Blue Dolphin Energy (BDCO) 10-Q 14 Nov 22 2022 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 14, 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	Sep. 30, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		14,921,968
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 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
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 6,294	$ 9
Restricted cash	0	48
Accounts receivable, net	87	126
Prepaid expenses and other current assets	5,202	2,433
Deposits	110	110
Inventory	19,596	3,098
Total current assets	31,289	5,824
LONG-TERM ASSETS
Total property and equipment, net	58,084	59,923
Operating lease right-of-use assets, net	197	332
Surety bonds	230	230
Total long-term assets	58,511	60,485
TOTAL ASSETS	89,800	66,309
CURRENT LIABILITIES
Long-term debt less unamortized debt issue costs, current portion (in default)	43,105	42,953
Long-term debt, related party, current portion (in default)	14,425	20,042
Interest payable	9,457	8,689
Interest payable, related party	3,934	3,454
Accounts payable	1,569	2,548
Accounts payable, related party	155	155
Current portion of lease liabilities	211	215
Income taxes payable	224	0
Asset retirement obligations, current portion	3,675	0
Accrued expenses and other current liabilities	8,943	6,225
Total current liabilities	85,698	84,281
LONG-TERM LIABILITIES
Asset retirement obligations	0	3,461
Long-term lease liabilities, net of current	0	156
Unearned contract renewal income, net of current	773	1,200
Long-term debt, net of current portion	2,326	838
Total long-term liabilities	3,099	5,655
TOTAL LIABILITIES	88,797	89,936
Common stock ($0.01 par value, 20,000,000 shares authorized; 14,897,377 and 12,693,514
shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively)	149	127
Additional paid-in capital	39,728	38,457
Accumulated deficit	(38,874)	(62,211)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	1,003	(23,627)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 89,800	$ 66,309

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000,000	20,000,000,000,000
Common stock, shares issued	14,897,377,000	12,693,514,000
Common stock, shares outstanding	14,897,377,000	12,693,514,000

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
REVENUE FROM OPERATIONS
Refinery operations	$ 127,349	$ 79,466	$ 372,314	$ 206,467
Tolling and terminaling	920	924	2,760	2,777
Total revenue from operations	128,269	80,390	375,074	209,244
COST OF GOODS SOLD
Crude oil, fuel use, and chemicals	113,664	78,312	332,378	204,594
Other conversion costs	4,570	1,802	9,242	5,609
Total cost of goods sold	118,234	80,114	341,620	210,203
Gross profit (loss)	10,035	276	33,454	(959)
COST OF OPERATIONS
LEH operating fee, related party	258	126	568	381
Other operating expenses	57	83	125	187
General and administrative expenses	564	649	1,835	1,919
Depletion, depreciation and amortization	699	693	2,099	2,079
Impairment of assets	114	0	114	0
Bad debt expense	62	0	62	0
Accretion of asset retirement obligations	34	0	100	0
Total cost of operations	1,788	1,551	4,903	4,566
Gain (loss) from operations	8,247	(1,275)	28,551	(5,525)
OTHER INCOME (EXPENSE)
Easement, interest and other income	0	0	0	2
Interest and other expense	(1,730)	(1,654)	(4,990)	(4,722)
Gain on extinguishment of debt	0	0	0	43
Total other expense	(1,730)	(1,654)	(4,990)	(4,677)
Gain (loss) before income taxes	6,517	(2,929)	23,561	(10,202)
Income tax expense	(68)	0	(224)	0
Net Income (loss)	$ 6,449	$ (2,929)	$ 23,337	$ (10,202)
Income (loss) per common share:
Basic	$ 0.43	$ (0.23)	$ 1.69	$ (0.80)
Diluted	0.43	(0.23)	1.69	(0.80)
Weighted average number of common shares outstanding:
Basic	14,825,763	12,693,514	13,797,701	12,693,514
Diluted	$ 14,825,763	$ 12,693,514	$ 13,797,701	$ 12,693,514

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)
Balance, shares at Dec. 31, 2020		12,693,514
Balance, amount at Dec. 31, 2020	$ (10,786)	$ 127	$ 38,457	$ (49,370)
Net loss	(3,174)	$ 0	0	(3,174)
Balance, shares at Mar. 31, 2021		12,693,514
Balance, amount at Mar. 31, 2021	(13,960)	$ 127	38,457	(52,544)
Balance, shares at Dec. 31, 2020		12,693,514
Balance, amount at Dec. 31, 2020	(10,786)	$ 127	38,457	(49,370)
Net loss	(10,202)
Balance, shares at Sep. 30, 2021		12,693,514
Balance, amount at Sep. 30, 2021	(20,988)	$ 127	38,457	(59,572)
Balance, shares at Mar. 31, 2021		12,693,514
Balance, amount at Mar. 31, 2021	(13,960)	$ 127	38,457	(52,544)
Net loss	(4,099)	$ 0	0	(4,099)
Balance, shares at Jun. 30, 2021		12,693,514
Balance, amount at Jun. 30, 2021	(18,059)	$ 127	38,457	(56,643)
Net loss	(2,929)	$ 0	0	(2,929)
Balance, shares at Sep. 30, 2021		12,693,514
Balance, amount at Sep. 30, 2021	(20,988)	$ 127	38,457	(59,572)
Balance, amount at Dec. 31, 2021	(23,627)	127	38,457	(62,211)
Net loss	3,478	$ 0	0	3,478
Balance, shares at Mar. 31, 2022		12,693,514
Balance, amount at Mar. 31, 2022	(20,149)	$ 127	38,457	(58,733)
Balance, amount at Dec. 31, 2021	(23,627)	$ 127	38,457	(62,211)
Net loss	23,337
Balance, shares at Sep. 30, 2022		14,897,377
Balance, amount at Sep. 30, 2022	1,003	$ 149	39,728	(38,874)
Balance, shares at Mar. 31, 2022		12,693,514
Balance, amount at Mar. 31, 2022	(20,149)	$ 127	38,457	(58,733)
Net loss	13,410	$ 0	0	13,410
Common stock issued for services, shares		252,447
Common stock issued for services, amount	131	$ 2	129	0
Common stock issued for extinguishment of related-party debt, shares		1,853,080
Common stock issued for extinguishment of related-party debt, amount	964	$ 19	945	0
Balance, shares at Jun. 30, 2022		14,799,041
Balance, amount at Jun. 30, 2022	(5,644)	$ 148	39,531	(45,323)
Net loss	6,449	$ 0	0	6,449
Common stock issued for extinguishment of related-party debt, shares		98,336
Common stock issued for extinguishment of related-party debt, amount	198	$ 1	197	0
Balance, shares at Sep. 30, 2022		14,897,377
Balance, amount at Sep. 30, 2022	$ 1,003	$ 149	$ 39,728	$ (38,874)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
OPERATING ACTIVITIES
Net income (loss)	$ 23,337	$ (10,202)
provided by (used in) operating activities:
Depletion, depreciation and amortization	2,099	2,079
Accretion of asset retirement obligations	100	0
Amortization of debt issue costs	153	96
Guaranty fees paid in kind	456	456
Related-party interest expense paid in kind	538	826
Deferred revenues and expenses	(427)	(207)
Loss on issuance of shares	357	0
Bad debt (recovery of bad debt)	62	0
Impairment of assets	114	0
Gain on extinguishment of debt	0	(43)
Changes in operating assets and liabilities
Accounts receivable	(23)	151
Prepaid expenses and other current assets	(2,769)	2,133
Deposits and other assets		14
Inventory	(16,498)	(26)
Accounts payable, accrued expenses and other liabilities	3,148	5,141
Net cash provided by operating activities	10,647	418
INVESTING ACTIVITIES
Capital expenditures	(102)	0
Net cash used in investing activities	(102)	0
FINANCING ACTIVITIES
Proceeds from debt	1,500	500
Payments on debt principal	(12)	(13)
Net activity on related-party debt	(5,796)	209
Net cash provided by (used in) financing activities	(4,308)	696
Net change in cash, cash equivalents, and restricted cash	6,237	1,114
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	57	1,111
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	6,294	2,225
Non-cash investing and financing activities:
Financing of line of credit via related-party debt	0	2,317
Issuance of shares for services and/or to extinguish debt	936	0
Related-party debt settled through related-party accounts receivable	10,658	5,225
Line of credit financed by offsetting tank leases less interest	0	971
Interest paid	1,893	727
Income taxes paid (refunded)	$ 0	$ 0

Organization

Organization	9 Months Ended
	Sep. 30, 2022
Organization
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 83% 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 a petition for 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. In a letter to LE and LRM dated August 2, 2022, Veritex affirmed existing defaults under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 for failing to make payments of principal and interest when due and demanded payment of all past due amounts owed. In addition, Veritex reserved all of its rights and noted that Veritex may, at its discretion, exercise all remedies available to it, which may include accelerating the loan, requesting appointment of a receiver, initiating foreclosure proceedings, or filing a lawsuit against obligors. · 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 existing defaults and continues to actively discuss potential restructuring and refinancing 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 related to 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 83% 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 $57.5 million and $63.0 million, respectively, as of September 30, 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 September 30, 2022 and December 31, 2021. Margin Volatility In March 2020, the WHO declared the outbreak of COVID-19 a pandemic, and thereafter the U.S. economy experienced pronounced adverse effects as the virus spread globally. Considerable progress was made to combat COVID-19 and its multiple variants. While domestic demand and refining margins improved during the nine months ended September 30, 2022, the future impact of COVID-19 remains unknown. Based on recent outbreaks in China, a global resurgence of the virus could negatively impact population health, commodity prices, and oil and product demand and supply worldwide. In February 2022, Russia invaded neighboring Ukraine. The military conflict caused turmoil in global commodity markets, injecting even more uncertainty into a global economy recovering from the effects of COVID-19. As Russia is a major international producer and exporter of crude oil, 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 three and nine months ended September 30, 2022 compared to the same periods a year earlier. However, the long term effect of the military conflict remains unclear due to uncertainty surrounding the war’s duration and the level and length of international sanctions on Russia. Recent data indicates a sharp rise in inflation in the U.S. and globally. Current and future inflationary effects may be driven by, among other things, supply chain disruptions, governmental stimulus, or fiscal policies, and increasing demand for certain goods and services as recovery from the COVID-19 pandemic continues. We have observed higher costs for feedstocks, labor, and materials used in our business. We cannot predict the effect of rising interest rates, concerns of a recession, and higher inflation on demand for our refined petroleum products. COVID-19, the Russian military conflict with Ukraine, and inflation continue to evolve, and the extent to which these factors may impact our business, financial condition, liquidity, results of operations, and future prospects will depend on future developments, which cannot be predicted with any degree of confidence. Historic Net Losses and Working Capital and Equity Deficits Net Income (Losses) Working Capital Deficits Cash and cash equivalents totaled $6.3 million and $0.01 million at September 30, 2022 and December 31, 2021, respectively. Restricted cash (current portion) totaled $0 and $0.05 million at September 30, 2022 and December 31, 2021, respectively. The increase in cash and cash equivalents at September 30, 2022 was the result of market-driven inventory management. Management anticipates that the cash reserve will be utilized in the near term to repay past-due amounts owed to Veritex. 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. COVID-19, the Russian military conflict with Ukraine, and inflation continue to evolve, and the extent to which these factors may impact our business, financial condition, liquidity, results of operations, and prospects will depend on future developments, which cannot be predicted with any degree of 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 inventory levels based on demand, managing cash flow, and delaying capital expenditures. To safeguard personnel, we offer remote work where possible and request that personnel practice social distancing, mask-wearing, and other site-specific precautionary measures when needed. We also encourage personnel to receive vaccines. We can provide no guarantees that: our business strategy will be successful, favorable refining margins will continue, 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	9 Months Ended
	Sep. 30, 2022
Principles of Consolidation and Significant Accounting Policies
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, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the consolidated statements of cash flows: September 30, December 31, 2022 2021 (in thousands) Cash and cash equivalents $ 6,294 $ 9 Restricted cash - 48 $ 6,294 $ 57 The increase in cash and cash equivalents at September 30, 2022 was the result of market-driven inventory management. Management anticipates that the cash reserve will be utilized in the near term to repay past-due amounts owed to Veritex. 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 storage tank 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 storage tank agreement does not include ancillary services fees. We consider ancillary services as a separate performance obligation under the storage tank 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 September 30, 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 September 30, 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 COVID-19, the Russian military conflict with Ukraine, and inflation 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 are 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; Oil and Gas Properties Computation of Earnings Per Share New Pronouncements Adopted New Pronouncements Issued, Not Yet Effective .

RelatedParty Transactions

RelatedParty Transactions	9 Months Ended
	Sep. 30, 2022
RelatedParty Transactions
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 historically relied on Affiliates for funding during periods of working capital deficits. We reflect such borrowings in our consolidated balance sheets in accounts payable, related party, or long-term debt, related party. During the three and nine months ended September 30, 2022, continued liquidity improvement tied to favorable market conditions enabled us to increasingly meet our needs through cash flow from operations. Related-Party Financial Impact Consolidated Balance Sheets Accounts payable, related party Long-term debt, related party, current portion (in default) and accrued interest payable, related party . September 30, December 31, 2022 2021 (in thousands) LEH June LEH Note (in default) $ 7,343 $ 12,672 BDPL-LEH Loan Agreement (in default) 7,934 7,454 LEH Total 15,277 20,126 Ingleside March Ingleside Note (in default) 1,103 1,066 Jonathan Carroll March Carroll Note (in default) 1,979 2,304 18,359 23,496 Less: Long-term debt, related party, current portion (in default) (14,425 ) (20,042 ) Less: Accrued interest payable, related party (in default) (3,934 ) (3,454 ) As indicated in the table below, the $5.3 million reduction associated with the June LEH Note reflects transactions related to the Jet Fuel Sales Agreement and the Amended and Restated Operating Agreement. June LEH Note (in default) (in thousands) Balance at December 31, 2021 $ 12,672 Related-party receivables settled against related-party provided working capital (10,658 ) Blue Dolphin operating costs and related LEH management fee under Amended and Restated Operating Agreement 5,329 Balance at September 30, 2022 $ 7,343 The $0.3 million reduction associated with the March Carroll Note reflects payment in common stock to Jonathan Carroll pursuant to the LE Amended and Restated Guaranty Fee Agreement and the LRM Amended and Restated Guaranty Fee Agreement. See “Note (15)” and “Note (16)” to our consolidated financial statements for additional information regarding the share issuance and guaranty fee payments. 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands, except percent amounts) (in thousands, except percent amounts) Refinery operations LEH $ 48,264 37.6 % $ 24,214 30.1 % $ 134,119 35.8 % $ 61,271 29.3 % Third-Parties 79,085 61.7 % 55,252 68.7 % 238,195 63.5 % 145,196 69.4 % Tolling and terminaling Third-Parties 920 0.7 % 924 1.2 % 2,760 0.7 % 2,777 1.3 % $ 128,269 100.0 % $ 80,390 100.0 % $ 375,074 100.0 % $ 209,244 100.0 % Interest expense. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Jonathan Carroll Guaranty Fee Agreements First Term Loan Due 2034 (in default) $ 108 $ 108 $ 324 $ 323 Second Term Loan Due 2034 (in default) 45 45 135 134 March Carroll Note (in default) 29 33 90 94 LEH BDPL-LEH Loan Agreement (in default) 160 160 480 480 June LEH Note (in default) 94 293 390 690 Ingleside March Ingleside Note (in default) 14 14 42 42 $ 450 $ 653 $ 1,461 $ 1,763 Other The LEH operating fee, related party increased to approximately $0.3 million for the three months ended September 30, 2022 compared to $0.1 million for the three months ended September 30, 2021. The LEH operating fee, related party was $0.6 million for the nine-month period ended September 30, 2022 compared to $0.4 million for the nine-month period ended September 30, 2021. The increases for both the three and nine-month comparative periods coincided with increased cost of goods sold during the same periods.

Revenue and Segment Information

Revenue and Segment Information	9 Months Ended
	Sep. 30, 2022
Revenue and Segment Information
Revenue and Segment Information	(4) Revenue and Segment Information We have two reportable business segments: (i) refinery operations, which derives revenue from refined product sales, and (ii) tolling and terminaling, which derives revenue from storage tank rental fees, ancillary services fees (such as for in-tank blending), and tolling and reservation fees for use of the naphtha stabilizer at the Nixon refinery. ‘Corporate and other’ as presented in the segment information includes BDSC, BDPL, and BDPC. Revenue from Contracts with Customers Disaggregation of Revenue Receivables from Contracts with Customers Contract Liabilities. Our contract liabilities consist of unearned revenue from customers in the form of prepayments. We include unearned revenue in accrued expenses and other current liabilities on our consolidated balance sheets. See “Note (9)” to our consolidated financial statements for more information related to unearned revenue. Remaining Performance Obligations Segment Information Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Refinery operations $ 127,349 $ 79,466 $ 372,314 $ 206,467 Tolling and terminaling 920 924 2,760 2,777 Total revenue from operations 128,269 80,390 375,074 209,244 Intercompany processing fees (1) Refinery operations (663 ) (650 ) (1,991 ) (1,797 ) Tolling and terminaling 663 650 1,991 1,797 Total intercompany processing fees - - - - Operation costs and expenses (2) Refinery operations (117,655 ) (79,593 ) (339,849 ) (208,936 ) Tolling and terminaling (580 ) (521 ) (1,772 ) (1,267 ) Corporate and other (57 ) (83 ) (125 ) (187 ) Total operation costs and expenses (118,292 ) (80,197 ) (341,746 ) (210,390 ) Segment contribution margin (deficit) Refinery operations 9,031 (777 ) 30,474 (4,266 ) Tolling and terminaling 1,003 1,053 2,979 3,307 Corporate and other (57 ) (83 ) (125 ) (187 ) Total segment contribution margin (deficit) 9,977 193 33,328 (1,146 ) General and administrative expenses (3) Refinery operations (426 ) (282 ) (1,021 ) (848 ) Tolling and terminaling (132 ) (70 ) (255 ) (206 ) Corporate and other (473 ) (423 ) (1,402 ) (1,246 ) Total general and administrative expenses (1,031 ) (775 ) (2,678 ) (2,300 ) Depreciation and amortization Refinery operations (305 ) (302 ) (918 ) (906 ) Tolling and terminaling (342 ) (340 ) (1,026 ) (1,020 ) Corporate and other (52 ) (51 ) (155 ) (153 ) Total depreciation and amortization (699 ) (693 ) (2,099 ) (2,079 ) Interest and other non-operating expenses, net (4) Refinery operations (972 ) (747 ) (2,392 ) (2,053 ) Tolling and terminaling (321 ) (384 ) (1,148 ) (1,284 ) Corporate and other (437 ) (523 ) (1,450 ) (1,340 ) Total interest and other non-operating expenses, net (1,730 ) (1,654 ) (4,990 ) (4,677 ) Income (loss) before income taxes Refinery operations 7,328 (2,108 ) 26,143 (8,073 ) Tolling and terminaling 208 259 550 797 Corporate and other (1,019 ) (1,080 ) (3,132 ) (2,926 ) Total income (loss) before income taxes 6,517 (2,929 ) 23,561 (10,202 ) Income tax expense (68 ) - (224 ) - Net income (loss) $ 6,449 $ (2,929 ) $ 23,337 $ (10,202 ) (1) Fees associated with an intercompany tolling agreement tied to naphtha volumes. (2) 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. (3) General and administrative expenses within refinery operations include the LEH operating fee, impairment expense, and bad debt expense. (4) 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. See “Note (3), ”“Note (15),” and “Note (16)” to our consolidated financial statements for additional information regarding guaranty fee agreements. Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Capital expenditures Refinery operations $ 56 $ - $ 102 $ - Tolling and terminaling - - - - Corporate and other - - - - Total capital expenditures $ 56 $ - $ 102 $ - September 30, December 31, 2022 2021 (in thousands) Identifiable assets Refinery operations $ 71,582 $ 44,939 Tolling and terminaling 17,151 19,878 Corporate and other 1,067 1,278 Total identifiable assets $ 89,800 $ 66,095

Concentration of Risk

Concentration of Risk	9 Months Ended
	Sep. 30, 2022
Concentration of Risk
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 September 30, 2022 and December 31, 2021, our cash balances (including restricted cash) exceeded the FDIC insurance limit per depositor by $5.8 million and $0, respectively. 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 September 30, 2022, we received approximately 12.4 million bbls, or 50.3%, 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 September 30, September 30, 2022 2 64 % $ 0 September 30, 2021 3 69 % $ 0 Nine Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at September 30, September 30, 2022 2 61 % $ 0 September 30, 2021 3 72 % $ 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. For the three months ended September 30, 2022 and 2021, the Affiliate accounted for approximately 38% and 30% of total revenue from operations, respectively. For the nine months ended September 30, 2022 and 2021, the Affiliate accounted for approximately 36% and 29% of total revenue from operations, respectively. The Affiliate represented $0 in accounts receivable at both September 30, 2022 and 2021, respectively. Concentration of Customers Refined Product Sales Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands, except percent amounts) (in thousands, except percent amounts) LPG mix $ - 0.0 % $ 9 0.0 % $ - 0.0 % $ 21 0.0 % Naphtha 25,571 20.1 % 20,440 25.7 % 80,707 21.7 % 49,928 24.1 % Jet fuel 48,264 37.9 % 24,212 30.5 % 134,119 36.0 % 61,271 29.7 % HOBM 19,143 15.0 % 17,607 22.2 % 63,045 16.9 % 49,282 23.9 % AGO 34,371 27.0 % 17,198 21.6 % 94,443 25.4 % 45,965 22.3 % $ 127,349 100.0 % $ 79,466 100.0 % $ 372,314 100.0 % $ 206,467 100.0 % 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	9 Months Ended
	Sep. 30, 2022
Prepaid Expenses and Other Current Assets
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: September 30, December 31, 2022 2021 (in thousands) Prepaid crude oil and condensate $ 3,836 $ 1,368 Prepaid insurance 1,235 953 Other prepaids 71 36 Prepaid easement renewal fees 60 76 $ 5,202 $ 2,433

Inventory

Inventory	9 Months Ended
	Sep. 30, 2022
Inventory
Inventory	(7) Inventory Inventory as of the dates indicated consisted of the following: Septembeer 30, December 31, 2022 2021 (in thousands) HOBM $ 18,051 $ 1,749 Crude oil and condensate 828 660 Naphtha 396 189 AGO 171 338 Chemicals 90 121 Propane 41 27 LPG mix 19 14 $ 19,596 $ 3,098

PropertyPlant and EquipmentNet

PropertyPlant and EquipmentNet	9 Months Ended
	Sep. 30, 2022
PropertyPlant and EquipmentNet
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: September 30, December 31, 2022 2021 (in thousands) Refinery and facilities $ 72,629 $ 72,583 Land 566 566 Other property and equipment 913 903 74,108 74,052 Less: Accumulated depreciation and amortiation (19,739 ) (17,795 ) 54,369 56,257 CIP 3,715 3,666 $ 58,084 $ 59,923

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	9 Months Ended
	Sep. 30, 2022
Accrued Expenses and Other Current Liabilities
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: September 30, December 31, 2022 2021 (in thousands) Unearned revenue from contracts with customers $ 6,583 $ 4,388 Insurance 572 273 Unearned contract renewal income 480 400 Accrued fines and penalties 407 407 Taxes payable 297 136 Board of director fees payable 208 230 Other payable 223 218 Customer deposits 173 173 $ 8,943 $ 6,225

ThirdParty LongTerm Debt

ThirdParty LongTerm Debt	9 Months Ended
	Sep. 30, 2022
ThirdParty LongTerm Debt
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: September 30, December 31, 2022 2021 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 24,088 $ 23,789 LRM Term Loan Due 2034 (in default) 9,791 9,861 Kissick Debt (in default) 10,807 10,210 GNCU Loan NPS Term Loan Due 2031 ( in default 9,976 10,094 SBA EIDLs BDEC Term Loan Due 2051 2,063 512 LE Term Loan Due 2050 159 156 NPS Term Loan Due 2050 159 156 Equipment Loan Due 2025 44 53 57,087 54,831 Less: Current portion of long-term debt, net (43,105 ) (42,953 ) Less: Unamortized debt issue costs (2,199 ) (2,351 ) Less: Accrued interest payable (9,457 ) (8,689 ) $ 2,326 $ 838 Unamortized debt issue costs associated with the Veritex and GNCU loans as of the dates indicated consisted of the following: September 30, 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 (922 ) (821 ) $ 2,199 $ 2,351 Amortization expense was $0.05 million and $0.03 million for the three months ended September 30, 2022 and 2021, respectively. Amortization expense was $0.1 million and $0.09 million for the nine months ended September 30, 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: September 30, December 31, 2022 2021 (in thousands) Kissick Debt (in default) $ 5,829 $ 5,232 Veritex Loans LE Term Loan Due 2034 (in default) 2,637 2,338 LRM Term Loan Due 2034 (in default) 889 959 GNCU Loan NPS Term Loan Due 2031 ( in default 18 136 SBA EIDLs BDEC Term Loan Due 2051 63 12 LE Term Loan Due 2050 9 6 NPS Term Loan Due 2053 9 6 Equipment Loan Due 2025 3 - 9,457 8,689 Less: Accrued interest payable (in default) (9,457 ) (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 September 30, 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	9 Months Ended
	Sep. 30, 2022
AROs
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. 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. We recorded an additional increase in liability during the nine months ended September 30, 2022 due to a further change in timing; BSEE mandated that decommissioning must occur prior to June 1, 2023. We will recognize accretion expense through the anticipated decommissioning date. ARO liability as of the dates indicated was as follows: September 30, December 31, 2022 2021 (in thousands) AROs, at the beginning of the period $ 3,461 $ 2,370 Changes in estimates of existing obligations 114 1,091 Accretion expense 100 - 3,675 3,461 Less: AROs, current portion (3,675 ) - Long-term AROs, at the end of the period $ - $ 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	9 Months Ended
	Sep. 30, 2022
Lease Obligations
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 a Fourth Amendment to Lease dated May 27, 2021 (the “Fourth Amendment”), 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 were subject to an annual percentage rate of 4.50%. As revised under the Fourth Amendment, BDSC’s base rent including the prorated portion of the Past Due Obligations was $0.02 million per month. Subsequent to the Fourth Amendment, Building Lessor notified BDSC of a new default under the office lease due to non-payment of rent. As a result of the subsequent default, Building Lessor deemed the Fourth Amendment null and void. On June 9, 2022, BDSC paid all past due amounts totaling approximately $0.2 million to Building Lessor and Building Lessor considered the office lease default cured. An Affiliate, LEH, subleases a portion of the Houston office space. BDSC received sublease income from LEH totaling $0.01 million for both three-month periods ended September 30, 2022 and 2021. BDSC received sublease income from LEH totaling $0.03 million for both nine-month periods ended September 30, 2022 and 2021. See “Note (3)” to our consolidated financial statements for additional disclosures related to the Affiliate sub-lease. The following table presents the lease-related assets and liabilities recorded on the consolidated balance sheet: September 30, 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 (590 ) (455 ) Total lease labilities 197 332 Liabilities Current Operating lease Current portion of lease liabilities 211 215 Noncurrent Operating lease Long-term lease liabilities, net of current - 156 Total lease labilities $ 211 $ 371 Weighted average remaining lease term in years Operating lease 0.92 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) Operating lease costs $ 51 $ 51 $ 154 $ 154 Total lease cost $ 51 $ 51 $ 154 $ 154 The table below presents supplemental cash flow information related to leases as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: $ 50 $ 49 $ 151 $ 148 Operating cash flows for operating lease As of September 30, 2022, maturities of lease liabilities for the periods indicated were as follows: Operating September 30, Lease (in thousands) 2023 $ 220 $ 220 Future minimum annual lease commitments that are non-cancelable: Operating September 30, Lease (in thousands) 2023 $ 220 $ 220

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2022
Income Taxes
Income Taxes	(13) Income Taxes The Inflation Reduction Act ("IRA") was enacted into law on August 16, 2022. The IRA imposes a 15% alternative minimum tax on corporations whose average annual adjusted financial statement income during the most recently completed three-year period exceeds $1.0 billion. We do not fall within the category of “applicable corporations” and are therefore exempt from payment of an alternative minimum tax. Tax Provision The provision for income tax benefit (expense) for the periods indicated was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) Current Federal $ - $ - $ - $ - State (68 ) - (224 ) - Deferred Federal (1,257 ) 615 (5,152 ) 1,782 State - - - - Change in valuation allowance 1,257 (615 ) 5,152 (1,782 ) Total provision for income taxes $ (68 ) $ - $ (224 ) $ - TMT is treated like an income tax for financial reporting purposes. Deferred income taxes as of the dates indicated consisted of the following: September 30, December 31, 2022 2021 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 12,472 $ 16,818 Business interest expense 3,973 4,680 Start-up costs (crude oil and condensate processing facility) 361 424 ARO liability/deferred revenue 772 727 Other 38 12 Total deferred tax assets 17,616 22,661 Deferred tax liabilities: Basis differences in property and equipment (8,149 ) (7,945 ) Total deferred tax liabilities (8,149 ) (7,945 ) 9,467 14,716 Valuation allowance (9,467 ) (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 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 (6,127 ) (15,330 ) (21,457 ) Balance at September 30, 2022 $ 1,770 $ 50,181 $ 51,951 Valuation Allowance . As of each reporting date, management considers new evidence, both positive and negative, to determine the realizability of deferred tax assets. This assessment (of whether there is more than a 50% probability that our deferred tax asset is realizable) depends on the generation of future taxable income before the expiration of any NOL carryforwards. At September 30, 2022 and December 31, 2021, management determined that realization of the deferred tax assets from NOLs is unlikely based on negative evidence of three-year cumulative net losses. Cumulative net losses represent significant negative objective evidence, limiting the ability to consider other subjective evidence, such as projections for future growth. Based on management’s evaluation, we recorded a valuation allowance against the deferred tax assets as of September 30, 2022 and December 31, 2021. We have NOL carryforwards that remain available for future use. At September 30, 2022 and December 31, 2021, there were no uncertain tax positions for which a reserve or liability was necessary.

Earnings and Dividends Per Shar

Earnings and Dividends Per Share	9 Months Ended
	Sep. 30, 2022
Earnings and Dividends Per Share
Earnings and Dividends Per Share	(14) Earnings and Dividends Per Share A reconciliation between basic and diluted income per share for the periods indicated was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands, except share and per share amounts) Net income (loss) $ 6,449 $ (2,929 ) $ 23,337 $ (10,202 ) Earnings per share Basic and diluted income (loss) per share $ 0.43 $ (0.23 ) $ 1.69 $ (0.80 ) Basic and diluted shares used in computing earnings per share 14,825,763 12,693,514 13,797,701 12,693,514 Diluted EPS for the three months and six months ended September 30, 2022 and 2021 was the same as basic EPS as there were no stock options or other dilutive instruments outstanding. Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding. Under certain of our secured loan agreements, we are restricted from declaring or paying any dividend on our Common Stock without the prior written consent of the lender. Historically, we have not declared any dividends on our Common Stock.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies
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. In August 2022, BSEE issued an INC to BDPL for failure to perform associated with decommissioning its main offshore pipeline and anchor platform. In addition, pursuant to a September 2022 letter, BSEE ordered BDPL to complete pipeline decommissioning and removal of the anchor platform by June 1, 2023. If BDPL fails to complete decommissioning of the offshore pipeline 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 cannot currently estimate when decommissioning may occur or 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 September 30, 2022 and December 31, 2021. At September 30, 2022 and December 31, 2021, BDPL maintained $3.7 million and $3.5 million, respectively, 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 could result in fines, penalties or other sanctions, or a revocation of our permits. Share Issuances We are obligated to issue shares of our Common Stock to: (i) Jonathan Carroll pursuant to the Guaranty Fee Agreements and (ii) non-employee directors for services rendered to the Board. Set forth below is information regarding the issuance of Common Stock related to these obligations during the three and nine months ended September 30, 2022: On September 6, 2022, we issued an aggregate of 98,336 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 2022 to June 2022. The average cost basis was $0.86, the low was $0.58, and the high was $1.26. 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 2020 through March 2022. The average cost basis was $0.42, the low was $0.27, and the high was $0.64. 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 securities issuances were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act. We recognized a loss on the issuance of shares of approximately $0.1 million and $0 for the three months ended September 30, 2022 and 2021, respectively. We recognized a loss on the issuance of shares of approximately $0.4 million and $0 for the nine months ended September 30, 2022 and 2021, respectively. See “Note (3)” and “Note (16)” 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. 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. 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 September 30, 2022 and December 31, 2021. At both September 30, 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. OSHA Settlement Agreement TCEQ Proposed Pilot Dispute Related to Set-Off Payments Defaults under Secured Loan Agreements Counterparty Contract-Related Dispute Resolved Matters. None.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2022
Subsequent Events
Subsequent Events	(16) Subsequent Events Director Fees On October 27, 2022, we issued an aggregate of 24,591 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, 2022. The cost basis for the shares was $1.22. The share payments were accrued at September 30, 2022. Guaranty Fee Agreements Payment On October 7, 2022, we made a cash payment to Jonathan Carroll in the amount of $0.2 million, which represents a fraction of the cash component owed under the LE Amended and Restated Guaranty Fee Agreement and LRM Amended and Restated Guaranty Fee Agreement. Historically, management did not pay Jonathan Carroll the cash portion due to Blue Dolphin’s working capital deficits. We accrue the cash portion monthly, and we add the amount to the balance owed to Jonathan Carroll under the March Carroll Note. The cash payment was accrued at September 30, 2022. See “Note (15)” for additional disclosures related to director share issuances. See “Note (3)” to our consolidated financial statements for additional information regarding guaranty fee payments.

Principles of Consolidation a_2

Principles of Consolidation and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2022
Principles of Consolidation and Significant Accounting Policies (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	Use of Estimates
Cash, Cash Equivalents, and Restricted Cash	Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the consolidated statements of cash flows: September 30, December 31, 2022 2021 (in thousands) Cash and cash equivalents $ 6,294 $ 9 Restricted cash - 48 $ 6,294 $ 57 The increase in cash and cash equivalents at September 30, 2022 was the result of market-driven inventory management. Management anticipates that the cash reserve will be utilized in the near term to repay past-due amounts owed to Veritex.
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 storage tank 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 storage tank agreement does not include ancillary services fees. We consider ancillary services as a separate performance obligation under the storage tank 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 September 30, 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 September 30, 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 COVID-19, the Russian military conflict with Ukraine, and inflation 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 are 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; Oil and Gas Properties
Computation of Earnings Per Share	Computation of Earnings Per Share
New Pronouncements Adopted	New Pronouncements Adopted
New Pronouncements Issued, Not Yet Effective	New Pronouncements Issued, Not Yet Effective .

Principles of Consolidation a_3

Principles of Consolidation and Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2022
Principles of Consolidation and Significant Accounting Policies (Tables)
Schedule of reconciliation of cash, cash equivalents, and restricted cash	September 30, December 31, 2022 2021 (in thousands) Cash and cash equivalents $ 6,294 $ 9 Restricted cash - 48 $ 6,294 $ 57

RelatedParty Transactions (Tabl

RelatedParty Transactions (Tables)	9 Months Ended
	Sep. 30, 2022
RelatedParty Transactions
Long-term debt, related party, current portion (in default) and accrued interest payable, related party.	September 30, December 31, 2022 2021 (in thousands) LEH June LEH Note (in default) $ 7,343 $ 12,672 BDPL-LEH Loan Agreement (in default) 7,934 7,454 LEH Total 15,277 20,126 Ingleside March Ingleside Note (in default) 1,103 1,066 Jonathan Carroll March Carroll Note (in default) 1,979 2,304 18,359 23,496 Less: Long-term debt, related party, current portion (in default) (14,425 ) (20,042 ) Less: Accrued interest payable, related party (in default) (3,934 ) (3,454 )
Reflects transaction against sales and amended and restaed operating agreement	June LEH Note (in default) (in thousands) Balance at December 31, 2021 $ 12,672 Related-party receivables settled against related-party provided working capital (10,658 ) Blue Dolphin operating costs and related LEH management fee under Amended and Restated Operating Agreement 5,329 Balance at September 30, 2022 $ 7,343
Consolidated Statement of operation	Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands, except percent amounts) (in thousands, except percent amounts) Refinery operations LEH $ 48,264 37.6 % $ 24,214 30.1 % $ 134,119 35.8 % $ 61,271 29.3 % Third-Parties 79,085 61.7 % 55,252 68.7 % 238,195 63.5 % 145,196 69.4 % Tolling and terminaling Third-Parties 920 0.7 % 924 1.2 % 2,760 0.7 % 2,777 1.3 % $ 128,269 100.0 % $ 80,390 100.0 % $ 375,074 100.0 % $ 209,244 100.0 %
Interest Expenses	Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Jonathan Carroll Guaranty Fee Agreements First Term Loan Due 2034 (in default) $ 108 $ 108 $ 324 $ 323 Second Term Loan Due 2034 (in default) 45 45 135 134 March Carroll Note (in default) 29 33 90 94 LEH BDPL-LEH Loan Agreement (in default) 160 160 480 480 June LEH Note (in default) 94 293 390 690 Ingleside March Ingleside Note (in default) 14 14 42 42 $ 450 $ 653 $ 1,461 $ 1,763

Revenue and Segment Informati_2

Revenue and Segment Information (Tables)	9 Months Ended
	Sep. 30, 2022
Revenue and Segment Information
Schedule of business segment Infirmation	Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Refinery operations $ 127,349 $ 79,466 $ 372,314 $ 206,467 Tolling and terminaling 920 924 2,760 2,777 Total revenue from operations 128,269 80,390 375,074 209,244 Intercompany processing fees (1) Refinery operations (663 ) (650 ) (1,991 ) (1,797 ) Tolling and terminaling 663 650 1,991 1,797 Total intercompany processing fees - - - - Operation costs and expenses (2) Refinery operations (117,655 ) (79,593 ) (339,849 ) (208,936 ) Tolling and terminaling (580 ) (521 ) (1,772 ) (1,267 ) Corporate and other (57 ) (83 ) (125 ) (187 ) Total operation costs and expenses (118,292 ) (80,197 ) (341,746 ) (210,390 ) Segment contribution margin (deficit) Refinery operations 9,031 (777 ) 30,474 (4,266 ) Tolling and terminaling 1,003 1,053 2,979 3,307 Corporate and other (57 ) (83 ) (125 ) (187 ) Total segment contribution margin (deficit) 9,977 193 33,328 (1,146 ) General and administrative expenses (3) Refinery operations (426 ) (282 ) (1,021 ) (848 ) Tolling and terminaling (132 ) (70 ) (255 ) (206 ) Corporate and other (473 ) (423 ) (1,402 ) (1,246 ) Total general and administrative expenses (1,031 ) (775 ) (2,678 ) (2,300 ) Depreciation and amortization Refinery operations (305 ) (302 ) (918 ) (906 ) Tolling and terminaling (342 ) (340 ) (1,026 ) (1,020 ) Corporate and other (52 ) (51 ) (155 ) (153 ) Total depreciation and amortization (699 ) (693 ) (2,099 ) (2,079 ) Interest and other non-operating expenses, net (4) Refinery operations (972 ) (747 ) (2,392 ) (2,053 ) Tolling and terminaling (321 ) (384 ) (1,148 ) (1,284 ) Corporate and other (437 ) (523 ) (1,450 ) (1,340 ) Total interest and other non-operating expenses, net (1,730 ) (1,654 ) (4,990 ) (4,677 ) Income (loss) before income taxes Refinery operations 7,328 (2,108 ) 26,143 (8,073 ) Tolling and terminaling 208 259 550 797 Corporate and other (1,019 ) (1,080 ) (3,132 ) (2,926 ) Total income (loss) before income taxes 6,517 (2,929 ) 23,561 (10,202 ) Income tax expense (68 ) - (224 ) - Net income (loss) $ 6,449 $ (2,929 ) $ 23,337 $ (10,202 )
Total capital expenditure	Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) (in thousands) Capital expenditures Refinery operations $ 56 $ - $ 102 $ - Tolling and terminaling - - - - Corporate and other - - - - Total capital expenditures $ 56 $ - $ 102 $ -
Identifiable assets	September 30, December 31, 2022 2021 (in thousands) Identifiable assets Refinery operations $ 71,582 $ 44,939 Tolling and terminaling 17,151 19,878 Corporate and other 1,067 1,278 Total identifiable assets $ 89,800 $ 66,095

Concentration of Risk (Tables)

Concentration of Risk (Tables)	9 Months Ended
	Sep. 30, 2022
Concentration of Risk
Schedule of significant customers	Three Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at September 30, September 30, 2022 2 64 % $ 0 September 30, 2021 3 69 % $ 0 Nine Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at September 30, September 30, 2022 2 61 % $ 0 September 30, 2021 3 72 % $ 0
Schedule of percentages of all refined petroleum products sales to total sales	Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands, except percent amounts) (in thousands, except percent amounts) LPG mix $ - 0.0 % $ 9 0.0 % $ - 0.0 % $ 21 0.0 % Naphtha 25,571 20.1 % 20,440 25.7 % 80,707 21.7 % 49,928 24.1 % Jet fuel 48,264 37.9 % 24,212 30.5 % 134,119 36.0 % 61,271 29.7 % HOBM 19,143 15.0 % 17,607 22.2 % 63,045 16.9 % 49,282 23.9 % AGO 34,371 27.0 % 17,198 21.6 % 94,443 25.4 % 45,965 22.3 % $ 127,349 100.0 % $ 79,466 100.0 % $ 372,314 100.0 % $ 206,467 100.0 %

Prepaid Expenses and Other Cu_2

Prepaid Expenses and Other Current Assets (Tables)	9 Months Ended
	Sep. 30, 2022
Prepaid Expenses and Other Current Assets
Schedule of Prepaid Expenses & other current assets	September 30, December 31, 2022 2021 (in thousands) Prepaid crude oil and condensate $ 3,836 $ 1,368 Prepaid insurance 1,235 953 Other prepaids 71 36 Prepaid easement renewal fees 60 76 $ 5,202 $ 2,433

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2022
Inventory
Schedule of inventory	Septembeer 30, December 31, 2022 2021 (in thousands) HOBM $ 18,051 $ 1,749 Crude oil and condensate 828 660 Naphtha 396 189 AGO 171 338 Chemicals 90 121 Propane 41 27 LPG mix 19 14 $ 19,596 $ 3,098

Property Plant and Equipment Ne

Property Plant and Equipment Net (Tables)	9 Months Ended
	Sep. 30, 2022
PropertyPlant and EquipmentNet
Schedule of property, plant and equipment	September 30, December 31, 2022 2021 (in thousands) Refinery and facilities $ 72,629 $ 72,583 Land 566 566 Other property and equipment 913 903 74,108 74,052 Less: Accumulated depreciation and amortiation (19,739 ) (17,795 ) 54,369 56,257 CIP 3,715 3,666 $ 58,084 $ 59,923

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	9 Months Ended
	Sep. 30, 2022
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilities	September 30, December 31, 2022 2021 (in thousands) Unearned revenue from contracts with customers $ 6,583 $ 4,388 Insurance 572 273 Unearned contract renewal income 480 400 Accrued fines and penalties 407 407 Taxes payable 297 136 Board of director fees payable 208 230 Other payable 223 218 Customer deposits 173 173 $ 8,943 $ 6,225

ThirdParty LongTerm Debt (Table

ThirdParty LongTerm Debt (Tables)	9 Months Ended
	Sep. 30, 2022
ThirdParty LongTerm Debt
Schedule of long term debt	September 30, December 31, 2022 2021 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 24,088 $ 23,789 LRM Term Loan Due 2034 (in default) 9,791 9,861 Kissick Debt (in default) 10,807 10,210 GNCU Loan NPS Term Loan Due 2031 ( in default 9,976 10,094 SBA EIDLs BDEC Term Loan Due 2051 2,063 512 LE Term Loan Due 2050 159 156 NPS Term Loan Due 2050 159 156 Equipment Loan Due 2025 44 53 57,087 54,831 Less: Current portion of long-term debt, net (43,105 ) (42,953 ) Less: Unamortized debt issue costs (2,199 ) (2,351 ) Less: Accrued interest payable (9,457 ) (8,689 ) $ 2,326 $ 838
Schedule of unamortized debt issue cost	September 30, 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 (922 ) (821 ) $ 2,199 $ 2,351
Schedule of accrued interest related to our long-term debt, net	September 30, December 31, 2022 2021 (in thousands) Kissick Debt (in default) $ 5,829 $ 5,232 Veritex Loans LE Term Loan Due 2034 (in default) 2,637 2,338 LRM Term Loan Due 2034 (in default) 889 959 GNCU Loan NPS Term Loan Due 2031 ( in default 18 136 SBA EIDLs BDEC Term Loan Due 2051 63 12 LE Term Loan Due 2050 9 6 NPS Term Loan Due 2053 9 6 Equipment Loan Due 2025 3 - 9,457 8,689 Less: Accrued interest payable (in default) (9,457 ) (8,689 ) Long-term Interest Payable, Net of Current Portion $ - $ -

AROs (Tables)

AROs (Tables)	9 Months Ended
	Sep. 30, 2022
AROs
Schedule of asset retirement obligations	September 30, December 31, 2022 2021 (in thousands) AROs, at the beginning of the period $ 3,461 $ 2,370 Changes in estimates of existing obligations 114 1,091 Accretion expense 100 - 3,675 3,461 Less: AROs, current portion (3,675 ) - Long-term AROs, at the end of the period $ - $ 3,461

Lease Obligations (Tables)

Lease Obligations (Tables)	9 Months Ended
	Sep. 30, 2022
Lease Obligations (Tables)
Schedule of lease-related assets and liabilities	September 30, 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 (590 ) (455 ) Total lease labilities 197 332 Liabilities Current Operating lease Current portion of lease liabilities 211 215 Noncurrent Operating lease Long-term lease liabilities, net of current - 156 Total lease labilities $ 211 $ 371
Schdule of lease cost	Weighted average remaining lease term in years Operating lease 0.92 Weighted average discount rate Operating lease 8.25 % Finance leases 8.25 %
Schedule of lease costs incurred for operating and finance leases	Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) Operating lease costs $ 51 $ 51 $ 154 $ 154 Total lease cost $ 51 $ 51 $ 154 $ 154
Schedule of supplemental cash flow information related to leases	Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: $ 50 $ 49 $ 151 $ 148 Operating cash flows for operating lease
Schedule of maturities of operating lease liabilities	Operating September 30, Lease (in thousands) 2023 $ 220 $ 220
Schedule of future minimum annual lease commitments	Operating September 30, Lease (in thousands) 2023 $ 220 $ 220

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2022
Income Taxes
Schedule of provision for income tax expense benefit	Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands) Current Federal $ - $ - $ - $ - State (68 ) - (224 ) - Deferred Federal (1,257 ) 615 (5,152 ) 1,782 State - - - - Change in valuation allowance 1,257 (615 ) 5,152 (1,782 ) Total provision for income taxes $ (68 ) $ - $ (224 ) $ -
Schedule of deferred tax assets and deferred tax liabilities	September 30, December 31, 2022 2021 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 12,472 $ 16,818 Business interest expense 3,973 4,680 Start-up costs (crude oil and condensate processing facility) 361 424 ARO liability/deferred revenue 772 727 Other 38 12 Total deferred tax assets 17,616 22,661 Deferred tax liabilities: Basis differences in property and equipment (8,149 ) (7,945 ) Total deferred tax liabilities (8,149 ) (7,945 ) 9,467 14,716 Valuation allowance (9,467 ) (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 (6,127 ) (15,330 ) (21,457 ) Balance at September 30, 2022 $ 1,770 $ 50,181 $ 51,951

Earnings and Dividends Per Sh_2

Earnings and Dividends Per Share (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings and Dividends Per Share
Schedule of earnings per share	Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands, except share and per share amounts) Net income (loss) $ 6,449 $ (2,929 ) $ 23,337 $ (10,202 ) Earnings per share Basic and diluted income (loss) per share $ 0.43 $ (0.23 ) $ 1.69 $ (0.80 ) Basic and diluted shares used in computing earnings per share 14,825,763 12,693,514 13,797,701 12,693,514

Organization (Details Narrative

Organization (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2022	Dec. 31, 2021
Substantial Current Debt	$ 57,500,000		$ 57,500,000			$ 63,000,000
Net income (loss)	6,400,000	$ (2,900,000)	23,300,000	$ (10,200,000)
Working capital deficit	(54,400,000)		(54,400,000)			(78,500,000)
Working capital deficit, excluding the current portion of long-term debt	(3,100,000)		(3,100,000)			(15,500,000)
Cash and cash equivalents	6,300,000		6,300,000			10,000
Restricted cash current portion	$ 0		$ 0			$ 500
Ownership percentage			5%
Veritex Loans
Payment reserve account					$ 1,000,000
Affiliates [Member]
Ownership percentage			83%

Principles of Consolidation a_4

Principles of Consolidation and Significant Accounting Policies (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Principles of Consolidation and Significant Accounting Policies (Policies)
Cash and cash equivalents	$ 6,294	$ 9
Restricted cash	0	48
Total	$ 6,294	$ 57

Principles of Consolidation a_5

Principles of Consolidation and Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Allowance for doubtful accounts	$ 60	$ 0
Impairment loss	$ 100	$ 1,100
Uncertain tax position , description	benefit in the financial statements equal to the largest amount greater than 50% likely to be realized upon settlement
Minimum [Member]
Estimated useful life	10 years
Maximum [Member]
Estimated useful life	22 years
Refinery and Facilities
Estimated useful life	25 years

RelatedParty Transactions (Deta

RelatedParty Transactions (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Long-term debt - net of current portion, related party	$ 18,359,000	$ 23,496,000
Less: Long-term debt, related party, current portion, in default	(14,425,000)	(20,042,000)
Less: Interest payable, related party, in default	(3,934,000)	(3,454,000)
Total Long-term debt - net of current portion, related party	0	0
LEH
Prepaid operating expenses, related party	15,277,000	20,126,000
June LEH Note (in default) | LEH
Prepaid operating expenses, related party	7,343,000	12,672,000
BDPL Loan Agreement (in default) | LEH
Prepaid operating expenses, related party	7,934,000	7,454,000
March Ingleside Note (in default) | Ingleside
Prepaid operating expenses, related party	1,103,000	1,066,000
March Carroll Note (in default) | Jonathan Carroll
Prepaid operating expenses, related party	$ 1,979,000	$ 2,304,000

RelatedParty Transactions (De_2

RelatedParty Transactions (Details 1)	9 Months Ended
	Sep. 30, 2022 USD ($)
RelatedParty Transactions
Balance at beginning, related parties	$ 12,672,000
Related-party receivables settled against related-party provided working capital	(10,658,000)
Blue Dolphin operating costs and related LEH management fee	5,329
Balance at ending, related parties	$ 7,343

RelatedParty Transactions (De_3

RelatedParty Transactions (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Total revenues	$ 128,269	$ 80,390	$ 375,074	$ 209,244
Total revenues, percent	100%	100%	100%	100%
LEH
Refinery operations revenues	$ 48,264	$ 24,214	$ 134,119	$ 61,271
Refinery operations revenues, percent	37.60%	30.10%	35.80%	29.30%
Third Parties
Refinery operations revenues	$ 79,085	$ 55,252	$ 238,195	$ 145,196
Refinery operations revenues, percent	61.70%	68.70%	63.50%	69.40%
Tolling and terminaling revenues	$ 920	$ 924	$ 2,760	$ 2,777
Tolling and terminaling revenues, percent	0.70%	1.20%	0.70%	1.30%

RelatedParty Transactions (De_4

RelatedParty Transactions (Details 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Interest expenses under loan and guarantee, related party	$ 450	$ 653	$ 1,461	$ 1,763
June LEH Note (in default) | LEH
Interest expenses under loan and guarantee, related party	94	293	390	690
BDPL Loan Agreement (in default) | LEH
Interest expenses under loan and guarantee, related party	160	160	480	480
March Ingleside Note (in default) | Ingleside
Interest expenses under loan and guarantee, related party	14	14	42	42
March Carroll Note (in default) | Jonathan Carroll
Interest expenses under loan and guarantee, related party	29	33	90	94
Term Loan Due 2034 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	108	108	324	323
Second Term Loan Due 2034 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	$ 45	$ 45	$ 135	$ 134

RelatedParty Transactions (De_5

RelatedParty Transactions (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Lease payments received under the office sub-lease agreement with LEH	$ 10,000	$ 10,000	$ 30,000	$ 30,000
LEH operating fee	300,000	$ 100,000	600,000	$ 400,000
Refinery equipment	$ 200,000		200,000		$ 200,000
June LEH Note (in default) | LEH
Restated guaranty fee			5,300,000
March Carroll Note (in default) | Jonathan Carroll
Restated guaranty fee			$ 300,000

Revenue and Segment Informati_3

Revenue and Segment Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Net revenues (excluding intercompany fees and sales)	$ 128,269,000	$ 80,390,000	$ 375,074,000	$ 209,244,000
Intercompany fees and sales	0	0	0	0
Operation costs and expenses	(118,292,000)	(80,197,000)	(341,746,000)	(210,390,000)
Segment contribution margin (deficit)	9,977,000	193,000	33,328,000	(1,146,000)
General and administrative expenses	(1,031,000)	(775,000)	(2,678,000)	(2,300,000)
Depreciation and amortization	(699,000)	(693,000)	(2,099,000)	(2,079,000)
Interest and other non-operating expenses, net	(1,730,000)	(1,654,000)	(4,990,000)	(4,677,000)
Total loss before income taxes	6,517,000	(2,929,000)	23,561,000	(10,202,000)
Capital expenditures	(56,000)	0	(102,000)	0
Total identified assets	89,800,000		89,800,000		$ 66,095,000
Income tax expense	(68,000)	0	(224,000)	0
Net loss	6,449,000	(2,929,000)	23,337,000	(10,202,000)
General and administrative expenses	(564,000)	(649,000)	(1,835,000)	(1,919,000)
Refinery Operations
Net revenues (excluding intercompany fees and sales)	127,349,000	79,466,000	372,314,000	206,467,000
Operation costs and expenses	(117,655,000)	(79,593,000)	(339,849,000)	(208,936,000)
Segment contribution margin (deficit)	9,031,000	(777,000)	30,474,000	(4,266,000)
Depreciation and amortization	(305,000)	(302,000)	(918,000)	(906,000)
Interest and other non-operating expenses, net	(972,000)	(747,000)	(2,392,000)	(2,053,000)
Total loss before income taxes	7,328,000	(2,108,000)	26,143,000	(8,073,000)
Capital expenditures		0	(102,000)	0
Intercompany fees and sales	(663,000)	(650,000)	(1,991,000)	(1,797,000)
General and administrative expenses	(426,000)	(282,000)	(1,021,000)	(848,000)
Tolling and Terminaling
Net revenues (excluding intercompany fees and sales)	920,000	924,000	2,760,000	2,777,000
Operation costs and expenses	(580,000)	(521,000)	(1,772,000)	(1,267,000)
Segment contribution margin (deficit)	1,003,000	1,053,000	2,979,000	3,307,000
Depreciation and amortization	(342,000)	(340,000)	(1,026,000)	(1,020,000)
Interest and other non-operating expenses, net	(321,000)	(384,000)	(1,148,000)	(1,284,000)
Total loss before income taxes	208,000	259,000	550,000	797,000
Capital expenditures	0	0	0	0
Intercompany fees and sales	663,000	650,000	1,991,000	1,797,000
General and administrative expenses	(132,000)	(70,000)	(255,000)	(206,000)
Corporate and Other
Operation costs and expenses	(57,000)	(83,000)	(125,000)	(187,000)
Segment contribution margin (deficit)	(57,000)	(83,000)	(125,000)	(187,000)
Depreciation and amortization	(52,000)	(51,000)	(155,000)	(153,000)
Interest and other non-operating expenses, net	(437,000)	(523,000)	(1,450,000)	(1,340,000)
Total loss before income taxes	(1,019,000)	(1,080,000)	(3,132,000)	(2,926,000)
Capital expenditures	0	0	0	0
General and administrative expenses	$ (473,000)	$ (423,000)	$ (1,402,000)	$ (1,246,000)

Concentration of Risk (Details)

Concentration of Risk (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Portion of accounts receivable	$ 0	$ 0	$ 0	$ 0
2 Significant Customers | Customer Concentration Risk [Member]
Concentration of risk	64%		61%
Portion of accounts receivable	$ 0		$ 0
3 Significant Customers | Customer Concentration Risk [Member]
Concentration of risk		69%		72%
Portion of accounts receivable		$ 0		$ 0

Concentration of Risk (Details

Concentration of Risk (Details 1) - Customer Concentration Risk [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Naphtha
Total refined petroleum product sales	$ 25,571	$ 20,440	$ 80,707	$ 49,928
Concentration risk	20.10%	25.70%	21.70%	24.10%
LPG Mix
Total refined petroleum product sales	$ 127,349	$ 79,466	$ 372,314	$ 206,467
Concentration risk	100%	100%	100%	100%
HOBM
Total refined petroleum product sales	$ 19,143	$ 17,607	$ 63,045	$ 49,282
Concentration risk	15%	22.20%	16.90%	23.90%
Jet Fuel
Total refined petroleum product sales	$ 48,264	$ 24,212	$ 134,119	$ 61,271
Concentration risk	37.90%	30.50%	36%	29.70%
AGO
Total refined petroleum product sales	$ 34,371	$ 17,198	$ 94,443	$ 45,965
Concentration risk	27%	21.60%	25.40%	22.30%

Concentration of Risk (Detail_2

Concentration of Risk (Details Narrative) bbl in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) bbl	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) bbl	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Concentration of Risk
Balances in excess of FDIC insurance limit	$ 5,800,000	$ 0	$ 5,800,000	$ 0
Cash FDIC insured amount	$ 250,000		$ 250,000		$ 250,000
Total revenue percentage	38%	30%	36%	29%
Crude oil, received | bbl	1,240		1,240
Description of total volume of contract			50.3%, of the contracted total volume under the Crude Supply Agreement
Expiration of renewal term			60 years
Accounts receivable	$ 0	$ 0	$ 0	$ 0
Net bbl amount | bbl	2,480		2,480

Prepaid Expenses and Other Cu_3

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Prepaid Expenses and Other Current Assets
Prepaid insurance	$ 1,235	$ 953
Prepaid crude oil and condensate	3,836	1,368
Other prepaids	71	36
Prepaid easement renewal fees	60	76
Prepaid expenses, net	$ 5,202	$ 2,433

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory	$ 19,596	$ 3,098
AGO
Inventory	171	338
Crude Oil and Condensate
Inventory	828	660
Chemicals
Inventory	90	121
Propane
Inventory	41	27
LPG Mix
Inventory	19	14
Naphtha
Inventory	396	189
HOBM
Inventory	$ 18,051	$ 1,749

Property Plant and Equipment _2

Property Plant and Equipment Net (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Total	$ 74,108	$ 74,052
Less: Accumulated depletion, depreciation, and amortization	(19,739,000)	(17,795,000)
Property, plant and equipment, net excluding CIP	54,369,000	56,257,000
CIP	3,715,000	3,666,000
Property, plant and equipment, net	58,084,000	59,923,000
Refinery and Facilities
Total	72,629,000	72,583,000
Land
Total	566,000	566,000
Other Property and Equipment
Total	$ 913,000	$ 903,000

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued Expenses and Other Current Liabilities
Unearned revenue from contracts with customers	$ 6,583	$ 4,388
Insurance	572	273
Unearned contract renewal income	480	400
Accrued fines and penalties	407	407
Taxes payable	297	136
Other payable	223	218
Board of director fees payable	208	230
Customer deposits	173	173
Total	$ 8,943	$ 6,225

ThirdParty LongTerm Debt (Detai

ThirdParty LongTerm Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Long term debt related party	$ 57,087	$ 54,831
Less: current portion of long-term debt, net	(43,105)	(42,953)
Less: unamortized debt issue costs	(2,199)	(2,351)
Less: accrued interest payable (in default)	(9,457)	(8,689)
Long-term debt, noncurrent	2,326	838
Kissick Debt
Less: accrued interest payable (in default)	(5,829)	(5,232)
Long-term debt, carrying amount	10,807	10,210
LE Term Loan Due 2034
Less: accrued interest payable (in default)	(2,637)	(2,338)
Long-term debt, carrying amount	24,088	23,789
LRM Term Loan Due 2034
Less: accrued interest payable (in default)	(889)	(959)
Long-term debt, carrying amount	9,791	9,861
NPS Term Loan Due 2031
Less: accrued interest payable (in default)	(18)	(136)
Long-term debt, carrying amount	9,976	10,094
BDEC Term Loan Due 2051
Less: accrued interest payable (in default)	(63)	(12)
Long-term debt, carrying amount	2,063	512
LE Term Loan Due 2050
Less: accrued interest payable (in default)	(9)	(6)
Long-term debt, carrying amount	159	156
NPS Term Loan Due 2050
Less: accrued interest payable (in default)	(9)	(6)
Long-term debt, carrying amount	159	156
Equipment Loan Due 2025
Less: accrued interest payable (in default)	(3)	0
Long-term debt, carrying amount	$ 44	$ 53

ThirdParty LongTerm Debt (Det_2

ThirdParty LongTerm Debt (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Less: accumulated amortization	$ (922)	$ (821)
Unamortized debt issue costs, net	2,199	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	Sep. 30, 2022	Dec. 31, 2021
Accrued interest payable	$ 9,457	$ 8,689
Less: accrued interest payable (in default)	(9,457)	(8,689)
Long-term interest payable, net of current portion	0	0
Kissick Debt
Accrued interest payable	5,829	5,232
LE Term Loan Due 2034
Accrued interest payable	2,637	2,338
LRM Term Loan Due 2034
Accrued interest payable	889	959
NPS Term Loan Due 2031
Accrued interest payable	18	136
BDEC Term Loan Due 2051
Accrued interest payable	63	12
LE Term Loan Due 2050
Accrued interest payable	9	6
NPS Term Loan Due 2050
Accrued interest payable	9	6
Equipment Loan Due 2025
Accrued interest payable	$ 3	$ 0

ThirdParty LongTerm Debt (Det_4

ThirdParty LongTerm Debt (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
ThirdParty LongTerm Debt
Amortization expense	$ 50	$ 30	$ 100	$ 90

AROS (Details)

AROS (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
AROs
AROs, at the beginning of the period	$ 3,461,000	$ 2,370,000
Changes in estimates of existing obligations	114,000	1,091,000
Accretion expense	100,000	0
Liabilities settled	3,675,000	3,461,000
Less: AROs, current portion	(3,675,000)	0
Long-term AROs, at the end of the period	$ 0	$ 3,461,000

Lease Obligations (Details)

Lease Obligations (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Lease Obligations (Tables)
Operating lease right-of-use assets, gross	$ 787,000	$ 787,000
Less: accumulated amortization on operating lease assets	(590,000)	(455,000)
Operating lease right-of-use assets, net	197,000	332,000
Current portion of operating lease	211,000	215,000
Long-term portion of operating lease	0	156,000
Total lease liabilities	$ 211,000	$ 371,000
Weighted average remaining lease term in years - operating lease		11 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		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lease Obligations (Tables)
Operating lease costs	$ 51	$ 51	$ 154	$ 154
Total lease cost	$ 51	$ 51	$ 154	$ 154

Lease Obligations (Details 2)

Lease Obligations (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lease Obligations (Tables)
Operating cash flows for operating lease	$ 50	$ 49	$ 151	$ 148

Lease Obligations (Details 3)

Lease Obligations (Details 3) $ in Thousands	Sep. 30, 2022 USD ($)
2022	$ 220
Total minimum rental payments	220
Operating Lease [Member]
2022	220
Total minimum rental payments	$ 220

Lease Obligations (Details Narr

Lease Obligations (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lease Obligations (Tables)
Lease term			5 years
Annual percentage rate			4.50%
Rent installments and other charges			$ 100,000
Past obligations of rent			20,000
Sublease income	$ 10,000	$ 10,000	$ 30,000	$ 30,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Taxes
Current federal	$ 0	$ 0	$ 0	$ 0
Current state	(68)	0	(224)	0
Deferred federal	(1,257)	615	(5,152)	1,782
Deferred state	0	0	0	0
Change in valuation allowance	1,257	(615)	5,152	(1,782)
Income tax expense	$ (68)	$ 0	$ (224)	$ 0

Income Taxes (Details 1)

Income Taxes (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deferred tax assets:
NOL and capital loss carryforwards	$ 12,472	$ 16,818
Business interest expense	3,973	4,680
Start-up costs (crude oil and condensate processing facility)	361	424
ARO liability/deferred revenue	772	727
Other	38	12
Total deferred tax assets	17,616	22,661
Deferred tax liabilities:
Basis differences in property and equipment	(8,149)	(7,945)
Total deferred tax liabilities	(8,149)	(7,945)
Deferred tax assets, gross	9,467	14,716
Valuation allowance	(9,467)	(14,716)
Deferred tax assets, net	$ 0	$ 0

Income Taxes (Details 2)

Income Taxes (Details 2) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Beginning balance	$ 73,408	$ 65,977
Net operating losses	(21,457)	7,431
Ending balance	51,951	73,408
Pre-Ownership Change
Beginning balance	7,897	9,614
Net operating losses	(6,127)	(1,717)
Ending balance	1,770	7,897
Post-Ownership Change
Beginning balance	65,511	56,363
Net operating losses	(15,330)	9,148
Ending balance	$ 50,181	$ 65,511

Income Taxes (Details Narrative

Income Taxes (Details Narrative) $ in Millions	9 Months Ended
	Sep. 30, 2022 USD ($)
Income Taxes
Ownership percentage	5%
Description of Inflation Reduction Act ("IRA") law	The IRA imposes a 15% alternative minimum tax on corporations whose average annual adjusted financial statement income during the most recently completed three-year period exceeds $1.0 billion
NOL and capital loss carryforwards	$ 16.3
Annual use limitation	$ 0.6
Description of net loss carryforwards	NOL carryforwards generated before the 2012 ownership change will expire unused. NOL carryforwards generated after the 2012 ownership change but before 2018 are not subject to an annual use limitation; we can use these NOL carryforwards for 20 years in addition to NOL carryforward amounts generated before the ownership change. NOL carryforwards that were generated beginning in 2018 may only be used to offset 80% of taxable income and are carried forward indefinitely
NOL carryforwards, annual use limitation	$ 6.7

Earnings per share (Details)

Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings and Dividends Per Share
Net loss	$ 6,449	$ (2,929)	$ 23,337	$ (10,202)
Basic and diluted income (loss) per share	$ 0.43	$ (0.23)	$ 1.69	$ (0.80)
Basic and Diluted
Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock	14,825,763	12,693,514	13,797,701	12,693,514

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($) $ / shares in Units, shares in Millions				1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 06, 2022	May 12, 2022	Oct. 04, 2021	Oct. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Mar. 31, 2018
Restricted shares of Common Stock	9,833.6	25,244.7
Monthly average cost for fees	$ 0.86	$ 0.55
Monthly low cost for fees	0.58	0.33
Monthly high cost for fees	$ 1.26	$ 0.91
Administrative penalty				$ 400,000
NPS disputed payment			$ 300,000
Additional financial assurance provided by BDPL										$ 4,800,000
Cash-backed							$ 200,000
Credit-backed							700,000
Loss on issuance of shares					$ 100,000	$ 0	400,000	$ 0
Accrued expenses and other current liabilities penalty					50,000		50,000
Accrued expenses and other current liabilities					$ 400,000		400,000		$ 400,000
BSEE INCs [Member]
Trunk pipeline, federal waters							3,700,000		3,500,000
BOEM INCs [Member]
Trunk pipeline, federal waters							$ 900,000		$ 900,000
Sales of Unregistered Securities [Member]
Restricted shares of Common Stock		185,308
Monthly average cost for fees		$ 0.42
Monthly low cost for fees		0.27
Monthly high cost for fees		$ 0.64

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, shares in Millions, $ in Millions			1 Months Ended
	Sep. 06, 2022	May 12, 2022	Oct. 27, 2022	Oct. 07, 2022	Sep. 30, 2022
Cost basis per share					$ 1.22
Restricted shares of Common Stock	9,833.6	25,244.7
Subsequent Event [Member] | Non-employee, independent directors [Member]
Restricted shares of Common Stock			2,459.1
Subsequent Event [Member] | Jonathan Carroll
Cash payment				$ 0.2