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):

August 15, 2023

Blue Dolphin Energy Company
(Exact name of registrant as specified in its charter)
Delaware	0-15905	73-1268729
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(State or Other Jurisdiction<br><br>of Incorporation)	(Commission File Number)	(IRS Employer<br><br>Identification No.)

801 Travis Street, Suite 2100

Houston, TX 77002

(Address of principal executive office and zip code)

(713) 568-4725

(Registrant’s telephone number, including area code)

(Not Applicable)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BDCO	OTCQX

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

The information in this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liabilities of such section, and is not deemed incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 2.02 Results of Operations and Financial Condition.

On August 15, 2023 Blue Dolphin Energy Company, a Delaware corporation (“Blue Dolphin”), issued a press release reporting its financial results for the three-month and six-month periods ended June 30, 2023 and its financial condition as of June 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	Blue Dolphin Energy Company Press Release Issued August 15, 2023.
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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 15, 2023

Blue Dolphin Energy Company
/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)
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Exhibit Index

99.1	Blue Dolphin Energy Company Press Release Issued August 15, 2023.
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bdco_ex991.htm EXHIBIT 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE

BLUE DOLPHIN ANNOUNCES SECOND QUARTER 2023 RESULTS

·	Reported gross profit of $1.9 million and $22.4 million for the three and six months ended June 30, 2023, respectively.
·	Reported net loss of $1.6 million, or $0.10 per share, and net income of $15.2 million, or income of $1.02 per share, for the three and six months ended June 30, 2023.
·	Further strengthening of the balance sheet, reducing long-term debt, net and associated interest payable by $2.7 million, or 4.6%, as of June 30, 2023 compared to December 31, 2022.
·	Continued safe operation of the Nixon refinery under extreme, heat-related weather conditions.

Houston, August 15, 2023 / Issuer Direct / -- Blue Dolphin Energy Company (“Blue Dolphin”) (OTCQX:BDCO), an independent refiner and marketer of petroleum products in the Eagle Ford Shale region, announced its financial results for the second quarter of 2023.

For the three months ended June 30, 2023, gross profit totaled $1.9 million compared to gross profit of $16.8 million for the three months ended June 30, 2022. Blue Dolphin reported a loss of $1.6 million, or a loss of $0.10 per share for the three months ended June 30, 2023 compared to net income of $13.4 million, or income of $0.97 per share, for the same period a year earlier. The $15.0 million, or $1.07 per share, decrease in net income between the periods was the result of: (i) significantly weaker refining margins, (ii) slightly lower refinery throughput, production, and sales volumes, and (iii) a buildup of inventory due to a planned turnaround, cooling equipment fabrication delays, and unsafe weather conditions.

For the six months ended June 30, 2023, gross profit totaled $22.4 million compared to gross profit of $23.4 million for the six months ended June 20, 2022. Net income totaled $15.2 million, or income of $1.02 per share for the same six month period in 2023 compared to net income of $16.9 million, or income of $1.27 per share, for the same period a year earlier. The $1.7 million, or $0.25 per share, decrease in net income between the periods was the result of significantly weaker refining margins, slightly lower refinery throughput, production, and sales volumes, and a buildup of inventory in Q2 2023.

“Although second quarter 2023 results were impacted by considerably lower refining margins and a challenging operating environment, our first half 2023 performance remained strong,” said Jonathan P. Carroll, Chief Executive Officer of Blue Dolphin Energy Company. “So far in the third quarter 2023, refining margins have reversed course, rebounding higher and setting the stage for what we believe will be a brighter current quarter.”

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Results of Operations

	Three Months Ended June 30,						Six Months Ended June 30,

| | **** 2023 | | | 2022 **** | | | 2023 | | | 2022 | | |

| Refinery operations | $ | 67,267 | | $ | 135,208 | | $ | 181,907 | | $ | 244,965 | |

| Tolling and terminaling | | 1,611 | | | 914 | | | 3,632 | | | 1,840 | |

| Total revenue from operations | | 68,878 | | | 136,122 | | | 185,539 | | | 246,805 | | | Total cost of goods sold | | (66,988 | ) | | (119,309 | ) | | (163,145 | ) | | (223,386 | ) | | Gross profit | | 1,890 | | | 16,813 | | | 22,394 | | | 23,419 | | | Total cost of operations | | (1,804 | ) | | (1,620 | ) | | (3,979 | ) | | (3,115 | ) | | Income from operations | | 86 | | | 15,193 | | | 18,415 | | | 20,304 | | | Total other expense | | (1,619 | ) | | (1,668 | ) | | (2,949 | ) | | (3,260 | ) | | Income (loss) before income taxes | | (1,533 | ) | | 13,525 | | | 15,466 | | | 17,044 | |

| Income tax expense | | (27 | ) | $ | (115 | ) | | (273 | ) | $ | (156 | ) |

| Net income (loss) | $ | (1,560 | ) | $ | 13,410 | | $ | 15,193 | | $ | 16,888 | | | Income (loss) per common share | | | | | | | | | | | | |

| Basic | $ | (0.10 | ) | $ | 0.97 | | $ | 1.02 | | $ | 1.27 | |

| Diluted | $ | (0.10 | ) | $ | 0.97 | | $ | 1.02 | | $ | 1.27 | |

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Reconciliation of Segment Gross Profit

	Three Months Ended June 30,

| | 2023 | | | 2022 | | | 2023 | | | 2022 | | | 2023 | | | 2022 | | | 2023 | | | 2022 | | |

| | (in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | Revenue | $ | 67,267 | | $ | 135,208 | | $ | 1,611 | | $ | 914 | | $ | - | | $ | - | | $ | 68,878 | | $ | 136,122 | |

| Intercompany processing fees | | (595 | ) | | (675 | ) | | 595 | | | 675 | | | - | | | - | | | - | | | - | |

| Cost of goods sold | | (66,532 | ) | | (118,736 | ) | | (456 | ) | | (573 | ) | | - | | | - | | | (66,988 | ) | | (119,309 | ) |

| Gross profit | | 140 | | | 15,797 | | | 1,750 | | | 1,016 | | | - | | | - | | | 1,890 | | | 16,813 | |

| Other operating and general and administrative expenses^(1)^ | | (341 | ) | | (313 | ) | | (156 | ) | | (53 | ) | | (610 | ) | | (555 | ) | | (1,107 | ) | | (921 | ) |

| Depreciation and amortization | | (304 | ) | | (306 | ) | | (342 | ) | | (342 | ) | | (51 | ) | | (51 | ) | | (697 | ) | | (699 | ) |

| Interest and other non-operating expenses, net | | (932 | ) | | (703 | ) | | (490 | ) | | (409 | ) | | (197 | ) | | (556 | ) | | (1,619 | ) | | (1,668 | ) |

| Income (loss) before income taxes | | (1,437 | ) | | 14,475 | | | 762 | | | 212 | | | (858 | ) | | (1,162 | ) | | (1,533 | ) | | 13,525 | |

| Income tax expense | | - | | | - | | | - | | | - | | | (43 | ) | | (115 | ) | | (27 | ) | | (115 | ) |

| Net income (loss) | $ | (1,437 | ) | $ | 14,475 | | $ | 762 | | $ | 212 | | $ | (901 | ) | $ | (1,277 | ) | $ | (1,560 | ) | $ | 13,410 | |

	Six Months Ended June 30,

| | 2023 | | | 2022 | | | | 2023 | | | 2022 | | | 2023 | | | 2022 | | | 2023 | | | 2022 | | |

| | (in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | Revenue | $ | 181,907 | | $ | 244,965 | | | $ | 3,632 | | $ | 1,840 | | $ | - | | $ | - | | $ | 185,539 | | $ | 246,805 | |

| Intercompany processing fees | | (1,171 | ) | | (1,328 | ) | | | 1,171 | | | 1,328 | | | - | | | - | | | - | | | - | |

| Cost of goods sold | | (162,332 | ) | | (222,194 | ) | | | (813 | ) | | (1,192 | ) | | - | | | - | | | (163,145 | ) | | (223,386 | ) |

| Gross profit | | 18,404 | | | 21,443 | | | | 3,990 | | | 1,976 | | | - | | | - | | | 22,394 | | | 23,419 | |

| Other operating and general and administrative expenses^(1)^ | | (819 | ) | | (595 | ) | | | (626 | ) | | (123 | ) | | (1,139 | ) | | (997 | ) | | (2,584 | ) | | (1,715 | ) |

| Depreciation and amortization | | (608 | ) | | (613 | ) | | | (684 | ) | | (684 | ) | | (103 | ) | | (103 | ) | | (1,395 | ) | | (1,400 | ) |

| Interest and other non-operating expenses, net | | (1,609 | ) | | (1,420 | ) | | | (960 | ) | | (827 | ) | | (380 | ) | | (1,013 | ) | | (2,949 | ) | | (3,260 | ) |

| Income (loss) before income taxes | | 15,368 | | | 18,815 | | | | 1,720 | | | 342 | | | (1,622 | ) | | (2,113 | ) | | 15,466 | | | 17,044 | |

| Income tax expense | | - | | | - | | | | - | | | - | | | (294 | ) | | (156 | ) | | (273 | ) | | (156 | ) |

| Net income (loss) | $ | 15,368 | | $ | 18,815 | | | $ | 1,720 | | $ | 342 | | $ | (1,916 | ) | $ | (2,269 | ) | $ | 15,193 | | $ | 16,888 | |

^(1)^General and administrative expenses within refinery operations includes the LEH operating fee, related party, other operating expenses, and accretion of asset retirement obligations.

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Financial Position, Liquidity, and Working Capital

As of June 30, 2023, Blue Dolphin had $0.6 million of cash and cash equivalents compared to $0.5 million at December 31, 2022. Blue Dolphin had $16.5 million and $45.2 million in working capital deficits at June 30, 2023 and December 31, 2022, respectively, representing a $28.7 million improvement. Excluding the current portion of long-term debt, Blue Dolphin had $20.7 million and $2.1 million in working capital at June 30, 2023 and December 31, 2022, respectively, representing an improvement of $18.6 million. The significant improvement in working capital over the past six months was due to decreased long-term debt, current portion and an improvement in accounts payable.

Mr. Carroll continued, “During the second quarter of 2023, we entered into forbearance agreements with two additional lenders. As a result of lender payments, Blue Dolphin decreased net debt and associated accrued interest by $2.7 million during the first half of 2023.”

			December 31,

| | | | 2022 | | |

| Cash and cash equivalents | 562 | | $ | 520 | |

| Accounts receivable | 1,558 | | | 1,148 | |

| Inventory | 31,090 | | | 19,844 | |

| Other current assets | 5,067 | | | 3,576 | |

| Total current assets | 38,277 | | | 25,088 | | | Non-current assets: | | | | | |

| Total property and equipment, net | 56,246 | | | 57,436 | |

| Restricted cash, noncurrent | 1,000 | | | 1,001 | |

| Other non-current assets | 497 | | | 379 | |

| Total non-current assets | 57,743 | | | 58,816 | |

| Total assets | 96,020 | | $ | 83,904 | | | LIABILITIES AND STOCKHOLDERS' EQUITY: | | | | | |

| Long-term debt | 37,182 | | $ | 47,366 | |

| Interest payable | 5,169 | | | 10,365 | |

| Accounts payable | 1,637 | | | 2,316 | |

| Other current liabilities | 10,798 | | | 10,287 | |

| Total current liabilities | 54,786 | | | 70,334 | | | Non-current liabilities: | | | | | |

| Long-term debt | 10,652 | | | 2,322 | |

| Interest payable | 4,308 | | | - | |

| Other non-current liabilities | 493 | | | 660 | |

| Total non-current liabilities | 15,453 | | | 2,982 | | | Total liabilities | 70,239 | | | 73,316 | | | Commitments and contingencies | | | | | | | Stockholders' equity | | | | | |

| Common stock (0.01 par value, 20,000,000 shares authorized; 14,921,968 shares issued at June 30, 2023 and December 31, 2022)(1) | 149 | | | 149 | |

| Additional paid-in capital | 39,758 | | | 39,758 | |

| Accumulated deficit | (14,126 | ) | | (29,319 | ) |

| Total stockholders' equity | 25,781 | | | 10,588 | |

| Total liabilities and stockholders' equity | 96,020 | | $ | 83,904 | |

All values are in US Dollars.

^(1)^Blue Dolphin has 2,500,000 shares of preferred stock, par value $0.10 per share, authorized. At June 30, 2023 and December 31, 2022, there were no shares of preferred stock issued and outstanding.

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About Blue Dolphin

Blue Dolphin is an independent downstream energy company operating in the Gulf Coast region of the United States. Subsidiaries operate a light sweet-crude, 15,000-bpd crude distillation tower with more than 1.25 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin was formed in 1986 as a Delaware corporation and is traded on the OTCQX under the ticker symbol “BDCO”. For additional information, visit Blue Dolphin’s corporate website at http://www.blue-dolphin-energy.com.

Contact:

Jonathan P. Carroll

Chief Executive Officer and President

713-568-4725

Cautionary Statements Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995. This press release contains forward-looking statements relating to Blue Dolphin’s operations that are based on management’s current expectations, estimates and projections about the oil and gas industry. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Blue Dolphin undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

For a discussion of risk factors that could cause actual results to differ materially from those in the forward-looking statements, please see the factors set forth under the heading “Risk Factors” in Blue Dolphin’s 2022 Annual Report on Form 10-K and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements.

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