SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K/A-2
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): February 16, 2000
(December 2, 1999)
BLUE DOLPHIN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 0-15905 73-1268729
(State of (Commission File Number) (IRS Employer
Incorporation) 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 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Pro Forma Information
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
INTRODUCTION
The following unaudited pro forma condensed financial statements for Blue
Dolphin Energy Company (the "Company") give effect to (i) the purchase of a 75%
ownership interest in American Resources Offshore Inc. ("ARO"), (ii) the private
placement of 1,016,718 shares of the Company's common stock, par value $.01 per
share, and (iii) the issuance of a $1,000,000 principal amount convertible
promissory note due June 1, 2000.
The pro forma financial information is presented for illustrative purposes
only and does not purport to represent what the Company's results which would
have actually occurred if the transactions occurred at the dates indicated, nor
does such information purport to project the results of operations for any
future period or as of any future date. The pro forma condensed financial
information should be read in conjuction with the notes thereto together with
the Company's and ARO's historical financial statements and the notes thereto,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations", contained in the respective Reports on Form 10-K for the year ended
December 31, 1998, and Form 10-Q for the quarter ended September 30, 1999.
The Unaudited Pro Forma Condensed Balance Sheet as of December 31, 1998
assumes that the transactions were completed as of that date. The unaudited Pro
Forma Condensed Statement of Operations for the nine months ended September 30,
1999 and the unaudited Pro Forma Condensed Statement of Operations for the year
ended December 31, 1998 assumed that the transactions were completed effective
January 1, 1998.
<PAGE>
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 1998
<TABLE>
<CAPTION>
ADJUSTMENTS
ASSETS AUDITED DEBIT CREDIT PRO FORMA
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents .................. $ 593,509 5,550,104(1)(2) 4,385,002(1) 1,758,611
Trade accounts receivable .................. 771,268 486,000(1) 1,257,268
Crude oil inventory, at market ............. 5,248 5,248
Prepaid expenses and other assets .......... 152,340 273,000(1) 425,340
------------ ------------
Total current assets .............. 1,522,365 3,446,467
------------ ------------
Net property and equipment: ................... 8,941,554 4,564,002(1) 13,505,556
Deferred federal income tax ................... 2,010,060 2,010,060
Acquisition and development costs - Petroport . 1,576,391 1,576,391
Escrow fund ................................... 1,107,573 1,107,573
Other assets .................................. 23,867 33,000(1) 56,867
------------ ------------
Total Assets ...................... $ 15,181,810 21,702,914
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable and accrued expenses $ 892,190 121,000(1) 1,013,190
Accrued interest payable ................... 105,662 81,649(2) 24,013
Current portion of accrued abandonment costs 206,000 206,000
Current portion of long term debt .......... 200,000 1,000,000(2) 1,200,000
Income taxes payable ....................... 13,970 13,970
------------ ------------
Total current liabilities ......... 1,417,822 2,457,173
Long-term debt ................................ 2,060,600 1,811,555(2) 249,045
Minority interest ............................. 1,193,000(1) 1,193,000
Accrued abandonment costs, less current portion 108,594 108,594
Common Stock .................................. 45,046 10,167(2) 55,213
Additional paid-in capital .................... 17,700,833 6,090,141(2) 23,790,974
Retained (deficit) since January 1, 1990 ...... (6,151,085) (6,151,085)
------------ ------------
Total Liabilities and
Stockholders' Equity .................... $ 15,181,810 21,702,914
============ ============
</TABLE>
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<PAGE>
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
ADJUSTMENTS
AUDITED DEBIT CREDIT PRO FORMA
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue from operations:
Pipeline operations .................... $ 2,788,944 2,788,944
Oil and gas sales and operating fees ... 769,829 5,437,000(3) 6,206,829
------------ ------------
Revenue from operations .......... 3,558,773 8,995,773
------------ ------------
Cost of operations:
Pipeline operating expenses ............ 796,144 796,144
Lease operating expenses ............... 669,377 1,840,000(3) 2,509,377
Repairs and maintenance costs .......... 264,630 264,630
Impairment of oil and gas properties ... 12,011,544 12,011,544
Depletion, depreciation and amortization 400,982 3,402,000(3) 3,802,982
General and administrative expenses .... 1,466,738 484,000(5) 1,950,738
------------ ------------
Cost of operations ............... 15,609,415 21,335,415
------------ ------------
Income (loss) from operations .... (12,050,642) (12,339,642)
Other income (expense):
Interest expense ....................... (215,141) (215,141)
Other income ........................... 239,000(3) 239,000
Interest income ........................ 105,994 41,000(3) 146,994
------------ ------------
Income (loss) before income taxes (12,159,789) (17,873,789)
Minority Interest ......................... 2,250(3) 2,250
Income tax benefit ........................ 3,099,810 2,295(3) 3,102,105
------------ ------------
Net income (loss) attributable to
common stockholders ........... $ (9,059,979) (9,064,434)
============ ============
Earnings (loss) per share:
Basic ................................ $ (2.02) (1.65)
============ ============
Diluted .............................. $ (2.02) (1.65)
============ ============
Weighted average number of common shares
outstanding and dilutive potential common
shares:
Basic ................................ 4,492,344 5,509,062
============ ============
Diluted .............................. 4,492,344 5,509,062
============ ============
</TABLE>
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<PAGE>
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
ADJUSTMENTS
UNAUDITED DEBIT CREDIT PRO FORMA
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue from operations:
Pipeline operations .................................. $ 1,393,880 1,393,880
Oil and gas sales and operating fees ................. 426,294 4,130,000(3) 4,556,294
------------ ------------
Revenue from operations ........................ 1,820,174 5,950,174
------------ ------------
Cost of operations:
Pipeline operating expenses .......................... 708,840 708,841
Lease operating expenses ............................. 453,470 953,000(3) 1,406,470
Repairs and maintenance costs ........................ 473,080 73,000(3) 546,080
Depletion, depreciation and amortization ............. 355,946 1,762,000(3) 2,117,946
General and administrative expenses .................. 1,486,258 363,000(5) 1,849,258
------------ ------------
Cost of operations ............................. 3,477,594 6,628,594
------------ ------------
Income (loss) from operations .................. (1,657,420) (678,421)
Other income (expense):
Interest expense ..................................... (181,834) (181,834)
Gain on sale of assets ............................... 2,052,920 2,052,920
Other expense ........................................ 252,000(3) (252,000)
Interest and other income ............................ 15,106 23,000(3) 38,106
------------ ------------
Income before income taxes and cumulative
effect of a change in an accounting principle .. 228,772 978,772
Minority Interest ....................................... 187,500(3) 187,500
Provision for income taxes .............................. (67,503) 191,250(3) (322,503)
------------ ------------
Income before cumulative effect of a
change in an accounting principle .............. 161,269 532,519
Cummulative effect at January 1, 1999 of a change in
accounting principle for start up cost, net of income tax
benefit of $41,480 ...................................... (80,334) (80,334)
------------ ------------
Net income .............................................. $ 80,935 452,185
============ ============
Earnings per common share-basic:
Income before accounting change ..................... $ 0.03 0.09
Cumulative effect of a change in accounting principle (0.01) (0.01)
------------ ------------
Net income .......................................... $ 0.02 0.08
============ ============
Earnings per common share-diluted:
Income before accounting change ..................... $ 0.03 0.09
Cumulative effect of a change in accounting principle (0.01) (0.01)
------------ ------------
Net income .......................................... $ 0.02 0.08
============ ============
Earnings (loss) per share:
Weighted average number of common shares outstanding
and dilutive potential common shares:
Basic .............................................. 4,694,895 5,534,678
============ ============
Diluted ............................................ 4,793,594 5,561,613
============ ============
</TABLE>
11
<PAGE>
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
(1) The Company purchased a 75% ownership interest in ARO for approximately
$4,500,000.
(2) The Company completed a $7,100,000 private placement consisting of
1,016,718 shares of its common stock and $1,000,000 convertible promissory
note, to fund the acquisition of ARO. Approximately $1,900,000 of the
private placement was provided by the holders of the Company's promissory
notes due December 31, 2000, tendering their promissory notes in exchange
for common stock. The common stock was sold at $6.00 per share.
(3) Revenues and expense associated with ARO are based on the Pro Forma
Financial Statements prepared by ARO for the periods presented. The ARO
Pro Forma Financial Statements reflect other transactions that were
required to be completed on or before the Company purchased the 75%
ownership interest in ARO. These transactions included the disposition of
all ARO's onshore oil and gas properties and an 80% interest in its Gulf
of Mexico oil and gas properties. Also, ARO settled substantially all of
its debts. ARO's remaining assets are an average 6% working interest in 8
producing oil and gas properties located offshore in the Gulf of Mexico.
(4) A Note payable for $5,000,000 from ARO to a wholly owned subsidiary of the
Company is eliminated from the Company's Pro Forma Balance Sheet as of
December 31, 1998.
(5) The general and administrative expenses reported by ARO reflects the
payment by ARO to a wholly owned subsidiary of the Company of $1,000,000
per year for management and administrative services. The $1,000,000 is
eliminated from the Company's Pro Forma Statement of Operations for the
year ended December 31, 1998 and nine months ended September 30, 1999.
<PAGE>
(b) Exhibits
99.1* Investment Agreement, as amended, by and between
American Resources Offshore, Inc. and Blue Dolphin
Exploration Company.
99.2* The financial statements contained in American Resources
Offshore, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1998 filed with the Securities and Exchange
Commission (the "SEC") on April 16, 1999 and Quarterly Report
on Form 10-Q for the quarter ended September 30, 1999 filed
with the SEC on November 15, 1999.
* Previously filed.
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: February 16, 2000 By: /s/ G. BRIAN LLOYD
G. Brian Lloyd
Vice President, Treasurer
3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
99.1* Investment Agreement, as amended, by and between
American Resources Offshore, Inc. and Blue Dolphin
Exploration Company (incorporated by reference
from the Company's Schedule 13D filed with the
Securities and Exchange Commission on October 22,
1999).
99.2* The financial statements contained in American
Resources Offshore, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998 filed
with the Securities and Exchange Commission (the
"SEC") on April 16, 1999 and Quarterly Report on
Form 10-Q for the quarter ended September 30, 1999
filed with the SEC on November 15, 1999.
*Previously filed.
4
