As filed with the Securities and Exchange Commission on June 5, 2000.
REGISTRATION NO. 333-_________
==============================================================================
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION Washington,ON JULY 6, 2005
REGISTRATION NO. 333-124908
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
Amendment
No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------------------------
BLUE DOLPHIN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 73-1268729
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
801 TRAVIS, SUITE 2100
HOUSTON, TEXAS 77002
(713) 227-7660
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
G. BRIAN LLOYD
VICE PRESIDENT, TREASURER AND SECRETARYBLUE DOLPHIN ENERGY COMPANY
801 TRAVIS, SUITE 2100
HOUSTON, TEXAS 77002
(713) 227-7660
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
------------------------------
WITH COPIES TO:---------------
Copies to:
BRYAN K. BROWN
NICK D. NICHOLAS
PORTER & HEDGES, L.L.P.
700 LOUISIANA, 35TH1000 MAIN, 36TH FLOOR
HOUSTON, TEXAS 77002TX 77002-6336
TELEPHONE: (713) 226-0600226-6000
FAX: (713) 226-6237
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the Registration Statement becomes effective.effective date of this registration statement.
If the only securities being registered on this Formform are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Formform are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Formform is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Formform is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------------
CALCULATION OF REGISTRATION FEE
=====================================================================================================================
PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
Common Stock, par value $.10 per share(1).... 4,853,942 $5.50 $26,696,681 $7,047.93
=====================================================================================================================
(1)Pursuant to Rule 457(c), the registration fee is calculated based upon the
average of the high and low sale prices for Common Stock reported by the
Nasdaq Small Cap Market on June 2, 2000.-----------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
SUBJECT TO COMPLETION, DATED JUNE 5, 2000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT OFFER THESE SECURITIES UNTIL THE REGISTRATION STATEMENT IS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.JULY 6, 2005
PROSPECTUS
BLUE DOLPHIN ENERGY COMPANY
4,853,942[BLUE DOLPHIN LOGO]
3,449,406 SHARES
OF
COMMON STOCK
------------------
TheThis prospectus covers the offer and sale by the selling stockholders
identified in this prospectus are offeringlisted under the heading "Selling Stockholders" of up to 4,853,9423,449,406 shares of our
common stock which are currently issued and outstanding.outstanding or which the selling
stockholders may acquire upon exercise of outstanding options and warrants.
The selling stockholders may offer and sell the shares of our common stock
in their discretion from time to time in privately-negotiated transactions, in underwritten offerings, or by a
combination of such methods of sale. Sales of shares of common stock may be made
at fixed prices which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at negotiated
prices or at negotiatedfixed prices. We are not offering any shares of our common stock for sale under this
prospectus and we will not receive any of the proceeds from the sale
of shares of our common stock by the selling stockholders underin this prospectus.offering. We
will bear all of the expenses incurred in connection with the registration of
these shares. The selling stockholders will pay any brokerage commissions and/or
similar charges incurred for the sale of their shares of our common stock.
Our common stock is traded on the Nasdaq Small CapSmallCap Market under the symbol
"BDCO." On June 2, 2000,July 5, 2005, the last reportedclosing sale price of our common stock was $5.50 per share.
------------------$3.05.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
CONSIDER CAREFULLY THE RISK FACTORSA HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6 IN3 OF THIS PROSPECTUS.
------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2005
- ----------
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is dated June ___, 2000.not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
TABLE OF CONTENTS
SECTION PAGE
Where You Can Find More Information..........................................3
Blue Dolphin Energy Company..................................................4
The Offering.................................................................4
Forward-Looking Statements...................................................4
Risk Factors.................................................................6
Use of Proceeds.............................................................13
Selling Stockholders........................................................14
Plan of Distribution........................................................16
Legal Matters...............................................................17
Experts.....................................................................17
2
WHERE YOU CAN FIND MORE INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3
that we filed with the SEC under the Securities Act. This prospectus, which
forms a part of the registration statement, does not contain all the information
set forth in the registration statement. You should refer to the registration
statement and its related exhibits and schedules for further information with
respect to our company and the shares offered in this prospectus. Statements
contained in this prospectus concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
that document filed as an exhibit to the registration statement or otherwise
filed with the SEC and each such statement is qualified by this reference. The
registration statement and its exhibits and schedules are on file at the offices
of the SEC and may be inspected without charge.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file, including
the registration statement, at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at l-800-SEC-0330 for
further information on the operation of the Public Reference Room. Our public
filings are also available from commercial document retrieval services and at
the Internet World Wide Web site maintained by the SEC at "http://www.sec.gov."
SEC rules allow us to include some of the information required to be in
the registration statement by incorporating that information by reference to
other documents we file with them. That means we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act of 1934 until all of the securities covered by this
prospectus are sold:
o Annual Report on Form 10-K for the year ended December 31, 1999;
o Quarterly Report on Form 10-Q for the period ended March 31, 2000;
o Current Reports on Form 8-K/A-3 filed on June 5, 2000, Form 8-K/A
filed on February 15, 2000, Form 8-K/A-2 filed on February 16, 2000
and Form 8-K filed on December
PAGE
PROSPECTUS SUMMARY............................................... 1
RISK FACTORS..................................................... 3
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS............ 9
WHERE YOU CAN FIND MORE INFORMATION.............................. 9
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.................. 10
USE OF PROCEEDS.................................................. 10
SELLING STOCKHOLDERS............................................. 11
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS............. 13
PLAN OF DISTRIBUTION............................................. 15
LEGAL MATTERS.................................................... 17
EXPERTS.......................................................... 17
1999;
o Definitive Proxy Statement on Schedule 14A dated April 20, 2000; and
o The description of our common stock contained in the Form 8-K, filed
June 5, 2000, including any amendments or reports filed to update
description.
You may request a copy of these filings, which we will provide to you at
no cost, by writing or telephoning us at the following address:
Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, Texas 77002
(713) 227-7660
Attention: G. Brian Lloyd, Secretary
You should rely only on the information incorporated by reference or contained in this prospectus. We
have not authorized any other personanyone to provide you with different information. If anyone provides you with different or
inconsistent information you should not rely on it.that is different.
The selling stockholders are not making an offeroffering to sell these securitiesand seeking offers to buy shares
of our common stock only in any jurisdictionjurisdictions where the
offer or sale is notoffers and sales are permitted.
You should assume that theThe information appearingcontained in this prospectus is accurate only as of the date on the front cover of
this prospectus, only. Our business, financial condition, resultsregardless of operationsthe time of delivery of this prospectus or of any
sale of our common stock.
PROSPECTUS SUMMARY
This summary highlights selected information described more fully
elsewhere or incorporated by reference in this prospectus. This summary may not
contain all the information that is important to you. We urge you to read the
entire prospectus, including the documents incorporated by reference, before
making an investment decision with respect to our common stock. References in
this prospectus to the terms "we," "us," "our" or other similar terms mean Blue
Dolphin Energy Company and prospects may have changed since that date.
3
BLUE DOLPHIN ENERGYits subsidiaries.
THE COMPANY
We conduct our business activitiesBlue Dolphin Energy Company is engaged in three primary business segments:
otwo lines of business: (i)
pipeline operationstransportation services to producer/shippers, and activities,
o(ii) oil and gas
exploration and production, and
o development of high potential midstream projects.
Our primary geographical focus areas are the western and central coasts of
the Gulf of Mexico.production. We operate natural gas and condensate pipeline gathering facilities,
including a 50% undivided interest in the Blue Dolphin Pipeline System and a 50%
undivided interest in the Black Marlin Pipeline System. We also hold a 50%
undivided interest in the currently inactive Omega Pipeline.
Our oil and gas exploration and production activities include the
exploration, acquisition, development, operation and, when appropriate,
disposition of oil and gas properties. Our oil and gas assets are held, and our
operations are conducted by Blue Dolphin Exploration Company and American
Resources Offshore, Inc., a publicly-held company in which we own approximately
75% of the outstanding common stock. In addition to conducting traditional oil
and gas production operations for ourselves, we operate and maintain oil and gas
production facilities for third party producers who also utilize pipeline
systems for gathering and transportation of their production.
Our midstream, development-stage projects include our investment in and
development of an offshore crude oil terminal through Petroport, Inc. and
acquisition of the Avoca gas storage assets through New Avoca Gas Storage LLC, a
25% owned and managed subsidiary. Petroport holds proprietary technology,
represented by certain patents issued and or pending, associated with the
development and operation of a deepwater crude oil and products port and
offshore storage facility. The Petroport deepwater terminal will receive crude
oil and refined products offshore with deliveries to shore by pipeline. Onshore
the Petroport pipeline will connect with an existing onshore storage and
distribution network, accessing Texas Gulf Coast and Mid-Continent refining
centers. New Avoca is currently conducting a feasibility study to determine the
technical and commercial viability of completing the construction of the Avoca
Natural Gas Storage facility.
We are a holding company that conducts substantially all ofconduct our operations through our subsidiaries.subsidiaries
and our assets are located offshore and onshore in the Texas Gulf coast area. In
addition to satisfying our liquidity and capital needs, our focus in 2005 is to
increase utilization of our pipelines, pursue strategic acquisitions and
continue cost management. Our long-term goal is to create greater value for our
stockholders through the addition of assets. Although we continue to have
interests in oil and gas properties and will consider acquiring interests in
producing oil and gas properties, as a result cost savings measures implemented
in 2004, we are primarily focused on our pipeline business.
In September 2004, we completed a private offering with certain accredited
investors and certain of our directors of promissory notes in an aggregate
principal amount of $750,000 (the "Promissory Notes") and 2,800,000 warrants
(the "Warrants") to purchase shares of our common stock. We were incorporatedalso issued a total
of 300,000 Warrants to the two directors nominated by the investors in 1986 as the
resultprivate offering and one of our existing directors.
In April 2005, we entered into Note Modification Agreements and Waiver
Agreements with holders of $450,000 aggregate principal amount of Promissory
Notes. Pursuant to the terms of the corporate combinationNote Modification Agreements and Waiver
Agreements, we agreed with each holder, among other things, to:
- amend the terms of ZIM Energy,their Promissory Note to (i) extend the maturity
date from September 8, 2005 to June 30, 2006 and (ii) defer the
payment of all interest on the Promissory Note until maturity; and
- waive their compliance with the lock-up provisions of the Purchase
Agreement and allow the sale of shares of common stock received upon
exercise of the Warrants.
Although we were able to implement certain cost savings measures and
restructure the terms of some of our indebtedness in 2004 and 2005, we have
limited revenues and have not been able to generate sufficient cash from
operations to cover operating and general and administrative expenses. Because
of our recurring losses and negative cash flows from operations, our independent
registered public accounting firm included a Texas corporation founded"going concern" exception in 1983,their
audit reports on our audited financial statements for the years ended December
31, 2004 and Petra Resources, Inc., an Oklahoma corporation formed2003. The "going concern" qualification signifies that substantial
doubt exists about our ability to continue our business. See "Risk Factors - The
current poor performance of our existing assets combined with the capital
requirements inherent in 1980.our business raise substantial doubt about our ability
to continue as a going concern."
Our principal executive offices areoffice is located at 801 Travis, Suite 2100,
Houston, Texas, 77002, and our phonetelephone number is (713) 227-7660.
THE OFFERING
Common stock offered by the selling stockholders......... up to 3,449,406 shares
Nasdaq SmallCap Market symbol.............................................. BDCO
Use of proceeds....................................... We will not receive any
of the proceeds from the
sale of shares by the
selling stockholders.
Relationships and Transactions........................ There are material
with Selling Stockholders relationships between us
and certain of the
selling stockholders.
Additionally, we and
certain of the selling
stockholders have been
parties to certain
transactions. See
"Certain Relationships
and Related Party
Transactions" beginning
on page 13 of this
prospectus for more
information on these
relationships and
transactions.
Risk Factors.......................................... Investing in our common
stock involves a high
degree of risk. See "Risk
Factors" beginning on
page 3 of this
prospectus.
2
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider each of the following risks and all of the information
set forth or incorporated by reference in this prospectus before deciding to
invest in our common stock. If any of the proceeds from sale of shares by the selling
stockholders.
FORWARD-LOOKING STATEMENTS
The statements made in this prospectus or in the documents we have
incorporated by reference that are not statements of historical fact, are
"forward looking statements" within the meaning of Section 27A of the Securities
Act of 1933following risks and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate" or "believe," or similar terminology.
The forward-looking statements include discussions about business strategy
and expectations concerning market position, future operations, margins,
profitability, liquidity and capital resources, and statements concerning the
integrationuncertainties
develop into 4
actual events, our business, of the operations we have acquired. Although we believe that the
expectations in such statements are reasonable, we can not give any assurance
that those expectations will be correct.
We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus.
Our operations are subject to several uncertainties, risks and other
influences, many of which are outside our control and any of which could
materially affect ourfinancial condition or results of
operations and the trading price of our common stock could be materially
adversely affected and you may lose all or part of your investment.
THE CURRENT POOR PERFORMANCE OF OUR EXISTING ASSETS COMBINED WITH THE CAPITAL
REQUIREMENTS INHERENT IN OUR BUSINESS RAISE SUBSTANTIAL DOUBT ABOUT OUR ABILITY
TO CONTINUE AS A GOING CONCERN.
Although we were able to implement certain cost savings measures and
restructure the terms of some of our indebtedness, we were not able to generate
sufficient cash from operations to cover operating and general and
administrative expenses in each of the three most recently completed fiscal
years. Furthermore, our financial condition has been significantly and
negatively affected by the poor performance of our businesses and our
significant indebtedness. For the three months ended March 31, 2005, we
generated revenues of approximately $.4 million while operating costs and
general and administrative costs totaled approximately $.7 million. For the year
ended December 31, 2004, we generated total revenues of approximately $1.4
million while operating costs and general administrative costs, excluding
certain non-cash compensation expense, totaled approximately $2.8 million.
Because of our recurring losses and negative cash flows from operations, our
independent registered public accounting firm included a "going concern"
exception in their audit reports on our audited financial statements for the
years ended December 31, 2004 and 2003. This raises substantial doubt about our
ability to continue our business as a going concern. We currently believe that
we have sufficient resources to satisfy our working capital and capital
expenditure requirements until March 31, 2006. Our long-term viability as a
going concern is dependent upon the following factors:
- our ability to raise capital to meet current commitments and
obligations, and fund the continuation of our operations; and
- our ability to ultimately proveachieve profitability and cash flows from
operations in amounts that will sustain our current operations.
Historically, we have primarily raised capital and financed our operations
through the statementssale of assets and from the issuance of debt and equity securities
to individuals or affiliates. There can be no assurance that we makewill become
profitable, that our cash flows from operations will be sufficient to allow us
to meet our commitments and obligations as they become due and fund the
continuation of our business, or that we will be able to raise capital or sell
assets on commercially acceptable terms. If we are not able to meet our
commitments and obligations as they become due, we may have to seek protection
under U.S. bankruptcy laws.
WE HAVE HAD ONLY ONE PROFITABLE YEAR SINCE 1997.
We have a history of losses with only one profitable year since 1997,
which was 2002 when we had net income of approximately $482,000. As of March 31,
2005 and December 31, 2004, we had an accumulated deficit of approximately $24.0
million and $23.8 million, respectively. We do not expect to be inaccurate.
Importantprofitable in
2005. Our ability to achieve profitability in the future will depend on many
factors, but primarily on the level of use of our pipeline systems. The level of
use of our pipeline systems is beyond our control.
WE ARE PRIMARILY DEPENDENT ON REVENUES FROM OUR PIPELINE SYSTEMS.
As a result of our sale of substantially all of our proved oil and gas
reserves in 2002 and the limited remaining reserves that could cause actual resultswere added in 2003, our
future revenues are primarily dependent on the level of use of our pipeline
systems. The oil and gas we transport is owned by third parties. As a result,
the volume of oil and gas involved in these activities depends on the actions of
those third parties, and is beyond our control. Further, the following factors,
most of which are beyond our control, may unfavorably impact our ability to
differ materially
frommaintain or increase current throughput or to renegotiate existing contracts on
our expectations are discussed underpipeline systems:
- service area competition;
- expiration and/or turn back of significant contracts;
3
- changes in regulation and action of regulatory bodies;
- future weather conditions;
- price competition;
- drilling activity and availability of oil and gas supplies;
- adverse general economic conditions; and
- unfavorable movements in commodity prices.
WE FACE STRONG COMPETITION FROM LARGER COMPANIES THAT MAY NEGATIVELY AFFECT OUR
ABILITY TO CARRY ON OPERATIONS.
We operate in a highly competitive industry. Our competitors include
affiliates of major interstate and intrastate pipelines, national and local
gas gatherers, major integrated oil companies, and substantial independent
energy companies, many of which possess greater financial and other resources
than we do. We cannot be sure that we will obtain, or be able to access, the
heading "Risk Factors,"financial and elsewhereother resources to compete successfully. Additionally, we often
establish a higher standard for the minimum projected rate of return on an
investment than some of our competitors since we cannot afford to absorb certain
risks. We believe this puts us at a competitive disadvantage in this prospectusacquiring
pipelines and in documents incorporated in this prospectus by
reference.
5
RISK FACTORS
YOU SHOULD CONSIDER THE FOLLOWING RISK FACTORS AND OTHER INFORMATION IN
THIS PROSPECTUS BEFORE DECIDING TO BUY ANY SHARES OF COMMON STOCK.oil and gas properties.
OIL AND GAS PRICES ARE VOLATILE AND A SUBSTANTIAL AND EXTENDED DECLINE IN THE
PRICE OF OIL AND GAS WOULD HAVE A MATERIAL ADVERSE EFFECT ON US.
The tightening of natural gas supply and demand fundamentals has resulted
in higher, but extremely volatile natural gas prices, and the volatility in
natural gas prices is expected to continue. Our revenues, profitability,
operating cash flow and futureour potential for growth and the carrying value of
our oil and gas properties are partiallylargely dependent on
prevailing oil and gas prices. Prices for oil and gas are subject to large
fluctuations in response to relatively minor changes in the supply and demand
for oil and gas, uncertainties within the market and a variety of other factors
beyond our control. These factors include:
o- weather conditions in the United States,
oStates;
- the condition of the United States economy,
oeconomy;
- the actionactions of the Organization of Petroleum Exporting Countries,
oCountries;
- governmental regulation,
oregulation;
- political stability in the Middle East, South America and elsewhere,
oelsewhere;
- the foreign supply of oil and gas,
ogas;
- the price of foreign imports,imports; and
o- the availability of alternate fuel sources.
Any substantial and extended decline in oilIn addition, low or gas prices would have an adverse
effect on the carrying value of our proved reserves, borrowing capacity,
revenues, profitability and cash flows from operations.
Volatiledeclining oil and gas prices make it difficult to estimatecould have collateral
effects that could adversely affect us, including the value of
producing properties we may acquire and also make it difficult for us to budgetfollowing:
- reducing the exploration for and project the return on acquisitions and development and exploitation
projects.
FACTORS BEYOND OUR CONTROL AFFECT OUR ABILITY TO MARKET OIL AND GAS.
Our ability to market oil and gas from our wells depends upon several
factors beyond our control. These factors include:
o the level of domestic production and imports of oil and gas o the proximity of gas production to gas pipelines,
o the available pipeline capacity,
o the demand for oil and gasreserves
held by utilities and other end users,
o the availability of alternate fuel sources,
o the effect of inclement weather,
6
o state and federal regulation of oil and gas marketing, and
o federal regulation of gas sold or transported in interstate commerce.
If these factors were to change dramatically, our ability to market oil and gas
or obtain favorable prices for our oil and gas could be adversely affected.
NEED FOR ADDITIONAL CAPITAL.
The oil and gas industry is capital intensive. Our ability to expand our
reserve base, diversify our operations and to fund our midstream,
development-stage projects is dependent upon our ability to obtain the necessary
capital. There can be no assurance as to our ability to obtain the additional
capital necessary to expand our reserve base and invest in future exploration,
development and acquisition opportunities. Under financing arrangements which we
may use for future purchases of oil and gas properties or to fund any
development projects, it is likely that such property's entire net, after-tax
cash flow will be dedicated to amortization of the financing and will thus be
unavailable to us until the financing is repaid. Any such lender may also
condition its financing upon its receipt of some form of ownership interest in
the property which would reduce our interest in revenues from the property
acquired.
OUR MIDSTREAM, DEVELOPMENT-STAGE PROJECTS WILL REQUIRE SUBSTANTIAL CAPITAL
INVESTMENTS THAT MAY NOT BE ECONOMICALLY RECOVERABLE.
The cost of the Petroport terminal complex, main oil pipeline to shore,
and its onshore support facilities and facility licensing is estimated to be
$200 million. Deepwater ports, such as the Petroport facility, must comply with
extensive federal and state regulations. The licensing process is expected to
require at least 1 year. Given, the nature and complexity of obtaining the
necessary license and permits, there can be no assurance that we will be issued
a deepwater port license and the other necessary permits for the Petroport
facility. Further, the fabrication, construction and installation of the
deepwater port is expected to require at a minimum 2 years. There can be no
assurances that upon completion of the facility that further competition and
regulations will not impede the operation of the deepwater port facility nor can
there be any assurances as to when we may expect to receive a return on our
capital investment, if any.
Avoca is currently conducting a feasibility study to determine the
technical and commercial viability of completing the construction of the Avoca
gas storage facility. We will either terminate the project or go forward with
its completion based on the results of the study. While we believe if liquidated
we can recover our investment in this project, we can make no assurances of the
return of our initial investment. Further, given the highly regulated and
competitive industry, we can make no assurances that if we go forward with the
project that we will obtain the necessary regulatory approval or that we will
recover our initial investment.
WE FACE STRONG COMPETITION FROM LARGER OIL AND GAS COMPANIES THAT MAY NEGATIVELY
AFFECT OUR ABILITY TO CARRY ON OPERATIONS.
We operate in a highly competitive industry. Factors which affect our
ability to successfully compete in the marketplace include:
o the availability of funds to acquire and develop a property,
o information relating to a property,
o the standards established by us for the minimum projected return on
investment, and
o the availability of alternate fuel sources.
7
Our competitors include major integrated oilthird party companies substantial independent
energy companies, affiliates of major interstate and intrastate pipelines and
national and local gas gatherers, many of which possess greater financial and
other resources than we do.
BECAUSE OF THE HIGHLY COMPETITIVE NATURE OF THE PIPELINE BUSINESS, WE MAY NOT BE
ABLE TO RETAIN EXISTING CUSTOMERS OR ACQUIRE NEW CUSTOMERS.
Competition is intense in many of the markets we operate pipeline
gathering facilities. Some of our competitors have greater financial resources
and access to customers who have larger supplies of natural gas than our
customers. This could allow those competitors to price their services more
aggressively than we do, which could hurt our profitability.
We cannot give any assurances that we will be able to renew or replace our
current contracts as they expire. The renewal or replacement of existing
long-term contracts with our customers at rates sufficient to maintain current
revenues and cash flows depends on a number of factors beyond our control,
including:
o competition from other pipelines, and
o the price of, and demand for, natural gas in markets served, and
o the successful drilling of new wells by other companies in the market
area around our pipeline systems; and
o- generally making it more difficult for us to obtain needed capital.
WE CANNOT CONTROL THE ACTIVITIES ON PROPERTIES WE DO NOT OPERATE.
Currently, other companies operate or control all of the production rates that wells connected to our pipeline are produced
at.
THE AMOUNT OF OIL AND GAS WE PRODUCE MAY NOT BE SUFFICIENT TO OFFSET HEDGES.
FURTHERMORE, BY HEDGING, WE MAY NOT BENEFIT FROM INCREASES IN COMMODITY PRICES.
Part of our business strategy is to reduce our exposure to the volatility
of oil and gas
prices by hedging a portion of our production. We may enter into
short positions through fixed price swaps or options. Our hedges have in the
past involved fixed price arrangements and other price arrangements at a variety
of prices, floors and caps. We may in the future enter into oil and natural gas
futures contracts, options and swaps.
Our hedging activities are subject to a number of risks including
instances in which:
o our production is less than we expected,
o there is a widening of price differentials between delivery points
required by fixed price delivery contracts to the extent they differ
from those points to which we typically deliver our production, or
o our customers or the counterparties to our futures contracts fail to
purchase or deliver the contracted quantities of oil or natural gas.
Additionally, our fixed price sales and hedging contracts limit the benefits we
will realize if actual prices rise above the contract prices. We may in the
future increase the percentage of our production covered by hedging
arrangements.
OUR FUTURE SUCCESS DEPENDS UPON OUR ABILITY TO FIND, DEVELOP AND ACQUIRE
ADDITIONAL OIL AND GAS RESERVES THAT ARE ECONOMICALLY RECOVERABLE.
Our future success depends upon our ability to find or acquire additional
oil and gas reserves that are economically recoverable. Our proved reserves will
decline as they are produced unless we conduct successful exploration or
development activities or acquire properties containing proved reserves. We must
attempt to increase our proved reserves even during periods of low oil and gas
prices when it is difficult to raise the capital necessary to finance these
activities. We
8
cannot assure you that our planned development projects and acquisition
activities will result in significant increases in our reserves or that we will
drill productive wells at economic returns. The drilling of oil and gas wells
involves a high degree of risk, especially the risk of dry holes or of wells
that are not sufficiently productive to provide an economic return on the
capital expended to drill the wells. The cost of drilling, completing and
operating a well is uncertain, and our drilling or production may be curtailed
or delayed as a result of many factors.
YOU SHOULD NOT PLACE UNDUE RELIANCE ON RESERVE INFORMATION BECAUSE RESERVE
INFORMATION REPRESENTS ESTIMATES.
This prospectus contains estimates of our oil and gas reserves and the
future net revenues from those reserves which we and our independent petroleum
consultants have prepared. Reserve engineering is a subjective process of
estimating our recovery from underground accumulations of oil and gas that
cannot be measured in an exact manner. The accuracy of our reserve estimates is
a function of the quality of available data and of engineering and geological
interpretation and judgment. Estimates of our economically recoverable oil and
gas reserves and of future net cash flows necessarily depend upon a number of
variable factors and assumptions, such as:
o historical production from the area compared with production from other
producing areas,
o the assumed effects of regulations by governmental agencies, and
o assumptions concerning future oil and gas prices, future operating
costs, severance and excise taxes, development costs and costs to
restore or increase production on a producing well.
In addition, different reserve engineers may make different estimates of
reserve quantities and cash flows based upon the same available data. Our
reserve estimates are to some degree speculative. As a result there may be
material variances between our actual results and costs, and our estimates of:
o the quantities of oil and gas that we ultimately recover,
o our production and operating cost,
o the amount and of timing of our future development expenditures, and
o our future oil and gas sales prices.
Any significant variance in these assumptions could materially affect the
estimated quantity and value of our reserves reported in this prospectus.
DEPENDENCE ON 3-D SEISMIC AND OTHER GEOLOGICAL AND GEOPHYSICAL DATA.
Our decision to participate in the drilling of exploratory wells on
exploratory prospects and, ultimately, the success of our participation depends
largely on the results of 3-D seismic surveys being conducted or planned on such
prospects. The acquisition and interpretation of 3-D and conventional seismic
survey data and other geological and geophysical data involves subjective
professional judgment. Reliance on such data and interpretations poses the risk
that a decision to participate in the drilling of a well may be founded on
incorrect data, erroneous interpretations of data, or both. Although we believe
our use of 3-D seismic surveys will increase the probability of success of such
exploratory wells and will reduce average finding costs through the elimination
of prospects that might otherwise be drilled solely on the basis of 2-D seismic
surveys and other traditional methods. There can be no assurance as to the
success of our participation in any drilling program.
9
CONSEQUENCES OF FUTURE NON-PAYMENT OF DRILLING COSTS.
If we lack and are unable to obtain cash sufficient to pay our
proportionate share of the estimated costs to drill any initial exploratory
wells, we may lose our right to participate in that well and in all wells
subsequently drilled on the prospect. If, after electing to participate in an
exploratory or development well on a prospect and paying the initial cost to do
so, we subsequently become unable to pay additional costs of the well, we may be
subject to contractual "non-consent" and other penalties. These penalties may
include full or partial forfeiture of our interest in the well or a
relinquishment of our interest in production from a well in favor of the
participating working interest owners until the participating working interest
owners have recovered a multiple of the costs which would have been borne by us
had we elected to participate, often from 300% to 400% of such costs.
RELIANCE ON OPERATORS; JOINT OPERATIONS.
We are or may be a non-operating working interest owner in many prospects
and a non-operating interest owner in other wells in which we have or may
acquirean interest. As a working interest. In such instances,result, we will depend on the operator
of the wells or leases to properly conduct lease acquisition, drilling,
completion and production operations. The failure of an operator, or the
drilling contractors and other service providers selected by the operator to
properly perform services, could adversely affect us.us, including the amount and
timing of revenues, if any, we receive from our interests.
We have and generally anticipate that we will typically own substantially less than
a 50% working interest in our prospects and will therefore engage in joint
operations with other working interest owners. In instances in whichSince we own or control less than
50%a majority of the working interest in a prospect, decisions affecting the
prospect could be made by the owners of more than 50%a majority of the working
interest with which we disagree.interest. For instance, if we are unwilling or unable to participate in
4
the costs of operations approved by a majority of the working interests in a
well, our working interest in the well (and possibly other wells on the
prospect) will likely be subject to contractual "non-consent penalties." TITLE TO PROPERTIES.
Until such time as an oil and gas exploration company acquires leases
covering its "prospects", its prospects are geological ideas rather than
recordable title interestsThese
penalties may include, for example, full or partial forfeiture of our interest
in real property and are subject to prior leasethe well or a relinquishment of our interest in whole orproduction from the well in
part by others. Certainfavor of the prospects in our inventory are
unleased. Until such time as allparticipating working interest owners until the participating
working interest owners have recovered a multiple of the lands within these prospects are leasedcosts which would have
been borne by us it is possible that all or a portionif we had elected to participate, which often ranges from 400%
to 600% of such prospects could be leased by
others.costs.
WE HAVE PURSUED, AND INTEND TO CONTINUE TO PURSUE, ACQUISITIONS. OUR BUSINESS
MAY BE ADVERSELY AFFECTED IF WE CANNOT EFFECTIVELY INTEGRATE ACQUIRED
OPERATIONS.
One of our business strategies has been to acquire operations and assets
that are complementary to our existing businesses. Acquiring operations and
assets involves financial, operational and legal risks. These risks includeinclude:
- inadvertently becoming subject to liabilities of the acquired
company that were unknown to us at the time of the acquisition, such
as later asserted litigation matters or tax liabilities;
- the difficulty of assimilating operations, systems and personnel of
the acquired businessesbusinesses; and
- maintaining uniform standards, controls, procedures and policies.
Any future acquisitions would likely result in an increase in expenses. In
addition, competitionCompetition from other potential buyers could cause us to pay a higher
price than we otherwise might have to pay and reduce our acquisition
opportunities. We are often out-bid by larger, better capitalized companies for
acquisition opportunities we pursue. Moreover, our past success in making
acquisitions and in integrating acquired businesses does not necessarily mean we
will be successful in making acquisitions and integrating businesses in the
future.
10
OPERATING HAZZARDSHAZARDS, INCLUDING THOSE PECULIAR TO THE MARINE ENVIRONMENT, MAY
ADVERSELY AFFECT OUR ABILITY TO CONDUCT BUSINESS.
Our operations are subject to risks inherent in the oil and gas industry,
such as:
o blowouts,
o cratering,
o explosions,
o uncontrollable flows- sudden violent expulsions of oil, gas orand mud while drilling a well,
fluids,
o fires,
o pollution,commonly referred to as a blowout;
- a cave in and ocollapse of the earth's structure surrounding a well,
commonly referred to as cratering;
- explosions;
- fires;
- pollution; and
- other environmental risks.
These risks could result in substantial losses to us from injury and loss
of life, damage to and destruction of property and equipment, pollution and
other environmental damage and suspension of operations. Our offshore operations
are also subject to a variety of operating risks peculiar to the marine
environment, such as hurricanes or other adverse weather conditions and more
extensive governmental regulation. These regulations may, in certain
circumstances, impose strict liability for pollution damage or result in the
interruption or termination of operations.
LOSSES AND LIABILITIES FROM UNINSURED OR UNDERINSURED DRILLING AND OPERATING
ACTIVITIES COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
We maintain several types of insurance to cover our operations, including
maritime employer's liability and comprehensive general liability. Amounts over
base coverages are provided by primary and excess umbrella liability policies
with maximum limits of $40$50 million. We also maintain operator's extra expense
coverage, which covers the control of drilled or producing wells as well as
redrilling expenses and pollution coverage for wells out of control.
We may not be able to maintain adequate insurance in the future at rates
we consider reasonable or losses may exceed the maximum limits under our
insurance policies. In 2004, in connection with our cost savings program, we
cancelled the property insurance coverage on our pipelines, however we do
continue to carry property insurance
5
coverage on our shore facilities and our offshore platforms. If a significant
event that is not fully insured or indemnified occurs, it could materially and
adversely affect our financial condition and results of operations.
COMPLIANCE WITH ENVIRONMENTAL AND OTHER GOVERNMENT REGULATIONS COULD BE COSTLY
AND COULD NEGATIVELY IMPACT PRODUCTIONPIPELINE AND PIPELINEPRODUCTION OPERATIONS.
Our operations are subject to numerous laws and regulations governing the
discharge of materials into the environment or otherwise relating to
environmental protection. These laws and regulations may:
o- require the acquisition of a permit before drilling commences,
ooperations can be
commenced;
- restrict the types, quantities and concentration of various
substances that can be released into the environment from drilling
and production activities,
oactivities;
- limit or prohibit drilling and pipeline activities on certain lands
lying within wilderness, wetlands and other protected areas,
11
oareas;
- require remedial measures to mitigate pollution from former
operations, such as plugging abandoned wells and abandoning
pipelines,pipelines; and
o- impose substantial liabilities for pollution resulting from our
operations.
The recent trend toward stricter standards in environmental legislation
and regulation is likely to continue. The enactment of stricter legislation or
the adoption of stricter regulationregulations could have a significant impact on our
operating costs, as well as on the oil and gas industry in general.
Our operations could result in liability for personal injuries, property
damage, oil spills, discharge of hazardous materials, remediation and clean-up
costs and other environmental damages. We could also be liable for environmental
damages caused by previous property owners. As a result, substantial liabilities
to third parties or governmental entities may be incurred which could have a
material adverse effect on our financial condition and results of operations. We
maintain insurance coverage for our operations, including limited coverage for
sudden and accidental environmental damages, but we do not believe that
insurance coverage for environmental damages that occur over time or complete
coverage for sudden and accidental environmental damages is available at a
reasonable cost. Accordingly, we may be subject to liability or may lose the
privilege to continue exploration or production activities upon substantial
portions of our properties if certain environmental damages occur.
The Oil and Pollution Act of 1990 ("OPA") imposes a variety of regulations
on "responsible parties" related to the prevention of oil spills. The
implementation of new, or the modification of existing, environmental laws or
regulations, including regulations promulgated pursuant to the Oil Pollution Act
of 1990,OPA, could have a
material adverse impact on us.
EXISTINGRISKS RELATED TO THIS OFFERING AND FUTURE UNITED STATES GOVERNMENTAL REGULATION, TAXATIONOWNERSHIP OF OUR COMMON STOCK
OUR COMMON STOCK HAS BEEN SUBJECT TO DELISTING FROM NASDAQ IN THE PAST, AND PRICE
CONTROLS COULD SERIOUSLY HINDER US.
Our oil and gas leasesMAY
BE SUBJECT TO DELISTING FROM NASDAQ IN THE FUTURE.
On February 16, 2005, we received a notice from Nasdaq indicating that our
common stock did not meet the continued listing requirement for the Nasdaq
SmallCap Market set forth in Nasdaq Marketplace Rule 4310(c)(4) because our
common stock traded below the minimum bid price requirement of $1.00 for a
period of 30 consecutive business days. On March 17, 2005, we received notice
from Nasdaq confirming that we are in compliance with the $1.00 SmallCap minimum
bid price requirement.
Although we were able to regain compliance, because of the volatility in
our common stock price, there can be no assurance that we will be able to
maintain compliance in the Gulffuture. During the past twelve months, the trading
price of Mexicoour common stock on the Nasdaq SmallCap Market ranged from $0.57 per
share to $4.92 per share. While there are administered principally
by the Minerals Management Service, an agencysteps we can take to attempt to
address this situation, including a reverse stock split or share repurchase, we
cannot assure you that our stock will maintain such minimum bid price
requirement or that we will be able to meet or maintain all of the U.S. Department of
Interior. This agency strictly regulates the exploration, development and
production of oil and gas reservesNasdaq
SmallCap Market continued listing requirements in the Gulf of Mexico. Such regulations could
seriously impact our operationsfuture. If, in the Gulffuture,
our minimum bid price is again below $1.00 for 30 consecutive trading days,
under the current Nasdaq
6
Marketplace Rule 4310(c)(8)(D), we will have a period of Mexico.180 days to attain
compliance by meeting the minimum bid price requirement for 10 consecutive days
during the compliance period. There can be no assurance that we will be able to
regain compliance in the future. If we are not able to regain compliance our
common stock could be delisted or the market value of our common stock could
fall and holders of our common stock will find it more difficult to sell their
shares of our common stock.
THERE ARE NO ASSURANCES THAT WE CAN MAINTAIN OUR LISTING ON THE NASDAQ SMALLCAP
MARKET AND THE FAILURE TO MAINTAIN LISTING COULD ADVERSELY AFFECT THE LIQUIDITY
OF OUR COMMON STOCK.
If we are unable to sustain compliance with all requirements for continued
listing on the Nasdaq SmallCap Market, including Nasdaq's corporate governance
requirements, our common stock will be delisted from the Nasdaq SmallCap Market.
If our common stock is delisted from the Nasdaq SmallCap Market, the trading of
our common stock is likely to be conducted on the OTC Bulletin Board. The
federal government
regulatesdelisting of our common stock from the interstate transportationNasdaq SmallCap Market will result in
decreased liquidity of oilour outstanding shares of common stock and natural gas, througha resulting
inability of our stockholders to sell our common stock or obtain accurate
quotations as to their market value, which would reduce the Federal Energyprice at which our
shares trade. The delisting of our common stock could also deter broker-dealers
from making a market in or otherwise generating interest in our common stock and
Regulatory Commission. Federal reenactment of price controls
or increased regulation of the transport of oil and natural gas could seriously
hinder us. Of the natural gas pipelines owned by the Company, only Black Marlin
is subjectwould adversely affect our ability to Natural Gas Act regulation.attract investors in our common stock.
Furthermore, our ability to raise capital would be severely impaired. As a
result its gas transportation
serviceof these factors, the value of the common stock would decline
significantly, and pricing are regulated by FERC. Although Black Marlin Pipeline
successfully completed a FERC rate case in 1998 and thus can expectour stockholders could lose some rate
stability, the trend toward greater competition among gas pipelines subject to
Natural Gas Act regulation is continuing, making it infeasible for regulated
pipelines to rely upon exclusive monopoly status.
WE MAY ISSUE SHARESor all of their investment.
SUBSTANTIAL SALES OF PREFERRED STOCK WITH GREATER RIGHTS THAN OUR COMMON STOCK.
Our certificateSTOCK BY THE SELLING STOCKHOLDERS OR US COULD
CAUSE OUR STOCK PRICE TO DECLINE AND ISSUANCES BY US MAY DILUTE YOUR OWNERSHIP
INTEREST IN OUR COMPANY.
The 3,449,406 shares covered by this prospectus represents approximately
34% of incorporation authorizes our boardoutstanding common stock, on a fully diluted basis. We are unable
to predict the amount or timing of directors to
issue one or more seriessales by the selling stockholders of preferred stock and set the terms of the preferred
stock without seeking any further approval from our
common stockholders.stock. Any preferred stock that is issued may rank aheadsales of substantial amounts of our common stock in termsthe public
market by the selling stockholders or us, or the perception that these sales
might occur, could lower the market price of
dividends, priority and liquidation premiums and may have greater voting rights
than our common stock. PROVISIONS IN OUR CORPORATE DOCUMENTS AND DELAWARE LAW COULD DELAY OR PREVENT A
CHANGE IN CONTROL OF OUR COMPANY, EVEN IF THAT CHANGE WOULD BE BENEFICIAL TO OUR
STOCKHOLDERS.
Certain provisions ofFurther, if we
issue additional equity securities to raise additional capital, your ownership
interest in our certificate of incorporationcompany may be diluted and the provisionsvalue of Section 203 of the Delaware General Corporation Lawyour investment may delay, discourage,
prevent or render more difficult an attempt to obtain control of our company,
whether through a tender offer, business combination, proxy contest or
otherwise. These provisions include:
o the charter authorization of "blank check" preferred stock,
12
o a limitation on the removal of directors only for cause, and
o a restriction on the ability of stockholders to take actions by written
consent.
OUR BUSINESS MAY BE ADVERSELY AFFECTED IF WE LOSE KEY PERSONNEL.
We depend upon the performance of our executive officers and key
employees. The loss of the services of any executive officer or key employee
could have a material adverse effect on our business, results of operations or
financial condition.be
reduced.
THERE IS A LIMITED TRADING MARKET FOR OUR COMMON STOCK.
Our common stock is traded on the Nasdaq Small CapSmallCap Market. Average dailyDespite an
unusually high volume recently, the trading volume for our common stock has
historically been low. Daily trading volume for our common stock, as reported by
the Nasdaq Small CapSmallCap Market for fiscal year 2004, ranged from a low of zero
shares to a high of 229,600 shares, with an average daily volume of
approximately 6,500 shares and a median daily volume of approximately 3,000
shares. In the first quarter of 2000, was2005, our daily trading volume ranged from a low
of zero shares to a high of 4,201,700 shares, with an average daily volume of
approximately 1,779328,700 shares and a median daily volume of approximately 6,800
shares. Despite the increase in the number of shares of common stock to be
publicly held as a result of this offering, or should additional equity be
issued, we cannot assure you that the current level of activity will be
sustained or that a more active trading market will develop.
THE PRICE OF OUR COMMON STOCK MAY BE VOLATILE.
The market price of our common stock could be subject to significant
fluctuations after this offering and may decline below the price paid. During
the past twelve months, the trading price of our common stock on the Nasdaq
SmallCap Market ranged from $0.57 per share to $4.92 per share. You may not be
able to resell your shares at or above the price paid to acquire our common
stock. Among the factors that could affect our stock price are:
- our operating and financial performance and prospects;
- quarterly variations in the rate of growth of our financial
indicators, such as earnings per share, net income and revenues;
- changes in revenue or earnings estimates;
- speculation in the press or investment community;
7
- sales of our common stock by stockholders, including the selling
stockholders;
- fluctuations in oil and gas prices;
- general market conditions; and
- U.S. and international economic, legal and regulatory factors
unrelated to our performance.
The stock markets in general have experienced extreme volatility that has
at times been unrelated to the operating performance of particular companies.
These broad market fluctuations may adversely affect the trading price of our
common stock. Because there is a small public float in our common stock and it
is, and historically has been, thinly traded, sales of small amounts of common
stock in the public market could materially adversely affect the market price
for our common stock.
If a more active market does not develop, we may not
be able to sell shares in the future promptly, for prices that we deem
appropriate, or perhaps at all.
WE HAVE NOT PAIDNO PLANS TO PAY REGULAR DIVIDENDS ON OUR COMMON STOCK, AND DOSO STOCKHOLDERS
MAY NOT EXPECT TO IN THE
FORESEEABLE FUTURE, SO OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON
THEIR INVESTMENTFUNDS WITHOUT SELLING THEIR SHARES.COMMON STOCK.
We have not paidno plans to pay regular dividends on our common stock sincestock. We
generally intend to invest our inception and do
not expect to in the foreseeable future so our shareholders will not be able to
receive a return on their investments without selling their shares. We presently
anticipate that all earnings, if any, will be retained for developmentto fund our growth. Any
payment of our
business. Any future dividends will be subject toat the discretion of our board of directors
and will depend on, among other things, futureour earnings, our operating
and financial condition,
our capital requirements, level of indebtedness, statutory and general business
conditions.
THE MARKET PRICE OF OUR COMMON STOCK COULD BE ADVERSELY AFFECTED BY SALES OF
SUBSTANTIAL AMOUNTS OF COMMON STOCK IN THE PUBLIC MARKET OR THE PERCEPTION THAT
SUCH SALES COULD OCCUR.
Ascontractual
restrictions applying to the payment of April 30, 2000, we had 5,950,880 sharesdividends, and other considerations that
our board of directors deems relevant. Accordingly, investors may have to sell
some or all of their common stock outstanding.
Approximately 222,326 additional shares ofin order to generate cash flow from their
investment. Investors may not receive a gain on their investment when they sell
our common stock were issuable uponand may lose the exerciseentire amount of outstanding options, warrantsthe investment.
8
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
Certain of the statements included in this prospectus, including those
regarding future financial performance or results or that are not historical
facts, are "forward-looking" statements as that term is defined in Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
convertible securities.Section 27A of the Securities Act of 1933, as amended (the "Securities Act").
The marketwords "expect," "plan," "believe," "anticipate," "project," "estimate," and
similar expressions are intended to identify forward-looking statements. We
caution readers that these statements are not guarantees of future performance
or events and such statements involve risks and uncertainties that may cause
actual results and outcomes to differ materially from those indicated in
forward-looking statements. Some of the important factors, risks and
uncertainties that could cause actual results to vary from forward-looking
statements include:
- the level of utilization of our pipelines;
- availability and cost of capital;
- actions or inactions of third party operators for properties where
we have an interest;
- the risks associated with exploration;
- the level of production from oil and gas properties;
- gas and oil price volatility;
- uncertainties in the estimation of proved reserves and in the
projection of future rates of production and timing of development
expenditures;
- regulatory developments; and
- general economic conditions.
Additional factors that could cause actual results to differ materially
from those indicated in the forward-looking statements are discussed under the
caption "Risk Factors." Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. We
undertake no duty to update these forward-looking statements. Readers are urged
to carefully review and consider the various disclosures made by us, which
attempt to advise interested parties of the additional factors, which may affect
our business.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-3 under the Securities Act with respect to the
securities offered by this prospectus. In this prospectus, we refer to that
registration statement, together with all amendments, exhibits and schedules to
that registration statement, as "the registration statement."
As is permitted by the rules and regulations of the SEC, this prospectus,
which is part of the registration statement, omits some information, exhibits,
schedules and undertakings set forth in the registration statement. For further
information with respect to us, and the securities offered by this prospectus,
please refer to the registration statement.
We file current reports, quarterly reports, annual reports, proxy
statements and other information with the SEC. You may read and copy those
reports, proxy statements and other information at the public reference facility
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies
of this material may also be obtained from the Public Reference Room of the SEC
at 450 Fifth Street, N.W. Washington, D.C. 20549 at prescribed rates.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-732-0330. The SEC maintains a website at www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants that make electronic filings with the SEC using its EDGAR
system.
9
You may request a copy of our filings, which we will provide at no cost,
by writing to our Corporate Secretary at the following address:
Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, Texas 77002
Attn: Corporate Secretary
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have previously been filed by us with the
SEC under the Exchange Act are incorporated herein by reference:
(1) Our annual report on Form 10-KSB, as amended by the Form 10-KSB/A
filed with the SEC on July 6, 2005, for the fiscal year ended
December 31, 2004;
(2) Our quarterly report on Form 10-QSB, as amended by the Form 10-QSB/A
filed with the SEC on July 6, 2005, for the fiscal quarter ended
March 31, 2005;
(3) Our current reports on Form 8-K filed on February 22, 2005, March 3,
2005, April 1, 2005, April 14, 2005, April 21, 2005, May 2, 2005
and July 6, 2005; and
(4) The description of our common stock couldcontained in our Form 8-K, filed
June 5, 2000, including any amendments or reports filed to update
the description.
In addition, we incorporate by reference any future filings we make
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding
any information in those documents that is deemed by the rules of the SEC to be
adversely affectedfurnished not filed) after the date of the registration statement of which this
prospectus is a part and prior to the termination of this offering shall be
deemed to be incorporated in this prospectus by salesreference and to be a part
hereof from the date of substantial
amountsfiling of common stocksuch documents. Any statement contained
herein, or in a document incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
prospectus to the public marketextent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
This prospectus incorporates documents by reference that are not delivered
herewith. Copies of these documents, other than the perception thatexhibits thereto (unless
such sales
could occur.exhibits are specifically incorporated by reference in such documents), are
available upon written or oral request, at no charge, from us. Requests for such
copies should be directed to the Corporate Secretary of Blue Dolphin Energy
Company at 801 Travis, Suite 2100, Houston, Texas 77002, or at (713) 227-7660.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock by the
selling stockholders pursuantin this offering. We have agreed to this prospectus.
13bear all of the
expenses incurred in connection with the registration of these shares.
10
SELLING STOCKHOLDERS
The following table sets forth certain information concerning each ofregarding the selling
stockholders. The shares are being registeredstockholders' ownership of our common stock as of June 30, 2005, and as adjusted
to permitreflect the assumed sale by the selling stockholders and certain of their respective pledgees, donees, transferors or
other successorsall of our common
stock owned by the selling stockholders in interest to offer the shares from time to time. See "Plan of
Distribution."this offering.
NUMBERSHARES OF
SHARES OF COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BEFORE THE BENEFICIALLY OWNED
OFFERING AFTER THE OFFERING (1)
PERCENTAGE NUMBER OF PERCENTAGE
OF OWNED AND TO BE NUMBERTOTAL OF SHARES OF TOTAL
NUMBER VOTING BEING NUMBER VOTING
SELLING STOCKHOLDER OF SHARES OWNED PRIOR TOPOWER (2) OFFERED OF SHARES BEING OWNED AFTER OWNED AFTER
SELLING STOCKHOLDERS OFFERING (1) OFFERED (1) OFFERING (2) OFFERINGPOWER (2)
- -------------------------------------------------- ----------------- ------------ ------------ ---------------------------------------------- --------- ---------- --------- --------- ----------
John Atwood
F. Gardner Parker (3)................................... 11,720 11,720 0............ 483,328 (4) 5.1% 483,328 (4) -- *
Ragnhild Bendigsten............................... 1,400 1,400 0Steven A. Webster................ 366,666 4.1% 366,666 -- *
Bjorn Bendigsten.................................. 26,833 26,833 0Michael S. Chadwick (3).......... 144,188 (5) 1.6% 144,188 (5) -- *
Sanders Opportunity Fund
(Institutional), LP........... 237,357 (6) 2.6% 237,357 (6) -- *
Kestrel Capital, LLC............. 217,776 2.4% 217,776 -- *
Laurence N. Benz (3)............. 183,334 (7) 2.0% 183,334 (7) -- *
Don A. Sanders................... 156,625 (6) 1.7% 156,625 (6) -- *
Sanders 1998 Children's Trust
dated December 1, 1997........ 156,625 (6) 1.7% 156,625 (6) -- *
William R. Zeigler............... 147,682 1.6% 147,682 -- *
Ramsay H. Gillman ............... 142,720 1.6% 142,720 -- *
Harris A. Kaffie (3)............. 807,007 (8) 9.0% 108,344 (8) 700,885 7.8%
Lee Moore ....................... 77,718 (17) * 77,718 -- *
Michael J. Jacobson.............. 79,779 (9) * 79,779 (9) 155,295 1.7%
Sanders Opportunity Fund, LP..... 75,894 (6) * 75,894 (6) -- *
Macille G. Moore................. 74,314 * 74,314 -- *
W. Tyler Moore, Jr. ............. 74,314 * 74,314 -- *
David R. Bolton.................. 74,074 * 74,074 -- *
William A. Lang.................. 73,842 * 73,842 -- *
Schmid Family Trust U/D/T
09-05-97...................... 72,812 * 72,812 -- *
Gordon Brian Lloyd............... 69,932 (10) * 69,932 (10) 42,366 *
James M. Trimble (3)............. 59,663 * 59,663 -- *
Ivar Siem (3).................... 622,618 (11) 6.9% 57,128 (11) 918,264 10.3%
Blue Dolphin Services Co. 401(k) Plan (4)......... 20,000 20,000 0401K... 50,000 * Blystad Shipping & Transport Inc.................. 200,000 200,000 050,000 -- *
Michael S. Chadwick (5)........................... 6,446 6,446 0Ben T. Morris ................... 39,156 (6) * Alvin Childs39,156 (6).................................. 669 669 0 -- *
Colombus Petroleum Limited Inc. (7)............... 911,712 911,712 0Don Weir and Julie Ellen Weir ... 39,156 (6) * Christian Hysing-Dahl (8)......................... 1,335 1,335 039,156 (6) -- *
William Driscoll (9).............................. 3,111 3,111 0Katherine U. Sanders ............ 39,156 (6) * Foilpropeller AS.................................. 65,000 65,000 0 *
Fohla LTD......................................... 166,666 166,666 0 *
Bjorn Gilbo....................................... 147,850 147,850 0 *
Greenway Energy Investors......................... 20,000 20,000 0 *
Debra Young Hatch & Richard J. Hatch Jr. TTEE ... 6,666 6,666 0 *
Michael J. Jacobson (10).......................... 96,161 96,161 0 *
Harris A. Kaffie (11)............................. 590,419 590,419 0 *
Harris A. Kaffie TTEE, Morgan Sims Kaffie (12).... 1,133 1,133 0 *
Lynda Young Kaffie TTEE, Morgan Sims Kaffie (13).. 106,666 106,666 0 *
Kalin AS.......................................... 89,212 89,212 039,156 (6) -- *
Roland B. Keller (14)............................. 28,401 28,401 0................ 66,981 (12) * Gordon Brian Lloyd (15)........................... 5,575 5,575 066,981 (12) -- *
Vernon Luning (16)................................ 7,110 7,110 0Alvin Childs .................... 52,964 (13) * Lysa Development SA............................... 63,000 63,000 021,788 31,176 *
Birger Nergaard................................... 108 108 0Greg Starks ..................... 45,178 (14) * Nordic Technology Corp. .......................... 66,001 66,001 018,016 27,162 *
Osler Holdings LTD................................ 263,900 263,900 0Haavard Strommen ................ 10,964 * Petrel Limited.................................... 30,000 30,000 010,964 -- *
Daniel B. Porter (17)............................. 175,823 175,823 0John Atwood ..................... 53,818 * Rithmanian LTD ................................... 166,666 166,666 0 *
Kenneth Sandvold.................................. 196,667 196,667 0 *
Kristian Siem (18)................................ 216,666 216,666 0 *
Elisabeth Siem (19)............................... 8,333 8,333 0 *
Ivar Siem (20).................................... 393,990 393,990 0 *
Kristine Siem (21)................................ 108,333 108,333 0 *
Spencer Invest Inc................................ 74,000 74,000 0 *
S.A. Storsveen.................................... 20,000 20,000 0 *
TI As (22)........................................ 4,700 4,700 0 *
Troulinell Limited................................ 273,700 273,700 0 *
Ware Snow Fogel Jackson & Green P.C. SHP.......... 29,875 29,875 0 *
Jan-Olaf Williams................................. 81,429 81,429 0 *
Woodland Company LTD.............................. 166,666 166,666 018,273 35,545 *
11
SHARES OF
SHARES OF COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BEFORE THE BENEFICIALLY OWNED
OFFERING AFTER THE OFFERING (1)
PERCENTAGE NUMBER PERCENTAGE
OF TOTAL OF SHARES OF TOTAL
NUMBER VOTING BEING NUMBER VOTING
SELLING STOCKHOLDER OF SHARES POWER (2) OFFERED OF SHARES POWER (2)
- --------------------------------- --------- ---------- --------- --------- ----------
Peregrine Management, LLC........ 8,147 * 8,147 -- *
Christine Anderson .............. 4,534 (15) * 1,827 2,707 *
Mickie Musgrave ................. 9,743 (16) * 1,827 18,793 *
TOTAL: 3,449,406
- ------------------------------------------
* IndicatesRepresents less than 1%.
(1) Ownership is determined in accordance with Rule 13d-3 under the Exchange
Act. The actual number of shares beneficially owned and offered for sale
is subject to adjustment and could be materially less or more than the
estimated amount indicated depending upon factors which we cannot predict
at this time.
(2) Assumes the sale of all shares that may be sold by that individual selling
stockholder under this prospectus.
(2) Based upon 9,045,569 shares of common stock issued and outstanding as of
June 30, 2005.
(3) Member of our Board of Directors.
(4) Consists of 483,328 shares of commons stock issuable upon exercise of
warrants purchased and granted pursuant to the Purchase Agreement, which
are subject to the lock-up provisions of the Purchase Agreement and may
not be sold, transferred or assigned without our prior written consent
until August 30, 2005.
(5) Consists of 141,667 shares offered herebyof commons stock issuable upon exercise of
warrants purchased and granted pursuant to persons who are
not affiliatesthe Purchase Agreement and
2,521 shares of common stock. The 141,667 shares issuable upon exercise of
the selling stockholders.
(3)warrants are subject to the lock-up provisions of the Purchase
Agreement and may not be sold, transferred or assigned without our prior
written consent until August 30, 2005.
(6) These shares are subject to the lock-up provisions of the Purchase
Agreement and may not be sold, transferred or assigned without our prior
written consent until August 30, 2005.
(7) Consists of 183,334 shares of commons stock issuable upon exercise of
warrants purchased and granted pursuant to the Purchase Agreement, which
are subject to the lock-up provisions of the Purchase Agreement and may
not be sold, transferred or assigned without our prior written consent
until August 30, 2005.
(8) Consists of 83,571 shares of common stock issuable upon exercise of
options and 24,773 shares of common stock.
(9) Mr. Atwood has served asJacobson is our Vice President-FinancePresident. Consists of 33,938 shares of common stock
issuable upon exercise of options, 33,156 shares of common stock, and
Corporate
Development since October 1998. He previously served as our Vice President12,685 shares of Land.
(4) Thecommon stock in the Blue Dolphin Services Co. 401(k) Plan is the savings plan for Blue
Dolphin Energy and all of our subsidiaries. The shares being registered
were issued in February 1999 for the benefit of employees eligible to
participate in the 401(k)401K Plan.
14
(5) Mr. Chadwick has been one of our directors since May 1992.
(6) Mr. Childs has served as our plant supervisor since April 1992 for our
subsidiary, Mission Energy, Inc..
(7) Colombus Petroleum Limited Inc. is and has been a greater than 10%
stockholder since May 1994.
(8) Mr. Hysing-Dahl served as our director from May 1992 until October 1998.
(9) Mr. Driscoll has served as our Manager of Geology since January 1991.
(10) Mr. Jacobson has served as our President since January 1990.
(11) Mr. Kaffie has served as our Director and has been a greater than 10%
stockholder since December 1989.
(12) Morgan Sims Kaffie is the son of Harris A. Kaffie.
(13) Morgan Sims Kaffie is the son of Lynda Young Kaffie, and Lynda Young
Kaffie is the wife of Harris A. Kaffie.
(14) Mr. Keller has served as our Executive Vice President-Exploration and
Development since September 1990.
(15) Mr. Lloyd is our Vice President Secretary and Treasurer. He has heldConsists of 25,500 shares
of common stock issuable upon exercise of options, 33,156 shares of common
stock, and 11,276 shares of common stock in the
position of Secretary since May 1989, Treasurer since September 1989 and
Vice President since March 1998.
(16) Mr. Luning has served as our Vice President-Drilling and Production since
June 1995.
(17) Mr. Porter served as our Director from December 1989 to May 2000.
(18) Kristian Siem is the brother of Ivar Siem, Chairman of Blue Dolphin Energy.
(19) ElisabethServices Co.
401K Plan.
(11) Mr. Siem is the adult daughter of Ivar Siem, Chairman of Blue
Dolphin Energy.
(20) Mr. Siem has served as our Chairman of the Board since December 1989.
(21) Kristineand Chief Executive Officer.
Consists of 8,000 shares of common stock issuable upon exercise of
options, 42,237 shares of common stock, and 6,891 shares of common stock
in the Blue Dolphin Services Co. 401K Plan.
(12) Consists of 30,000 shares of common stock issuable upon exercise of
options.
(13) Consists of 14,488 shares of common stock issuable upon exercise of
options, 7,300 shares of common stock, and 29,838 shares of common stock
in the Blue Dolphin Services Co. 401K Plan.
(14) Includes 1,000 shares of common stock issuable upon exercise of options,
17,016 shares of common stock, and 27,162 shares of common stock in the
Blue Dolphin Services Co. 401K Plan.
(15) Includes 2,707 shares of common stock in the Blue Dolphin Services Co.
401K Plan.
(16) Includes 7,916 shares of common stock in the Blue Dolphin Services Co.
401K Plan.
(17) Includes 83,334 shares of common stock issuable upon exercise of warrants
purchased pursuant to the Purchase Agreement.
12
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In September 2004, we entered into the Note and Warrant Purchase Agreement
dated September 8, 2004 (the "Purchase Agreement") with certain accredited
investors and certain directors of the Company for the purchase and sale of the
Promissory Notes in an aggregate principal amount of $750,000 and the Warrants
to purchase shares of common stock at a purchase price of $0.003 per warrant.
The sale of the Promissory Notes and the Initial Warrants closed on September 8,
2004, and the closing of the sale of the Additional Warrants closed on November
30, 2004, after we received stockholder approval at our November 11, 2004
special stockholders' meeting. We received net proceeds of $758,400 from the
sale of the Promissory Notes and the Warrants. The Promissory Notes mature on
September 8, 2005, and accrue interest at a rate of 12.0% per annum, of which 4%
is payable monthly and 8% is payable at maturity. The Promissory Notes are
secured by a second lien on our 83% interest in the Blue Dolphin Pipeline
system. All Warrants are immediately exercisable and will expire five years
after their date of issuance. Each Warrant is exercisable for one share of
common stock at an exercise price of $0.25 per share. The Warrants contain
standard antidilution provisions, as well as provisions that will result in
adjustments to the exercise price of the Warrants if we issue common stock at a
price below $0.25 per share, subject to certain exceptions.
Pursuant to the terms of the Purchase Agreement, we appointed Messrs. Benz
and Parker to our Board of Directors. Messrs. Benz and Parker each purchased a
Promissory Note in the principal amount of $25,000. Messrs. Benz and Parker
purchased 83,334 and 383,328 Warrants, respectively. Mr. Chadwick, an existing
director, purchased a Promissory Note in the principal amount of $12,500 and
41,667 Warrants. In addition Messrs. Benz, Chadwick and Parker were each granted
100,000 warrants to purchase shares of our common stock on the same terms as the
Warrants.
In April 2005, we entered into Note Modification Agreements and Waiver
Agreements with the holders of $450,000 principal amount of Promissory Notes.
These note holders were originally issued Warrants exercisable to acquire
1,500,005 shares of common stock pursuant to the Purchase Agreement. Pursuant to
the terms of the Note Modification Agreements and Waiver Agreements, we agreed
to the following:
- To amend the terms of the Promissory Notes to (i) extend the
maturity date from September 8, 2005 to June 30, 2006 and (ii) defer
the payment of all interest on the Promissory Note until maturity;
- To waive the note holders' compliance with the lock-up provisions of
the Purchase Agreement and allow it to sell shares of our common
stock that it may receive upon exercise of the Warrants; and
- To accelerate the date we are required to file a registration
statement registering the resale of the shares of our common stock
that the note holders may acquire upon exercise of Warrants to May
15, 2005.
In addition to serving on our Board of Directors, Mr. Chadwick is also a
Senior Vice President and Managing Director of Sanders Morris Harris Group, Inc.
("SMH"), a financial services holding company headquartered in Houston, Texas.
We paid SMH a $25,000 fee in connection with the Purchase Agreement and agreed
to retain SMH to provide a fairness opinion, if required.
We also entered into a consulting agreement with Mr. Parker. Mr. Parker's
consulting agreement has a term of up to eighteen months. We are obligated to
pay Mr. Parker a monthly fee of $2,000 and a bonus that will accrue at the rate
of $3,000 per month and be payable upon consummation of a merger or acquisition
by us.
We own 12.8% of the common stock of Drillmar, Inc. Our Chairman, Mr. Siem,
and one of our directors, Mr. Kaffie, own or control 33.9%, and 30.3%,
respectively, of Drillmar's common stock. Messrs. Siem and Kaffie are both
directors, and Mr. Siem is Chairman and President of Drillmar.
In September 2001, Drillmar, Inc. entered into a merger agreement and
merged with Zephyr Drilling Ltd. ("Zephyr"). Prior to the adult daughtermerger, Zephyr was a
limited partnership in which Drillmar was the general partner and Messrs. Siem
and Kaffie were limited partners. Zephyr owned a semi-submersible drilling rig
that was prepared for reconfiguration into a semi-tender. Prior to the merger,
we owned approximately 64% of Drillmar's outstanding common stock. As a result
of the merger between Drillmar and Zephyr, our interest in Drillmar decreased to
12.8% and Messrs. Siem and Kaffie became owners of 30.3% and 30.6%,
respectively, of Drillmar's common stock.
13
Messrs. Siem and Kaffie provided funding to Drillmar in 2002 of $116,000
and $100,000, respectively, and in 2001 of $300,000 and $425,000, respectively,
and were issued unsecured promissory notes from Drillmar. The promissory notes
were due June 30, 2002 and bore interest at the rate of 10% per annum. Along
with the promissory notes, Drillmar issued detachable warrants to Messrs. Siem
and Kaffie of 41,500 and 42,500, respectively. Each warrant provides for the
purchase of one share of Drillmar common stock at $5 per share and are
exercisable through June 2005. The promissory notes issued by Drillmar are
nonrecourse to the Company.
In 2002, we recorded a full impairment of our investment in Drillmar and a
full reserve for the accounts receivable amount owed to us from Drillmar of
approximately $200,000 due to Drillmar's working capital deficiency and delays
in securing capital funding. During 2004, we collected $165,000 of the accounts
receivable from Drillmar and we have collected the remaining balance of
approximately $45,000 in 2005.
In January 2003, Drillmar stockholders approved a restructuring plan
whereby Drillmar was able to issue up to $3.0 million of convertible notes that
will convert into common stock representing over 99% of Drillmar's outstanding
shares. As a result, our ownership in Drillmar can be reduced to less than 1%.
However, in November 2003, we converted a contingent obligation due from
Drillmar for providing office space, accounting and administrative services from
May 2002 through January 2003 totaling $162,000 (9 months at $18,000 per month)
into a convertible note, which if converted along with all of Drillmar's
outstanding convertible notes would represent 5.5% of Drillmar's common stock.
Messrs. Siem, Kaffie and Trimble (each one of our directors) hold or control
Drillmar convertible notes which if converted along with all of Drillmar's
outstanding convertible notes would represent 30.2%, 28.7% and 1.5%,
respectively, of Drillmar's common stock.
In May 2002, we entered into a new agreement with Drillmar effective as of
May 1, 2002, whereby we provided office space and minimal accounting and
administrative services to Drillmar for $2,000 per month. The agreement can be
terminated upon 30 days notice or by the mutual agreement of the parties. This
agreement was replaced by a new agreement effective as of February 1, 2003,
whereby we provide and charge for office space which is currently $4,750 per
month. We had provided professional, accounting and administrative services to
Drillmar based on hourly rates based on its cost. However, since our
implementation of staff reductions in mid 2004, no such services have been
provided. The agreement can be terminated upon 30 days notice or by the mutual
agreement of the parties.
In March 2003, we entered into a sublease agreement expiring December 31,
2006 for certain of our office space with TexCal Energy (GP) LLC, formerly
Tri-Union Development Corporation. Our annual receipts from this sublease are
approximately $78,000. One of our directors, Mr. Trimble, was the Chairman and
Chief Executive Officer of TexCal Energy (GP) LLC until November 2004.
On September 8, 2004, we sold the common stock of our wholly owned
subsidiary American Resources Offshore, Inc. ("ARO") to Ivar Siem Chairmanon behalf of
those stockholders who hold a number of shares of our common stock above a
threshold determined by Mr. Siem, which included 30 of our largest shareholders
on a proportionate basis. Messrs. Siem and Kaffie, Mr. Jacobson, our President,
and Mr. Lloyd, our Vice President and Treasurer received stock representing
approximately 12%, 14%, 3% and 3%, respectively, of ARO. ARO had no revenue and
no assets, except for federal net operating loss carryforwards. The
consideration paid to us consisted of $1,000 cash, the assumption of the
Company.
(22) Ivar Siem, Chairmantransaction costs, including incremental costs associated with the reporting and
disclosure of Blue Dolphin Energy isthis transaction incurred by us in our filings with the beneficial ownerSEC and
any other required filings or announcements, and the assumption of these shares.
15any and all
liabilities of ARO.
14
PLAN OF DISTRIBUTION
The selling stockholders, including some of their transferees who may
selllater hold their interest in the shares of our common stock in
transactions on exchanges or markets as our common stock may be then listed for
trading. Shares may be sold in privately-negotiated transactions, in
underwritten offerings, orcovered by a combination of such methods of sale. Sales of
shares of common stock may be made at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. As used in this
prospectus "selling stockholders" includes pledgees, donees, transferees and other
successors in interestwho are otherwise entitled to the selling stockholders sellingresell their shares received from
a selling stockholder after the date ofusing this
prospectus. The selling
stockholdersprospectus, may effect such transactions by sellingsell the shares of common stock covered by this prospectus from
time to time in any legal manner selected by the selling stockholders, including
directly to purchasers or through underwriters, broker-dealers and such broker-dealersor agents, who
may receive compensation in the form of discounts, concessions or commissions
from the selling stockholders or the purchasers of the shares for whom such broker-dealerspurchasers. These discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may
act as agent or to whom they sell as principal, or both (which compensation to a
particular broker-dealer might be in
excess of those customary commissions).
Other methods by whichin the types of transactions involved. The selling
stockholders may sell sharesact independently of ourus in making decisions with respect to the
pricing, timing, manner and size of each sale of common stock include, without limitation:
ocovered by this
prospectus.
The selling stockholders have advised us that the shares may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at prices related to the prevailing market prices, at varying
prices determined at the time of sale and/or at negotiated prices. These sales
may be effected at various times in one or more transactions, which may include:
- ordinary brokers' transactions and transactions in which the
broker-dealer solicits purchasers;
- transactions involving cross or block trades or otherwise on the
Nasdaq SmallCap Market or in the over-the-counter market or any
other stock exchange, market or trading facility on which the shares
are traded;
- transactions otherwise than on the NASDAQ SmallCap Market or in the
over-the-counter market or any other stock exchange, market or
trading facility on which the shares are traded;
- transactions in which brokers, dealers or underwriters purchase the
shares for resale;
- transactions "at the market" to or through market makers of our
common stock or into an existing market for our common stock,
o in other waysstock;
- transactions not involving market makers or established trading
markets, including direct sales of the shares to purchasers or sales
effected through agents,
o through transactions in options or swaps or other derivatives, whether
exchange-listed or otherwise,
o throughagents;
- privately negotiated transactions;
- block trades o throughin which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- short sales, or
o anysales;
- a combination of any such methods of sale.
Thesale; or
- any other method permitted pursuant to applicable law.
In addition, the selling stockholders may also enter into optionhedging and/or
other monetization transactions. For example, the selling stockholders may:
- enter into transactions with a broker-dealer or affiliate of a
broker-dealer or other third party in connection with which that
other party will become a selling stockholder and engage in short
sales of our common stock under this prospectus, in which case the
other party may use shares of our common stock received from the
selling stockholders to close out any short positions;
- itself sell short our common stock under this prospectus and use
shares of our common stock held by it to close out any short
positions;
- engage in short sales against the box (i.e. when the seller owns
securities that are the same as, or substantially identical to,
securities borrowed and sold short), puts and calls and other
transactions in our securities or derivatives of our securities and
may sell or deliver shares in connection with these trades;
- enter into options, forward contracts or other transactions with
broker-dealers whichthat
require the deliveryselling stockholder to those broker dealersdeliver, in a transaction exempt
from registration under the Securities Act, our common stock to a
broker-dealer or an affiliate of a broker-dealer or other third
party who may then become a selling stockholder and publicly resell
or otherwise transfer our common stock under this prospectus; or
- loan or pledge our common stock to a broker-dealer or client of a
broker-dealer or other third party who may then become a selling
stockholder and sell the loaned shares or, in an event of default in
the case of a pledge, become a selling stockholder and sell the
pledged shares, under this prospectus.
15
To our knowledge, there are currently no plans, arrangements or
understandings between the selling stockholders and any broker-dealer or agent
regarding the sale of common stock by the selling stockholders. To the extent
required, the shares to be sold, the name of the selling stockholders, the
respective purchase prices and public offering prices, the names of any agent,
dealer or underwriter, and any applicable commissions or discounts with respect
to a particular offer will be set forth in an accompanying prospectus supplement
filed with the SEC under Rule 424(b) under the Securities Act or, if
appropriate, a post-effective amendment to the registration statement of which
this prospectus is a part. The selling stockholders may sell any or all of the
shares of our common stock offered by it pursuant to this prospectus, whichprospectus. In
addition, there can be no assurance that the selling stockholders will not
transfer the shares of common stock such broker-dealers may
resell underby other means not described in this
prospectus.
The selling stockholders also may also maketransfer the shares of common stock as a
gift, pledge or other non-sale related transfer, in which case the donees,
pledgees, transferees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus and may sell the shares of
common stock from time to time under this prospectus after we have filed a
supplement or an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act amending the list of selling
stockholders to include the donee, pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.
There can be no assurance that the selling stockholders will sell all or
any of the shares of common stock pursuant to this prospectus. In addition, any
common stock covered by this prospectus that qualifies for sale pursuant to an
exemption from the registration requirements of the Securities Act may be sold
pursuant to that exemption, including sales under Rule 144 (subject to the terms
of the Securities Act ifregistration rights agreement), rather than under this prospectus. The
common stock may be sold in some states only through registered or licensed
brokers or dealers. In addition, in some states the shares of common stock may
not be sold unless they have been registered or qualified for sale or an
exemption from registration or qualification is available.available and complied with.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and the rules and
regulations thereunder relating to stock manipulation, including without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the common stock by the selling stockholders and any other such person.
In addition, Regulation M may restrict the ability of any person engaged in the
distribution of the common stock to engage in market making activities with
respect to the common stock being distributed. This may affect the marketability
of the common stock and the ability of any person or entity to engage in
market-making activities with respect to the common stock.
The selling stockholders and any broker-dealers who act in connection with
the sale of shares of our common stock under this prospectushereunder may be deemed to be "underwriters" as that
term is defined in the Securities Act, and any commissions received by them and
any profit on anythe resale of the shares of our common stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. Under certainIf any selling
stockholder is deemed to be an "underwriter" within the meaning of the
Securities Act, it will be subject to the prospectus delivery requirements of
the Securities Act, which may include delivery through the facilities of the
Nasdaq SmallCap Market pursuant to Rule 153 under the Securities Act.
We will pay all of the costs, fees and expenses incurred by us incident to
our registration rights agreements with certainof the resale of the selling stockholders, we have agreed to indemnify certainstockholders' common stock. We
will not pay any commissions, fees and discounts of the selling stockholdersunderwriters, brokers,
dealers and each underwriter, if any, against certain liabilities, including certain
liabilities under the Securities Act as amended, or will contribute to payments
such selling stockholders or underwriters may be required to make in respect of
certain losses, claims, damages or liabilities.
After we are notified by a selling stockholder that any material
arrangement has been entered into with a broker- dealer for the sale of common
stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
o the name of each such selling stockholder and of the participating
broker-dealer(s),agents.
16
o the type and number of securities involved,
o the price at which such securities were sold,
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
o that such broker-dealer(s) did not conduct any investigations to verify
the information set out or incorporated by reference in this
prospectus, and
o other facts material to the transaction.
LEGAL MATTERS
Certain legal matters relating to the validity ofin connection with the common stock offered hereby
will be passed uponon for us by Porter & Hedges, L.L.P., Houston, Texas. Any
underwriters will be advised by their own legal counsel.
EXPERTS
The consolidated financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-KSB of Blue Dolphin Energy Company for the Company and subsidiaries as
of December 31, 1999 and 1998, and for each of the years in the three-year
periodyear
ended December 31, 1999,2004 have been so incorporated by reference in this
prospectus in reliance uponon the reports of KPMG LLP, and Ernst & Young LLP
independent certified public accountants appearing elsewhere (incorporated by
reference herein), upon the authority of said firms as experts in accounting and
auditing.
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of American Resources Offshore, Inc. as of December 31,
1998 and for the year then ended included in our Current Report on Form 8-K
filed December 17, 1999, as set forth in their report
(which contains an explanatory paragraph describing conditions that raise substantial doubt about
therelating to Blue Dolphin Energy
Company's ability to continue as a going concern as described in Note 20note 2 to the
consolidated financial statements), which is incorporated by reference in
this prospectus and elsewhere in the registration statement. The consolidated
financial statements of American Resources Offshore, Inc. are incorporated by
reference in reliance on ErnstUHY Mann Frankfort Stein & Young LLP's report,Lipp CPAs, LLP, an
independent registered public accounting firm, given on theirthe authority of said
firm as experts in accounting and auditing.
17
================================================================================
BLUE DOLPHIN ENERGY COMPANY
3,449,406 SHARES
OF
COMMON STOCK
PROSPECTUS
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SetThe following table sets forth below is an estimatethe various expenses, all of the amount of fees and expenses towhich will be
incurredborne by us, in connection with the issuancesale and distribution of the securities
being registered, hereby, other than the underwriting discounts and commissions. Registration Fee UnderAll
amounts shown are estimates except for the Securities Act $ 7,048
Legal Fees........................... 15,000
Accounting Fees...................... 7,500
Printing and Engraving............... 10,000
Miscellaneous Fees................... 2,000
---------
Total.......................... $ 41,548
=========Exchange Commission
registration fee.
Securities and Exchange Commission registration fee............. $ 639
Accounting fees and expenses.................................... $ 5,000
Legal fees and expenses......................................... $ 20,000
Printing and engraving expenses................................. $ 2,000
Miscellaneous................................................... $ 1,361
--------
Total.................................................. $ 29,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Blue Dolphin is incorporated under the laws of the State of Delaware.
Section 145 ("Section 145") of Title 8 of the Delaware General CorporateCorporation Law
("DGCL") permitsgives a corporation power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that hethe person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by himthe person in connection with such action.
Inaction, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful.
Section 145 also gives a corporation power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit broughtby or in the right of the corporation to obtainprocure a
judgment in its favor by reason of the corporation's favor, whether
byfact that the person is or was a
director, officer, employee or agent of the corporation, itself or derivatively by a stockholder,is or was serving at
the request of the corporation may
only indemnify foras a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses including attorney's fees,(including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the case,person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation may not indemnify for amounts paid in satisfaction of a judgment or
in settlement of the claim. In any such action,and except that
no indemnification mayshall be paidmade in respect of any claim, issue or matter as to
which such personsperson shall have been adjudged to be liable to the corporation
except as otherwise provided byunless and only to the Delawareextent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper. Section 145
further provides that, to the extent that a present or former director or
officer of a corporation has been successful on the merits or otherwise in
defense of any such action, suit or proceeding, or in defense of any claim,
was brought. In any
other type of proceeding, the indemnification may extend to judgments, fines and
amounts paid in settlement,issue or matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with
such other proceeding, as well astherewith.
Section 145 also authorizes a corporation to expenses (including attorneys' fees).
The statute does not permit indemnification unless thepurchase and maintain
insurance on behalf of any person seeking
indemnification has acted in good faith and inwho is or was a manner he reasonably believed
to be in,director, officer, employee or
not opposed to, the best interestagent of the corporation, and, inor is or was serving at the case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. There are additional limitations applicable to
criminal actions and to actions brought by or in the namerequest of the corporation.
The determinationcorporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as such,
whether or not the corporation would otherwise have the power to whether a person seeking indemnification has met the
required standard of conduct is to be made (i) by a majority vote of a quorum of
disinterested members of the board of directors, or (ii) by independent counsel
in a written opinion, if such a quorum does not exist or if the disinterested
directors so direct, or (iii) by the stockholders.
Ourindemnify him
under Section 145.
II-1
Blue Dolphin's amended and restated certificate of incorporation and
bylaws require us to indemnify ourprovide for the indemnification of officers and directors and officers to the fullest
extent permitted underby the Delaware law. Our
certificate of incorporation limitsGeneral Corporation Law. If we enter into an
underwriting agreement, it shall also provide for the personal liability of a director to us
or our stockholders to damages for breachindemnification of the
director's fiduciary duty.
The above discussiondirectors and officers in certain circumstances.
All of our certificate of incorporationBlue Dolphin's directors and bylaws andofficers are covered by insurance
policies maintained by Blue Dolphin against certain liabilities for actions
taken in their capacities as such, including liabilities under the DGCL is not intended to be exhaustive and is qualified in its entirety by
the certificate, bylaws and statute.
We maintain officers' and directors' indemnity insurance against expenses
of defending claims or payment of amounts arising out of good-faith conduct
believed by the officer or director to be in or not opposed to our best
interest.
18
Securities
Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT NO. DESCRIPTIONEXHIBITS.
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 (1) Specimen Certificate of common stock.
4.2 (2) Form of Warrant issued pursuant to the Note and Warrant Purchase
Agreement Dated September 8, 2004.
**5.1 Opinion of Porter & Hedges, L.L.P.
*23.1 Consent of UHY Mann Frankfort Stein & Lipp CPAs, LLP.
**23.2 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1).
**24.1 Power of Attorney.
99.1(2) Voting Agreement between certain stockholders of Blue Dolphin
Energy Company and certain investors of Blue Dolphin Energy
Company, dated September 8, 2004.
- ----------- -----------
* 5.1 -- Opinion of Porter & Hedges, L.L.P.
*23.1 -- Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
*23.2 -- Consent of KPMG LLP
*23.3 -- Consent of Ernst & Young LLP
*23.4 -- Consent of Netherland, Sewell & Associates, Inc., independent
petroleum engineers and geologists
*23.5 -- Consent of Ryder Scott Company, independent petroleum engineers
*24.1 -- Power of Attorney (included on signature page)
- ------------------------------------------------
* Filed herewith
(b) Financial Statement Schedules
Schedules are omitted since the information requiredherewith.
** Previous filed.
(1) Incorporated herein by reference to be submitted has
been includedExhibits filed in the Consolidated Financial Statementsconnection with Form
10-K of Blue Dolphin Energy Company orfor the notes thereto, oryear ended December 31, 1989
under the required information is not applicable.Securities and Exchange Act of 1934, dated March 30, 1990
(Commission File No. 000-15905).
(2) Incorporated herein by reference to Exhibits filed in connection with Form
8-K of Blue Dolphin Energy Company under the Securities and Exchange Act
of 1934, dated September 14, 2004 (Commission File No. 000-15905).
II-2
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:registrant will:
(1) To file,File, during any period in which it offers or sales are being made,sells
securities, a post-effective amendment to this Registration Statement:registration statement to:
(i) To includeInclude any prospectus required by sectionSection 10(a)(3) of
the Securities Act of 1933;Act;
(ii) To reflectReflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which,
individually or in the aggregate,together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in thisthe "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To includeInclude any additional or changed material information
with respect toon the plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement; provided, however, that subparagraphs
(i) and (ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in the periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities and
Exchange Act of 1934 that are incorporated by reference in
this registration statement.distribution.
(2) That for the purpose ofFor determining any liability under the Securities Act, of 1933,treat each such
post-effective amendment shall be
deemed to beas a new registration statement relating toof the securities
offered, herein, and the offering of suchthe securities at that time
shall be deemed to be the initial
bona fide offering thereof.
19
offering.
(3) ToFile a post-effective amendment to remove from registration by means of a post-effective amendment
any of the securities being registered whichthat remain unsold at the terminationend of the offering.
(4) The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange of 1934
that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(5)(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrantsmall business issuer pursuant to the foregoing provisions, or otherwise,
the Registrantsmall business issuer has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act of 1933 and
is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrantsmall business issuer of expenses incurred or
paid by a director, officer or controlling person of the Registrantsmall business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrantsmall business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
20(c) The undersigned registrant will:
(1) For determining any liability under the Securities Act, treat
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the small business issuer under Rule 424(b)(1), or
(4) or 497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Blue Dolphin Energy Companythe registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration Statementamendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Citycity of Houston, Statestate of Texas, on June 2,
2000.the 6th day of
July, 2005.
BLUE DOLPHIN ENERGY COMPANY
By: /s/ MICHAEL J. JACOBSON
-------------------------------------
MICHAEL J. JACOBSON, PRESIDENT AND
CHIEF EXECUTIVE OFFICERIvar Siem
---------------------------
Ivar Siem
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this
Registration Statement on Form S-3amendment to the registration statement has been signed below by the following persons
in the capacities and on the dates indicated; and each of the
undersigned officers and directorsindicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Ivar Siem Chairman July 6, 2005
- -------------------------------- (Principal Executive Officer)
Ivar Siem
/s/ Michael J. Jacobson President July 6, 2005
- --------------------------------
Michael J. Jacobson
/s/ G. Brian Lloyd Vice President, Treasurer July 6, 2005
- -------------------------------- (Principal Accounting and Financial Officer)
G. Brian Lloyd
* Director July 6, 2005
- --------------------------------
Laurence N. Benz
* Director July 6, 2005
- --------------------------------
Harris A. Kaffie
* Director July 6, 2005
- --------------------------------
Michael S. Chadwick
II-4
SIGNATURE TITLE DATE
--------- ----- ----
* Director July 6, 2005
- --------------------------------
James M. Trimble
* Director July 6, 2005
- --------------------------------
F. Gardner Parker
* By: /s/ G. Brian Lloyd
---------------------------
G. Brian Lloyd
(Attorney-in-Fact)
II-5
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 (1) Specimen Certificate of common stock.
4.2 (2) Form of Warrant issued pursuant to the Note and Warrant Purchase
Agreement Dated September 8, 2004.
**5.1 Opinion of Porter & Hedges, L.L.P.
*23.1 Consent of UHY Mann Frankfort Stein & Lipp CPAs, LLP.
**23.2 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1).
**24.1 Power of Attorney.
99.1(2) Voting Agreement between certain stockholders of Blue Dolphin
Energy Company and certain investors of Blue Dolphin Energy
Company, dated September 8, 2004.
- --------------------
* Filed herewith.
** Previously filed.
(1) Incorporated herein by reference to Exhibits filed in connection with Form
10-K of Blue Dolphin Energy Company hereby
severally constitutes and appoints Michael J. Jacobson and G. Brian Lloyd, and
each of them, to sign for him, and in his name in the capacity indicated below,
such Registration Statement on Form S-3 and for the purpose of registering such
securitiesyear ended December 31, 1989
under the Securities and Exchange Act of 1933, as amended, and any and all
amendments thereto, including without limitation any registration statements or
post-effective amendment thereof1934, dated March 30, 1990
(Commission File No. 000-15905).
(2) Incorporated herein by reference to Exhibits filed under and meeting the requirementsin connection with Form
8-K of Rule 462(b)Blue Dolphin Energy Company under the Securities and Exchange Act
hereby ratifying and confirming our
signatures as they may be signed by our attorneys to such Registration Statement
and any and all amendments thereto.
SIGNATURES TITLE DATE
---------- ----- ----
/S/ MICHAEL J. JACOBSON President and Chief Executive Officer, May 31, 2000
- --------------------------------- (Principal Executive Officer)
Michael J. Jacobson
/S/ G. BRIAN LLOYD Vice President, Treasurer and Secretary May 31, 2000
- --------------------------------- (Principal Financial and Accounting Officer)
G. Brian Lloyd
/S/ IVAR SIEM Director May 31, 2000
- ---------------------------------
Ivar Siem
/S/ HARRIS A. KAFFIE Director May 31, 2000
- ---------------------------------
Harris A. Kaffie
/S/ ROBERT L. BARBANELL Director May 31, 2000
- ---------------------------------
Robert L. Barbanell
/S/ MICHAEL S. CHADWICK Director May 31, 2000
- ---------------------------------
Michael S. Chadwick
21
EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
* 5.1 -- Opinion of Porter & Hedges, L.L.P.
*23.1 -- Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
*23.2 -- Consent of KPMG LLP
*23.3 -- Consent of Ernst & Young LLP
*23.4 -- Consent of Netherland, Sewell & Associates, Inc., independent
petroleum engineers and geologists
*23.5 -- Consent of Ryder Scott Company, independent petroleum engineers
*24.1 -- Power of Attorney (included on signature page)
- ----------------------------
* Filed herewith
221934, dated September 14, 2004 (Commission File No. 000-15905).