Blue Dolphin Energy (BDCO) 10-Q 14 Nov 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 14, 2023
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, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		14,921,968
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
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 11,471	$ 520
Accounts receivable, net	223	1,148
Accounts receivable, related party	1,963	0
Prepaid expenses and other current assets	2,871	3,466
Deposits	110	110
Inventory	28,359	19,844
Total current assets	44,997	25,088
LONG-TERM ASSETS
Total property and equipment, net	55,601	57,436
Operating lease right-of-use assets, net	215	149
Restricted cash, noncurrent	1,000	1,001
Surety bonds	230	230
Total long-term assets	57,046	58,816
TOTAL ASSETS	102,043	83,904
CURRENT LIABILITIES
Long-term debt less unamortized debt issue costs, current portion	38,369	42,155
Long-term debt, related party, current portion	0	5,211
Interest payable	3,836	6,271
Interest payable, related party	0	4,094
Accounts payable	1,164	2,161
Accounts payable, related party	600	155
Current portion of operating lease liabilities	199	156
Income taxes payable	612	307
Asset retirement obligations, current portion	4,074	3,710
Accrued expenses and other current liabilities	6,468	6,114
Total current liabilities	55,322	70,334
LONG-TERM LIABILITIES
Unearned contract renewal income, net of current	355	660
Long-term debt, net of current portion	5,211	2,322
Long-term debt, related party, net of current portion	4,000	0
Long-term interest payable, related party, net of current portion	4,309	0
Total long-term liabilities	13,875	2,982
TOTAL LIABILITIES	69,197	73,316
STOCKHOLDERS' EQUITY
shares issued at September 30, 2023 and December 31, 2022) (1)	149	149
Additional paid-in capital	39,758	39,758
Accumulated deficit	(7,061)	(29,319)
TOTAL STOCKHOLDERS' EQUITY	32,846	10,588
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 102,043	$ 83,904

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Consolidated Balance Sheets
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	14,921,968	14,921,968
Common stock, shares outstanding	14,921,968	14,921,968

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
REVENUE FROM OPERATIONS
Refinery operations	$ 101,598	$ 127,349	$ 283,505	$ 372,314
Tolling and terminaling	956	920	4,588	2,760
Total revenue from operations	102,554	128,269	288,093	375,074
COST OF GOODS SOLD
Crude oil, fuel use, and chemicals	87,795	113,664	244,927	332,378
Other conversion costs	3,593	4,570	9,606	9,242
Total cost of goods sold	91,388	118,234	254,533	341,620
Gross profit	11,166	10,035	33,560	33,454
COST OF OPERATIONS
LEH operating fee, related party	149	258	396	568
Other operating expenses	65	57	95	125
General and administrative expenses	1,112	564	3,230	1,835
Depreciation and amortization	699	699	2,094	2,099
Impairment of assets	324	114	324	114
Bad debt expense	0	62	0	62
Accretion of asset retirement obligations	0	34	59	100
Total cost of operations	2,219	1,788	6,198	4,903
Income from operations	8,947	8,247	27,362	28,551
OTHER INCOME (EXPENSE)
Interest and other income	30	0	82	0
Interest and other expense	(1,573)	(1,730)	(4,574)	(4,990)
Total other income (expense)	(1,543)	(1,730)	(4,492)	(4,990)
Income before income taxes	7,404	6,517	22,870	23,561
Income tax benefit (expense)	(339)	(68)	(612)	(224)
Net Income	$ 7,065	$ 6,449	$ 22,258	$ 23,337
Income per common share:
Basic	$ 0.47	$ 0.43	$ 1.49	$ 1.69
Diluted	$ 0.47	$ 0.43	$ 1.49	$ 1.69
Weighted average number of common shares outstanding:
Basic	14,921,968	14,825,763	14,921,968	13,797,701
Diluted	14,921,968	14,825,763	14,921,968	13,797,701

Statement Of Stockholder's Equi

Statement Of Stockholder's Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)
Balance, amount at Dec. 31, 2021	$ (23,627)	$ 127	$ 38,457	$ (62,211)
Balance, shares at Dec. 31, 2021		12,693,514
Common Stock Issued For Services Shares		252,447
Common stock issued for services	132	$ 3	129	0
Common Stock Issued For Payment Of Debt Shares		1,951,416
Common stock issued for payment of debt	1,161	$ 19		1,142
Net Income (Loss)	23,337		0	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, amount at Dec. 31, 2022	10,588	$ 149	39,758	(29,319)
Balance, shares at Dec. 31, 2022		14,921,968
Net Income (Loss)	22,258	$ 0	0	22,258
Balance, shares at Sep. 30, 2023		14,921,968
Balance, amount at Sep. 30, 2023	$ 32,846	$ 149	$ 39,758	$ (7,061)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
OPERATING ACTIVITIES
Net income	$ 22,258	$ 23,337
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	2,094	2,099
Accretion of asset retirement obligations	59	100
Amortization of debt issue costs	153	153
Guaranty fees paid in kind	0	456
Related-party interest expense paid in kind	0	538
Deferred revenues and expenses	(305)	(427)
Loss on issuance of shares	0	357
Bad debt	0	62
Impairment of fixed assets	324	114
Changes in operating assets and liabilities
Accounts receivable	925	(23)
Accounts receivable, related party	(1,963)	0
Prepaid expenses and other current assets	595	(2,769)
Inventory	(8,515)	(16,498)
Accounts payable, accrued expenses and other liabilities	(2,758)	3,148
Accounts payable, related party	445	0
Net cash provided by operating activities	13,312	10,647
INVESTING ACTIVITIES
Capital expenditures	(102)	(102)
Net cash used in investing activities	(102)	(102)
FINANCING ACTIVITIES
Proceeds from debt	0	1,500
Payments on debt principal	(1,049)	(12)
Net activity on related-party debt	(1,211)	(5,796)
Net cash used in financing activities	(2,260)	(4,308)
Net change in cash, cash equivalents, and restricted cash	10,950	6,237
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	1,521	57
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	12,471	6,294
Non-cash investing and financing activities:
Issuance of shares for services and/or to extinguish debt	0	936
Right of use assets financed via operating lease	215	0
Interest paid	$ 5,737	$ 1,893

Organization

Organization	9 Months Ended
	Sep. 30, 2023
Organization
Organization	(1) Organization Company 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 1.25 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. Jonathan Carroll, our Chief Executive Officer, and an Affiliate together controlled approximately 83% of the voting power of our Common Stock as of the filing date of this report. An Affiliate also operates and manages all Blue Dolphin properties, funds working capital requirements during periods of working capital deficits, guarantees certain of our third-party secured debt, and 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 In accordance with GAAP accounting standards, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that our consolidated financial statements are issued. Management determined that certain factors may present substantial doubt about our ability to continue as a going concern. These factors include significant current debt, which impacts our ability to meet debt covenants, and historical working capital deficits. 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 our 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, including selling assets, raising additional debt or equity capital, cutting costs, reducing cash requirements, restructuring debt obligations, filing bankruptcy, or ceasing operating. Our significant current debt is the result of certain third-party loan agreements being classified within the current portion of long-term debt on our consolidated balance sheets at September 30, 2023 and December 31, 2022. Excluding accrued interest, we had current debt of $38.4 million and $47.4 million as of September 30, 2023 and December 31, 2022, respectively. Our significant current debt at September 30, 2023 consisted of bank debt to Veritex and GNCU and investor debt to John Kissick. Forbearance Agreements Veritex First Amended Forbearance Agreement Kissick Forbearance Agreement Blue Dolphin Energy Company September 30, 2023 │Page 17 LEH Forbearance Agreement Other Defaults Refining Margins Net income for the three months ended September 30, 2023 totaled $7.1 million, or $0.47 per share, compared to net income of $6.4 million, or $0.43 per share, for the three months ended September 30, 2022. The $0.7 million, or $0.04 per share, increase in net income between the periods was the result of higher refining margins. Net income for the nine months ended September 30, 2023 totaled $22.3 million, or $1.49 per share, compared to net income of $23.3 million, or $1.69 per share, for the nine months ended September 30, 2022. The $1.0 million, or $0.20 per share, decrease in net income between the periods was the result of weaker refining margins and lower refinery throughput, production, and sales volumes for the nine months ended September 30, 2023. We can provide no assurances that refining margins and demand will remain at current levels. Working Capital Improvements There can be no assurance that we will be able to raise additional capital on acceptable terms, or at all. If we are unable to raise additional capital, we may not, in the short term, be able to purchase crude oil and condensate or meet debt payment obligations. In the long term, we may not be able to manage business disruptions or execute our business strategy. We may have to consider other options, such as selling assets, raising additional debt or equity capital, filing bankruptcy, or ceasing operating. Operating Risks Successful execution of our business strategy depends on several critical factors, including having adequate working capital, favorable refining margins, and maintaining operation of the Nixon refinery. Working Capital Blue Dolphin Energy Company September 30, 2023 │Page 18 Refining Margins Nixon Refinery Operation Capital, credit, and commodity markets, as well as armed conflicts in the Middle East and Europe continue to evolve, and the extent to which these factors may impact our working capital, commodity prices, refined product demand, supply chain, financial condition, liquidity, results of operations, and prospects will depend on future developments, which cannot be predicted with any degree of confidence. We can provide no guarantees that: our business strategy will be successful; Affiliates will continue to fund our working capital needs if we experience working capital deficits; we will meet regulatory requirements to provide additional supplemental pipeline bonds and abandon offshore assets; we can obtain additional financing on commercially reasonable terms or at all; or margins on our refined products will be favorable. Further, if lenders exercise their rights and remedies under secured loan agreements that are in default, or if we are required to obtain our crude oil and condensate without the benefit of a long-term crude supply agreement, 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, 2023
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, 2022 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, 2022 Significant Accounting Policies A summary of significant Blue Dolphin accounting policies 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 We assessed certain accounting matters that require consideration of forecasted financial information in context with information reasonably available to us as of September 30, 2023 and through the filing date of this report. The accounting matters assessed included, but not limited to, our allowance for doubtful accounts, inventory valuation, and the carrying value of long-lived assets. 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, 2023 2022 (in thousands) Cash and cash equivalents $ 11,471 $ 520 Restricted cash, noncurrent 1,000 1,001 $ 12,471 $ 1,521 Accounts Receivable and Allowance for Doubtful Accounts Financial Instruments Inventory Property and Equipment Refinery and Facilities Pipelines and Facilities Because our pipelines and facilities assets have been inactive for an extended period, BOEM mandated that they be decommissioned. In October 2023, management met with BSEE to discuss BDPL’s path forward for meeting decommissioning requirements. Management worked with a consultant to develop a decommissioning plan, and BDPL submitted its decommissioning plan to the agency on November 8, 2023. . Separately, management is exploring alternatives to reactivate the assets under a potential alternate Rights-of-Use and Easement (RUE).As a result of updated decommissioning bids, our ARO estimate increased by $0.3 million at September 30, 2023. Based on updated estimates for pipeline decommissioning, platform removal, and associated costs, as well as resource availability and projected weather conditions, we believe decommissioning and remediation of all associated INCs will be completed by the end of the third quarter of 2024. However, BDPL’s work plan does not relieve BDPL of its obligations to comply with BSEE’s mandate or of BSEE’s authority to impose financial penalties. Further, there can be no assurance that BDPL will be able to complete the anticipated work or predict the outcome of BSEE INCs. Accordingly, we did not record a liability related to potential penalties on our consolidated balance sheets as of September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, BDPL maintained $4.1 million and $3.7 million, respectively, in AROs related to abandonment of these assets, which amount does not include potential penalties. Due to BDPL’s failure to complete decommissioning of the offshore pipeline and platform assets and remedy associated INCs within the timeframe mandated by BSEE, BDPL could be subject to regulatory oversight and enforcement, including but not limited to failing 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. Construction in Progress (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, 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 are calculated utilizing the applicable rates on items included in the determination of income for income tax purposes. Our effective tax rate may be different than what would be expected if the federal and state statutory rates were applied to income from continuing operations primarily because of amounts expensed for financial reporting that are not deductible for tax purposes. The benefit of an uncertain tax position is recognized in the financial statements if it meets a minimum recognition threshold. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more-likely-than-not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At September 30, 2023 and December 31, 2022, we had no uncertain tax positions for which a reserve or liability was necessary. Deferred Taxes Impairment or Disposal of Long-Lived Assets Management evaluated refinery and facilities assets for impairment considering shifts in the capital, credit, and commodity markets, recession and inflation, and armed conflicts in the Middle East and Europe and associated sanctions on Russian crude products. As of September 30, 2023 and December 31, 2022, we did not record any impairment of our long-lived assets. However, impairment may be required in the future if external events or circumstances change or if internal conditions shift materially. 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, 2023
RelatedParty Transactions
Related-Party Transactions	(3) Related-Party Transactions Affiliate Agreements Financial and Operational Agreements Agreement/Transaction Parties Effective Date Key Terms Blue Dolphin Guaranty Fee Agreement Blue Dolphin Jonathan Carroll 01/01/2023 Related to payoff of Blue Dolphin $2.0 million SBA loan; Jonathan Carroll receives a cash fee equal to 2.00% per annum of outstanding principal balance owed under Blue Dolphin Term Loan Due 2051 as consideration for providing his personal guarantee. Jet Fuel Purchase Agreements LE LEH 04/21/2023 Product agreements for the purchase of jet fuel by LE from LEH; first transaction dated April 21, 2023 for approximately 1.9 million gallons of jet fuel; second transaction dated May 10, 2023 for approximately 2.0 million gallons of jet fuel; the jet fuel was priced at LEH’s product cost; LE sold the products back to LEH under the Jet Fuel Sales Agreement. Jet Fuel Sales Agreement LE LEH 04/01/2023 Sale of jet fuel by LE to LEH; 1-year term expiring earliest to occur of 03/31/2024 plus 30-day carryover or delivery of maximum jet fuel quantity; LEH sells the jet fuel to the DLA under preferential pricing terms due to its HUBZone certification. LE Amended and Restated Guaranty Fee Agreement LE Jonathan Carroll 01/01/2023 Related to payoff of LE $25.0 million Veritex loan; Jonathan Carroll receives a cash fee equal to 2.00% per annum of outstanding principal balance owed under LE Term Loan Due 2034 as consideration for providing his personal guarantee. LE Amended and Restated Master Services Agreement LE Ingleside 03/01/2023 For storage of products intended for customer receipt by barge; tank rental fee $0.1 million per month. LRM Amended and Restated Guaranty Fee Agreement LRM Jonathan Carroll 01/01/2023 Related to payoff of LRM $10.0 million Veritex loan; Jonathan Carroll receives a cash fee equal to 2.00% per annum of outstanding principal balance owed under LRM Term Loan Due 2034 as consideration for providing his personal guarantee. NPS Guaranty Fee Agreement NPS Jonathan Carroll 01/01/2023 Related to payoff of NPS $10.0 million GNCU loan; Jonathan Carroll receives a cash fee equal to 2.00% per annum of outstanding principal balance owed under NPS Term Loan Due 2031 as consideration for providing his personal guarantee. NPS Terminal Services Agreement NPS LEH 11/01/2022 For LEH storage of jet fuel at the Nixon facility; tank rental fee $0.2 million per month; 1-year term on an evergreen basis; either party may cancel upon 60 days’ prior written notice. Office Sub-Lease Agreement BDSC LEH 05/31/23 12-month extension of prior office sublease; term expires 08/31/2024; office lease Houston, Texas; rent approximately $0.003 million per month Second Amended and Restated Operating Agreement Blue Dolphin LE LRM NPS BDPL BDPC BDSC LEH 04/01/2023 1-year term; expires 04/01/2024 or notice by either party at any time of material breach or 90 days Board notice; LEH receives management fee of 5% of all consolidated operating costs, excluding crude costs, depreciation, amortization, and interest, of Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC Debt Agreements Loan Description Parties Maturity Date Interest Rate Loan Purpose June LEH Note Blue Dolphin LEH Jan 2019 8.00% Blue Dolphin working capital; reflected amounts owed to LEH under the Second Amended and Restated Operating Agreement BDPL-LEH Loan Agreement (in forbearance) BDPL LEH Aug 2018 16.00% Original principal amount of $4.0 million; Blue Dolphin working capital June LEH Note Forbearance and Defaults LEH Forbearance Agreement Covenants, Guarantees and Security The BDPL-LEH Loan Agreement contains representations and warranties, affirmative and negative covenants, and events of default that we consider usual and customary for a credit facility of this type. Certain BDPL property serves as collateral under the BDPL-LEH Loan Agreement. 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. Related-Party Financial Impact Working Capital . Consolidated Balance Sheets Accounts receivable, related party Accounts payable, related party Long-term debt, related party, net of current portion and accrued interest payable, related party, net of current portion . September 30, December 31, 2023 2022 (in thousands) LEH June LEH Note (debt satisfied) $ - $ 1,211 BDPL-LEH Loan Agreement (in forbearance) 8,309 8,094 LEH Total 8,309 9,305 Less: Long-term debt, related party, current portion - (5,211 ) Less: Accrued interest payable, related party - (4,094 ) $ 8,309 $ - Consolidated Statements of Operations Total revenue from operations . Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except percent amounts) (in thousands, except percent amounts) Refinery operations LEH $ 33,060 36.9 % $ 48,264 37.6 % $ 93,824 32.6 % $ 134,119 35.8 % Third-Parties 68,538 60.7 % 79,085 61.7 % 189,681 65.8 % 238,195 63.5 % Tolling and terminaling LEH 540 0.8 % - - - 0.0 % - - Third-Parties 416 1.6 % 920 0.7 % 4,588 1.6 % 2,760 0.7 % $ 102,554 100.0 % $ 128,269 100.0 % $ 288,093 100.0 % $ 375,074 100.0 % Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Jonathan Carroll Guaranty Fee Agreements Tied to First Term Loan Due 2034 $ 101 $ 108 $ 304 $ 324 Tied to Second Term Loan Due 2034 42 45 126 135 Tied to Blue Dolphin Term Loan Due 2051 10 - 30 - Tied to NPS Term Loan Due 2031 50 - 150 - LEH BDPL-LEH Loan Agreement (in forbearance) 167 160 491 480 June LEH Note (debt satisfied) - 137 - 522 $ 370 $ 450 $ 1,101 $ 1,461 Other . The LEH operating fee, related party totaled $0.1 million for the three-month period ended September 30, 2023 compared to approximately $0.3 million for the three-month period ended September 30, 2022. The LEH operating fee, related party totaled approximately $0.4 million for the nine-month period ended September 30, 2023 compared to approximately $0.6 million for the nine-month period ended September 30, 2022. The decrease in both comparative periods related to lower refinery operating expenses on lower throughput and lower inventory impairment. Lease expense associated with the LE Amended and Restated Master Services Agreement totaled $0.3 million and $0.9 million for the three-month period ended September 30, 2023 and nine-month period ended September 30, 2023, respectively.

Revenue and Segment Information

Revenue and Segment Information	9 Months Ended
	Sep. 30, 2023
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 Remaining Performance Obligations Contract Balances September 30, December 31, 2023 2022 Accounts receivable (including related-party), beginning of period $ 1,148 $ 126 Accounts receivable (including related-party), end of period 2,186 1,148 Unearned revenue, beginning of period $ 3,888 $ 4,388 Unearned revenue, end of period 3,859 3,888 Business segment information for the periods indicated (and as of the dates indicated) was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Refinery operations $ 101,598 $ 127,349 $ 283,505 $ 372,314 Tolling and terminaling 956 920 4,588 2,760 Total revenue from operations 102,554 128,269 288,093 375,074 Intercompany processing fees (1) Refinery operations (930 ) (663 ) (2,101 ) (1,991 ) Tolling and terminaling 930 663 2,101 1,991 Total intercompany processing fees - - - - Costs of good sold (2) Refinery operations (90,985 ) (117,655 ) (253,317 ) (339,849 ) Tolling and terminaling (403 ) (580 ) (1,216 ) (1,772 ) Total costs of goods sold (91,388 ) (118,235 ) (254,533 ) (341,621 ) Gross profit Refinery operations 9,683 9,031 28,087 30,474 Tolling and terminaling 1,483 1,003 5,473 2,979 Total gross profit 11,166 10,034 33,560 33,453 Other operating and general and administrative expenses (3) Refinery operations (374 ) (426 ) (1,193 ) (1,021 ) Tolling and terminaling (306 ) (132 ) (932 ) (255 ) Corporate and other (840 ) (530 ) (1,979 ) (1,527 ) Total other operating and general and administrative expenses (1,520 ) (1,088 ) (4,104 ) (2,803 ) Depreciation and amortization Refinery operations (303 ) (305 ) (911 ) (918 ) Tolling and terminaling (342 ) (342 ) (1,026 ) (1,026 ) Corporate and other (54 ) (52 ) (157 ) (155 ) Total depreciation and amortization (699 ) (699 ) (2,094 ) (2,099 ) Interest and other non-operating expenses, net Refinery operations (847 ) (972 ) (2,456 ) (2,392 ) Tolling and terminaling (502 ) (321 ) (1,462 ) (1,148 ) Corporate and other (194 ) (437 ) (574 ) (1,450 ) Total interest and other non-operating expenses, net (1,543 ) (1,730 ) (4,492 ) (4,990 ) Income (loss) before income taxes Refinery operations 8,159 7,328 23,527 26,143 Tolling and terminaling 333 208 2,053 550 Corporate and other (1,088 ) (1,019 ) (2,710 ) (3,132 ) Total income before income taxes 7,404 6,517 22,870 23,561 Income tax expense (339 ) (68 ) (612 ) (224 ) Net income $ 7,065 $ 6,449 $ 22,258 $ 23,337 (1) Fees associated with an intercompany tolling agreement related to naphtha volumes. (2) Cost of goods sold within tolling and terminaling includes terminal operating expenses and an allocation of other costs (e.g., insurance and maintenance). (3) General and administrative expenses within refinery operations includes the LEH operating fee, related party, other operating expenses, and accretion of asset retirement obligations. Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Capital expenditures Refinery operations $ - $ 56 $ 102 $ 102 Tolling and terminaling - - - - Corporate and other - - - - Total capital expenditures $ - $ 56 $ 102 $ 102 September 30, December 31, 2023 2022 (in thousands) Identifiable assets Refinery operations $ 84,218 $ 64,359 Tolling and terminaling 16,568 17,836 Corporate and other 1,257 1,709 Total identifiable assets $ 102,043 $ 83,904

Concentration of Risk

Concentration of Risk	9 Months Ended
	Sep. 30, 2023
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, 2023 and December 31, 2022, our cash balances (including restricted cash) exceeded the FDIC insurance limit per depositor by $11.7 million and $0.9 million, respectively. Instability and volatility in the capital, credit, and commodity markets, as well as with financial institutions, could adversely affect our cash balances (including restricted cash) in excess of FDIC insurance limits per depositor. In the event that banks in which we maintain our cash balances (including restricted cash) fail, there can be no assurance that the federal government and the Federal Reserve would intervene. Key Supplier Operation of the Nixon refinery depends on our ability to purchase adequate amounts of crude oil and condensate. We currently operate under a crude supply agreement with Tartan. Related to the Crude Supply Agreement, Tartan stores crude oil at the Nixon facility under a terminal services agreement. In a letter dated October 31, 2023, Tartan provided LE and NPS the required 60 days’ notice of its intention to terminate the Crude Supply Agreement and terminal services agreement. The effective date of the termination is December 31, 2023. Management has continued to develop crude supplier relationships over the past year. As a result, management believes that available alternative suppliers will be able to provide us with adequate amounts of crude oil and condensate following agreement termination and for the foreseeable future. Under the volume-based Crude Supply Agreement, Tartan was to deliver 24.8 million net bbls of crude oil. For the nine months ended September 30, 2023 and 2022, volume delivered under the Crude Supply Agreement, as a percentage of the total net bbls of crude oil deliverable, was 66.8% and 50.3%, respectively. During the three and nine months ended September 30, 2023, substantially all our crude was sourced from Tartan. During the three and nine months ended September 30, 2022, all our crude oil was sourced from Tartan. At September 30, 2023, accounts payable for crude oil and condensate was $0. See “Note (16)” to our consolidated financial statements for additional information regarding the Crude Supply Agreement and terminal services agreement. Our financial health has been materially and adversely affected by significant current debt, certain of which is in default, historical net losses, working capital deficits, and margin volatility. If we are required to obtain our crude oil and condensate without the benefit of a long-term crude supply agreement, our exposure to the risks associated with volatile crude oil prices may increase, crude oil transportation costs could increase, and our liquidity may be reduced. Similarly, 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, which could result in refinery downtime and could materially affect our business, financial condition, and results of operations. Customers Significant Customers Three Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at September 30, September 30, 2023 3 73.5 % $2.1 million September 30, 2022 2 64.4 % $ 0 Nine Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at September 30, September 30, 2023 3 72.6 % $2.1 million September 30, 2022 2 60.9 % $ 0 One of our significant customers is LEH, an Affiliate. The Affiliate purchases our jet fuel under a Jet Fuel Sales Agreement and sells the jet fuel to the DLA under preferential pricing terms due to its HUBZone certification. The jet fuel, which is stored at the Nixon Facility, is lifted by the Affiliate as needed. For the three months ended September 30, 2023 and 2022, the Affiliate accounted for 32.2% and 37.6% of total revenue from operations, respectively. For the nine months ended September 30, 2023 and 2022, the Affiliate accounted for 32.6% and 35.8% of total revenue from operations, respectively. Accounts receivable by the Affiliate represented $2.0 million at September 30, 2023. Customer Concentration Refined Product Sales We sell our products primarily in the U.S. within PADD 3. Occasionally we sell refined products to customers that export to other countries, such as naphtha and distillate to Mexico. Total refined product sales by distillation (from light to heavy) for the periods indicated consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except percent amounts) (in thousands, except percent amounts) LPG mix $ 37 0.0 % $ - 0.0 % $ 149 0.1 % $ - 0.0 % Naphtha 27,659 27.2 % 25,571 20.1 % 57,562 20.3 % 80,707 21.7 % Jet fuel 33,060 32.5 % 48,264 37.9 % 93,824 33.1 % 134,119 36.0 % HOBM 16,047 15.8 % 19,143 15.0 % 59,732 21.1 % 63,045 16.9 % AGO 24,795 24.5 % 34,371 27.0 % 72,238 25.4 % 94,443 25.4 % $ 101,598 100.0 % $ 127,349 100.0 % $ 283,505 100.0 % $ 372,314 100.0 % An Affiliate, LEH, purchases all our jet fuel. See “Note (3)” to our consolidated financial statements for additional disclosures related to Affiliate agreements and arrangements.

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	9 Months Ended
	Sep. 30, 2023
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, 2023 2022 (in thousands) Prepaid insurance $ 1,381 $ 1,066 Prepaid crude oil and condensate 1,288 2,183 Other prepaids 165 163 Prepaid easement renewal fees 37 54 $ 2,871 $ 3,466

Inventory

Inventory	9 Months Ended
	Sep. 30, 2023
Inventory
Inventory	(7) Inventory Inventory as of the dates indicated consisted of the following: September 30, December 31, 2023 2022 (in thousands) HOBM $ 13,941 $ 14,879 Jet 8,555 - Naphtha 3,538 1,056 Crude oil and condensate 987 3,458 AGO 162 301 Chemicals 136 116 Propane 37 27 LPG mix 3 7 $ 27,359 $ 19,844

PropertyPlant and EquipmentNet

PropertyPlant and EquipmentNet	9 Months Ended
	Sep. 30, 2023
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, 2023 2022 (in thousands) Refinery and facilities $ 72,675 $ 72,675 Land 566 566 Other property and equipment 913 913 74,154 74,154 Less: Accumulated depreciation and amortiation (22,323 ) (20,387 ) 51,831 53,767 CIP 3,770 3,669 $ 55,601 $ 57,436

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	9 Months Ended
	Sep. 30, 2023
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, 2023 2022 (in thousands) Unearned revenue from contracts with customers $ 3,859 $ 3,888 Insurance 777 568 Unearned contract renewal income 480 480 Accrued fines and penalties 522 407 Taxes payable 279 64 Other payable 200 324 Board of director fees payable 188 210 Customer deposits 163 173 $ 6,468 $ 6,114

ThirdParty LongTerm Debt

ThirdParty LongTerm Debt	9 Months Ended
	Sep. 30, 2023
ThirdParty LongTerm Debt
Third-Party Long-Term Debt	(10) Third-Party Long-Term Debt Loan Agreements Loan Description Parties Principal (in millions) Origination / Maturity Monthly Principal and Interest Payment Interest Rate Loan Purpose Veritex Loans LE Term Loan Due 2034 ( in forbearance (1) LE Veritex $25.0 Jun 2015 / Jun 2034 $0.2 million WSJ Prime + 2.75% Refinance loan; capital improvements LRM Term Loan Due 2034 ( in forbearance (1) LRM Veritex $10.0 Dec 2015 / Dec 2034 $0.1 million WSJ Prime + 2.75% Refinance bridge loan; capital improvements Kissick Debt (in forbearance) ( 2)(3)(4) LE Kissick $11.7 Jun 2006 / Jan 2018 $0.5 million 6.25% Working capital GNCU Loan NPS Term Loan Due 2031( in default (5) NPS GNCU $10.0 Oct 2021 / Oct 2031 $0.1 million 5.75% Working capital SBA EIDLs Blue Dolphin Term Loan Due 2051 (as modified) (6) Blue Dolphin SBA $2.0 May 2021 / Jun 2051 $0.01 million 3.75% Working capital LE Term Loan Due 2050 (7) LE SBA $0.15 Aug 2020 / Aug 2050 $0.0007 million 3.75% Working capital NPS Term Loan Due 2050 (7) NPS SBA $0.15 Aug 2020 / Aug 2050 $0.0007 million 3.75% Working capital Equipment Loan Due 2025 (8) LE Texas First $0.07 Oct 2020 / Oct 2025 $0.0013 million 4.50% Equipment Lease Conversion (1) At both September 30, 2023 and December 31, 2022, restricted cash, noncurrent, representing amounts held by Veritex in a payment reserve account, was $1.0 million. (2) Original principal amount was $8.0 million; pursuant to a 2017 sixth amendment, principal under the Kissick Debt increased by $3.7 million. (3) Pursuant to the Kissick Forbearance Agreement, LE began making monthly payments of $0.5 million to Kissick Noteholder in April 2023; as modified, interest on outstanding principal and accrued and unpaid interest decreased from 16.00% to 6.25% per year. (4) Subject to the Kissick Subordination Agreement. (5) Loan requires monthly interest-only payments for the first thirty-six (36) months. Afterwards, principal and interest payments due monthly through loan maturity. First payment due in November 2024. (6) Original principal amount was $0.5 million; the Blue Dolphin Term Loan Due 2051 was modified to increase the principal amount by $1.5 million. Payments deferred for thirty (30) months; first payment due and paid in November 2023; interest accrues during deferral period; loan not forgivable. (7) Payments deferred for thirty (30) months; first payment due and paid in February 2023; interest accrued during deferral period; loan not forgivable. (8) In May 2019, LE entered into 12-month equipment rental agreement with option to purchase a backhoe at maturity; equipment rental agreement matured in May 2020; in October 2020, LE entered into the Equipment Loan Due 2025 to finance the backhoe purchase; backhoe used at the Nixon facility. 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, 2023 2022 (in thousands) Veritex Loans LE Term Loan Due 2034 (in forbearance) $ 20,074 $ 20,801 LRM Term Loan Due 2034 (in forbearance) 8,351 8,671 Kissick Debt (in forbearance) 8,521 11,006 GNCU Loan NPS Term Loan Due 2031 ( in default 9,975 9,975 SBA EIDLs BDEC Term Loan Due 2051 2,137 2,082 LE Term Loan Due 2050 161 162 NPS Term Loan Due 2050 161 162 Equipment Loan Due 2025 33 38 49,413 52,897 Less: Current portion of long-term debt, net (38,369 ) (42,155 ) Less: Unamortized debt issue costs (1,997 ) (2,149 ) Less: Accrued interest payable (3,836 ) (6,271 ) $ 5,211 $ 2,322 Unamortized debt issue costs associated with the Veritex and GNCU loans as of the dates indicated consisted of the following: September 30, December 31, 2023 2022 (in thousands) Veritex Loans LE Term Loan Due 2034 (in forbearance) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in forbearance) 768 768 GNCU Loan NPS Term Loan Due 2031 ( in default 730 730 Less: Accumulated amortization (1,175 ) (1,023 ) $ 1,997 $ 2,149 Amortization expense was $0.05 million for both three-month periods ended September 30, 2023 and 2022. Amortization expense was $0.1 million for both nine-month periods ended September 30, 2023 and 2022. 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, 2023 2022 (in thousands) Kissick Debt (in forbearance) $ 3,544 $ 6,028 Veritex Loans LE Term Loan Due 2034 (in forbearance) 49 53 LRM Term Loan Due 2034 (in forbearance) 67 66 GNCU Loan NPS Term Loan Due 2031 ( in default 17 17 SBA EIDLs BDEC Term Loan Due 2051 137 82 LE Term Loan Due 2050 11 12 NPS Term Loan Due 2053 11 12 Equipment Loan Due 2025 - 1 3,836 6,271 Less: Accrued interest payable (3,836 ) (6,271 ) Long-term Interest Payable, Net of Current Portion $ - $ - The debt associated with the LE Term Loan Due 2034, LRM Term Loan Due 2034, and NPS Term Loan Due 2031 was classified within the current portion of long-term debt on our consolidated balance sheets at September 30, 2023 and December 31, 2022. Although the debt associated with the Kissick Debt was classified within the current portion of long-term debt on our consolidated balance sheet at December 31, 2022, the Kissick Debt was reclassified to long-term debt, net of current portion at September 30, 2023 as a result of the Kissick Forbearance Agreement. Forbearance and Defaults Veritex First Amended Forbearance Agreement Under the Veritex Forbearance Agreement, which expired on September 30, 2023, LE and LRM paid Veritex: (i) $4.3 million in past due principal and interest at the non-default rate (excluding late fees), (ii) $1.0 million into a payment reserve account, and (iii) $0.04 million in Veritex attorney fees. The Veritex Forbearance Agreement was superseded by the Veritex First Amended Forbearance Agreement. Kissick Forbearance Agreement Other Defaults We can provide no assurance that: (i) our assets or cash flow will be sufficient to fully repay borrowings under secured loan agreements that are in default, either upon maturity or if accelerated, (ii) LE, LRM, NPS, or BDPL will be able to refinance or restructure the debt, and/or (iii) third parties will provide future forbearances or default waivers, particularly if the banks with whom we have relationships fail. If one or more banks fail, we could be exposed to additional events of default (if not cured or waived) under existing secured loan agreements. 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 price 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. If the debt associated with secured loan agreements is accelerated and we are unable to refinance or restructure the debt or obtain default waivers, we may have to consider other options, including selling assets, raising additional debt or equity capital, cutting costs, reducing cash requirements, filing bankruptcy, or ceasing operating. 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. Guarantees and Security Loan Description Guarantees Security Veritex Loans LE Term Loan Due 2034 ( in forbearance • USDA • Jonathan Carroll (1) · Affiliate cross-guarantees • First priority lien on Nixon facility’s business assets (excluding accounts receivable and inventory) • Assignment of all Nixon facility contracts, permits, and licenses • Absolute assignment of Nixon facility rents and leases, including tank rental income • $5.0 million life insurance policy on Jonathan Carroll LRM Term Loan Due 2034 ( in forbearance • USDA • Jonathan Carroll (1) • Affiliate cross-guarantees • Second priority lien on rights of LE in crude distillation tower and other collateral of LE • First priority lien on real property interests of LRM • First priority lien on all LRM fixtures, furniture, machinery, and equipment • First priority lien on all LRM contractual rights, general intangibles, and instruments, except with respect to LRM rights in its leases of certain specified tanks for which Veritex has second priority lien • Substantially all assets Kissick Debt (in forbearance) ( 2) --- • Subordinated deed of trust that encumbers the crude distillation tower and general assets of LE GNCU Loan NPS Term Loan Due 2031 (in default) • USDA • Jonathan Carroll (1) • Affiliate cross-guarantees • Deed of trust lien on approximately 56 acres of land and improvements owned by LE • Leasehold deed of trust lien on certain property leased by NPS from LE • Assignment of leases and rents and certain personal property SBA EIDLs Blue Dolphin Term Loan Due 2051 --- • Business assets (e.g., machinery and equipment, furniture, fixtures, etc.) LE Term Loan Due 2050 --- • Business assets (e.g., machinery and equipment, furniture, fixtures, etc.) NPS Term Loan Due 2050 --- • Business assets (e.g., machinery and equipment, furniture, fixtures, etc.) Equipment Loan Due 2025 --- • First priority security interest in the equipment (backhoe). (1) Jonathan Carroll was required to personally guarantee repayment of borrowed funds and accrued interest. (2) Subject to the Kissick Subordination Agreement.

AROs

AROs	9 Months Ended
	Sep. 30, 2023
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. We recorded an additional increase in liability during the twelve months ended December 31, 2022 due to a further change in timing. Because our pipelines and facilities assets have been inactive for an extended period, BOEM mandated that they be decommissioned. In October 2023, management met with BSEE to discuss BDPL’s path forward for meeting decommissioning requirements. Management worked with a consultant to develop a decommissioning plan, and BDPL submitted its decommissioning plan to the agency on November 8, 2023. Separately, management is exploring alternatives to reactivate the assets under a potential alternate Rights-of-Use and Easement (RUE). As a result of updated decommissioning bids, our ARO estimate increased by $0.3 million at September 30, 2023. Based on updated estimates for pipeline decommissioning, platform removal, and associated costs, as well as resource availability and projected weather conditions, we believe decommissioning and remediation of all associated INCs will be completed by the end of the third quarter of 2024. However, BDPL’s work plan does not relieve BDPL of its obligations to comply with BSEE’s mandate or of BSEE’s authority to impose financial penalties. Further, there can be no assurance that BDPL will be able to complete the anticipated work or predict the outcome of BSEE INCs. Accordingly, we did not record a liability related to potential penalties on our consolidated balance sheets as of September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, BDPL maintained $4.1 million and $3.7 million, respectively, in AROs related to abandonment of these assets, which amount does not include potential penalties. Due to BDPL’s failure to complete decommissioning of the offshore pipeline and platform assets and remedy associated INCs within the timeframe mandated by BSEE, BDPL could be subject to regulatory oversight and enforcement, including but not limited to failing 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. ARO liability as of the dates indicated was as follows: September 30, December 31, 2023 2022 (in thousands) AROs, at the beginning of the period $ 3,710 $ 3,461 Changes in estimates of existing obligations 323 114 Liabilities settled nine months ended September 30, 2023 (18 ) - Accretion expense nine months ended September 30, 2023 59 135 Less: AROs, current portion (4,074 ) (3,710 ) Long-term AROs, at the end of the period $ - $ - 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, 2023
Lease Obligations
Lease Obligatons	(12) Lease Obligations Lease Obligations Office Lease 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, 2023 and 2022. Sublease income from LEH totaled $0.03 million for both nine-month periods ended September 30, 2023 and 2022. See “Note (3)” to our consolidated financial statements for additional disclosures related to the Affiliate sub-lease. Tank Lease The following table presents the lease-related assets and liabilities recorded on the consolidated balance sheet: September 30, December 31, Balance Sheet Location 2023 2022 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 1,003 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (788 ) (638 ) Total lease assets 215 149 Liabilities Current Operating lease Current portion of lease liabilities 199 156 Noncurrent Operating lease Long-term lease liabilities, net of current - - Total lease liabilities $ 199 $ 156 Weighted average remaining lease term in years Operating lease (1) 0.92 Weighted average discount rate Operating lease 8.25 % (1) Pursuant to a May 2023 amendment, the operating lease term was extended by twelve (12) months. 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, 2023 2022 2023 2022 (in thousands) Operating lease costs $ 55 $ 51 $ 158 $ 154 Short-term lease expense, related party 300 - 700 - Total lease cost $ 355 $ 51 $ 858 $ 154 The table below presents supplemental cash flow information related to leases as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 57 $ 50 $ 172 $ 151 As of September 30, 2023, maturities of lease liabilities for the periods indicated were as follows: September 30, Operating Lease (in thousands) 2024 $ 199 $ 199 Future minimum annual lease commitments that are non-cancelable: Operating September 30, Lease (in thousands) 2024 $ 211 $ 211

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Taxes
Income Taxes	(13) Income Taxes The Inflation Reduction Act ("IRA") was enacted into law in August 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, 2023 2022 2023 2022 (in thousands) (in thousands) Current Federal $ (262 ) $ - $ (382 ) $ - State (77 ) (68 ) (230 ) (224 ) Deferred Federal (1,277 ) (1,257 ) (4,373 ) (5,152 ) Change in valuation allowance 1,277 1,257 4,373 5,152 Total provision for income taxes $ (339 ) $ (68 ) $ (612 ) $ (224 ) GAAP treats Texas margins tax, a form of business tax imposed on an entity’s gross profit rather than its net income, like an income tax for financial reporting purposes. Deferred income taxes as of the dates indicated consisted of the following: September 30, December 31, 2023 2022 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 7,526 $ 11,088 Business interest expense 2,793 3,524 Start-up costs (crude oil and condensate processing facility) 275 339 ARO liability/deferred revenue 856 779 Other 62 43 Total deferred tax assets 11,512 15,773 Deferred tax liabilities: Basis differences in property and equipment (8,328 ) (8,216 ) Total deferred tax liabilities (8,328 ) (8,216 ) 3,184 7,557 Valuation allowance (3,184 ) (7,557 ) 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 Under IRC Section 382, a corporation that undergoes an “ownership change” is subject to limitations on its use of pre-change NOL carryforwards to offset future taxable income. Within the meaning of IRC Section 382, an “ownership change” occurs when the aggregate stock ownership of stockholders who own more than 5% (after applying certain look-through rules) increase by more than fifty percent (50% over such stockholders’ lowest percentage ownership during the testing period (generally three years). Based on the tax rule, ownership changes occurred in 2005 and 2012. The 2005 ownership change related to a series of private placements; the 2012 ownership change related to a reverse acquisition. The 2005 and 2012 ownership changes limit the use of pre-change NOL carryforwards to offset future taxable income. The annual use limitation generally equals the value of the common stock, on an aggregate basis, when the ownership change occurred multiplied by a specified tax-exempt interest rate. The 2012 ownership change will subject approximately $16.3 million in NOL carryforwards generated before the ownership change to an annual use limitation of approximately $0.6 million per year. We may use any unused portions of the limitation in subsequent years. Because of the yearly restriction, approximately $6.7 million in 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 Available for Use Net Operating Loss Carryforward Pre- Ownership Change Post- Ownership Change Total (in thousands) Balance at December 31, 2021 $ 7,897 $ 65,511 $ 73,408 Net operating losses used and expired (6,127 ) (22,384 ) (28,511 ) Balance at December 31, 2022 $ 1,770 $ 43,127 $ 44,897 Net operating losses used and expired (638 ) (15,560 ) (16,198 ) Balance at September 30, 2023 $ 1,132 $ 27,567 $ 28,699 Valuation Allowance We have NOL carryforwards that remain available for future use. At September 30, 2023 and December 31, 2022, 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, 2023
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, 2023 2022 2023 2022 (in thousands, (in thousands, except share and per share amounts) except share and per share amounts) Net income (loss) $ 7,065 $ 6,449 $ 22,258 $ 23,337 Earnings per share Basic and diluted income (loss) per share $ 0.47 $ 0.43 $ 1.49 $ 1.69 Basic and diluted shares used in computing earnings per share 14,921,968 14,825,763 14,921,968 13,797,701 Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding plus dilutive instruments. Diluted EPS for the three and nine months ended September 30, 2023 and 2022 was the same as basic EPS as there were no stock options or other dilutive instruments outstanding. Shareholders are entitled to receive such dividends as may be declared by our Board out of funds legally available for such purpose. However, no dividend may be declared or paid unless after-tax profit was made in the preceding fiscal year, we are in compliance with covenants in our secured loan agreements, we are current on all required debt payments, and we have received prior written concurrence from certain of our lenders.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2023
Commitments and contingencies (Note 15)
Commitments and Contingencies	(15) Commitments and Contingencies Second 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 Second Amended and Restated Operating Agreement. Offshore Pipelines and Platform Requirements BDPL has pipelines and platform assets that are subject to BSEE’s idle iron regulations. Idle iron regulations require 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. Abandonment Based on updated estimates for pipeline decommissioning, platform removal, and associated costs, as well as resource availability and projected weather conditions, we believe decommissioning and remediation of all associated INCs will be completed by the end of the third quarter of 2024. However, BDPL’s work plan does not relieve BDPL of its obligations to comply with BSEE’s mandate or of BSEE’s authority to impose financial penalties. Further, there can be no assurance that BDPL will be able to complete anticipated work or predict the outcome of BSEE INCs. Accordingly, we did not record a liability related to potential penalties on our consolidated balance sheets as of September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, BDPL maintained $4.1 million and $3.7 million, respectively, in AROs related to abandonment of these assets, which amount does not include potential penalties. Due to BDPL’s failure to comply with BSEE requirements, BDPL could be subject to regulatory oversight and enforcement, including but not limited to failing 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. Inspections Defaults Under Secured Loan Agreements with Third Parties and Related Parties See “Notes (1), (3), (10), and (16)” 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. Failing 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. 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 . Pilot Dispute Related to Terminal Services Agreement On October 28, 2022, Pilot commenced an action and application for a temporary restraining order against NPS in Harris County District Court (the “Texas Action”). After a hearing on the application on October 28, 2022, Pilot’s application for the temporary restraining order was denied the same day. On December 2, 2022, NPS filed its answer in the Texas Action. On December 6, 2022, NPS provided notice under Section 7.206(a) of the Texas Business and Commerce Code of its intent to sell the remaining inventory of Pilot’s jet fuel at the Nixon facility by January 7, 2023. After a series of negotiations, NPS agreed to forbear from exercising its remedies under the Texas Business and Commerce Code while the parties explored a potential compromise of the dispute pursuant to the Pilot Forbearance and Accommodation Agreement, with a forbearance period terminating on February 28, 2023. As part of the Pilot Forbearance and Accommodation Agreement, Pilot paid NPS approximately $1.5 million in January 2023. On March 31, 2023, NPS and Pilot executed the Pilot Forbearance Amendment, extending the forbearance period and all deadlines in the unresolved Texas Action to June 15, 2023. As part of the Pilot Forbearance Amendment, Pilot paid NPS approximately $1.1 million and $0.2 million in April and June 2023, respectively. The parties also negotiated the sale of all 185,000 bbls of stored jet fuel in April 2023. On June 16, 2023, following expiration of the Pilot Forbearance and Accommodation Agreement, the parties agreed to extend the deadline for responses to outstanding discovery requests in the Texas Action to August 31, 2023. On August 28, 2023 the parties filed a joint motion to stay this case. The parties anticipate attending mediation in December 2023 to settle all outstanding disputes. If, upon conclusion of the mediation there is no resolution, then either party may individually or jointly move for the court to lift the stay and enter a new scheduling order and trial setting. BOEM Supplemental Pipeline Bonds BDPL historically maintained $0.9 million in pipeline bonds with 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 the abandonment of BDPL’s offshore pipelines and platform may help in future discussions with BOEM related to the INCs. Abandonment of these assets will significantly reduce or eliminate the amount of supplemental pipeline bonds 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 supplemental pipeline bond requirements. If BDPL is required by BOEM to provide significant additional 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 supplemental pipeline bond INCs. Accordingly, we did not record a liability on our consolidated balance sheets as of September 30, 2023 and December 31, 2022. At both September 30, 2023 and December 31, 2022, BDPL maintained approximately $0.9 million in pipeline rights-of-way surety bonds issued to BOEM through RLI Corp. However, as noted below, we may need to secure a new bonding relationship. Of the pipeline rights-of-way bonds, $0.7 million was credit-backed and $0.2 million was cash-backed. RLI Surety Bonds TCEQ Proposed Agreed Order Pilot Dispute Related to Set-Off Payments Defaults under Secured Loan Agreements Counterparty Contract-Related Dispute

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2023
Subsequent Events
Subsequent Events	(16) Subsequent Events Veritex First Amended Forbearance Agreement On October 30, 2023, but effective September 30, 2023 (the “Amendment Effective Date”), LE, LRM, Veritex, and guarantors (as defined therein), entered into the First Amended Forbearance Agreement). Under the First Amended Forbearance Agreement, Veritex agreed to forbear from exercising any of its remedies under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 in connection with existing defaults beginning on the Amendment Effective Date through and including December 29, 2023 (the “Forbearance Termination Date”). Unless sooner terminated as stipulated under the First Amended Forbearance Agreement, Veritex also agreed to forbear from testing the Borrowers’ compliance with financial covenants and taking any action to exercise its rights and/or remedies with respect to LE or LRM’s compliance or non-compliance with financial covenants from the Amendment Effective Date through the Forbearance Termination Date. Termination of Crude Supply Agreement and Terminal Services Agreement As previously disclosed, LE entered into a Crude Supply Agreement with Pilot dated May 7, 2019, as amended on November 11, 2019. The Crude Supply Agreement was assigned by Pilot to Tatan pursuant to an Assignment of Contract dated March 20, 2020. Related to the Crude Supply Agreement, Tartan stores crude oil at the Nixon facility under a Terminal Services Agreement with NPS dated June 1, 2019. Pursuant to a letter dated October 31, 2023, and received by LE and NPS on November 2, 2023, Tartan provided the required 60 days’ notice of its intention to terminate the Crude Supply Agreement and Terminal Services Agreement effective December 31, 2023. There were no penalties associated with the termination. We will recognize a non-cash gain related to the remaining portion of the contract renewal bonus in the fourth quarter of 2023. BSEE Civil Penalty On October 24, 2023, BSEE proposed an administrative civil penalty of approximately $0.2 million related to BDPL’s failure to timely remediate an INC related to a required platform inspection. The proposed administrative civil penalty will be finalized 30 days following the date of notice. We recorded a liability for the maximum proposed amount of approximately $0.2 million on our consolidated balance sheets within accrued expenses and other current liabilities as of September 30, 2023.

Principles of Consolidation a_2

Principles of Consolidation and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
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, 2022 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, 2022
Significant Accounting Policies	A summary of significant Blue Dolphin accounting policies 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 We assessed certain accounting matters that require consideration of forecasted financial information in context with information reasonably available to us as of September 30, 2023 and through the filing date of this report. The accounting matters assessed included, but not limited to, our allowance for doubtful accounts, inventory valuation, and the carrying value of long-lived assets.
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, 2023 2022 (in thousands) Cash and cash equivalents $ 11,471 $ 520 Restricted cash, noncurrent 1,000 1,001 $ 12,471 $ 1,521
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful Accounts
Financial Instruments	Financial Instruments
Inventory	Inventory
Property and Equipment	Refinery and Facilities Pipelines and Facilities Because our pipelines and facilities assets have been inactive for an extended period, BOEM mandated that they be decommissioned. In October 2023, management met with BSEE to discuss BDPL’s path forward for meeting decommissioning requirements. Management worked with a consultant to develop a decommissioning plan, and BDPL submitted its decommissioning plan to the agency on November 8, 2023. . Separately, management is exploring alternatives to reactivate the assets under a potential alternate Rights-of-Use and Easement (RUE).As a result of updated decommissioning bids, our ARO estimate increased by $0.3 million at September 30, 2023. Based on updated estimates for pipeline decommissioning, platform removal, and associated costs, as well as resource availability and projected weather conditions, we believe decommissioning and remediation of all associated INCs will be completed by the end of the third quarter of 2024. However, BDPL’s work plan does not relieve BDPL of its obligations to comply with BSEE’s mandate or of BSEE’s authority to impose financial penalties. Further, there can be no assurance that BDPL will be able to complete the anticipated work or predict the outcome of BSEE INCs. Accordingly, we did not record a liability related to potential penalties on our consolidated balance sheets as of September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, BDPL maintained $4.1 million and $3.7 million, respectively, in AROs related to abandonment of these assets, which amount does not include potential penalties. Due to BDPL’s failure to complete decommissioning of the offshore pipeline and platform assets and remedy associated INCs within the timeframe mandated by BSEE, BDPL could be subject to regulatory oversight and enforcement, including but not limited to failing 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. Construction in Progress (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, 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	Deferred Revenue
Unearned Contract Renewal Income	Unearned Contract Renewal Income
Income Taxes	Income Taxes Income taxes are calculated utilizing the applicable rates on items included in the determination of income for income tax purposes. Our effective tax rate may be different than what would be expected if the federal and state statutory rates were applied to income from continuing operations primarily because of amounts expensed for financial reporting that are not deductible for tax purposes. The benefit of an uncertain tax position is recognized in the financial statements if it meets a minimum recognition threshold. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more-likely-than-not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At September 30, 2023 and December 31, 2022, we had no uncertain tax positions for which a reserve or liability was necessary.
Deferred Taxes	Deferred Taxes
Impairment or Disposal of Long-Lived Assets	Impairment or Disposal of Long-Lived Assets Management evaluated refinery and facilities assets for impairment considering shifts in the capital, credit, and commodity markets, recession and inflation, and armed conflicts in the Middle East and Europe and associated sanctions on Russian crude products. As of September 30, 2023 and December 31, 2022, we did not record any impairment of our long-lived assets. However, impairment may be required in the future if external events or circumstances change or if internal conditions shift materially.
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, 2023
Principles of Consolidation and Significant Accounting Policies
Schedule of reconciliation of cash, cash equivalents, and restricted cash	September 30, December 31, 2023 2022 (in thousands) Cash and cash equivalents $ 11,471 $ 520 Restricted cash, noncurrent 1,000 1,001 $ 12,471 $ 1,521

RelatedParty Transactions (Tabl

RelatedParty Transactions (Tables)	9 Months Ended
	Sep. 30, 2023
RelatedParty Transactions
Long-term debt, related party, current portion (in default) and accrued interest payable, related party.	September 30, December 31, 2023 2022 (in thousands) LEH June LEH Note (debt satisfied) $ - $ 1,211 BDPL-LEH Loan Agreement (in forbearance) 8,309 8,094 LEH Total 8,309 9,305 Less: Long-term debt, related party, current portion - (5,211 ) Less: Accrued interest payable, related party - (4,094 ) $ 8,309 $ -
Schedule of revenue from operations	Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except percent amounts) (in thousands, except percent amounts) Refinery operations LEH $ 33,060 36.9 % $ 48,264 37.6 % $ 93,824 32.6 % $ 134,119 35.8 % Third-Parties 68,538 60.7 % 79,085 61.7 % 189,681 65.8 % 238,195 63.5 % Tolling and terminaling LEH 540 0.8 % - - - 0.0 % - - Third-Parties 416 1.6 % 920 0.7 % 4,588 1.6 % 2,760 0.7 % $ 102,554 100.0 % $ 128,269 100.0 % $ 288,093 100.0 % $ 375,074 100.0 %
Interest Expenses	Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Jonathan Carroll Guaranty Fee Agreements Tied to First Term Loan Due 2034 $ 101 $ 108 $ 304 $ 324 Tied to Second Term Loan Due 2034 42 45 126 135 Tied to Blue Dolphin Term Loan Due 2051 10 - 30 - Tied to NPS Term Loan Due 2031 50 - 150 - LEH BDPL-LEH Loan Agreement (in forbearance) 167 160 491 480 June LEH Note (debt satisfied) - 137 - 522 $ 370 $ 450 $ 1,101 $ 1,461

Revenue and Segment Informati_2

Revenue and Segment Information (Tables)	9 Months Ended
	Sep. 30, 2023
Revenue and Segment Information
Schedule of contract balances	September 30, December 31, 2023 2022 Accounts receivable (including related-party), beginning of period $ 1,148 $ 126 Accounts receivable (including related-party), end of period 2,186 1,148 Unearned revenue, beginning of period $ 3,888 $ 4,388 Unearned revenue, end of period 3,859 3,888
Schedule of business segment Infirmation	Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Refinery operations $ 101,598 $ 127,349 $ 283,505 $ 372,314 Tolling and terminaling 956 920 4,588 2,760 Total revenue from operations 102,554 128,269 288,093 375,074 Intercompany processing fees (1) Refinery operations (930 ) (663 ) (2,101 ) (1,991 ) Tolling and terminaling 930 663 2,101 1,991 Total intercompany processing fees - - - - Costs of good sold (2) Refinery operations (90,985 ) (117,655 ) (253,317 ) (339,849 ) Tolling and terminaling (403 ) (580 ) (1,216 ) (1,772 ) Total costs of goods sold (91,388 ) (118,235 ) (254,533 ) (341,621 ) Gross profit Refinery operations 9,683 9,031 28,087 30,474 Tolling and terminaling 1,483 1,003 5,473 2,979 Total gross profit 11,166 10,034 33,560 33,453 Other operating and general and administrative expenses (3) Refinery operations (374 ) (426 ) (1,193 ) (1,021 ) Tolling and terminaling (306 ) (132 ) (932 ) (255 ) Corporate and other (840 ) (530 ) (1,979 ) (1,527 ) Total other operating and general and administrative expenses (1,520 ) (1,088 ) (4,104 ) (2,803 ) Depreciation and amortization Refinery operations (303 ) (305 ) (911 ) (918 ) Tolling and terminaling (342 ) (342 ) (1,026 ) (1,026 ) Corporate and other (54 ) (52 ) (157 ) (155 ) Total depreciation and amortization (699 ) (699 ) (2,094 ) (2,099 ) Interest and other non-operating expenses, net Refinery operations (847 ) (972 ) (2,456 ) (2,392 ) Tolling and terminaling (502 ) (321 ) (1,462 ) (1,148 ) Corporate and other (194 ) (437 ) (574 ) (1,450 ) Total interest and other non-operating expenses, net (1,543 ) (1,730 ) (4,492 ) (4,990 ) Income (loss) before income taxes Refinery operations 8,159 7,328 23,527 26,143 Tolling and terminaling 333 208 2,053 550 Corporate and other (1,088 ) (1,019 ) (2,710 ) (3,132 ) Total income before income taxes 7,404 6,517 22,870 23,561 Income tax expense (339 ) (68 ) (612 ) (224 ) Net income $ 7,065 $ 6,449 $ 22,258 $ 23,337
Total capital expenditure	Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Capital expenditures Refinery operations $ - $ 56 $ 102 $ 102 Tolling and terminaling - - - - Corporate and other - - - - Total capital expenditures $ - $ 56 $ 102 $ 102
Identifiable assets	September 30, December 31, 2023 2022 (in thousands) Identifiable assets Refinery operations $ 84,218 $ 64,359 Tolling and terminaling 16,568 17,836 Corporate and other 1,257 1,709 Total identifiable assets $ 102,043 $ 83,904

Concentration of Risk (Tables)

Concentration of Risk (Tables)	9 Months Ended
	Sep. 30, 2023
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, 2023 3 73.5 % $2.1 million September 30, 2022 2 64.4 % $ 0 Nine Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at September 30, September 30, 2023 3 72.6 % $2.1 million September 30, 2022 2 60.9 % $ 0
Schedule of percentages of all refined petroleum products sales to total sales	Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except percent amounts) (in thousands, except percent amounts) LPG mix $ 37 0.0 % $ - 0.0 % $ 149 0.1 % $ - 0.0 % Naphtha 27,659 27.2 % 25,571 20.1 % 57,562 20.3 % 80,707 21.7 % Jet fuel 33,060 32.5 % 48,264 37.9 % 93,824 33.1 % 134,119 36.0 % HOBM 16,047 15.8 % 19,143 15.0 % 59,732 21.1 % 63,045 16.9 % AGO 24,795 24.5 % 34,371 27.0 % 72,238 25.4 % 94,443 25.4 % $ 101,598 100.0 % $ 127,349 100.0 % $ 283,505 100.0 % $ 372,314 100.0 %

Prepaid Expenses and Other Cu_2

Prepaid Expenses and Other Current Assets (Tables)	9 Months Ended
	Sep. 30, 2023
Prepaid Expenses and Other Current Assets
Schedule of Prepaid Expenses & other current assets	September 30, December 31, 2023 2022 (in thousands) Prepaid insurance $ 1,381 $ 1,066 Prepaid crude oil and condensate 1,288 2,183 Other prepaids 165 163 Prepaid easement renewal fees 37 54 $ 2,871 $ 3,466

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2023
Inventory
Schedule of inventory	September 30, December 31, 2023 2022 (in thousands) HOBM $ 13,941 $ 14,879 Jet 8,555 - Naphtha 3,538 1,056 Crude oil and condensate 987 3,458 AGO 162 301 Chemicals 136 116 Propane 37 27 LPG mix 3 7 $ 27,359 $ 19,844

Property Plant and Equipment Ne

Property Plant and Equipment Net (Tables)	9 Months Ended
	Sep. 30, 2023
PropertyPlant and EquipmentNet
Schedule of property, plant and equipment	September 30, December 31, 2023 2022 (in thousands) Refinery and facilities $ 72,675 $ 72,675 Land 566 566 Other property and equipment 913 913 74,154 74,154 Less: Accumulated depreciation and amortiation (22,323 ) (20,387 ) 51,831 53,767 CIP 3,770 3,669 $ 55,601 $ 57,436

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	9 Months Ended
	Sep. 30, 2023
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilities	September 30, December 31, 2023 2022 (in thousands) Unearned revenue from contracts with customers $ 3,859 $ 3,888 Insurance 777 568 Unearned contract renewal income 480 480 Accrued fines and penalties 522 407 Taxes payable 279 64 Other payable 200 324 Board of director fees payable 188 210 Customer deposits 163 173 $ 6,468 $ 6,114

ThirdParty LongTerm Debt (Table

ThirdParty LongTerm Debt (Tables)	9 Months Ended
	Sep. 30, 2023
ThirdParty LongTerm Debt
Schedule of long term debt	September 30, December 31, 2023 2022 (in thousands) Veritex Loans LE Term Loan Due 2034 (in forbearance) $ 20,074 $ 20,801 LRM Term Loan Due 2034 (in forbearance) 8,351 8,671 Kissick Debt (in forbearance) 8,521 11,006 GNCU Loan NPS Term Loan Due 2031 ( in default 9,975 9,975 SBA EIDLs BDEC Term Loan Due 2051 2,137 2,082 LE Term Loan Due 2050 161 162 NPS Term Loan Due 2050 161 162 Equipment Loan Due 2025 33 38 49,413 52,897 Less: Current portion of long-term debt, net (38,369 ) (42,155 ) Less: Unamortized debt issue costs (1,997 ) (2,149 ) Less: Accrued interest payable (3,836 ) (6,271 ) $ 5,211 $ 2,322
Schedule of unamortized debt issue cost	September 30, December 31, 2023 2022 (in thousands) Veritex Loans LE Term Loan Due 2034 (in forbearance) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in forbearance) 768 768 GNCU Loan NPS Term Loan Due 2031 ( in default 730 730 Less: Accumulated amortization (1,175 ) (1,023 ) $ 1,997 $ 2,149
Schedule of accrued interest related to third party long-term debt, net	September 30, December 31, 2023 2022 (in thousands) Kissick Debt (in forbearance) $ 3,544 $ 6,028 Veritex Loans LE Term Loan Due 2034 (in forbearance) 49 53 LRM Term Loan Due 2034 (in forbearance) 67 66 GNCU Loan NPS Term Loan Due 2031 ( in default 17 17 SBA EIDLs BDEC Term Loan Due 2051 137 82 LE Term Loan Due 2050 11 12 NPS Term Loan Due 2053 11 12 Equipment Loan Due 2025 - 1 3,836 6,271 Less: Accrued interest payable (3,836 ) (6,271 ) Long-term Interest Payable, Net of Current Portion $ - $ -

AROs (Tables)

AROs (Tables)	9 Months Ended
	Sep. 30, 2023
AROs
Schedule of asset retirement obligations	September 30, December 31, 2023 2022 (in thousands) AROs, at the beginning of the period $ 3,710 $ 3,461 Changes in estimates of existing obligations 323 114 Liabilities settled nine months ended September 30, 2023 (18 ) - Accretion expense nine months ended September 30, 2023 59 135 Less: AROs, current portion (4,074 ) (3,710 ) Long-term AROs, at the end of the period $ - $ -

Lease Obligations (Tables)

Lease Obligations (Tables)	9 Months Ended
	Sep. 30, 2023
Lease Obligations
Schedule of lease-related assets and liabilities	September 30, December 31, Balance Sheet Location 2023 2022 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 1,003 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (788 ) (638 ) Total lease assets 215 149 Liabilities Current Operating lease Current portion of lease liabilities 199 156 Noncurrent Operating lease Long-term lease liabilities, net of current - - Total lease liabilities $ 199 $ 156
Schdule of lease cost	Weighted average remaining lease term in years Operating lease (1) 0.92 Weighted average discount rate Operating lease 8.25 %
Schedule of lease costs incurred for operating and finance leases	Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Operating lease costs $ 55 $ 51 $ 158 $ 154 Short-term lease expense, related party 300 - 700 - Total lease cost $ 355 $ 51 $ 858 $ 154
Schedule of supplemental cash flow information related to leases	Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 57 $ 50 $ 172 $ 151
Schedule of maturities of lease liabilities	September 30, Operating Lease (in thousands) 2024 $ 199 $ 199
Schedule of future minimum annual lease commitments	Operating September 30, Lease (in thousands) 2024 $ 211 $ 211

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2023
Income Taxes
Schedule of provision for income tax expense benefit	Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Current Federal $ (262 ) $ - $ (382 ) $ - State (77 ) (68 ) (230 ) (224 ) Deferred Federal (1,277 ) (1,257 ) (4,373 ) (5,152 ) Change in valuation allowance 1,277 1,257 4,373 5,152 Total provision for income taxes $ (339 ) $ (68 ) $ (612 ) $ (224 )
Schedule of deferred tax assets and deferred tax liabilities	September 30, December 31, 2023 2022 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 7,526 $ 11,088 Business interest expense 2,793 3,524 Start-up costs (crude oil and condensate processing facility) 275 339 ARO liability/deferred revenue 856 779 Other 62 43 Total deferred tax assets 11,512 15,773 Deferred tax liabilities: Basis differences in property and equipment (8,328 ) (8,216 ) Total deferred tax liabilities (8,328 ) (8,216 ) 3,184 7,557 Valuation allowance (3,184 ) (7,557 ) 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, 2021 $ 7,897 $ 65,511 $ 73,408 Net operating losses used and expired (6,127 ) (22,384 ) (28,511 ) Balance at December 31, 2022 $ 1,770 $ 43,127 $ 44,897 Net operating losses used and expired (638 ) (15,560 ) (16,198 ) Balance at September 30, 2023 $ 1,132 $ 27,567 $ 28,699

Earnings and Dividends Per Sh_2

Earnings and Dividends Per Share (Tables)	9 Months Ended
	Sep. 30, 2023
Earnings and Dividends Per Share
Schedule of earnings per share	Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands, (in thousands, except share and per share amounts) except share and per share amounts) Net income (loss) $ 7,065 $ 6,449 $ 22,258 $ 23,337 Earnings per share Basic and diluted income (loss) per share $ 0.47 $ 0.43 $ 1.49 $ 1.69 Basic and diluted shares used in computing earnings per share 14,921,968 14,825,763 14,921,968 13,797,701

Organization (Details Narrative

Organization (Details Narrative) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended
	May 31, 2023	Apr. 30, 2023	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022
Substantial Current Debt			$ 38,400	$ 38,400	$ 47,400
Description of Refining Margins of net ncome				totaled $7.1 million, or $0.47 per share, compared to net income of $6.4 million, or $0.43 per share, for the three months ended September 30, 2022. The $0.7 million, or $0.04 per share, increase in net income between the periods was the result of higher refining margins. Net income for the nine months ended September 30, 2023 totaled $22.3 million, or $1.49 per share, compared to net income of $23.3 million, or $1.69 per share, for the nine months ended September 30, 2022. The $1.0 million, or $0.20 per share, decrease in net income between the periods was the result of weaker refining margins and lower refinery throughput, production, and sales volumes
Working capital deficit			(10,300)	$ (10,300)	(45,200)
Improved working capital deficit			34,900	34,900
Working capital deficit, excluding the current portion of long-term debt			(2,800)	(2,800)	$ (2,100)
Improved Working capital deficit, excluding the current portion of long-term debt			25,900	25,900
Additional working capital through CARES Act loans			1,500	1,500
Kissick Forbearance Agreement [Member]
Monthly payments		$ 500
Final payment				400
Payment made by affiliate			1,500	3,500
LEH Forbearance Agreement [Member]
Monthly payments	$ 50
Payment made by affiliate			$ 2	3
Principal and interest monthly payments				$ 400
Affiliates [Member]
Ownership percentage				83%

Principles of Consolidation a_4

Principles of Consolidation and Significant Accounting Policies (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Principles of Consolidation and Significant Accounting Policies
Cash and cash equivalents	$ 11,471	$ 520
Restricted cash, noncurrent	1,000	1,001
Total	$ 12,471	$ 1,521

Principles of Consolidation a_5

Principles of Consolidation and Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Allowance for doubtful accounts	$ 0	$ 0	$ 60,000
Abandonment of assets,	4,100,000	4,100,000	3,700,000
Impairment loss	300,000	300,000	$ 100,000	$ 1,100,000
Rights-of-Use assets	$ 30,000	$ 30,000
Uncertain tax position , description		benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate 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, 2023	Dec. 31, 2022
Long-term debt - net of current portion, related party	$ 8,309,000	$ 0
Less: Long-term debt, related party, current portion	0	(5,211,000)
Less: Accrued interest payable, related party	0	4,094,000
LEH
Prepaid operating expenses, related party	8,309,000	9,305,000
June LEH Note (in default) | LEH
Prepaid operating expenses, related party	0	1,211,000
BDPL-LEH Loan Agreement (in forbearance) | LEH
Prepaid operating expenses, related party	$ 8,309,000	$ 8,094,000

RelatedParty Transactions (De_2

RelatedParty Transactions (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Total revenues	$ 102,554,000	$ 128,269,000	$ 288,093,000	$ 375,074,000
Total revenues, percent	100%	100%	100%	100%
LEH
Refinery operations revenues	$ 33,060,000	$ 48,264,000	$ 93,824,000	$ 134,119,000
Refinery operations revenues, percent	36.90%	37.60%	32.60%	35.80%
LEH | Tolling And Terminating
Tolling and terminaling revenues	$ 540,000	$ 0	$ 0	$ 0
Tolling and terminaling revenues, percent	0.80%	0.70%	0%	0%
Third Parties
Refinery operations revenues	$ 68,538,000	$ 79,085,000	$ 189,681,000	$ 238,195,000
Refinery operations revenues, percent	60.70%	61.70%	65.80%	63.50%
Third Parties | Tolling And Terminating
Tolling and terminaling revenues	$ 416,000	$ 920,000	$ 4,588,000	$ 2,760,000
Tolling and terminaling revenues, percent	1.60%	0%	1.60%	0.70%

RelatedParty Transactions (De_3

RelatedParty Transactions (Details 2) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Interest expenses under loan and guarantee, related party	$ 370,000	$ 450,000	$ 1,101,000	$ 1,461,000
June LEH Note (in default) | LEH
Interest expenses under loan and guarantee, related party	0	137,000	0	522,000
BDPL-LEH Loan Agreement (in forbearance) | LEH
Interest expenses under loan and guarantee, related party	167,000	160,000	491,000	480,000
First Term Loan Due 2034 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	101,000	108,000	304,000	324,000
Second Term Loan Due 2034 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	42,000	45,000	126,000	135,000
Blue Dolphin Term Loan Due 2051 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	10,000	0	30,000	0
NPS Term Loan Due 2031 | Jonathan Carroll
Interest expenses under loan and guarantee, related party	$ 50,000	$ 0	$ 150,000	$ 0

RelatedParty Transactions (De_4

RelatedParty Transactions (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
BDPL Forbearance Agreement, Description				Pursuant to the LEH Forbearance Agreement, LEH agreed to forbear from exercising any of its rights and remedies related to existing defaults pertaining to payment violations under the BDPL-LEH Loan Agreement. Under the terms of the LEH Forbearance Agreement, BDPL agreed to make interest-only monthly payments approximating $0.05 million beginning in May 2023, continuing on the fifteenth of each month through April 2025. Beginning in May 2025, BDPL agreed to make principal and interest monthly payments approximating $0.4 million through April 2027. Interest will be incurred throughout the agreement term, including the interest-only payment period. BDPL paid LEH approximately $0.2 million and $0.3 million for the three and nine months ended September 30, 2023, respectively. As of the filing date of this report, the BDPL-LEH Loan Agreement was in forbearance related to past defaults
LEH operating fee	$ 100,000	$ 300,000		$ 400,000	$ 600,000
Lease expense	300,000			900,000
Sublease income	10,000	10,000	$ 300	30,000
Accounts receivable, related party	2,000,000			2,000,000		$ 0
Accounts payable, related party	600,000			600,000		$ 200,000
LEH Forbearance Agreement [Member]
Principal and interest monthly payments				400,000
LEH | June LEH Note (in default)
Sublease income	$ 10,000	$ 10,000		$ 30,000	$ 30,000

Revenue and Segment Informati_3

Revenue and Segment Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Revenue and Segment Information
Accounts receivable (including related-party), beginning of period	$ 1,148	$ 126
Accounts receivable (including related-party), end of period	2,186	1,148
Unearned revenue, beginning of period	3,888	4,388
Unearned revenue, end of period	$ 3,859	$ 3,888

Revenue and Segment Informati_4

Revenue and Segment Information (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Total revenue from operations	$ 102,554	$ 128,269	$ 288,093	$ 375,074
Intercompany processing fees	0	0	0	0
Total costs of goods sold	91,388	118,235	254,533	341,621
Total gross profit	11,166	10,034	33,560	33,453
Total other operating and general and administrative expenses	(1,520)	(1,088)	(4,104)	(2,803)
Total depreciation and amortization	(699)	(699)	(2,094)	(2,099)
Total interest and other non-operating expenses, net	(1,543)	(1,730)	(4,492)	(4,990)
Income tax expense	339	68	612	224
Total capital expenditures	0	56	102	102
Net income	7,065	6,449	22,258	23,337
Total identifiable assets	102,043		102,043		$ 83,904
Income (loss) before income taxes	(7,404)	(6,517)	(22,870)	(23,561)
Refinery Operations
Total revenue from operations	101,598	127,349	283,505	372,314
Intercompany processing fees	(930)	(663)	(2,101)	(1,991)
Total costs of goods sold	90,985	117,655	253,317	339,849
Total gross profit	9,683	9,031	28,087	30,474
Total other operating and general and administrative expenses	(374)	(426)	(1,193)	(1,021)
Total depreciation and amortization	(303)	(305)	(911)	(918)
Total capital expenditures	0	56	102	102
Total identifiable assets	84,218		84,218		64,359
Income (loss) before income taxes	(8,159)	(7,328)	(23,527)	(26,143)
Total interest and other non-operating expenses, net	(847)	(972)	(2,456)	(2,392)
Tolling and Terminaling
Total revenue from operations	956	920	4,588	2,760
Intercompany processing fees	930	663	2,101	1,991
Total costs of goods sold	403	580	1,216	1,772
Total gross profit	1,483	1,003	5,473	2,979
Total other operating and general and administrative expenses	(306)	(132)	(932)	(255)
Total depreciation and amortization	(342)	(342)	(1,026)	(1,026)
Total capital expenditures	0	0	0	0
Total identifiable assets	16,568		16,568		17,836
Income (loss) before income taxes	(333)	(208)	(2,053)	(550)
Total interest and other non-operating expenses, net	(502)	(321)	(1,462)	(1,148)
Corporate and Other
Total other operating and general and administrative expenses	(840)	(530)	(1,979)	(1,527)
Total depreciation and amortization	(54)	(52)	(157)	(155)
Total capital expenditures	0	0	0	0
Total identifiable assets	1,257		1,257		$ 1,709
Income (loss) before income taxes	1,088	1,019	2,710	3,132
Total interest and other non-operating expenses, net	$ (194)	$ (437)	$ (574)	$ (1,450)

Concentration of Risk (Details)

Concentration of Risk (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Portion of accounts receivable	$ 2,000		$ 2,000
Customer Concentration Risk [Member]
Number Significant Customers	3	2	3	2
Total Revenue from Operations	73.50%	64.40%	72.60%	60.90%
Portion of accounts receivable	$ 210,000	$ 0	$ 210,000	$ 0

Concentration of Risk (Details

Concentration of Risk (Details 1) - Customer Concentration Risk [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Total refined petroleum product sales	$ 101,598,000	$ 127,349,000	$ 283,505,000	$ 372,314,000
Concentration risk	100%	100%	100%	100%
AGO
Total refined petroleum product sales	$ 24,795,000	$ 34,371,000	$ 72,238,000	$ 94,443,000
Concentration risk	24.50%	27%	25.40%	25.40%
Jet Fuel
Total refined petroleum product sales	$ 33,060,000	$ 48,264,000	$ 93,824,000	$ 134,119,000
Concentration risk	32.50%	37.90%	33.10%	36%
HOBM
Total refined petroleum product sales	$ 16,047,000	$ 19,143,000	$ 59,732,000	$ 63,045,000
Concentration risk	15.80%	15%	21.10%	16.90%
LPG Mix
Total refined petroleum product sales	$ 37,000	$ 0	$ 149,000	$ 0
Concentration risk	0%	0%	0.10%	0%
Naphtha
Total refined petroleum product sales	$ 27,659,000	$ 25,571,000	$ 57,562,000	$ 80,707,000
Concentration risk	27.20%	20.10%	20.30%	21.70%

Concentration of Risk (Detail_2

Concentration of Risk (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Jun. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Total revenue percentage	32.20%	37.60%	32.60%	35.80%
Balances in excess of FDIC insurance limit	$ 11,700,000		$ 11,700,000		$ 900,000
Cash FDIC insured amount	250,000		250,000
Accounts payable	1,164,000		1,164,000		$ 2,161,000
Accounts receivable	2,000		$ 2,000
Crude Supply Agreement
Allowable contracted volume under the Crude Supply Percentage			66.80%	50.30%
Allowable contracted volume under the Crude Supply			$ 24,800,000
Accounts payable	$ 0		$ 0

Prepaid Expenses and Other Cu_3

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Prepaid Expenses and Other Current Assets
Prepaid crude oil and condensate	$ 1,288	$ 2,183
Prepaid insurance	1,381	1,066
Other prepaids	165	163
Prepaid easement renewal fees	37	54
Prepaid expenses, net	$ 2,871	$ 3,466

Inventory (Details)

Inventory (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Inventory	$ 27,359,000	$ 19,844,000
Jet
Inventory	8,555,000	0
Crude Oil and Condensate
Inventory	987,000	3,458,000
AGO
Inventory	162,000	301,000
Chemicals
Inventory	136,000	116,000
Propane
Inventory	37,000	27,000
Naphtha
Inventory	3,538,000	1,056,000
HOBM
Inventory	13,941,000	14,879,000
LPG Mix
Inventory	$ 3,000	$ 7,000

Property Plant and Equipment _2

Property Plant and Equipment Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Less: Accumulated depletion, depreciation, and amortization	$ (22,323)	$ (20,387)
Property, plant and equipment, net excluding CIP	51,831	53,767
CIP	3,770	3,669
Property, plant and equipment, net	55,601	57,436
Property, plant and equipment, gross	74,154	74,154
Refinery and Facilities
Property, plant and equipment, gross	72,675	72,675
Land
Property, plant and equipment, gross	566	566
Other Property and Equipment
Property, plant and equipment, gross	$ 913	$ 913

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accrued Expenses and Other Current Liabilities
Unearned revenue from contracts with customers	$ 3,859	$ 3,888
Insurance	777	568
Unearned contract renewal income	480	480
Accrued fines and penalties	522	407
Taxes payable	279	64
Customer deposits	163	173
Other payable	200	324
Board of director fees payable	188	210
Total	$ 6,468	$ 6,114

ThirdParty LongTerm Debt (Detai

ThirdParty LongTerm Debt (Details)	9 Months Ended
	Sep. 30, 2023 USD ($)
LE Term Loan Due 2034
Original principal amount	$ 25,000,000
Maturity date	Jun 2015 / Jun 2034
Monthly principal and interest payment	$ 200,000
Interest rate	WSJ Prime + 2.75
LRM Term Loan Due 2034
Original principal amount	$ 10,000,000
Maturity date	Dec 2015 / Dec 2034
Monthly principal and interest payment	$ 100,000
Interest rate	WSJ Prime + 2.75
Kissick Debt
Original principal amount	$ 11,700,000
Maturity date	Jun 2006 / Jan 2018
Interest rate	6.25%
Monthly principal and interest payment	$ 500,000
NPS Term Loan Due 2031
Original principal amount	$ 10,000,000
Maturity date	Oct 2021 / Oct 2031
Interest rate	5.75%
Monthly principal and interest payment	$ 100,000
BDEC Term Loan Due 2051
Original principal amount	$ 2,000,000
Maturity date	May 2021 / Jun 2051
Interest rate	3.75%
Monthly principal and interest payment	$ 10,000
LE Term Loan Due 2050
Original principal amount	$ 150,000
Maturity date	Aug 2020 / Aug 2050
Interest rate	3.75%
Monthly principal and interest payment	$ 700
NPS Term Loan Due 2050
Original principal amount	$ 150,000
Maturity date	Aug 2020 / Aug 2050
Interest rate	3.75%
Monthly principal and interest payment	$ 700
Equipment Loan Due 2025
Original principal amount	$ 70,000
Maturity date	Oct 2020 / Oct 2025
Interest rate	4.50%
Monthly principal and interest payment	$ 1,300

ThirdParty LongTerm Debt (Det_2

ThirdParty LongTerm Debt (Details 1) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Long-term debt, carrying amount	$ 49,413,000	$ 52,897,000
Less: current portion of long-term debt, net	38,369,000	42,155,000
Less: unamortized debt issue costs	1,997,000	2,149,000
Less: accrued interest payable (in default)	3,836,000	6,271,000
Long-term debt, noncurrent	5,211,000	2,322,000
LE Term Loan Due 2034
Long-term debt, carrying amount	20,074,000	20,801,000
Less: accrued interest payable (in default)	49,000	53,000
LRM Term Loan Due 2034
Long-term debt, carrying amount	8,351,000	8,671,000
Less: accrued interest payable (in default)	67,000	66,000
Kissick Debt
Long-term debt, carrying amount	8,521,000	11,006,000
NPS Term Loan Due 2031
Long-term debt, carrying amount	9,975,000	9,975,000
Less: accrued interest payable (in default)	17,000	17,000
BDEC Term Loan Due 2051
Long-term debt, carrying amount	2,137,000	2,082,000
Less: accrued interest payable (in default)	137,000	82,000
LE Term Loan Due 2050
Long-term debt, carrying amount	161,000	162,000
Less: accrued interest payable (in default)	11,000	12,000
NPS Term Loan Due 2050
Long-term debt, carrying amount	161,000	162,000
Less: accrued interest payable (in default)	11,000	12,000
Equipment Loan Due 2025
Long-term debt, carrying amount	33,000	38,000
Less: accrued interest payable (in default)	$ 0	$ 1,000

ThirdParty LongTerm Debt (Det_3

ThirdParty LongTerm Debt (Details 2) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Less: accumulated amortization	$ 1,175	$ 1,023
Unamortized debt issue costs, net	1,997	2,149
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_4

ThirdParty LongTerm Debt (Details 3) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Less: accrued interest payable (in default)	$ 3,836,000	$ 6,271,000
Long-term interest payable, net of current portion	0	0
Accrued interest payable	3,836,000	6,271,000
LE Term Loan Due 2034
Accrued interest payable	49,000	53,000
LRM Term Loan Due 2034
Accrued interest payable	67,000	66,000
NPS Term Loan Due 2031
Accrued interest payable	17,000	17,000
BDEC Term Loan Due 2051
Accrued interest payable	137,000	82,000
LE Term Loan Due 2050
Accrued interest payable	11,000	12,000
NPS Term Loan Due 2050
Accrued interest payable	11,000	12,000
Equipment Loan Due 2025
Accrued interest payable	0	1,000
Notre Dame Debt
Accrued interest payable	$ 3,544,000	$ 6,028,000

ThirdParty LongTerm Debt (Det_5

ThirdParty LongTerm Debt (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Amortization expense	$ 50,000	$ 50,000	$ 100,000	$ 100,000
Restricted cash, noncurrent	1,000,000		$ 1,000,000
April 2023 Kissick Forbearance Agreement
Description of payment agreement			LE began making monthly payments of $0.5 million to Kissick Noteholder in April 2023; as modified, interest on outstanding principal and accrued and unpaid interest decreased from 16.00% to 6.25% per year
BDEC Term Loan Due 2051
Debt, increase (decrease), net			$ 1,500,000
Original principal amount, before modification	$ 500,000		$ 500,000

AROS (Details)

AROS (Details) - USD ($)	1 Months Ended	9 Months Ended	12 Months Ended
	Oct. 24, 2023	Sep. 30, 2023	Dec. 31, 2022
AROs
AROs, at the beginning of the period		$ 3,710,000	$ 3,461,000
Changes in estimates of existing obligations		323	114,000
Accretion expense nine months ended September 30, 2023	$ 200,000	59,000	135,000
Liabilities settled nine months ended September 30, 2023		18	0
Less: AROs, current portion		(4,074,000)	(3,710,000)
Long-term AROs, at the end of the period		$ 0	$ 0

AROS (Details Narrative)

AROS (Details Narrative) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
AROs
ARO increased	$ 0.3
Description of abandonment of assets	BDPL maintained $4.1 million and $3.7 million, respectively, in AROs related to abandonment of these assets, which amount does not include potential penalties

Lease Obligations (Details)

Lease Obligations (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Lease Obligations
Operating lease ROU assets	$ 1,003,000	$ 787,000
Less: accumulated amortization on operating lease assets	(788,000)	(638,000)
Total lease assets	215,000	149,000
Current portion of operating lease	199,000	156,000
Long-term portion of operating lease	0	0
Total lease liabilities	$ 199,000	$ 156,000
Weighted average remaining lease term in years - operating lease	11 months 1 day
Weighted average discount rate - operating lease	8.25%

Lease Obligations (Details 1)

Lease Obligations (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lease Obligations
Operating lease costs	$ 55,000	$ 51,000	$ 158,000	$ 154,000
Short-term lease expense, related party	300,000	0	700,000	0
Total lease cost	$ 355,000	$ 51,000	$ 858,000	$ 154,000

Lease Obligations (Details 2)

Lease Obligations (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lease Obligations
Operating cash flows for operating lease	$ 57	$ 50	$ 172	$ 151

Lease Obligations (Details 3)

Lease Obligations (Details 3) $ in Thousands	Sep. 30, 2023 USD ($)
Operating Lease [Member]
2024	$ 199
Total minimum rental payments	199
Annual Lease [Member]
2024	211
Total minimum rental payments	$ 211

Lease Obligations (Details Narr

Lease Obligations (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2023
Lease Obligations
Sublease income	$ 10,000	$ 10,000	$ 300	$ 30,000
Monthly base rental amount				$ 20,000
Office lease amended agreement				In May 2023, BDSC signed a 12-month extension to its existing operating lease. The extended term commenced on September 1, 2023 and expires on August 31, 2024. Under the amended agreement, the annual rent was reduced from $31.00 per square foot to $30.00 per square foot, resulting in a monthly base rental amount of $0.02 million
Lease expense	$ 300,000			$ 900,000

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Taxes
Current federal	$ (262,000)	$ 0	$ (382,000)	$ 0
Current state	77,000	68,000	230,000	224,000
Deferred federal	(1,277,000)	(1,257,000)	(4,373,000)	(5,152,000)
Change in valuation allowance	1,277,000	1,257,000	4,373,000	5,152,000
Income tax expense	$ 339,000	$ 68,000	$ 612,000	$ 224,000

Income Taxes (Details 1)

Income Taxes (Details 1) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Deferred tax assets:
NOL and capital loss carryforwards	$ 7,526,000	$ 11,088,000
Business interest expense	2,793,000	3,524,000
Start-up costs (crude oil and condensate processing facility)	275,000	339,000
ARO liability/deferred revenue	856,000	779,000
Other	62,000	43,000
Total deferred tax assets	11,512,000	15,773,000
Deferred tax liabilities:
Basis differences in property and equipment	8,328,000	8,216,000
Total deferred tax liabilities	8,328,000	8,216,000
Deferred tax assets, gross	3,184,000	7,557,000
Valuation allowance	(3,184,000)	(7,557,000)
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, 2023	Dec. 31, 2022
Beginning balance	$ 44,897	$ 73,408
Net operating losses used and expired	(16,198)	(28,511)
Ending balance	28,699	44,897
Pre-Ownership Change
Beginning balance	1,770	7,897
Net operating losses used and expired	(638)	(6,127)
Ending balance	1,132	1,770
Post-Ownership Change
Beginning balance	43,127	65,511
Net operating losses used and expired	(15,560)	(22,384)
Ending balance	$ 27,567	$ 43,127

Earnings and Dividends Per Sh_3

Earnings and Dividends Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings and Dividends Per Share
Net income	$ 7,065	$ 6,449	$ 22,258	$ 23,337
Earnings per share
Basic and diluted income (loss) per share	$ 0.47	$ 0.43	$ 1.49	$ 1.69
Basic and diluted shares used in computing earnings per share	14,921,968	14,825,763	14,921,968	13,797,701

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	1 Months Ended					9 Months Ended	12 Months Ended
	Oct. 24, 2023	Jun. 30, 2023	Apr. 30, 2023	Jan. 31, 2023	Oct. 31, 2021	Sep. 30, 2023	Dec. 31, 2022	Mar. 31, 2018
Set-off payments between Pilot and NPS					$ 300,000
NPS payment		$ 200,000	$ 1,100,000	$ 1,500,000
Additional financial assurance provided by BDPL								$ 4,800,000
Cash-backed						$ 200,000
Credit-backed						700,000
Administrative penalty						400,000
Final penalty						350,000
Accrued expenses and other current liabilities penalty						400,000
Accrued expenses	$ 200,000					59,000	$ 135,000
BSEE INCs [Member]
Trunk pipeline, federal waters						4,100,000	$ 3,700,000
Administrative civil penalty	$ 200,000
Accrued expenses						200,000
Other current liabilities						200,000
BOEM INCs [Member]
Trunk pipeline, federal waters						$ 900,000
Description of surety bonds						which would reduce the amount of surety bonds held by RLI from $1.25 million to $0.25 million
RLI Surety Bonds [Member]
Collateralized in cash						$ 200,000
Letter of credit						$ 1,000,000
Bonds collateral requirement percentage rate						50%
Bonds aggregate value						$ 125,000

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended	12 Months Ended
	Oct. 24, 2023	Sep. 30, 2023	Dec. 31, 2022
Accrued expenses	$ 200	$ 59	$ 135
October 24 2023 [Member]
Administrative civil penalty	$ 200