SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K/A-5
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 5, 2000
(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 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Pro Forma Information
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
INTRODUCTION
On December 2, 1999, Blue Dolphin Energy Company (the "Company") acquired
a 75% ownership interest in American Resources Offshore, Inc. by purchasing
approximately 39.0 million shares of American Resources common stock. The
following unaudited pro forma condensed financial statements for the Company
give effect to (i) the purchase of a 75% ownership interest in American
Resources Offshore Inc. ("American Resources"), (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 would be 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 due to American Resources disposing of all of its onshore oil and
gas properties, an 80% interest in its Gulf of Mexico oil and gas properties,
and settling substantially all of its debts. American Resources' remaining
assets are an average 6% working interest in 8 producing oil and gas properties
located offshore in the Gulf of Mexico. The pro forma condensed financial
information should be read in conjunction with the notes thereto together with
the Company's and American Resources' 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 September 30, 1999,
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. Since the acquisition of a 75% ownership interest in American
Resources is accounted for using purchase accounting and American Resources uses
the successful efforts method to account for its oil and gas properties,
American Resources' historical and Pro Forma Balance Sheets are not included in
the Company's Pro Forma Financial Statements below.
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<PAGE>
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
BLUE DOLPHIN BLUE DOLPHIN
ENERGY COMPANY PRO FORMA ENERGY COMPANY
ASSETS HISTORICAL ADJUSTMENTS PRO FORMA
--------------- --------------- ---------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents ...................................... $ 615,858 5,207,104(1) 1,780,960
(4,042,002)(2)
Trade accounts receivable ...................................... 968,983 486,000(2) 1,454,983
Crude oil inventory, at market ................................. 19,871 19,871
Prepaid expenses and other assets .............................. 138,399 273,000(2) 411,399
--------------- --------------- ---------------
Total current assets .................................. 1,743,111 1,924,102 3,667,213
--------------- --------------- ---------------
Net property and equipment: ....................................... 9,826,960 4,878,520(2) 14,705,480
Deferred federal income tax ....................................... 1,974,416 1,974,416
Acquisition and development costs - Petroport ..................... 1,700,554 1,700,554
Escrow fund ....................................................... 1,154,237 1,154,237
Other assets ...................................................... 1,056,987 33,000(2) 1,089,987
--------------- --------------- ---------------
Total Assets .......................................... $ 17,456,265 6,835,622 24,291,887
=============== =============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable and accrued expenses .................... $ 1,314,364 121,000(2) 1,435,364
Accrued interest payable ....................................... 54,432 304,351(2) 358,783
Current portion of long term debt .............................. 260,000 1,000,000(1) 1,260,000
Income taxes payable ........................................... 90,306 90,306
--------------- --------------- ---------------
Total current liabilities ............................. 1,719,102 1,425,351 3,144,453
Long-term debt .................................................... 2,050,600 (1,811,555)(1) 239,045
Minority interest ................................................. 1,193,000(2) 1,193,000
Total stockholders' equity ........................................ 13,686,563 6,028,826(1) 19,715,389
--------------- --------------- ---------------
Total Liabilities and
Stockholders' Equity ........................................ $ 17,456,265 6,835,622 24,291,887
=============== =============== ===============
</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>
BLUE DOLPHIN AMERICAN RESOURCES OFFSHORE BLUE DOLPHIN
ENERGY COMPANY ----------------------------------------------- PRO FORMA ENERGY COMPANY
HISTORICAL HISTORICAL ADJUSTMENTS ADJUSTED ADJUSTMENTS PRO FORMA
------------ ------------ ------------ ------------ ------------ ------------
Revenue from operations:
Pipeline operations .......... $ 2,788,944 2,788,944
Oil and gas sales and
<S> <C> <C> <C> <C> <C> <C>
operating fees ............. 769,829 36,137,000 (30,700,000)(3) 5,437,000 6,206,829
------------ ------------ ------------ ------------ ------------ ------------
Revenue from
operations .......... 3,558,773 36,137,000 (30,700,000) 5,437,000 -- 8,995,773
------------ ------------ ------------ ------------ ------------ ------------
Cost of operations:
Pipeline operating
expenses ................... 796,144 796,144
Lease operating expenses ..... 669,377 18,168,000 (16,328,000)(3) 1,840,000 2,509,377
Repairs and maintenance
costs ...................... 264,630 264,630
Impairment of oil and
gas properties ............. 12,011,544 36,735,000 (31,030,000)(3) 5,705,000 17,716,544
Depletion, depreciation
and amortization ........... 400,982 18,031,000 (14,629,000)(3) 3,402,000(8) 3,802,982
General and administrative
expenses ................... 1,466,738 4,569,000 -- 4,569,000(5) 6,035,738
------------ ------------ ------------ ------------ ------------ ------------
Cost of operations .... 15,609,415 77,610,000 (62,094,000) 15,516,000 -- 31,125,415
------------ ------------ ------------ ------------ ------------ ------------
Income (loss) from
operations .......... (12,050,642) (41,473,000) 31,394,000 (10,079,000) -- (22,129,642)
Other income (expense):
Interest expense ............. (215,141) (7,437,000) 6,987,000(3) (450,000) 450,000(4) (215,141)
Interest expense
private placement .......... 100,000(6) 100,000
Other income ................. -- 239,000 -- 239,000 239,000
Interest income .............. 105,994 101,000 (60,000)(3) 41,000 146,994
------------ ------------ ------------ ------------ ------------ ------------
Income (loss) before
income taxes ....... (12,159,789) (48,570,000) 38,321,000 (10,249,000) 1,050,000 (21,858,789)
Miniority interest .............. 2,562,250 2,562,250
Income tax benefit .............. 3,099,810 2,346,000 -- 2,346,000 5,445,810(7)
------------ ------------ ------------ ------------ ------------ ------------
Net income (loss)
attributable to
common stockholders . $ (9,059,979) (46,227,000) 41,809,000 (4,418,000) 1,050,000 (13,850,729)
------------ ------------ ------------ ------------ ------------ ------------
Earnings (loss) per share:
Basic ...................... $ (2.02) (2.51)
============ ============
Weighted average number of
common shares outstanding
and dilutive potential
common shares:
Basic ...................... 4,492,344 5,509,062
============ ============
</TABLE>
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
BLUE DOLPHIN AMERICAN RESOURCES OFFSHORE BLUE DOLPHIN
ENERGY COMPANY -------------------------------------------- PRO FORMA ENERGY COMPANY
HISTORICAL HISTORICAL ADJUSTMENTS ADJUSTED ADJUSTMENTS PRO FORMA
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue from operations:
Pipeline operations ................... $ 1,393,880 1,393,880
Oil and gas sales
and operating fees .................. 426,294 18,570,000 (14,440,000)(3) 4,130,000 4,556,294
----------- ----------- ----------- ----------- ----------- -----------
Revenue from
operations .................... 1,820,174 18,570,000 (14,440,000) 4,130,000 -- 5,950,174
----------- ----------- ----------- ----------- ----------- -----------
Cost of operations:
Pipeline operating
expenses ............................ 708,840 708,841
Lease operating
expenses ............................ 453,470 9,029,000 (8,076,000)(3) 953,000 1,406,470
Repairs and maintenance
costs ............................... 473,080 365,000 (292,000)(3) 73,000 546,080
Depletion, depreciation
and amortization .................... 355,946 9,420,000 (7,658,000)(3) 1,762,000(8) 2,117,946
General and administrative
expenses ............................ 1,486,258 3,322,000 (2,509,000)(3) 813,000(5) 2,299,258
----------- ----------- ----------- ----------- ----------- -----------
Cost of operations .............. 3,477,594 22,136,000 (18,535,000) 3,601,000 -- 7,078,594
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from
operations .................... (1,657,420) (3,566,000) 4,095,000 529,000 (1,128,420)
Other income (expense):
Interest expense ...................... (181,834) (6,560,000) 6,222,000(3) (338,000) 338,000(4) (106,834)
Interest expense private
placement ........................... 75,000(6)
Gain on sale of assets ................ 2,052,920 2,052,920
Other expense ......................... -- (252,000) -- (252,000) (252,000)
Interest and other income ............. 15,106 141,000 (118,000)(3) 23,000 38,106
----------- ----------- ----------- ----------- ----------- -----------
Income before income
taxes and cumulative
effect of a change
in an accounting principle .... 228,772 (10,237,000) 10,199,000 (38,000) 413,000 603,772
Minority interest ........................ 9,500 9,500
Provision for income taxes ............... (67,503) -- (67,503)
----------- ----------- ----------- ----------- ----------- -----------
Income before cumulative
effect of a change in an
accounting principle .......... 161,269 (10,237,000) 10,199,000 (38,000) 413,000 545,769
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 (10,237,000) 10,199,000 (38,000) 413,000 465,435
=========== =========== =========== =========== =========== ===========
Earnings per common share-basic:
Income before accounting change ...... $ 0.03 0.10
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 0.10
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>
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<PAGE>
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
BALANCE SHEET
(1) The Company completed a $7,100,000 private placement consisting of
1,016,718 shares of its common stock and a $1,000,000 convertible
promissory note from a director of the Company, to fund the acquisition of
American Resources. Approximately $1,900,000 of the proceeds from 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.
(2) The Company purchased a 75% ownership interest in American Resources for
approximately $4,500,000. The American Resources balances consolidated
into the Company reflect transactions that were required to be completed
on or before the Company's purchase of the 75% ownership interest in
American Resources. These transactions included the disposition of all
American Resources' onshore oil and gas properties and an 80% interest in
its Gulf of Mexico oil and gas properties; and American Resources settling
substantially all of its debts. American Resources' remaining assets are
an average 6% working interest in 8 producing oil and gas properties
located offshore in the Gulf of Mexico.
STATEMENTS OF OPERATIONS
(3) To reflect the transactions required to be completed on or before the
Company's purchase of a 75% ownership interest in American Resources.
These transactions included the disposition of all of American Resources'
onshore oil and gas properties and an 80% interest in its Gulf of Mexico
oil and gas properties; and American Resources settling substantially all
of its debts.
(4) Interest on a $5,000,000 note payable from American Resources to the
Company of $450,000 and $338,000 is eliminated from the Company's Pro
Forma Statement of Operations for the year ended December 31, 1998 and the
nine months ended September 30, 1999, respectively.
(5) The general and administrative expenses reported by American Resources for
the year ended December 31, 1998 and nine months ended September 30, 1999
have not been adjusted, even though the Company expects actual G&A to be
lower due to the elimination of duplicate services and personnel.
6
<PAGE>
BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS - CONTINUED
(6) To record interest of $100,000 and $75,000 for the year ended December 31,
1998 and the nine months ended September 30, 1999, respectively, on the
promissory note issued by the Company to fund the acquisition of American
Resources. The promissory note bears interest at a rate of 10%, which is
the fixed rate stated in the promissory note as negotiated via arm's
length negotiations between the parties.
(7) No pro forma adjustments needed due to the Company's net loss carryforward
position and the 100% valuation allowance on deferred tax assets.
(8) Depletion, depreciation and amortization are determined based upon the
units of production during the period. The life of the reserves is
expected to be approximately 10 years.
(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.
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 5, 2000 By: /s/ G. BRIAN LLOYD
G. Brian Lloyd
Vice President, Treasurer
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<PAGE>
INDEX TO EXIBITS
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.
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