SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 31, 2001 (January 22, 2001)
BLUE DOLPHIN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 0-15905 73-1268729
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
801 TRAVIS, SUITE 2100
HOUSTON, TEXAS 77002
(Address of Registrant's principal executive offices)
(713) 227-7660
(Registrant's telephone number, including area code)
(NOT APPLICABLE)
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 22, 2001, Blue Dolphin Energy Company (the "Company") issued a
press release announcing that it sold its 50% interest in the Black Marlin
Pipeline System to affiliates of the Williams Companies, Inc. for approximately
$4.625 million. The Black Marlin Pipeline System includes a 75-mile natural gas
and condensate gathering line with related shore facilities servicing the High
Island Area, offshore Texas (the "Black Marlin Pipeline") and the recently
constructed 3-mile lateral pipeline extending from High Island Block A-5 to an
interconnection into the Black Marlin Pipeline in High Island Block A-6 ("the
A-5 Lateral").
This disposition was consummated, in part, through a sale of all of the
outstanding capital stock of Black Marlin Pipeline Company (formerly an indirect
wholly owned subsidiary of the Company) the owner of a 50% interest in the Black
Marlin Pipeline, pursuant to a Purchase and Sale Agreement dated January 12,
2001 (the "Stock Purchase Agreement") among Black Marlin Energy Company, a
wholly owned subsidiary of the Company, MCNIC Offshore Pipeline & Processing
Company ("MCNIC"), WBI Southern, Inc. ("WBI") and Williams Field Services Group,
Inc. The Company received $3.625 million for the outstanding capital stock of
Black Marlin Pipeline Company
The remaining part of this disposition was consummated through the sale of
the A-5 Lateral owned 50% by Blue Dolphin Pipe Line Company, a wholly owned
subsidiary of the Company ("BDPL"), pursuant to a Purchase and Sale Agreement
dated January 12, 2001 (the "Asset Purchase Agreement") among BDPL, MCNIC, WBI
and Williams Field Services - Gulf Coast Company, L.P. The Company received $1.0
million for the A-5 Lateral.
The Stock Purchase Agreement, Asset Purchase Agreement and press release
are filed as exhibits hereto and are incorporated by reference. The description
of the Stock Purchase Agreement and Asset Purchase Agreement set forth above do
not purport to be complete and are qualified in their entirety by reference to
the provisions of such agreements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Pro Forma Information
Introduction
The pro forma financial information is presented for illustrative purposes
only and does not purport to represent what the Company's results actually would
have been if such event had occurred at the date indicated. The pro forma
condensed financial information should be read in conjunction with the notes
thereto together with the Company's financial statements and the notes thereto,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations," all appearing in the Company's Report on Form 10-K for the year
ended December 31, 1999, and in the Company's report on form 10-Q for the
quarter ended September 30, 2000.
2
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET - UNAUDITED
September 30, 2000
SALE OF
BLACK PRO
HISTORICAL MARLIN FORMA
------------ ------------ ------------
(Unaudited)
ASSETS
Current Assets:
Cash ......................................... $ 1,871,282 4,625,000 (1) 6,496,282
Trade accounts receivable .................... 2,176,399 2,176,399
Funds Escrowed for abandonment ............... 1,466,857 1,466,857
Prepaid expenses ............................. 931,878 (4,763)(1) 927,115
------------ ------------ ------------
Total Current Assets .................. 6,446,416 4,620,237 11,066,653
Property and Equipment, at cost, using full cost
method for oil and gas properties ........... 34,331,212 (3,613,166)(1) 30,718,046
Accumulated depletion, depreciation
and amortization ............................ (29,931,631) 316,248 (1) (29,615,383)
------------ ------------ ------------
4,399,581 (3,296,918) 1,102,663
Land ............................................ 930,500 (80,500)(1) 850,000
Acquisition and development costs - Petroport ... 1,871,543 1,871,543
Other Assets .................................... 498,793 498,793
------------ ------------ ------------
Total Assets .......................... $ 14,146,833 1,242,819 15,389,652
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses ........ $ 3,650,044 3,650,044
Current portion of long term-debt ............ 218,412 218,412
Notes payable - related parties .............. 1,400,000 1,400,000
------------ ------------
Total Current Liabilities .............. 5,268,456 5,268,456
Minority interest ............................... 1,177,744 1,177,744
Common Stock .................................... 59,749 59,749
Additional Paid-in Capital ...................... 25,784,758 25,784,758
Accumulated (Deficit) ........................... (18,143,874) 1,242,819 (1) (16,901,055)
------------ ------------ ------------
Total Liabilities and
Stockholders' Equity ................ $ 14,146,833 1,242,819 15,389,652
============ ============ ============
3
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED BALANCE SHEET - UNAUDITED
September 30, 2000
(1) To reflect the sale of the Company's 50% interest in the Black Marlin
Pipeline System as of September 30, 2000, for $4,625,000 cash.
4
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
For the Nine Months Ended September 30, 2000
SALE OF
BLACK PRO
HISTORICAL MARLIN FORMA
------------ ------------ ------------
Revenue from operations:
Pipeline operations ............................. $ 1,716,102 (1,018,976)(1) 697,126
Oil and gas sales ............................... 3,810,333 3,810,333
Operating fees ................................. 234,338 234,338
------------ ------------ ------------
REVENUE FROM OPERATIONS ......... 5,760,773 (1,018,976) 4,741,797
Cost of operations:
Pipeline operating expenses ..................... 753,726 (394,359)(1) 359,367
Lease operating expenses ........................ 951,068 951,068
Depletion, depreciation, and amortization ....... 1,441,694 (149,802)(1) 1,291,892
Impairment of oil and gas properties ............ 10,654,976 10,654,976
General and administrative ...................... 1,583,151 1,583,151
------------ ------------ ------------
COST OF OPERATIONS .............. 15,384,615 (544,161) 14,840,454
------------ ------------ ------------
LOSS FROM OPERATIONS ............ (9,623,842) (474,815) (10,098,657)
Other income (expense):
Interest and other expense ...................... (140,405) 15,750 (1) (124,655)
Interest and other income ....................... 77,418 77,418
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF A
CHANGE IN AN ACCOUNTING PRINCIPLE (9,686,829) (459,065) (10,145,894)
Minority interest ................................... (219,223) (219,223)
Provision for income taxes .......................... -- --
------------ ------------
Net income (loss) ................................... $ (9,906,052) (10,365,117)
============ ============
Earnings per common share-basic
Net income ...................................... $ (1.66) (1.74)
============ ============
Earnings per common share-diluted
Net income ...................................... $ (1.66) (1.74)
============ ============
Weighted average number of common shares outstanding
and dilutive potential common shares:
Basic ........................................... 5,955,645 5,955,645
============ ============
Diluted ......................................... 5,955,645 5,955,645
============ ============
5
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED STATEMENT OF OPERATIONS -UNAUDITED
For the Nine Months Ended September 30, 2000
(1) To eliminate the revenues, direct operating expenses and depreciation
associated with the Black Marlin Pipeline System.
6
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
Year Ended December 31, 1999
SALE OF
BLACK PRO
HISTORICAL MARLIN FORMA
------------ ------------ ------------
Revenue from operations:
Pipeline operations ................................... $ 1,875,716 (701,144) (1) 1,174,572
Oil and gas sales ..................................... 567,103 567,103
Operating fees ........................................ 314,237 314,237
------------ ------------ ------------
Revenue from operations ........................ 2,757,056 (701,144) 2,055,912
------------ ------------ ------------
Cost of operations:
Pipeline operating expenses ........................... 1,102,998 (411,873) (1) 691,125
Lease operating expenses .............................. 1,100,549 1,100,549
Depletion, depreciation and amortization .............. 595,286 (199,017) (1) 396,269
General and administrative expenses ................... 2,061,805 2,061,805
------------ ------------ ------------
Cost of operations ............................. 4,860,638 (610,890) 4,249,748
------------ ------------ ------------
Income (loss) from operations .................. (2,103,582) (90,254) (2,193,836)
Other income (expense):
Interest and other expense ............................ (238,322) 14,665 (1) (223,657)
Gain on sale of assets ................................ 2,052,920 2,052,920
Interest and other income ............................. 80,722 80,722
------------ ------------ ------------
Income (loss) before income taxes .............. (208,262) (104,919) (313,181)
Minority interest ........................................ (882) (882)
Income tax benefit (expense) ............................. (1,797,033) (1,797,033)
------------ ------------
Income (loss) before cumulative effect of a
change in an accounting principle............. (2,006,177) (2,111,096)
Change in accounting principal (net of $41,480 income tax) (80,334) (80,334)
------------ ------------
Net income (loss) .............................. $ (2,086,511) (2,191,430)
============ ============
Earnings per common share-basic
Income before accounting change ...................... $ (0.41) (0.43)
Cumulative effect of a change in accounting principle (0.02) (0.02)
------------ ------------
Net income ........................................... $ (0.43) (0.45)
============ ============
Earnings per common share-diluted
Income before accounting change ...................... $ (0.41) (0.43)
Cumulative effect of a change in accounting principle (0.02) (0.02)
------------ ------------
Net income ........................................... $ (0.43) (0.45)
============ ============
Weighted average number of common shares
outstanding and dilutive potential common shares:
Basic ................................................. 4,837,504 4,837,504
============ ============
Diluted ............................................... 4,837,504 4,837,504
============ ============
7
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED STATEMENT OF OPERATIONS - UNAUDITED
Year Ended December 31, 1999
(1) To eliminate the revenues, direct operating expenses and depreciation
associated with the Black Marlin Pipeline System.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (CONTINUED)
(b) Exhibit
99.1 Purchase and Sale Agreement by and between Williams Field
Services Group. Inc. and Black Marlin Energy Company
99.2 Purchase and Sale Agreement by and between Williams Field
Services - Gulf Coast Company, L.P. and Blue Dolphin Pipeline
Company
99.3 Press release dated January 22, 2001
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BLUE DOLPHIN ENERGY COMPANY
Date: January 31, 2001 By: /s/ G. BRIAN LLOYD
G. Brian Lloyd
Vice President, Treasurer
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INDEX TO EXIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
99.1 Purchase and Sale Agreement by and between Williams
Field Services Group. Inc. and Black Marlin Energy
Company
99.2 Purchase and Sale Agreement by and between Williams
Field Services - Gulf Coast Company, L.P. and Blue
Dolphin Pipeline Company
99.3 Press release dated January 22, 2001
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