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): December 7, 1999
(December 2, 1999)
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)
<PAGE>
ITEM 5. OTHER EVENTS
On December 2, 1999, Blue Dolphin Energy Company, a Delaware corporation
(the "Company"), issued a press release announcing that it, through its
wholly-owned subsidiary Blue Dolphin Exploration Company, a Delaware corporation
("BDEX"), closed the purchase of 39,509,457 shares of common stock, par value
$0.00001 per share (the "Common Stock"), of American Resources Offshore, Inc., a
Delaware corporation ("ARO"), pursuant to an Investment Agreement dated as of
July 30, 1999 by and between BDEX and ARO (the "Investment Agreement"). The
purchase price for the shares of Common Stock was approximately $4.5 million.
The Company funded the purchase price through a private placement of 1,016,667
shares of its common stock and the issuance of a Convertible Promissory Note in
the principal amount of $1,000,000. Concurrently with the closing of the
Investment Agreement, ARO sold an 80% interest in its Gulf of Mexico Assets to
Fidelity Oil Holdings, Inc., a subsidiary of MDU Resources Group, Inc.
The press release is filed as an exhibit hereto and is incorporated herein
by reference. The Investment Agreement was more fully described in, and filed as
exhibit 99.1 to, the Company's Current Report on Form 8-K dated August 9, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Text of Press Release, dated December 2, 1999.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BLUE DOLPHIN ENERGY COMPANY
Date: December 7, 1999 By: /s/ G. BRIAN LLOYD
G. Brian Lloyd
Vice President, Treasurer
3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
99.1 Text of Press Release, dated December 2, 1999.
4
EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE December 2, 1999
HOUSTON, TEXAS - BLUE DOLPHIN ENERGY COMPANY (NASDAQ SYMBOL: BDCO)
BLUE DOLPHIN COMPLETES ACQUISITION OF AMERICAN RESOURCES OFFSHORE, INC.
Blue Dolphin Energy Company announced today that it has completed the
acquisition of a 75% ownership interest of American Resources Offshore, Inc.
("ARO") (NASD: GASS.OB), through its subsidiary Blue Dolphin Exploration
Company. The purchase price for the ARO shares was approximately $4.5 million.
Concurrently with the transaction, ARO sold an 80% interest in its Gulf of
Mexico assets to Fidelity Oil Holdings, Inc., a subsidiary of MDU Resources
Group, Inc. (NYSE: MDU). The proceeds received by ARO were used to retire
certain indebtedness.
ARO's assets now consist of an average 6% non-operated working interest in eight
producing properties and one proved undeveloped property along with leasehold
interests in 34 additional offshore tracts, all located in the Gulf of Mexico
offshore Louisiana and Texas. The properties currently have estimated proven
reserves of approximately 5.8 billion cubic feet of natural gas equivalent. Blue
Dolphin believes that significant probable and possible reserves and exploratory
drilling opportunities also exist.
At the same time, Blue Dolphin announced that it had completed a $7,100,000
private placement, consisting of 1,016,667 shares of its common stock and a
$1,000,000 convertible promissory note, the proceeds of which were used to
partially finance the ARO acquisition. The shares issued at a price of $6.00 per
share are not expected to be freely traded in the near future unless the
purchasing shareholders exercise registration rights granted to them by the
Company in connection with the private placement. The $1,000,000 Convertible
Promissory Note issued to a related party is due June 1, 2000, bears interest at
the rate of 10% per annum and is convertible into common stock at $6.60 per
share.
<PAGE>
Ivar Siem, Chairman of Blue Dolphin, said "We are very pleased with the addition
of ARO to the Blue Dolphin group and with the existing reserves and exploratory
potential we believe ARO's assets offer. While the transaction is itself
important to Blue Dolphin, it also represents a vital step in our strategy of
increasing our exploration and production assets in the Gulf of Mexico. I am
also particularly proud of the creativity and hard work Blue Dolphin's
management team exhibited in bringing a difficult acquisition process to
successful conclusion."
Certain of the statements included in this press release, which express a
belief, expectation or intention, as well as those regarding future financial
performance or results, or which are not historical facts, are "forward-looking"
statements as that term is defined in the Securities Act of 1933, as amended and
the Securities Exchange Act of 1934, as amended. The words "expect", "plan",
"believe", "anticipate", "project", "estimate", and similar expressions are
intended to identify forward-looking statements. These forward-looking
statements are not guarantees of future performance or events and such
statements involve a number of risks, uncertainties and assumptions, including
but not limited to industry conditions, prices of crude oil and natural gas,
regulatory changes, general economic conditions, interest rates, competition,
and other factors. Should one or more of these risks or uncertainties
materialize or should the underlying assumptions prove incorrect, actual results
and outcomes may differ materially from those indicated in the forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
BLUE DOLPHIN ENERGY COMPANY is engaged in the gathering and transportation of
natural gas and condensate, exploration and acquisition of oil and gas
properties, and development of an offshore terminal and storage facility to
handle crude oil and refined products. Questions should be directed to G. Brian
Lloyd, Vice President, Treasurer, at the Company's offices in Houston, Texas,
(713) 227-7660. For further information see our home page at
http://www.blue-dolphin.com.
