UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 7010
July 12, 2005
Mr. G. Brian Lloyd
Blue Dolphin Energy Company
801 Travis, Suite 2100
Houston, Texas 77002
Re: Blue Dolphin Energy Company
Registration Statement on Form S-3
Filed May 13, 2005 and amended July 6, 2005
File No. 333-124908
Form 10-KSB
Filed March 25, 2005 and amended July 6, 2005
File No. 0-15905
Dear Mr. Lloyd:
We have limited our review of your filing to those issues we
have addressed in our comments. Where indicated, we think you
should
revise your document in response to these comments. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We
look forward to working with you in these respects. We welcome
any
questions you may have about our comments or on any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-KSB/A-1 for the Fiscal Year Ended December 31, 2004
Description of Business, page 1
Oil and Gas Exploration and Production Activities, page 4
1. We have read your response to prior comment one and note that
you
have recognized a gain of $140,000 related to the sale of your
unevaluated leasehold interest in the Galveston Area Blocks 287
and
297. Please explain how this accounting treatment complies with
Rule
4-10(c)(6)(i) of Regulation S-X which states that "Sales of oil
and
gas properties, whether or not being amortized currently, shall be
accounted for as adjustments of capitalized costs, with no gain or
loss recognized, unless such adjustments would significantly alter
the
relationship between capitalized costs and proved reserves of oil
and
gas attributable to a cost center."
Note 13 - Supplemental Oil and Gas Information - Unaudited, page
50
2. We have considered the revision you made in response to prior
comment 10 and are unable to determine whether or not your
presentation complies with the computational requirements of
paragraph
30(b) of SFAS 69. Please confirm that your calculation of future
development and production costs were made based on year-end
costs.
If true, revise your disclosure in future filings or otherwise
advise.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing
includes all information required under the Securities Act of 1933
and
that they have provided all information investors require for an
informed investment decision. Since the company and its
management
are in possession of all facts relating to a company`s disclosure,
they are responsible for the accuracy and adequacy of the
disclosures
they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in connection with our review of your
filing or
in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering of
the securities specified in the above registration statement. We
will
act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Jennifer Goeken at (202) 551-3721 or Jill
Davis,
Branch Chief, at (202) 551-3683 if you have questions regarding
comments on the financial statements and related matters. Please
contact Carmen Moncada-Terry at (202) 551-3687 or, in her absence,
the
undersigned at (202) 551-3745 with any other questions.
Sincerely,
H. Roger Schwall
Assistant Director
cc: B. Brown
C. Moncada-Terry
J. Goeken
J. Davis
Mr. G. Brian Lloyd
Blue Dolphin Energy Company
July 12, 2005
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