depletion,
depreciation and amortization and minority interest deduction as a result
of the sale of the Company's interest in the South Timbalier Block 148
property effective as of January 1, 2001.
2. To record the gain from the sale of the Company's interest in the South
Timbalier Block 148 property effective as of January 1, 2001.
6
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
Three Months ended March 31, 2002
Adjustments
Unaudited Debit Credit Pro Forma
----------- ----------- ----------- -----------
Revenue from operations:
Oil and gas sales $ 578,269 121,654(1) 456,615
Pipeline operations 329,297 329,297
----------- -----------
Revenue from operations 907,566 785,912
----------- -----------
Cost of operations:
Lease operating expenses 217,647 37,643(1) 180,004
Pipeline operating expenses 144,716 144,716
Depletion, depreciation and amortization 289,567 47,376(1) 242,191
Impairment of assets 339,984 339,984
General and administrative expenses 584,615 584,615
----------- -----------
Cost of operations 1,576,529 1,491,509
----------- -----------
Loss from operations (668,963) (705,598)
Other income (expense):
Interest and other expense (15,792) (15,792)
Gain on sale of assets -- 1,363,437(2) 1,363,437
Bad debt expense (197,500) (197,500)
Interest and other income 14,590 14,590
----------- -----------
Income/(loss) before minority interest (867,665) 459,137
Minority interest (55,746) 18,634(1) (37,112)
----------- -----------
Net income/(loss) $ (923,411) 422,025
=========== ===========
Income/(loss) per common share-basic: $ (0.15) 0.07
=========== ===========
Weighted average number of common shares 6,213,324 6,213,324
=========== ===========
7
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
Three Months ended March 31, 2002
1. To record reductions in revenues, lease operating expenses, depletion,
depreciation and amortization and minority interest deduction as a result
of the sale of the Company's interest in the South Timbalier Block 148
property effective as of January 1, 2002.
2. To record the gain from the sale of the Company's interest in the South
Timbalier Block 148 property effective as of January 1, 2002.
8
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
(c) Exhibits
10.1 Purchase and Sale Agreement between Blue Dolphin Energy Company and
Newfield Exploration Company
99.1 Press Release July 9, 2002
9
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BLUE DOLPHIN ENERGY COMPANY
Date: July 23, 2002 /s/ Michael J. Jacobson
-------------------------------------
Michael J. Jacobson
President and Chief Executive Officer
/s/ G. Brian Lloyd
-------------------------------------
G. Brian Lloyd
Vice President, Treasurer
10