HOUSTON, TX — (Marketwired) — 11/14/14 — Blue Dolphin Energy Company (“Blue Dolphin”) (OTCQX: BDCO) announced financial results for the third quarter financial period ended September 30, 2014.
For the three months ended September 30, 2014 (the “Third Quarter 2014”), Blue Dolphin reported net income of $816,047, or an income of $0.08 per share, compared to a net loss of $2,080,737, or a loss of $0.20 per share, for the three months ended September 30, 2013 (the “Third Quarter 2013”). The $2,896,784 improvement in net income in the Third Quarter 2014 was primarily attributable to favorable refining margins and the introduction of jet fuel into the product mix. Total revenue from operations for the Third Quarter 2014 was $87,903,657 compared to total revenue from operations of $106,620,393 for the Third Quarter 2013. The nearly 18% decrease in total revenue from operations was primarily the result of Blue Dolphin–s crude oil and condensate processing facility (the “Nixon Facility”) operating 12 fewer days and having lower refined product sales in the Third Quarter 2014 compared to the Third Quarter 2013.
For the nine months ended September 30, 2014 (the “Nine Months 2014”), Blue Dolphin reported net income of $8,448,877, or an income of $0.81 per share, compared to a net loss of $7,951,078, or a loss of $0.76 per share, for the nine months ended September 30, 2013 (the “Nine Months 2013”). The $16,399,955 improvement in net income in the Nine Months 2014 was primarily attributable to favorable refining margins and the introduction of jet fuel into the product mix. Total revenue from operations for the Nine Months 2014 was $311,117,774 compared to total revenue from operations of $320,254,921 for the Nine Months 2013. The nearly 3% decrease in total revenue from operations was primarily the result of decreased total refinery throughput at the Nixon Facility in the Nine Months 2014 compared to the Nine Months 2013.
On October 30, 2014, subsequent to the end of the reporting period, FLNG Land, II, Inc., a Delaware corporation (“FLNG”) made a second payment of $250,000 to Blue Dolphin Pipe Line Company (“BDPL”), a wholly-owned subsidiary of Blue Dolphin, pursuant to a Master Easement Agreement dated December 11, 2013. Under the Master Easement Agreement, BDPL is providing FLNG with: (i) uninterrupted pedestrian and vehicular ingress and egress to and from State Highway 332, across the certain property of BDPL to certain property of FLNG (the “Access Easement”) and (ii) a pipeline easement and right of way across certain property of BDPL to certain property owned by FLNG. Such second payment of $250,000 will result in FLNG making annual payments in the amount of $500,000 to BDPL in October of each year for a minimum of five (5) years. One year after the final annual payment of $500,000 is made to BDPL, FLNG will begin paying to BDPL annual payments of $10,000 for so long as FLNG desires to use the Access Easement.
Financial Highlights:
increased $2,962,586 to $1,444,711 for the Third Quarter 2014 from a negative EBITDA of $1,517,875 for the Third Quarter 2013; total EBITDA increased $16,721,231 to $10,553,487 for the Nine Months 2014 from a negative EBITDA of $6,167,744 for the Nine Months 2013;
increased $2,896,784 to $816,047 for the Third Quarter 2014 from a net loss of $2,080,737 for the Third Quarter 2013; net income increased $16,399,955 to $8,448,877 for the Nine Months 2014 from a net loss of $7,951,078 for the Nine Months 2013; and
increased $10,773,338 to $6,212,791 for the Nine Months 2014 from a negative cash flow from operations of $4,560,547 for the Nine Months 2013.
Business Segments:
Blue Dolphin has two reportable business segments: (i) “Refinery Operations” and (ii) “Pipeline Transportation.” Business activities related to Blue Dolphin–s “Refinery Operations” business segment are conducted at the Nixon Facility. Operations at the Nixon Facility also involve the storage and terminaling of petroleum under third-party lease agreements. Business activities related to Blue Dolphin–s “Pipeline Transportation” business segment are primarily conducted in the U.S. Gulf of Mexico through pipeline assets and leasehold interests in oil and gas properties. Blue Dolphin–s “Refinery Operations” business segment represents more than 99% of total operations.
Operational Update:
The Nixon Facility, which was refurbished and began operations in February 2012, has been operating for approximately two and a half years. Key operational statistics for the Nixon Facility were as follows:
The Nixon Facility operated for a total of 78 days at 73% of operating capacity during the Third Quarter 2014 compared to a total of 90 days at 73% of operating capacity during the Third Quarter 2013. This represented 12 fewer operating days in the Third Quarter 2014 compared to the Third Quarter 2013. The Nixon Facility experienced 14 calendar days of downtime in the Third Quarter 2014 primarily related to repair of an overhead accumulator and a temporary curtailment of certain crude oil deliveries compared to two calendar days of downtime in the Third Quarter 2013 for non-routine maintenance.
The Nixon Facility operated for a total of 252 days at 77% of operating capacity during the Nine Months 2014 compared to a total of 265 days at 75% of operating capacity during the Nine Months 2013. This represented 13 fewer operating days in the Nine Months 2014 compared to the Nine Months 2013. The Nixon Facility experienced 21 calendar days of downtime in the Nine Months 2014 related to a planned maintenance turnaround and repair of an overhead accumulator compared to 8 calendar days of downtime in the Nine Months 2013 for a planned maintenance turnaround.
The “Refinery Operations” business segment generated EBITDA of $1,773,357 for the Third Quarter 2014 compared to a negative EBITDA of $1,142,267 for the Third Quarter 2013. The “Refinery Operations” business segment generated EBITDA of $11,495,160 for the Nine Months 2014 compared to a negative EBITDA of $4,765,377 for the Nine Months 2013.
Non-GAAP Financial Measures:
This press release and its attachments include EBITDA, a financial measure defined as non-GAAP by the Securities and Exchange Commission (the “SEC”). Net income (loss) is adjusted for income taxes, interest expense (or income), depletion, depreciation, and amortization. Management excludes these items so that investors may evaluate Blue Dolphin–s current operating results without regard to Blue Dolphin–s financing methods or capital structure.
Blue Dolphin–s financial measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (“GAAP”). An explanation of our non-GAAP financial measure and a reconciliation of the financial measure to the GAAP financial measure Blue Dolphin considers most comparable are presented in “Part I, Item 1. Financial Statements — Note (4) Business Segment Information” and “Part I, Item 2. Management–s Discussion of Financial Condition and Results of Operations — EBITDA” of Blue Dolphin–s quarterly report on Form 10-Q for the three and nine months ended September 30, 2014, as filed with the SEC on November 14, 2014.
Blue Dolphin Energy Company (OTCQX: BDCO) is an independent refiner and marketer of refined petroleum products in the Eagle Ford Shale. Blue Dolphin–s primary business is refinery operations at the Nixon Facility, which includes the refining of crude oil and condensate into marketable finished and intermediate products, as well as petroleum storage and terminaling. Blue Dolphin also owns and operates pipeline assets and has leasehold interests in oil and gas properties. For additional information, visit Blue Dolphin–s corporate website at .
Certain of the statements included in this press release, which express a belief, expectation or intention, as well as those regarding future financial performance or results, or which are not historical facts, are “forward-looking” statements as that term is defined in the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements are not guarantees of future performance or events and such statements involve a number of risks, uncertainties and assumptions, including but not limited to: changes in the general economic conditions; changes in the underlying demand for our products; fluctuations of crude oil inventory costs and refined petroleum products inventory prices and their effect on our refining margins; our dependence on Genesis Energy, LLC (“Genesis”) and its affiliates for continued financing, sourcing of crude oil inventory and marketing of our refined petroleum products; the early termination of our agreements with Genesis and its affiliates; our dependence on Lazarus Energy Holdings, LLC for continued financing and management of all of our subsidiaries and the operation of all of our assets, including the Nixon Facility, pursuant to the Management Agreement; our ability to generate sufficient funds from operations or obtain financing from other sources; failure to comply with certain financial covenants related to certain of our long-term indebtedness; regulatory changes that reduce the allowable sulfur content for commercially sold diesel in the United States, which will require us to incur significant capital upgrades and could have a material adverse effect on our results of operations, financial condition and cash flows; availability and cost of renewable fuels for blending and Renewable Identification Numbers to meet Renewable Fuel Standards obligations; strict laws and regulations regarding employee and business process safety to which we are subject, the compliance failure of which could have a material adverse effect on our results of operations and financial condition; potential increased indebtedness, which may reduce our financial flexibility; regulatory restrictions on greenhouse gas emissions, which could force us to incur increased capital and operating costs and could have a material adverse effect on our results of operations and financial condition; access to less than desired levels of crude oil for processing at the Nixon Facility; and the factors set forth under the heading “Risk Factors” in Part I, Item 1A of Blue Dolphin–s previously filed Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and Part II, Item 1A of Blue Dolphin–s previously filed quarterly report on Form 10-Q for the quarterly periods ended March 31, 2014 and June 30, 2014. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Blue Dolphin undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
See notes to consolidated financial statements in Blue Dolphin–s quarterly report on Form 10-Q for the three and nine months ended September 30, 2014.
See notes to consolidated financial statements in Blue Dolphin–s quarterly report on Form 10-Q for the three and nine months ended September 30, 2014.
See notes to consolidated financial statements in Blue Dolphin–s quarterly report on Form 10-Q for the three and nine months ended September 30, 2014.
Jonathan P. Carroll
Chief Executive Officer and President
713-568-4725