Blue Dolphin Energy (BDCO) 10-Q 16 May 22 2022 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 16, 2022
Cover [Abstract]
Entity Registrant Name	BLUE DOLPHIN ENERGY COMPANY
Entity Central Index Key	0000793306
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		14,799,041
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-15905
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	73-1268729
Entity Interactive Data Current	Yes
Entity Address Address Line 1	801 Travis Street
Entity Address Address Line 2	Suite 2100
Entity Address City Or Town	Houston
Entity Address State Or Province	TX
Entity Address Postal Zip Code	77002
City Area Code	713
Local Phone Number	568-4725
Security 12b Title	Common Stock, par value $0.01 per share
Trading Symbol	BDCO

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 106,000	$ 9,000
Restricted cash	0	48,000
Accounts receivable, net	143,000	126,000
Prepaid expenses and other current assets	1,732,000	2,433,000
Deposits	110,000	110,000
Inventory	5,810,000	3,098,000
Total current assets	7,901,000	5,824,000
LONG-TERM ASSETS
Total property and equipment, net	59,274,000	59,923,000
Operating lease right-of-use assets, net	288,000	332,000
Surety bonds	230,000	230,000
Total long-term assets	59,792,000	60,485,000
TOTAL ASSETS	67,693,000	66,309,000
CURRENT LIABILITIES
Long-term debt less unamortized debt issue costs, current portion (in default)	43,004,000	42,953,000
Long-term debt, related party, current portion (in default)	18,087,000	20,042,000
Interest payable (in default)	8,493,000	8,689,000
Interest payable, related party (in default)	3,614,000	3,454,000
Accounts payable	2,356,000	2,548,000
Accounts payable, related party	155,000	155,000
Current portion of lease liabilities	220,000	215,000
Income taxes payable	41	0
Accrued expenses and other current liabilities	4,855,000	6,225,000
Total current liabilities	80,825,000	84,281,000
LONG-TERM LIABILITIES
Asset retirement obligations	3,494,000	3,461,000
Long-term lease liabilities, net of current	99,000	156,000
Unearned contract renewal income	1,090,000	1,200,000
Long-term debt, net of current portion	2,334,000	838,000
Total long-term liabilities	7,017,000	5,655,000
TOTAL LIABILITIES	87,842,000	89,936,000
STOCKHOLDERS' DEFICIT
Common stock ($0.01 par value, 20,000,000 shares authorized; 12,693,514 shares issued at both March 31, 2022 and December 31, 2021)(1)	127,000	127,000
Additional paid-in capital	38,457,000	38,457,000
Accumulated deficit	(58,733,000)	(62,211,000)
TOTAL STOCKHOLDERS' DEFICIT	(20,149,000)	(23,627,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 67,693,000	$ 66,309,000

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 01, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000,000
Common stock, shares issued	12,693,514	12,693,514,000
Common stock, shares outstanding	12,693,514	12,693,514

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
REVENUE FROM OPERATIONS
Refinery operations	$ 109,757,000	$ 58,483,000
Tolling and terminaling	926,000	930,000
Total revenue from operations	110,683,000	59,413,000
COST OF GOODS SOLD
Crude oil, fuel use, and chemicals	102,393,000	57,783,000
Other conversion costs	1,684,000	1,840,000
Total cost of goods sold	104,077,000	59,623,000
Gross profit (loss)	6,606,000	(210,000)
COST OF OPERATIONS
LEH operating fee, related party	126,000	124,000
Other operating expenses	11,000	54,000
General and administrative expenses	624,000	658,000
Depreciation and amortization	701,000	693,000
Accretion of asset retirement obligations	33
Total cost of operations	1,495,000	1,529,000
Income (loss) from operations	5,111,000	(1,739,000)
OTHER INCOME (EXPENSE)
Easement, interest and other income	0	2,000
Interest and other expense	(1,592,000)	(1,480,000)
Gain on extinguishment of debt	0	43,000
Total other expense	(1,592,000)	(1,435,000)
Income (loss) before income taxes	3,519,000	(3,174,000)
Income tax expense	41,000	0
Net Income (loss)	$ 3,478,000	$ (3,174,000)
Income (loss) per common share:
Basic	$ 0.27	$ (0.25)
Diluted	$ 0.27	$ (0.25)
Weighted average number of common shares outstanding:
Basic	12,693,514	12,693,514
Diluted	12,693,514	12,693,514

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
OPERATING ACTIVITIES
Net income (loss)	$ 3,478	$ (3,174)
used in operating activities:
Depletion, depreciation and amortization	701	693
Accretion of asset retirement obligations	33	0
Amortization of debt issue costs	51	32
Guaranty fees paid in kind	152	152
Related-party interest expense paid in kind	277	225
Deferred revenue and expenses	(110)	(3)
Gain on extinguishment of debt	0	(43)
Changes in operating assets and liabilities
Accounts receivable	(17)	44
Prepaid expenses and other current assets	701	2,504
Deposits and other assets	0	14
Inventory	(2,712)	(37)
Accounts payable, accrued expenses and other liabilities	(1,617)	(913)
Accounts payable, related party	0	0
Net cash provided by operating activities	937	(500)
FINANCING ACTIVITIES
Proceeds from debt	1,500	0
Payments on debt	(4)	(6)
Net activity on related-party debt	(2,384)	(36)
Net cash used in financing activities	(888)	(42)
Net change in cash, cash equivalents, and restricted cash	49	(542)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	57	1,111
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	106	569
Non-cash operating activities
Financing of line of credit via related-party debt	0	873
Amended Pilot Line of Credit offset by tank lease payments	0	576
Interest paid	1,051	287
Income taxes paid (refunded)	$ 0	$ 0

Organization

Organization	3 Months Ended
	Mar. 31, 2022
Organization
Note 1. Organization	(1) Organization Overview Blue Dolphin was formed in 1986 as a Delaware corporation. The company is an independent downstream energy company operating in the Gulf Coast region of the United States. Operations primarily consist of a light sweet-crude, 15,000-bpd crude distillation tower, and approximately 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin trades on the OTCQX under the ticker symbol “BDCO.” Assets are organized in two business segments: ‘refinery operations’ (owned by LE) and ‘tolling and terminaling services’ (owned by LRM and NPS). ‘Corporate and other’ includes Blue Dolphin subsidiaries BDPL (inactive pipeline and facilities assets), BDPC (inactive leasehold interests in oil and gas wells), and BDSC (administrative services). See “Note (4)” to our consolidated financial statements for more information about our business segments. Unless the context otherwise requires, references in this report to “we,” “us,” “our,” or “ours,” refer to Blue Dolphin, one or more of its consolidated subsidiaries or all of them taken as a whole. Affiliates Affiliates controlled approximately 82% of the voting power of our Common Stock as of the filing date of this report. An Affiliate operates and manages all Blue Dolphin assets and funds working capital requirements during periods of working capital deficits. In addition, an Affiliate is a significant customer of our refined products. Blue Dolphin and certain of its subsidiaries are currently parties to a variety of agreements with Affiliates. See “Note (3)” to our consolidated financial statements for additional disclosures related to Affiliate agreements, arrangements, and risks associated with working capital deficits. Going Concern Management determined that certain factors raise substantial doubt about our ability to continue as a going concern. These factors include defaults under secured loan agreements, substantial current debt, margin volatility, historical net losses and working capital and equity deficits, as discussed more fully below. Our consolidated financial statements assume we will continue as a going concern and do not include any adjustments that might result from this uncertainty. Our ability to continue as a going concern depends on sustained positive operating margins and adequate working capital for, amongst other requirements, purchasing crude oil and condensate and making payments on long-term debt. If we are unable to process crude oil and condensate into sellable refined products or make required debt payments, we may consider other options. These options could include selling assets, raising additional debt or equity capital, cutting costs, reducing cash requirements, restructuring debt obligations, or filing bankruptcy. Defaults Under Secured Loan Agreements Third-Party Defaults · Veritex Loans –As of the filing date of this report, LE and LRM were in default under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 for failing to make required monthly principal and interest payments and failing to satisfy financial covenants. In addition, LE was in default under the LE Term Loan Due 2034 for failing to replenish a $1.0 million payment reserve account. Defaults under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 permit Veritex to declare the amounts owed under these loan agreements immediately due and payable, exercise its rights concerning collateral securing obligors’ obligations under these loan agreements, and exercise any other rights and remedies available. · GNCU Loan –As of the filing date of this report, NPS was in default under the NPS Term Loan Due 2031 for failing to satisfy financial covenants. · Kissick Debt – Under a 2015 subordination agreement, John Kissick agreed to subordinate his right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. To date, LE has made no payments under the subordinated Kissick Debt. To date, Mr. Kissick has taken no action due to the non-payment. As of the filing date of this report, there were defaults under the Kissick Debt related to payment of past due obligations at maturity. We can provide no assurance that: (i) our assets or cash flow will be sufficient to fully repay borrowings under our secured loan agreements, either upon maturity or if accelerated, (ii) LE, LRM, and NPS will be able to refinance or restructure the debt, and/or (iii) third parties will provide future default waivers. Defaults under our secured loan agreements and any exercise by third parties of their rights and remedies related to such defaults may have a material adverse effect on the trading prices of our Common Stock and on the value of an investment in our Common Stock, and holders of our Common Stock could lose their investment in our Common Stock in its entirety. Management maintains ongoing dialogue with lenders regarding defaults and continues to actively discuss potential restructuring and refinance opportunities. See “Note (10)” to our consolidated financial statements for additional information regarding defaults under our secured loan agreements and their potential effects on our business, financial condition, and results of operations. Related-Party Defaults · Notes and Loan Agreement – As of the filing date of this report, Blue Dolphin was in default concerning past due payment obligations under the March Carroll Note, March Ingleside Note, and June LEH Note. As of the same date, BDPL was also in default related to past due payment obligations under the BDPL-LEH Loan Agreement. Affiliates controlled approximately 82% of the voting power of our Common Stock as of the filing date of this report, an Affiliate operates and manages all Blue Dolphin assets, an Affiliate is a significant customer of our refined products, and we borrow from Affiliates during periods of working capital deficits. Substantial Current Debt Excluding accrued interest, we had current debt of $61.1 million and $63.0 million, respectively, as of March 31, 2022 and December 31, 2021. Current debt consists of bank debt, investor debt, and related party debt. Substantial current debt is primarily the result of secured loan agreements being in default. As a result, these debt obligations were classified within the current portion of long-term debt on our consolidated balance sheets at March 31, 2022 and December 31, 2021. Margin Volatility In March 2020, the WHO declared the outbreak of COVID-19 a pandemic, and the U.S. economy began to experience pronounced adverse effects as a result of the global outbreak. Significant progress has been made to combat COVID-19 and its multiple variants; however, it remains a global challenge and continues to have an impact on our financial results. The extent of the COVID-19 outbreak on our operational and financial performance will significantly depend on further developments, including the duration and spread of the outbreak and continued impact on our personnel and customers. While domestic demand and refining margins improved heading into 2022 and during the first quarter, we expect global market volatility to continue at least until the outbreak of COVID-19, including any new variants, stabilizes, if not longer. In February 2022, Russia invaded neighboring Ukraine. The conflict caused turmoil in global commodity markets, injecting even more uncertainty into a worldwide economy recovering from the effects of COVID-19. Sanctions imposed on Russia resulted in global tightening of refined product inventories and crude stocks, which caused refining margins to widen significantly. These conditions contributed to a significant improvement in our refining operating results in the first quarter of 2022 compared to the prior year period. Despite favorable refining margins during the first quarter, the future impact of the Russian-Ukrainian conflict on our financial position and results of operations remains uncertain. The Russian conflict with Ukraine and the COVID-19 pandemic continue to evolve, and the extent to which these events may impact our business, financial condition, liquidity, results of operations, and prospects will depend highly on future developments, which are very uncertain and cannot be predicted with confidence. Historic Net Losses and Working Capital Deficits Net Income (Losses) Working Capital Deficits Cash and cash equivalents totaled $0.1 million and $0.01 million at March 31, 2022 and December 31, 2021, respectively. Restricted cash (current portion) totaled $0 and $0.05 million at March 31, 2022 and December 31, 2021, respectively. Our financial health has been materially and adversely affected by defaults in our secured loan agreements, substantial current debt, margin volatility, historical net losses and working capital and equity deficits. If Tartan terminates the Crude Supply Agreement or terminal services agreement, our ability to acquire crude oil and condensate could be adversely affected. If producers experience crude supply constraints and increased transportation costs, our crude acquisition costs may rise, or we may not receive sufficient amounts to meet our needs. Operating Risks Successful execution of our business strategy depends on several critical factors, including having adequate working capital to meet contractual, operational, regulatory, and safety needs and having favorable margins on refined products. The Russian conflict with Ukraine and the COVID-19 pandemic continue to evolve, and the extent to which these events may impact our business, financial condition, liquidity, results of operations, and prospects will depend highly on future developments, which are very uncertain and cannot be predicted with confidence. Management continues to take steps to mitigate risk, avoid business disruptions, manage cash flow, and remain competitive in a volatile commodity price environment. Mitigation steps include: adjusting throughput and production based on market conditions, optimizing receivables and payables by prioritizing payments, optimizing inventory levels based on demand, monitoring discretionary spending, and delaying capital expenditures. To safeguard personnel, we adopted remote working where possible and social distancing, mask-wearing, and other site-specific precautionary measures where on-site operations are required. We also incentivize personnel to receive the COVID-19 vaccine. We can provide no guarantees that: our business strategy will be successful, Affiliates will continue to fund our working capital needs when we experience working capital deficits, we will meet regulatory requirements to provide additional financial assurance (supplemental pipeline bonds) and decommission offshore pipelines and platform assets, we can obtain additional financing on commercially reasonable terms or at all, or margins on our refined products will be favorable. Further, if third parties exercise their rights and remedies under our secured loan agreements, our business, financial condition, and results of operations will be materially adversely affected.

Principles of Consolidation and

Principles of Consolidation and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2022
Principles of Consolidation and Significant Accounting Policies
Note 2. Principles of Consolidation and Significant Accounting Policies	(2) Principles of Consolidation and Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements, which include Blue Dolphin and its subsidiaries, have been prepared in accordance with GAAP for interim consolidated financial information pursuant to the rules and regulations of the SEC under Article 10 of Regulation S-X and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in our audited financial statements have been condensed or omitted pursuant to the SEC’s rules and regulations. Significant intercompany transactions have been eliminated in the consolidation. In management’s opinion, all adjustments considered necessary for a fair presentation have been included, disclosures are adequate, and the presented information is not misleading. The consolidated balance sheet as of December 31, 2021 was derived from the audited financial statements at that date. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 Significant Accounting Policies The summary of significant accounting policies of Blue Dolphin is presented to assist in understanding our consolidated financial statements. Our consolidated financial statements and accompanying notes are representations of management, who is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of our consolidated financial statements. Use of Estimates Cash and Cash Equivalents Restricted Cash Accounts Receivable and Allowance for Doubtful Accounts Inventory Property and Equipment Refinery and Facilities Pipelines and Facilities Oil and Gas Properties CIP Leases. For operating leases, we record lease cost on a straight-line basis over the lease term; we record lease expenses in the appropriate line on the income statement based on the leased asset’s intended use. For finance leases (previously referred to under GAAP as capital leases), we amortize lease payments for the ROU asset on a straight-line basis over the lesser of the leased asset’s useful life or the lease term; we record amortization expenses on the income statement in ‘depreciation and amortization expense;’ we record interest expense on the income statement in ‘interest and other expense.’ Revenue Recognition Refinery Operations Revenue We consider a variety of facts and circumstances in assessing the point of a control transfer, including but not limited to: whether the purchaser can direct the use of the refined product, the transfer of significant risks and rewards, our rights to payment, and transfer of legal title. In each case, the term between the sale and when payment is due is not significant. We include incurred transportation, shipping, and handling costs in the cost of goods sold. We do not include excise and other taxes collected from customers and remitted to governmental authorities in revenue. Tolling and Terminaling Revenue We typically satisfy performance obligations for tolling and terminaling operations over time. We determine the transaction price at agreement inception based on the guaranteed minimum amount of revenue over the agreement term. We allocate the transaction price to the single performance obligation that exists under the agreement. We recognize revenue in the amount for which we have a right to invoice. Generally, payment terms do not exceed 30 days. Revenue from tank storage customers may, from time to time, include fees for ancillary services, such as in-tank and tank-to-tank blending. These services are considered optional to the customer. The fixed cost under the customer’s tank storage agreement does not include ancillary service fees. We consider ancillary services as a separate performance obligation under the tank storage agreement. We satisfy the performance obligation and recognize the associated fee when we complete the requested service. Deferred Revenue Unearned Contract Renewal Income Income Taxes Management uses significant judgment in evaluating uncertain tax positions and determining the provision for income taxes. As of each reporting date, we consider new evidence, both positive and negative, to assess the realizability of deferred tax assets. We weigh whether there is a more than 50% probability of realizing a portion or all the deferred tax assets. Realization depends on the generation of future taxable income before the expiration of any NOL carryforwards. We record a valuation allowance against deferred income tax assets if there is a more than 50% probability of not realizing some portion of the asset. We recognize an uncertain tax positions benefit in our financial statements if deferred tax assets meet a minimum recognition threshold. First, we determine whether there is a more than 50% probability that our income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If we meet the criteria, we record a benefit in the financial statements equal to the largest amount greater than 50% likely to be realized upon settlement with taxing authorities. A significant piece of objective negative evidence evaluated was cumulative losses incurred over the three-year period ended March 31, 2022. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Based on this evaluation, we recorded a valuation allowance against the deferred tax assets for which realization was not deemed more likely than not as of March 31, 2022 and December 31, 2021. In addition, we have NOL carryforwards that remain available for future use. See “Note (13)” to our consolidated financial statements for more information related to income taxes. Impairment or Disposal of Long-Lived Assets Commodity price market volatility associated with the COVID-19 pandemic and the Russian conflict with Ukraine could affect the value of certain of our long-lived assets. Management evaluated refinery and facilities assets for impairment as of December 31, 2021. We did not record any impairment of our long-lived assets for the periods presented. However, impairment may be required in the future if losses continue to be material, or as new opportunities arise, such as reconfiguration of the Nixon refinery into a renewable fuels facility. Asset Retirement Obligations Refinery and Facilities Pipeline and Facilities Computation of Earnings Per Share New Pronouncements Adopted New Pronouncements Issued, Not Yet Effective . No new pronouncements issued but not yet effective are not expected to have a material impact on our financial position, results of operations, or liquidity.

RelatedParty Transactions

RelatedParty Transactions	3 Months Ended
	Mar. 31, 2022
RelatedParty Transactions
Note 3. Related-Party Transactions	(3) Related-Party Transactions Affiliate Operational Agreements Summary Blue Dolphin and certain of its subsidiaries are parties to several operational agreements with Affiliates, including the Amended and Restated Operating Agreement, BDSC-LEH Office Sub-Lease Agreement, and the Jet Fuel Sales Agreement. Working Capital We have historically relied on Affiliates for funding when revenue from operations and availability under bank facilities were insufficient to meet our liquidity and working capital needs. We reflect such borrowings in our consolidated balance sheets in accounts payable, related party, or long-term debt, related party. Related-Party Financial Impact Consolidated Balance Sheets Accounts payable, related party Blue Dolphin Energy Company March 31, 2022 │Page 20 March 31, December 31, 2022 2021 (in thousands) LEH June LEH Note (in default) $ 10,507 $ 12,672 BDPL-LEH Loan Agreement 7,614 7,454 LEH Total 18,121 20,126 Ingleside March Ingleside Note (in default) 1,075 1,066 Jonathan Carroll March Carroll Note (in default) 2,505 2,304 21,701 23,496 Less: Long-term debt, related party, current portion, in default (18,087 ) (20,042 ) Less: Accrued interest payable, related party (in default) (3,614 ) (3,454 ) Currently, management does not intend to pay Mr. Carroll the cash portion owed under the LE Amended and Restated Guaranty Fee Agreement and LRM Amended and Restated Guaranty Fee Agreement due to Blue Dolphin’s working capital deficits. The cash portion will continue to accrue and increase the outstanding principal balance owed to Mr. Carroll under the March Carroll Note. See “Notes (1) and (10)” to our consolidated financial statements for additional information regarding defaults under our secured loan agreements and their potential effects on our business, financial condition, and results of operations. Consolidated Statements of Operations Total revenue from operations. Three Months Ended March 31, 2022 2021 (in thousands, except percent amounts) Refinery operations LEH $ 34,518 31.2 % $ 16,080 27.1 % Third-Parties 75,239 68.0 % 42,403 71.3 % Tolling and terminaling Third-Parties 926 0.8 % 930 1.6 % $ 110,683 100.0 % $ 59,413 100.0 % Interest expense. Three Months Ended March 31, 2022 2021 (in thousands) Jonathan Carroll Guaranty Fee Agreements LE Term Loan Due 2034 $ 107 $ 108 LRM Term Loan Due 2034 45 45 March Carroll Note ( in default 49 29 LEH BDPL-LEH Loan Agreement ( in default 160 160 June LEH Note ( in default 206 182 Ingleside March Ingleside Note ( in default 21 14 $ 588 $ 538 Other

Revenue and Segment Information

Revenue and Segment Information	3 Months Ended
	Mar. 31, 2022
Revenue and Segment Information
Note 4. Revenue and Segment Information	(4) Revenue and Segment Information We have two reportable business segments: (i) refinery operations, focused on refining and marketing petroleum products at the Nixon facility, and (ii) tolling and terminaling, focused on tolling and storing petroleum products for third parties at the Nixon facility. Corporate and other includes BDSC, BDPL, and BDPC. Revenue from Contracts with Customers Disaggregation of Revenue Receivables from Contracts with Customers Contract Liabilities Remaining Performance Obligations Remainder of Page Intentionally Left Blank Blue Dolphin Energy Company March 31, 2022 │Page 22 Three Months Ended March 31, 2022 2021 (in thousands) Net revenue (excluding intercompany fees and sales) Refinery operations $ 109,757 $ 58,483 Tolling and terminaling 926 930 Total net revenue 110,683 59,413 Intercompany fees and sales Refinery operations (653 ) (566 ) Tolling and terminaling 653 566 Total intercompany fees - - Operation costs and expenses (1) Refinery operations (103,458 ) (59,289 ) Tolling and terminaling (619 ) (334 ) Corporate and other (11 ) (54 ) Total operation costs and expenses (104,088 ) (59,677 ) Segment contribution margin (deficit) Refinery operations 5,646 (1,372 ) Tolling and terminaling 960 1,162 Corporate and other (11 ) (54 ) Total segment contribution margin (deficit) 6,595 (264 ) General and administrative expenses (2) Refinery operations (282 ) (301 ) Tolling and terminaling (70 ) (68 ) Corporate and other (431 ) (413 ) Total general and administrative expenses (783 ) (782 ) Depreciation and amortization Refinery operations (307 ) (302 ) Tolling and terminaling (342 ) (340 ) Corporate and other (52 ) (51 ) Total depreciation and amortization (701 ) (693 ) Interest and other non-operating expenses, net (3) Refinery operations (717 ) (598 ) Tolling and terminaling (418 ) (452 ) Corporate and other (457 ) (385 ) Total interest and other non-operating expenses, net (1,592 ) (1,435 ) Income (loss) before income taxes Refinery operations 4,340 (2,573 ) Tolling and terminaling 130 302 Corporate and other (951 ) (903 ) Total income (loss) before income taxes 3,519 (3,174 ) Income tax expense (41) - Net income (loss) $ 3,478 $ (3,174 ) (1) Operation costs include cost of goods sold. Also, operation costs within: (a) tolling and terminaling includes terminal operating expenses and an allocation of other costs (e.g., insurance and maintenance) and (b) corporate and other includes expenses related to BDSC, BDPC and BDPL. (2) General and administrative expenses within refinery operations include the LEH operating fee and accretion of asset retirement obligations. (3) Corporate and other within interest and other non-operating expenses, net primarily reflects interest expense for the LE Amended and Restated Guaranty Fee Agreement, LRM Amended and Restated Guaranty Fee Agreement, June LEH Note, March Carroll Note, and March Ingleside Note. Blue Dolphin Energy Company March 31, 2022 │Page 23 Three Months Ended March 31, 2022 2021 (in thousands) Capital expenditures Refinery operations $ - $ - Tolling and terminaling - - Corporate and other - - Total capital expenditures $ - $ - March 31, 2022 2021 (in thousands) Identifiable assets Refinery operations $ 48,741 $ 45,186 Tolling and terminaling 17,434 18,527 Corporate and other 1,518 1,839 Total identifiable assets $ 67,693 $ 65,552

Concentration of Risk

Concentration of Risk	3 Months Ended
	Mar. 31, 2022
Concentration of Risk
Note 5. Concentration of Risk	(5) Concentration of Risk Bank Accounts Financial instruments that potentially subject us to concentrations of risk consist primarily of cash, trade receivables and payables. We maintain cash balances at financial institutions in Houston, Texas. The FDIC insures certain financial products up to a maximum of $250,000 per depositor. At March 31, 2022 and December 31, 2021, our cash balances (including restricted cash) did not exceed the FDIC insurance limit per depositor. Key Supplier Operation of the Nixon refinery depends on our ability to purchase adequate amounts of crude oil and condensate. We have a long-term crude supply agreement in place with Tartan. The volume-based Crude Supply Agreement expires when we receive 24.8 million net bbls of crude oil. After that, the Crude Supply Agreement automatically renews for successive one-year terms (each such term, a renewal term). Either party may provide the other with notice of non-renewal at least 60 days before the expiration of any renewal term. As of March 31, 2022, we received approximately 10.1 million bbls, or 40.4%, of the contracted total volume under the Crude Supply Agreement. Related to the Crude Supply Agreement, Tartan stores crude oil at the Nixon facility under a terminal services agreement dated as of June 1, 2019. Under the terminal services agreement, crude oil is stored at the Nixon facility at a specified rate per bbl of the storage tank’s shell capacity. The terminal services agreement renews on a one-year evergreen basis. Either party may terminate the terminal services agreement by providing the other party 60 days prior written notice. However, the terminal services agreement will automatically terminate upon expiration or termination of the Crude Supply Agreement. Our financial health has been materially and adversely affected by defaults in our secured loan agreements, substantial current debt, margin volatility, historical net losses and working capital and equity deficits. If Tartan terminates the Crude Supply Agreement or terminal services agreement, our ability to acquire crude oil and condensate could be adversely affected. If producers experience crude supply constraints and increased transportation costs, our crude acquisition costs may rise, or we may not receive sufficient amounts to meet our needs. Significant Customers We routinely assess the financial strength of our customers. To date, we have not experienced significant write-downs in accounts receivable balances. We believe that our accounts receivable credit risk exposure is limited. Three Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at March 31, March 31, 2022 3 64.9 % $ 0 March 31, 2021 4 90.4 % $ 0 One of our significant customers is LEH, an Affiliate. Due to a HUBZone certification, the Affiliate purchases our jet fuel under a Jet Fuel Sales Agreement and bids on jet fuel contracts under preferential pricing terms. The Affiliate accounted for 31.2% and 27.1% of total revenue from operations for the three months ended March 31, 2022 and 2021, respectively. The Affiliate represented $0 in accounts receivable at both March 31, 2022 and 2021, respectively. Concentration of Customers Refined Product Sales Three Months Ended March 31, 2022 2021 (in thousands, except percent amounts) LPG mix $ - 0.0 % $ 6 0.0 % Naphtha 27,754 25.2 % 14,224 24.3 % Jet fuel 34,518 30.3 % 16,080 27.5 % HOBM 23,075 22.0 % 15,663 26.8 % AGO 24,410 22.5 % 12,510 21.4 % $ 109,757 100.0 % $ 58,483 100.0 % An Affiliate, LEH, purchases all of our jet fuel. See “Notes (3) and (15)” to our consolidated financial statements for additional disclosures related to Affiliate agreements and arrangements, as well as “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	3 Months Ended
	Mar. 31, 2022
Prepaid Expenses and Other Current Assets
Note 6. Prepaid Expenses and Other Current Assets	(6) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of the dates indicated consisted of the following: March 31, December 31, 2022 2021 (in thousands) Prepaid crude oil and condensate $ 932 $ 1,368 Prepaid insurance 680 953 Prepaid easement renewal fees 71 76 Other prepaids 49 36 $ 1,732 $ 2,433

Inventory

Inventory	3 Months Ended
	Mar. 31, 2022
Inventory
Note 7. Inventory	(7) Inventory Inventory as of the dates indicated consisted of the following: March 31, December 31, 2022 2021 (in thousands) HOBM $ 3,265 $ 1,749 Naphtha 1,107 189 Crude oil and condensate 954 660 AGO 305 338 Chemicals 116 121 Propane 43 27 LPG mix 20 14 $ 5,810 $ 3,098

Property Plant and Equipment Ne

Property Plant and Equipment Net	3 Months Ended
	Mar. 31, 2022
Property Plant and Equipment Net
Note 8. Property, Plant and Equipment, Net	(8) Property, Plant and Equipment, Net Property, plant and equipment, net, as of the dates indicated consisted of the following: March 31, December 31, 2022 2021 (in thousands) Refinery and facilities $ 72,583 $ 72,583 Land 566 566 Other property and equipment 903 903 74,052 74,052 Less: Accumulated depreciation and amortiation (18,444 ) (17,795 ) 55,608 56,257 CIP 3,666 3,666 $ 59,274 $ 59,923

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	3 Months Ended
	Mar. 31, 2022
Accrued Expenses and Other Current Liabilities
Note 9. Accrued Expenses and Other Current Liabilities	(9) Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of the dates indicated consisted of the following: March 31, December 31, 2022 2021 (in thousands) Unearned revenue from contracts with customers $ 3,066 $ 4,388 Accrued fines and penalties 407 407 Unearned contract renewal income 400 400 Board of director fees payable 263 230 Other payable 207 218 Taxes payable 203 136 Customer deposits 173 173 Insurance 136 273 $ 4,855 $ 6,225

ThirdParty LongTerm Debt

ThirdParty LongTerm Debt	3 Months Ended
	Mar. 31, 2022
ThirdParty LongTerm Debt
Note 10 .Third-Party Long-Term Debt	(10) Third-Party Long-Term Debt Outstanding Principal, Debt Issue Costs, and Accrued Interest Third-party long-term debt, including outstanding principal and accrued interest, as of the dates indicated was as follows: March 31, December 31, 2022 2021 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 23,580 $ 23,789 LRM Term Loan Due 2034 (in default) 9,777 9,861 Kissick Debt (in default) 10,409 10,210 GNCU Loan NPS Term Loan Due 2031 ( in default 9,976 10,094 SBA EIDLs BDEC Term Loan Due 2051 2,025 512 LE Term Loan Due 2050 158 156 NPS Term Loan Due 2050 158 156 Equipment Loan Due 2025 49 53 56,132 54,831 Less: Current portion of long-term debt, net (43,004 ) (42,953 ) Less: Unamortized debt issue costs (2,301 ) (2,351 ) Less: Accrued interest payable (in default) (8,493 ) (8,689 ) $ 2,334 $ 838 Blue Dolphin Energy Company March 31, 2022 │Page 26 March 31, December 31, 2022 2021 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in default) 768 768 GNCU Loan NPS Term Loan Due 2031 ( in default 730 730 Less: Accumulated amortization (871 ) (821 ) $ 2,301 $ 2,351 Amortization expense was $0.05 million and $0.03 million for the three months ended March 31, 2022 and 2021, respectively. Accrued interest related to third-party long-term debt, reflected as accrued interest payable in our consolidated balance sheets, as of the dates indicated consisted of the following: March 31, December 31, 2022 2021 (in thousands) Kissick Debt (in default) $ 5,431 $ 5,232 Veritex Loans LE Term Loan Due 2034 (in default) 2,129 2,338 LRM Term Loan Due 2034 (in default) 875 959 GNCU Loan NPS Term Loan Due 2031 ( in default 17 136 SBA EIDLs BDEC Term Loan Due 2051 25 12 LE Term Loan Due 2050 8 6 NPS Term Loan Due 2050 8 6 8,493 8,689 Less: Accrued interest payable (in default) (8,493 ) (8,689 ) Long-term Interest Payable, Net of Current Portion $ - $ - As reflected in the table above and elsewhere in this report, we are in default under the LE Term Loan Due 2034, LRM Term Loan Due 2034, NPS Term Loan Due 2031, and the Kissick Debt. Defaults under these secured loan agreements permit the lender to declare the amounts owed under these loan agreements immediately due and payable, exercise their rights with respect to collateral securing obligors’ obligations under these loan agreements, and/or exercise any other rights and remedies available. The debt associated with these loan agreements was classified within the current portion of long-term debt on our consolidated balance sheets at March 31, 2022 and December 31, 2021. Any exercise by third parties of their rights and remedies under our secured loan agreements will have a material adverse effect on our business operations, including crude oil and condensate procurement and our customer relationships; financial condition; and results of operations. In such a case, the trading price of our Common Stock and the value of an investment in our Common Stock could significantly decrease, which could lead to holders of our Common Stock losing their investment in our Common Stock in its entirety. We can provide no assurance that: (i) our assets or cash flow will be sufficient to fully repay borrowings under our secured loan agreements, either upon maturity or if accelerated, (ii) LE, LRM, and NPS will be able to refinance or restructure the debt, and/or (iii) third parties will provide future default waivers. Defaults under our secured loan agreements and any exercise by third parties of their rights and remedies related to such defaults may have a material adverse effect on our business, the trading prices of our Common Stock, and on the value of an investment in our Common Stock, and holders of our Common Stock could lose their investment in our Common Stock in its entirety. See “Notes (1) and (3)” to our consolidated financial statements for additional information regarding defaults under our secured loan agreements and their potential effects on our business, financial condition, and results of operations.

AROs

AROs	3 Months Ended
	Mar. 31, 2022
AROs
Note 11 . ARO's	(11) AROs Refinery and Facilities Management has concluded that there is no legal or contractual obligation to dismantle or remove refinery and facilities assets. Management believes that refinery and facilities assets have indeterminate lives under FASB ASC guidance for estimating AROs because dates or ranges of dates upon which we would retire these assets cannot reasonably be estimated at this time. When a legal or contractual obligation to dismantle or remove refinery and facilities assets arises and a date or range of dates can reasonably be estimated for the retirement of these assets, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that cost using present value techniques. Pipelines and Facilities and Oil and Gas Properties We have AROs associated with decommissioning our pipelines and facilities assets, as well as plugging and abandoning our oil and gas properties. We recorded a discounted liability for the fair value of an ARO with a corresponding increase to the carrying value of the related long-lived asset at the time the asset was installed or placed in service, and we depreciated the amount added to property and equipment. Although these assets were previously fully accreted, during the twelve months ended December 31, 2021 we determined that the estimated future cost and timing of decommissioning these assets changed. As a result, we recorded an increase in liability at December 31, 2021, and we will recognize accretion expense relating to the discounted liability of the assets over their remaining life. ARO liability as of the dates indicated was as follows: March 31, December 31, 2022 2021 (in thousands) AROs, at the beginning of the period $ 3,461 $ 2,370 Changes in estimates of existing obligations - 1,091 Accretion expense 33 - 3,494 3,461 Less: AROs, current portion - - Long-term AROs, at the end of the period $ 3,494 $ 3,461 See “Note (15)” to our consolidated financial statements for disclosures related to decommissioning of our offshore pipelines and platform assets and related risks.

Lease Obligations

Lease Obligations	3 Months Ended
	Mar. 31, 2022
Lease Obligations
Note 12. Lease Obligatons	(12) Lease Obligations Lease Obligations Office Lease In March 2021, BDSC defaulted on the office lease due to non-payment of rent. In May 2021, BDSC and TR 801 Travis LLC (“Building Lessor”) reached an agreement to cure BDSC’s office lease default. Under the terms of a fourth amendment to the office lease, Building Lessor agreed to defer BDSC’s past due obligations, including rent installments and other charges totaling approximately $0.1 million (the “Past Due Obligations”), in equal monthly installments beginning in June 2021, and continuing through lease expiration The Past Due Obligations are subject to an annual percentage rate of 4.50%. As revised, BDSC’s monthly base rent including the prorated portion of the Past Due Obligations was $0.02 million. Building Lessor notified BDSC in an October 11, 2021 letter of a new default under the office lease due to non-payment of rent. As of the filing date of this report, BDSC was in default related to required monthly base rent including Past Due Obligations, as well as for proportionate base costs. Default under the office lease permits Building Lessor to declare the amounts owed under the office lease immediately due and payable, exercise its rights concerning collateral securing obligors’ obligations under the office lease, including property placed in or upon the leased premises, and exercise any other rights and remedies available. BDSC and Lessor are in discussions with regard to requirements to cure the default. Although management desires to cure the default, there can be no assurance that management’s efforts will be successful. An Affiliate, LEH, subleases a portion of the Houston office space. BDSC received sublease income from LEH totaling $0.008 million for both three-month periods ended March 31, 2022, and 2021. See “Note (3)” to our consolidated financial statements for additional disclosures related to the Affiliate sub-lease. Blue Dolphin Energy Company March 31, 2022 │Page 28 March 31, December 31, Balance Sheet Location 2022 2021 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 787 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (499 ) (455 ) Total lease assets 288 332 Liabilities Current Operating lease Current portion of lease liabilities 220 215 Noncurrent Operating lease Long-term lease liabilities, net of current 99 156 Total lease liabilities $ 319 $ 371 Weighted average remaining lease term in years Operating lease 1.42 Weighted average discount rate Operating lease 8.25 % Finance leases 8.25 % The following table presents information related to lease costs incurred for operating and finance leases: Three Months Ended March 31, 2022 2021 (in thousands) Operating lease costs $ 51 $ 51 Total lease cost $ 51 $ 51 The table below presents supplemental cash flow information related to leases as follows: March 31, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 52 $ 47 As of March 31, 2022, maturities of lease liabilities for the periods indicated were as follows: March 31, Operating Lease Total (in thousands) 2023 $ 220 $ 220 2024 99 99 $ 319 $ 319 Future minimum annual lease commitments that are non-cancelable: Operating March 31, Lease (in thousands) 2023 $ 238 2024 101 $ 339

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2022
Income Taxes
Note 13. Income Taxes	(13) Income Taxes Tax Provision The provision for income tax benefit (expense) for the periods indicated was as follows: Three Months Ended March 31, 2022 2021 (in thousands) Current Federal $ - $ - State (41) - Deferred Federal (1,086) 667 State - - Change in valuation allowance 1,086 (667 ) Total provision for income taxes $ (41) $ - TMT is treated like an income tax for financial reporting purposes. Deferred income taxes as of the dates indicated consisted of the following: March 31, December 31, 2022 2021 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 15,588 $ 16,818 Business interest expense 4,573 4,680 Start-up costs (crude oil and condensate processing facility) 403 424 ARO liability/deferred revenue 734 727 Other 18 12 Total deferred tax assets 21,316 22,661 Deferred tax liabilities: Basis differences in property and equipment (8,012 ) (7,945 ) Total deferred tax liabilities (8,012 ) (7,945 ) 13,304 14,716 Valuation allowance (13,304 ) (14,716 ) Deferred tax assets, net $ - $ - Deferred Income Taxes Balances for deferred income tax represent the effects of temporary differences between carrying amounts and the actual income tax basis of our assets and liabilities; the balances also reflect NOL carryforwards. We record the balances based on tax rates we expect to be in effect when paid. NOL carryforwards and deferred tax assets represent amounts available to reduce future taxable income. NOL Carryforwards Blue Dolphin Energy Company March 31, 2022 │Page 30 Net Operating Loss Carryforward Pre-Ownership Change Post-Ownership Change Total (in thousands) Balance at December 31, 2020 9,614 56,363 65,977 Net operating losses used and expired (1,717 ) 9,148 7,431 Balance at December 31, 2021 $ 7,897 $ 65,511 $ 73,408 Net operating losses used and expired (5,855 ) - (5,855 ) Balance at March 31, 2022 $ 2,042 $ 65,511 $ 67,553 Valuation Allowance We have NOL carryforwards that remain available for future use. At March 31, 2022 and December 31, 2021, there were no uncertain tax positions for which a reserve or liability was necessary.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2022
Earnings Per Share
Note 14. Earnings Per Share	(14) Earnings Per Share A reconciliation between basic and diluted income per share for the periods indicated was as follows: Three Months Ended March 31, 2022 2021 (in thousands, except share and per share amounts) Net income (loss) $ 3,478 $ (3,174 ) Basic and diluted income (loss) per share $ 0.27 $ (0.25 ) Basic and Diluted Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock 12,693,514 12,693,514 Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted EPS for the three months ended March 31, 2022 and 2021 was the same as basic EPS as there were no stock options or other dilutive instruments outstanding.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2022
Commitments and Contingencies
Note 15. Commitments and Contingencies	(15) Commitments and Contingencies Amended and Restated Operating Agreement See “Note (3)” to our consolidated financial statements for additional disclosures related to operation and management of all Blue Dolphin assets by an Affiliate under the Amended and Restated Operating Agreement. BSEE Offshore Pipelines and Platform Decommissioning BDPL has pipelines and platform assets that are subject to BSEE’s idle iron regulations. Idle iron regulations mandate lessees and rights-of-way holders to permanently abandon and/or remove platforms and other structures when they are no longer useful for operations. Until such structures are abandoned or removed, lessees and rights-of-way holders are required to inspect and maintain the assets in accordance with regulatory requirements. In December 2018, BSEE issued an INC to BDPL for failure to flush and fill Pipeline Segment No. 13101. Management met with BSEE in August 2019 to address BDPL’s plans with respect to decommissioning its offshore pipelines and platform assets. BSEE proposed that BDPL re-submit pipeline and platform decommissioning permit applications, including a safe boarding plan, by February 2020. BDPL submitted permit applications to BSEE in February 2020 and the USACOE in March 2020. In April 2020, BSEE issued another INC to BDPL for failure to perform the required structural surveys for the GA-288C Platform. BDPL completed the required platform surveys in June 2020. Abandonment operations were delayed due to our cash constraints associated with historical net losses and the ongoing impact of COVID-19. We cannot currently estimate when decommissioning may occur. Lack of permit approvals does not relieve BDPL of its obligations to remedy the BSEE INCs or of BSEE’s authority to impose financial penalties. If BDPL fails to complete decommissioning of the offshore pipelines and platform assets and/or remedy the INCs within a timeframe determined to be prudent by BSEE, BDPL could be subject to regulatory oversight and enforcement, including but not limited to failure to correct an INC, civil penalties, and revocation of BDPL’s operator designation, which could have a material adverse effect on our earnings, cash flows, and liquidity. We are currently unable to predict the outcome of the BSEE INCs. Accordingly, we did not record a liability related to potential penalties on our consolidated balance sheets as of March 31, 2022 and December 31, 2021. At both March 31, 2022 and December 31, 2021, BDPL maintained $3.5 million in AROs related to abandonment of these assets, which amount does not include potential penalties. Defaults Under Secured Loan Agreements with Third Parties and Related Parties See “Notes (1), (3), and (10)” to our consolidated financial statements for additional disclosures related to defaults under our secured and unsecured debt agreements. Financing Agreements and Guarantees Indebtedness Guarantees Health, Safety and Environmental Matters The operations of certain Blue Dolphin subsidiaries are subject to extensive federal, state, and local environmental, health, and safety regulations governing, among other things, the generation, storage, handling, use and transportation of petroleum products and hazardous substances; the emission and discharge of materials into the environment; waste management; characteristics and composition of jet fuel and other products; and the monitoring, reporting and control of air emissions. These operations also require numerous permits and authorizations under various environmental, health, and safety laws and regulations. Failure to obtain and comply with these permits or environmental, health, or safety laws generally could result in fines, penalties or other sanctions, or a revocation of our permits. Legal Matters In the ordinary course of business, we are involved in legal matters incidental to the routine operation of our business, such as mechanic’s liens and contract-related disputes. We may also become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. Large, and sometimes unspecified, damages or penalties may be sought from us in some matters and certain matters may require years to resolve. Although we cannot provide assurance, we believe that an adverse resolution of the matters described below would not have a material impact on our liquidity, consolidated financial position, or consolidated results of operations. Unresolved Matters. BOEM Additional Financial Assurance (Supplemental Pipeline Bonds) BDPL historically maintained $0.9 million in financial assurance to BOEM for the decommissioning of its trunk pipeline offshore in federal waters. Following an agency restructuring of the financial assurance program, in March 2018 BOEM ordered BDPL to provide additional financial assurance totaling approximately $4.8 million for five (5) existing pipeline rights-of-way. In June 2018, BOEM issued BDPL INCs for each right-of-way that failed to comply. BDPL appealed the INCs to the IBLA. Although the IBLA granted multiple extension requests, the Office of the Solicitor of the U.S. Department of the Interior indicated that BOEM would not consent to further extensions. The solicitor’s office signaled that BDPL’s adherence to milestones identified in an August 2019 meeting between management and BSEE may help in future discussions with BOEM related to the INCs. Decommissioning of these assets will significantly reduce or eliminate the amount of financial assurance required by BOEM, which may serve to partially or fully resolve the INCs. Decommissioning of these assets was delayed due to our cash constraints associated with historical net losses and the ongoing impact of COVID-19. We cannot currently estimate when decommissioning may occur. BDPL’s pending appeal of the BOEM INCs does not relieve BDPL of its obligations to provide additional financial assurance or of BOEM’s authority to impose financial penalties. There can be no assurance that we will be able to meet additional financial assurance (supplemental pipeline bond) requirements. If BDPL is required by BOEM to provide significant additional financial assurance (supplemental pipeline bonds) or is assessed significant penalties under the INCs, we will experience a significant and material adverse effect on our operations, liquidity, and financial condition. We are currently unable to predict the outcome of the BOEM INCs. Accordingly, we did not record a liability on our consolidated balance sheets as of March 31, 2022 and December 31, 2021. At both March 31, 2022 and December 31, 2021, BDPL maintained approximately $0.9 million in pipeline rights-of-way surety bonds issued to BOEM through RLI Corp. Of the pipeline rights-of-way bonds, $0.7 million was credit-backed and $0.2 million was cash-backed. TCEQ Proposed Agreed Order Pilot Dispute Related to Set-Off Payments Defaults under Secured Loan Agreements Counterparty Contract-Related Dispute

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2022
Subsequent Events
Note 16. Subsequent Events	(16) Subsequent Events Sales of Unregistered Securities Set forth below is information regarding the sale or issuance of shares of Common Stock by us that were not registered under the Securities Act of 1933 and subsequent to the three months ended March 31, 2022: On May 12, 2022, we issued an aggregate of 1,853,080 restricted shares of Common Stock to Jonathan Carroll, which represents payment of the common stock component under the LE Amended and Restated Guaranty Fee Agreement and LRM Amended and Restated Guaranty Fee Agreement for monthly periods from April 30, 2020 through March 31, 2022. The average cost basis was $0.42, the low was $0.27, and the high was $0.64. Currently, management does not intend on paying Mr. Carroll the cash portion of guaranty fees due to Blue Dolphin’s working capital deficits. The cash portion will continue to accrue and be added to the principal balance of the March Carroll Note. See “Note (3)” to our consolidated financial statements for additional disclosures related to Affiliates and working capital deficits, as well as for information related to the LE Amended and Restated Guaranty Fee Agreement and LRM Amended and Restated Guaranty Fee Agreement. On May 12, 2022, we also issued an aggregate of 252,447 restricted shares of Common Stock to certain of our non-employee, independent directors, which represents payment for services rendered to the Board for the three-month periods ended September 30, 2020, March 31, 2021, September 30, 2021, and March 31, 2022. The average cost basis was $0.55, the low was $0.33, and the high was $0.91. The sale and issuance of the securities were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act.

Principles of Consolidation a_2

Principles of Consolidation and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2022
Principles of Consolidation and Significant Accounting Policies (Policies)
Use of Estimates	Use of Estimates
Cash and Cash Equivalents	Cash and Cash Equivalents
Restricted Cash	Restricted Cash
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful Accounts
Inventory	Inventory
Property and Equipment	Refinery and Facilities Pipelines and Facilities Oil and Gas Properties CIP
Leases	Leases. For operating leases, we record lease cost on a straight-line basis over the lease term; we record lease expenses in the appropriate line on the income statement based on the leased asset’s intended use. For finance leases (previously referred to under GAAP as capital leases), we amortize lease payments for the ROU asset on a straight-line basis over the lesser of the leased asset’s useful life or the lease term; we record amortization expenses on the income statement in ‘depreciation and amortization expense;’ we record interest expense on the income statement in ‘interest and other expense.’
Revenue Recognition	Refinery Operations Revenue We consider a variety of facts and circumstances in assessing the point of a control transfer, including but not limited to: whether the purchaser can direct the use of the refined product, the transfer of significant risks and rewards, our rights to payment, and transfer of legal title. In each case, the term between the sale and when payment is due is not significant. We include incurred transportation, shipping, and handling costs in the cost of goods sold. We do not include excise and other taxes collected from customers and remitted to governmental authorities in revenue. Tolling and Terminaling Revenue We typically satisfy performance obligations for tolling and terminaling operations over time. We determine the transaction price at agreement inception based on the guaranteed minimum amount of revenue over the agreement term. We allocate the transaction price to the single performance obligation that exists under the agreement. We recognize revenue in the amount for which we have a right to invoice. Generally, payment terms do not exceed 30 days. Revenue from tank storage customers may, from time to time, include fees for ancillary services, such as in-tank and tank-to-tank blending. These services are considered optional to the customer. The fixed cost under the customer’s tank storage agreement does not include ancillary service fees. We consider ancillary services as a separate performance obligation under the tank storage agreement. We satisfy the performance obligation and recognize the associated fee when we complete the requested service. Deferred Revenue Unearned Contract Renewal Income
Income Taxes	Income Taxes Management uses significant judgment in evaluating uncertain tax positions and determining the provision for income taxes. As of each reporting date, we consider new evidence, both positive and negative, to assess the realizability of deferred tax assets. We weigh whether there is a more than 50% probability of realizing a portion or all the deferred tax assets. Realization depends on the generation of future taxable income before the expiration of any NOL carryforwards. We record a valuation allowance against deferred income tax assets if there is a more than 50% probability of not realizing some portion of the asset. We recognize an uncertain tax positions benefit in our financial statements if deferred tax assets meet a minimum recognition threshold. First, we determine whether there is a more than 50% probability that our income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If we meet the criteria, we record a benefit in the financial statements equal to the largest amount greater than 50% likely to be realized upon settlement with taxing authorities. A significant piece of objective negative evidence evaluated was cumulative losses incurred over the three-year period ended March 31, 2022. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Based on this evaluation, we recorded a valuation allowance against the deferred tax assets for which realization was not deemed more likely than not as of March 31, 2022 and December 31, 2021. In addition, we have NOL carryforwards that remain available for future use. See “Note (13)” to our consolidated financial statements for more information related to income taxes.
Impairment or Disposal of Long-Lived Assets	Impairment or Disposal of Long-Lived Assets Commodity price market volatility associated with the COVID-19 pandemic and the Russian conflict with Ukraine could affect the value of certain of our long-lived assets. Management evaluated refinery and facilities assets for impairment as of December 31, 2021. We did not record any impairment of our long-lived assets for the periods presented. However, impairment may be required in the future if losses continue to be material, or as new opportunities arise, such as reconfiguration of the Nixon refinery into a renewable fuels facility.
Asset Retirement Obligations	Asset Retirement Obligations Refinery and Facilities Pipeline and Facilities
Computation of Earnings Per Share	Computation of Earnings Per Share
New Pronouncements Adopted	New Pronouncements Adopted
New Pronouncements Issued, Not Yet Effective	No new pronouncements issued but not yet effective are not expected to have a material impact on our financial position, results of operations, or liquidity.

RelatedParty Transactions (Tabl

RelatedParty Transactions (Tables)	3 Months Ended
	Mar. 31, 2022
RelatedParty Transactions
Schedule of affiliate agreements/transactions	March 31, December 31, 2022 2021 (in thousands) LEH June LEH Note (in default) $ 10,507 $ 12,672 BDPL-LEH Loan Agreement 7,614 7,454 LEH Total 18,121 20,126 Ingleside March Ingleside Note (in default) 1,075 1,066 Jonathan Carroll March Carroll Note (in default) 2,505 2,304 21,701 23,496 Less: Long-term debt, related party, current portion, in default (18,087 ) (20,042 ) Less: Accrued interest payable, related party (in default) (3,614 ) (3,454 )
Schedule of accounts payable, related party	Three Months Ended March 31, 2022 2021 (in thousands, except percent amounts) Refinery operations LEH $ 34,518 31.2 % $ 16,080 27.1 % Third-Parties 75,239 68.0 % 42,403 71.3 % Tolling and terminaling Third-Parties 926 0.8 % 930 1.6 % $ 110,683 100.0 % $ 59,413 100.0 %
Schedule of refinery operating expenses	Three Months Ended March 31, 2022 2021 (in thousands) Jonathan Carroll Guaranty Fee Agreements LE Term Loan Due 2034 $ 107 $ 108 LRM Term Loan Due 2034 45 45 March Carroll Note ( in default 49 29 LEH BDPL-LEH Loan Agreement ( in default 160 160 June LEH Note ( in default 206 182 Ingleside March Ingleside Note ( in default 21 14 $ 588 $ 538

Revenue and Segment Informati_2

Revenue and Segment Information (Tables)	3 Months Ended
	Mar. 31, 2022
Revenue and Segment Information
Schedule of business segment reporting	Three Months Ended March 31, 2022 2021 (in thousands) Net revenue (excluding intercompany fees and sales) Refinery operations $ 109,757 $ 58,483 Tolling and terminaling 926 930 Total net revenue 110,683 59,413 Intercompany fees and sales Refinery operations (653 ) (566 ) Tolling and terminaling 653 566 Total intercompany fees - - Operation costs and expenses (1) Refinery operations (103,458 ) (59,289 ) Tolling and terminaling (619 ) (334 ) Corporate and other (11 ) (54 ) Total operation costs and expenses (104,088 ) (59,677 ) Segment contribution margin (deficit) Refinery operations 5,646 (1,372 ) Tolling and terminaling 960 1,162 Corporate and other (11 ) (54 ) Total segment contribution margin (deficit) 6,595 (264 ) General and administrative expenses (2) Refinery operations (282 ) (301 ) Tolling and terminaling (70 ) (68 ) Corporate and other (431 ) (413 ) Total general and administrative expenses (783 ) (782 ) Depreciation and amortization Refinery operations (307 ) (302 ) Tolling and terminaling (342 ) (340 ) Corporate and other (52 ) (51 ) Total depreciation and amortization (701 ) (693 ) Interest and other non-operating expenses, net (3) Refinery operations (717 ) (598 ) Tolling and terminaling (418 ) (452 ) Corporate and other (457 ) (385 ) Total interest and other non-operating expenses, net (1,592 ) (1,435 ) Income (loss) before income taxes Refinery operations 4,340 (2,573 ) Tolling and terminaling 130 302 Corporate and other (951 ) (903 ) Total income (loss) before income taxes 3,519 (3,174 ) Income tax expense (41) - Net income (loss) $ 3,478 $ (3,174 ) Three Months Ended March 31, 2022 2021 (in thousands) Capital expenditures Refinery operations $ - $ - Tolling and terminaling - - Corporate and other - - Total capital expenditures $ - $ - March 31, 2022 2021 (in thousands) Identifiable assets Refinery operations $ 48,741 $ 45,186 Tolling and terminaling 17,434 18,527 Corporate and other 1,518 1,839 Total identifiable assets $ 67,693 $ 65,552

Concentration of Risk (Tables)

Concentration of Risk (Tables)	3 Months Ended
	Mar. 31, 2022
Concentration of Risk
Schedule of significant customers	Three Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at March 31, March 31, 2022 3 64.9 % $ 0 March 31, 2021 4 90.4 % $ 0
Schedule of percentages of all refined petroleum products sales to total sales	Three Months Ended March 31, 2022 2021 (in thousands, except percent amounts) LPG mix $ - 0.0 % $ 6 0.0 % Naphtha 27,754 25.2 % 14,224 24.3 % Jet fuel 34,518 30.3 % 16,080 27.5 % HOBM 23,075 22.0 % 15,663 26.8 % AGO 24,410 22.5 % 12,510 21.4 % $ 109,757 100.0 % $ 58,483 100.0 %

Prepaid Expenses and Other Cu_2

Prepaid Expenses and Other Current Assets (Tables)	3 Months Ended
	Mar. 31, 2022
Prepaid Expenses and Other Current Assets
Schedule of Prepaid balances	March 31, December 31, 2022 2021 (in thousands) Prepaid crude oil and condensate $ 932 $ 1,368 Prepaid insurance 680 953 Prepaid easement renewal fees 71 76 Other prepaids 49 36 $ 1,732 $ 2,433

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2022
Inventory
Schedule of inventory	March 31, December 31, 2022 2021 (in thousands) HOBM $ 3,265 $ 1,749 Naphtha 1,107 189 Crude oil and condensate 954 660 AGO 305 338 Chemicals 116 121 Propane 43 27 LPG mix 20 14 $ 5,810 $ 3,098

Property Plant and Equipment _2

Property Plant and Equipment Net (Tables)	3 Months Ended
	Mar. 31, 2022
Property Plant and Equipment Net
Schedule of property, plant and equipment	March 31, December 31, 2022 2021 (in thousands) Refinery and facilities $ 72,583 $ 72,583 Land 566 566 Other property and equipment 903 903 74,052 74,052 Less: Accumulated depreciation and amortiation (18,444 ) (17,795 ) 55,608 56,257 CIP 3,666 3,666 $ 59,274 $ 59,923

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	3 Months Ended
	Mar. 31, 2022
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilities	March 31, December 31, 2022 2021 (in thousands) Unearned revenue from contracts with customers $ 3,066 $ 4,388 Accrued fines and penalties 407 407 Unearned contract renewal income 400 400 Board of director fees payable 263 230 Other payable 207 218 Taxes payable 203 136 Customer deposits 173 173 Insurance 136 273 $ 4,855 $ 6,225

ThirdParty LongTerm Debt (Table

ThirdParty LongTerm Debt (Tables)	3 Months Ended
	Mar. 31, 2022
ThirdParty LongTerm Debt
Schedule of long term debt	March 31, December 31, 2022 2021 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 23,580 $ 23,789 LRM Term Loan Due 2034 (in default) 9,777 9,861 Kissick Debt (in default) 10,409 10,210 GNCU Loan NPS Term Loan Due 2031 ( in default 9,976 10,094 SBA EIDLs BDEC Term Loan Due 2051 2,025 512 LE Term Loan Due 2050 158 156 NPS Term Loan Due 2050 158 156 Equipment Loan Due 2025 49 53 56,132 54,831 Less: Current portion of long-term debt, net (43,004 ) (42,953 ) Less: Unamortized debt issue costs (2,301 ) (2,351 ) Less: Accrued interest payable (in default) (8,493 ) (8,689 ) $ 2,334 $ 838
Schedule of unamortized debt issue cost	March 31, December 31, 2022 2021 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in default) 768 768 GNCU Loan NPS Term Loan Due 2031 ( in default 730 730 Less: Accumulated amortization (871 ) (821 ) $ 2,301 $ 2,351
Schedule of accrued interest related to our long-term debt, net	March 31, December 31, 2022 2021 (in thousands) Kissick Debt (in default) $ 5,431 $ 5,232 Veritex Loans LE Term Loan Due 2034 (in default) 2,129 2,338 LRM Term Loan Due 2034 (in default) 875 959 GNCU Loan NPS Term Loan Due 2031 ( in default 17 136 SBA EIDLs BDEC Term Loan Due 2051 25 12 LE Term Loan Due 2050 8 6 NPS Term Loan Due 2050 8 6 8,493 8,689 Less: Accrued interest payable (in default) (8,493 ) (8,689 ) Long-term Interest Payable, Net of Current Portion $ - $ -

AROs (Tables)

AROs (Tables)	3 Months Ended
	Mar. 31, 2022
AROs
Schedule of asset retirement obligations	March 31, December 31, 2022 2021 (in thousands) AROs, at the beginning of the period $ 3,461 $ 2,370 Changes in estimates of existing obligations - 1,091 Accretion expense 33 - 3,494 3,461 Less: AROs, current portion - - Long-term AROs, at the end of the period $ 3,494 $ 3,461

Lease Obligations (Tables)

Lease Obligations (Tables)	3 Months Ended
	Mar. 31, 2022
Lease Obligations (Tables)
Schedule of lease-related assets and liabilities	March 31, December 31, Balance Sheet Location 2022 2021 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 787 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (499 ) (455 ) Total lease assets 288 332 Liabilities Current Operating lease Current portion of lease liabilities 220 215 Noncurrent Operating lease Long-term lease liabilities, net of current 99 156 Total lease liabilities $ 319 $ 371 Weighted average remaining lease term in years Operating lease 1.42 Weighted average discount rate Operating lease 8.25 % Finance leases 8.25 %
Schedule of lease costs	Three Months Ended March 31, 2022 2021 (in thousands) Operating lease costs $ 51 $ 51 Total lease cost $ 51 $ 51
Schedule of supplemental cash flow information related to leases	March 31, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 52 $ 47
Schedule of maturities of operating lease liabilities	March 31, Operating Lease Total (in thousands) 2023 $ 220 $ 220 2024 99 99 $ 319 $ 319
Schedule of future minimum annual lease commitments	Operating March 31, Lease (in thousands) 2023 $ 238 2024 101 $ 339

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2022
Income Taxes
Schedule of income tax expense	Three Months Ended March 31, 2022 2021 (in thousands) Current Federal $ - $ - State (41) - Deferred Federal (1,086) 667 State - - Change in valuation allowance 1,086 (667 ) Total provision for income taxes $ (41) $ -
Schedule of deferred tax assets and deferred tax liabilities	March 31, December 31, 2022 2021 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 15,588 $ 16,818 Business interest expense 4,573 4,680 Start-up costs (crude oil and condensate processing facility) 403 424 ARO liability/deferred revenue 734 727 Other 18 12 Total deferred tax assets 21,316 22,661 Deferred tax liabilities: Basis differences in property and equipment (8,012 ) (7,945 ) Total deferred tax liabilities (8,012 ) (7,945 ) 13,304 14,716 Valuation allowance (13,304 ) (14,716 ) Deferred tax assets, net $ - $ -
Schedule of NOL carryforwards	Net Operating Loss Carryforward Pre-Ownership Change Post-Ownership Change Total (in thousands) Balance at December 31, 2020 9,614 56,363 65,977 Net operating losses used and expired (1,717 ) 9,148 7,431 Balance at December 31, 2021 $ 7,897 $ 65,511 $ 73,408 Net operating losses used and expired (5,855 ) - (5,855 ) Balance at March 31, 2022 $ 2,042 $ 65,511 $ 67,553

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2022
Earnings Per Share
Schedule of earnings per share	Three Months Ended March 31, 2022 2021 (in thousands, except share and per share amounts) Net income (loss) $ 3,478 $ (3,174 ) Basic and diluted income (loss) per share $ 0.27 $ (0.25 ) Basic and Diluted Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock 12,693,514 12,693,514

Organization (Details Narrative

Organization (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Substantial Current Debt	$ 61,100,000		$ 63,000,000
Net loss	3,500,000	$ 3,200,000
Working capital deficit	(72,900,000)		(78,500,000)
Working capital deficit, excluding the current portion of long-term debt	(11,800,000)		(15,500,000)
Cash and cash equivalents	100,000		10,000
Restricted cash current portion	$ 0		50,000
Restricted cash non current portion			$ 0
Ownership percentage	5.00%
Veritex Loans
Payment reserve account	$ 1,000,000
Affiliates [Member]
Ownership percentage	82.00%

Principles of Consolidation a_3

Principles of Consolidation and Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Allowance for doubtful accounts	$ 0	$ 0
Uncertain tax position , description	benefit in the financial statements equal to the largest amount greater than 50% likely to be realized upon settlement with taxing authorities
Refinery and Facilities
Estimated useful life	25 years
Maximum [Member]
Estimated useful life	22 years
Minimum [Member]
Estimated useful life	10 years

RelatedParty Transactions (Deta

RelatedParty Transactions (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Less: Long-term debt, related party, current portion, in default	$ (18,087,000)	$ (20,042,000)
Less: Interest payable, related party, in default	(3,614,000)	(3,454,000)
Long-term debt - net of current portion, related party	21,701	23,496
LEH
Prepaid operating expenses, related party	18,121,000	20,126,000
June LEH Note (in default) | LEH
Prepaid operating expenses, related party	10,507,000	12,672,000
BDPL Loan Agreement (in default) | LEH
Prepaid operating expenses, related party	7,614,000	7,454,000
March Ingleside Note (in default) | Ingleside
Prepaid operating expenses, related party	1,075,000	1,066,000
March Carroll Note (in default) | Jonathan Carroll
Prepaid operating expenses, related party	$ 2,505,000	$ 2,304,000

RelatedParty Transactions (De_2

RelatedParty Transactions (Details 1) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2020
Total revenues	$ 110,683	$ 59,413
Total revenues, percent	100.00%	100.00%
LEH
Refinery operations revenues	$ 34,518	$ 16,080
Refinery operations revenues, percent	31.20%	27.10%
Third Parties
Refinery operations revenues	$ 75,239	$ 42,403
Refinery operations revenues, percent	68.00%	71.30%
Tolling and terminaling revenues	$ 926	$ 930
Tolling and terminaling revenues, percent	0.80%	1.60%

RelatedParty Transactions (De_3

RelatedParty Transactions (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Interest expenses under loan and guarantee, related party	$ 588	$ 538
June LEH Note (in default) | LEH
Interest expenses under loan and guarantee, related party	206	182
BDPL Loan Agreement (in default) | LEH
Interest expenses under loan and guarantee, related party	160	160
March Ingleside Note (in default) | Ingleside
Interest expenses under loan and guarantee, related party	21	14
March Carroll Note (in default) | Jonathan Carroll
Interest expenses under loan and guarantee, related party	49	29
Term Loan Due 2034 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	107	108
Second Term Loan Due 2034 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	$ 45	$ 45

RelatedParty Transactions (De_4

RelatedParty Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
RelatedParty Transactions
Lease payments received under the office sub-lease agreement with LEH	$ 10,000	$ 10,000
Refinery equipment	200,000		$ 200,000
LEH operating fee	$ 100,000	$ 100,000

Revenue and Segment Informati_3

Revenue and Segment Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Net revenues (excluding intercompany fees and sales)	$ 110,683,000	$ 59,413,000
Intercompany fees and sales	0	0
Total General and administrative expenses	(783,000)	(782,000)
Depreciation and amortization	(701,000)	(693,000)
Interest and other non-operating expenses, net	(1,592,000)	(1,435,000)
Total loss before income taxes	3,519,000	(3,174,000)
Income tax expense	41	0
Net loss	3,478,000	(3,174,000)
Capital expenditures	0	0
Total assets	67,693,000	65,552,000	$ 66,309,000
Segment contribution margin (deficit)	6,595,000	(264,000)
Operation costs and expenses	11,000	54,000
General and administrative expenses	(624,000)	(658,000)
Refinery Operations
Net revenues (excluding intercompany fees and sales)	109,757,000	58,483,000
Depreciation and amortization	(307,000)	(302,000)
Interest and other non-operating expenses, net	(717,000)	(598,000)
Total loss before income taxes	4,340,000	(2,573,000)
Capital expenditures	0	0
Total assets	48,741,000	45,186,000
Segment contribution margin (deficit)	5,646,000	(1,372,000)
Operation costs and expenses	103,458,000	(59,289,000)
General and administrative expenses	(282,000)	(301,000)
Intercompany fees and sales	(653,000)	(566,000)
Tolling and Terminaling
Net revenues (excluding intercompany fees and sales)	926,000	930,000
Depreciation and amortization	(342,000)	(340,000)
Interest and other non-operating expenses, net	(418,000)	(452,000)
Total loss before income taxes	130,000	302,000
Capital expenditures	0	0
Total assets	17,434,000	18,527,000
Segment contribution margin (deficit)	960,000	1,162,000
Operation costs and expenses	(619,000)	(334,000)
General and administrative expenses	(70,000)	(68,000)
Intercompany fees and sales	653,000	566,000
Corporate and Other
Depreciation and amortization	(52,000)	(51,000)
Interest and other non-operating expenses, net	(457,000)	(385,000)
Total loss before income taxes	(951,000)	(903,000)
Capital expenditures	0	0
Total assets	1,518,000	1,839,000
Segment contribution margin (deficit)	(11,000)	(54,000)
Operation costs and expenses	(11,000)	(54,000)
General and administrative expenses	$ (431,000)	$ (413,000)

Concentration of Risk (Details)

Concentration of Risk (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Concentration of risk	100.00%	100.00%
Portion of accounts receivable	$ 0	$ 0
3 Significant Customers
Concentration of risk	64.90%
Portion of accounts receivable		$ 0
4 Significant Customers
Concentration of risk		90.40%
Portion of accounts receivable	$ 0

Concentration of Risk (Details

Concentration of Risk (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Total refined petroleum product sales	$ 109,757,000	$ 58,483,000
Concentration risk	100.00%	100.00%
AGO
Total refined petroleum product sales	$ 24,410,000	$ 12,510,000
Concentration risk	22.50%	21.40%
Jet Fuel
Total refined petroleum product sales	$ 34,518,000	$ 16,080,000
Concentration risk	30.30%	27.50%
HOBM
Total refined petroleum product sales	$ 23,075,000	$ 15,663,000
Concentration risk	22.00%	26.80%
LPG Mix
Total refined petroleum product sales	$ 0	$ 6
Concentration risk	0.00%	0.00%
Naphtha
Total refined petroleum product sales	$ 27,754,000	$ 14,224,000
Concentration risk	25.20%	24.30%

Concentration of Risk (Detail_2

Concentration of Risk (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Concentration of Risk
Net sales	$ 24,800,000
Accounts receivable	0	$ 0
Long term debt, related-party	10,100,000
Cash FDIC insured amount	$ 250,000
Total revenue percentage	The Affiliate accounted for 31.2% and 27.1% of total revenue from operations for the three months ended March 31, 2022 and 2021, respectively

Prepaid Expenses and Other Cu_3

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Prepaid Expenses and Other Current Assets
Prepaid crude oil and condensate	$ 932	$ 1,368
Prepaid insurance	680	953
Prepaid easement renewal fees	71	76
Other prepaids	49	36
Prepaid expenses, net	$ 1,732	$ 2,433

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Inventory	$ 5,810	$ 3,098
AGO
Inventory	305	338
Crude Oil and Condensate
Inventory	954	660
Chemicals
Inventory	116	121
Propane
Inventory	43	27
LPG Mix
Inventory	20	14
Naphtha
Inventory	1,107	189
HOBM
Inventory	$ 3,265	$ 1,749

Property Plant and Equipment _3

Property Plant and Equipment Net (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Total	$ 74,052	$ 74,052
Less: Accumulated depletion, depreciation, and amortization	(18,444)	(17,795)
Property, plant and equipment, net excluding CIP	55,608	56,257
CIP	3,666	3,666
Property, plant and equipment, net	59,274	59,923
Refinery and Facilities
Total	72,583	72,583
Land
Total	566	566
Other Property and Equipment
Total	$ 903	$ 903

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Accrued Expenses and Other Current Liabilities
Unearned revenue from contracts with customers	$ 3,066,000	$ 4,388,000
Accrued fines and penalties	407	407
Unearned contract renewal income	400,000	400,000
Board of director fees payable	263,000	230,000
Other payable	207,000	218,000
Taxes payable	203,000	136,000
Customer deposits	173,000	173,000
Insurance	136,000	273,000
Total	$ 4,855,000	$ 6,225,000

ThirdParty LongTerm Debt (Detai

ThirdParty LongTerm Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Less: current portion of long-term debt, net	$ (43,004)	$ (42,953)
Less: unamortized debt issue costs	(2,301)	(2,351)
Less: accrued interest payable (in default)	(8,493)	(8,689)
Long-term debt, noncurrent	2,334	838
LE Term Loan Due 2034
Less: accrued interest payable (in default)	(2,129)	(2,338)
Long-term debt, carrying amount	23,580	23,789
LRM Term Loan Due 2034
Less: accrued interest payable (in default)	(875)	(959)
Long-term debt, carrying amount	9,777	9,861
Kissick Debt
Less: accrued interest payable (in default)	(5,431)	(5,232)
Long-term debt, carrying amount	10,409	10,210
NPS Term Loan Due 2031
Less: accrued interest payable (in default)	(17)	(136)
Long-term debt, carrying amount	9,976	10,094
BDEC Term Loan Due 2051
Less: accrued interest payable (in default)	(25)	(12)
Long-term debt, carrying amount	2,025	512
LE Term Loan Due 2050
Less: accrued interest payable (in default)	(8)	(6)
Long-term debt, carrying amount	158	156
NPS Term Loan Due 2050
Less: accrued interest payable (in default)	(8)	(6)
Long-term debt, carrying amount	158	156
Equipment Loan Due 2025
Long-term debt, carrying amount	$ 49	$ 53

ThirdParty LongTerm Debt (Det_2

ThirdParty LongTerm Debt (Details 1) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Less: accumulated amortization	$ (871)	$ (821)
Unamortized debt issue costs, net	2,301	2,351
LE Term Loan Due 2034
Unamortized debt issue costs, gross	1,674	1,674
LRM Term Loan Due 2034
Unamortized debt issue costs, gross	768	768
NPS Term Loan Due 2031
Unamortized debt issue costs, gross	$ 730	$ 730

ThirdParty LongTerm Debt (Det_3

ThirdParty LongTerm Debt (Details 2) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accrued interest payable	$ 8,493	$ 8,689
Less: accrued interest payable (in default)	(8,493)	(8,689)
Long-term interest payable, net of current portion	0	0
Accrued interest payable	8,493	8,689
LE Term Loan Due 2034
Accrued interest payable	2,129	2,338
LRM Term Loan Due 2034
Accrued interest payable	875	959
Kissick Debt
Accrued interest payable	5,431	5,232
NPS Term Loan Due 2031
Accrued interest payable	17	136
BDEC Term Loan Due 2051
Accrued interest payable	25	12
LE Term Loan Due 2050
Accrued interest payable	8	6
NPS Term Loan Due 2050
Accrued interest payable	$ 8	$ 6

ThirdParty LongTerm Debt (Det_4

ThirdParty LongTerm Debt (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
ThirdParty LongTerm Debt
Amortization expense	$ 50	$ 30

AROS (Details)

AROS (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
AROs
AROs, at the beginning of the period	$ 3,461,000	$ 2,370,000
Changes in estimates of existing obligations	0	1,091,000
Accretion expense	33	0
Liabilities settled	3,494,000	3,461,000
Less: AROs, current portion	0	0
Long-term AROs, at the end of the period	$ 3,494,000	$ 3,461,000

Lease Obligations (Details)

Lease Obligations (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Lease Obligations (Tables)
Operating lease right-of-use assets, gross	$ 787	$ 787
Less: accumulated amortization on operating lease assets	(499)	(455)
Operating lease right-of-use assets, net	288	332
Current portion of operating lease	220	215
Long-term portion of operating lease	99	156
Total lease liabilities	$ 319	$ 371
Weighted average remaining lease term in years - operating lease		1 year 5 months 1 day
Weighted average discount rate - operating lease		8.25%
Weighted average discount rate - finance lease		8.25%

Lease Obligations (Details 1)

Lease Obligations (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lease Obligations (Tables)
Operating lease costs	$ 51	$ 51
Total lease cost	$ 51	$ 51

Lease Obligations (Details 2)

Lease Obligations (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lease Obligations (Tables)
Operating cash flows for operating lease	$ 52	$ 47

Lease Obligations (Details 3)

Lease Obligations (Details 3) $ in Thousands	Mar. 31, 2022USD ($)
2022	$ 220
2023	99
Total minimum rental payments	319
Operating Lease [Member]
2022	220
2023	99
Total minimum rental payments	$ 319

Lease Obligations (Details 4)

Lease Obligations (Details 4) $ in Thousands	Mar. 31, 2022USD ($)
Lease Obligations (Tables)
2022	$ 238
2022	101
Total	$ 339

Lease Obligations (Details Narr

Lease Obligations (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lease Obligations (Tables)
Annual percentage rate	4.50%
Lease term	5 years
Rent installments and other charges	$ 100,000
Sublease income	8,000	$ 8,000
Past obligations of rent	$ 20,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Taxes
Current federal	$ 0	$ 0
Current state	41	0
Deferred federal	(1,086)	667
Deferred state	0	0
Change in valuation allowance	(1,086)	(667)
Income tax expense	$ 41	$ 0

Income Taxes (Details 1)

Income Taxes (Details 1) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Deferred tax assets:
NOL and capital loss carryforwards	$ 15,588,000	$ 16,818,000
Business interest expense	4,573,000	4,680,000
Start-up costs (crude oil and condensate processing facility)	403,000	424,000
ARO liability/deferred revenue	734,000	727,000
AMT credit	0	0
Other	18,000	12,000
Total deferred tax assets	21,316,000	22,661,000
Deferred tax liabilities:
Basis differences in property and equipment	(8,012,000)	(7,945,000)
Total deferred tax liabilities	(8,012,000)	(7,945,000)
Deferred tax assets, gross	13,304,000	14,716,000
Valuation allowance	(13,304,000)	(14,716,000)
Deferred tax assets, net	$ 0	$ 0

Income Taxes (Details 2)

Income Taxes (Details 2) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Beginning balance	$ 73,408,000	$ 65,977,000
Net operating losses	(5,855)	7,431
Ending balance	67,553,000	73,408,000
Pre-Ownership Change
Beginning balance	7,897,000	9,614,000
Net operating losses	(5,855)	(1,717)
Ending balance	2,042,000	7,897,000
Post-Ownership Change
Beginning balance	65,511,000	56,363,000
Net operating losses	0	9,148,000
Ending balance	$ 65,511,000	$ 65,511,000

Income Taxes (Details Narrative

Income Taxes (Details Narrative) $ in Millions	3 Months Ended
	Mar. 31, 2022USD ($)
Income Taxes
Ownership percentage	5.00%
NOL and capital loss carryforwards	$ 16.3
Annual use limitation	0.6
NOL carryforwards, annual use limitation	$ 6.7

Earnings per share (Details)

Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share
Net loss	$ 3,478	$ 3,174
Basic and diluted income (loss) per share	$ 0.27	$ (0.25)
Basic and Diluted
Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock	12,693,514	12,693,514

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	Oct. 04, 2021	Oct. 31, 2021	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2018
Administrative penalty		$ 400,000
NPS disputed payment	$ 300,000
Cash-backed			$ 200,000
Additional financial assurance provided by BDPL						$ 4,800,000
Share issued income					$ 0
Trunk pipeline, federal waters			70,000
BSEE INCs [Member]
Trunk pipeline, federal waters			3,500,000	$ 3,500,000
BOEM INCs [Member]
Trunk pipeline, federal waters			$ 90,000

Subsequent Event (Details Narra

Subsequent Event (Details Narrative) shares in Millions	May 12, 2022$ / sharesshares
Restricted shares of Common Stock | shares	25,244.7
Monthly high cost for fees	$ 0.91
Sales of Unregistered Securities [Member] | Subsequent Event [Member]
Restricted shares of Common Stock | shares	185,308
Monthly high cost for fees	$ 0.64
Monthly average cost for fees	0.42
Monthly low cost for fees	$ 0.27