HOUSTON, TX
-- (Marketwired)
-- 04/01/15
Blue Dolphin Energy Company ("Blue Dolphin") (OTCQX: BDCO) today announced financial results for the full year ended December 31, 2014.
2014 Full Year Financial Highlights:
- Net income of $15.8 million, or $1.51 per share, including an income tax benefit of $5.6 million; and
- Total EBITDA of $12.6 million and refinery operations EBITDA of $13.8 million.
For the full year 2014, Blue Dolphin reported an increase in net income of $19.6 million to $15.8 million, or $1.51 per share, from a net loss of $3.8 million, or a loss of $0.36 per share, for the full year 2013. The significant increase in net income in 2014 was primarily attributable to favorable refining margins, improved product mix, and recognition of a net deferred tax asset of $5.7 million. The net deferred tax asset was primarily related to net operating losses generated before and after Blue Dolphin's reverse acquisition of Lazarus Energy, LLC in 2012, the primary asset of which is the Nixon Facility.
Total earnings before interest, income taxes and depreciation ("EBITDA") increased $13.9 million to $12.6 million for the full year 2014 from a negative EBITDA of $1.3 million for the same 2013 period. Refinery operations EBITDA increased $13.2 million to $13.8 million for the full year 2014 from an EBITDA of $0.6 million for the full year 2013 due to improved refining margins.
Total cash flow from operations totaled $7.2 million for the full year 2014 compared to $1.0 million for the full year 2013, representing an increase of $6.2 million. During 2014, Blue Dolphin repaid $4.6 million of debt, net of new proceeds.
Years Ended December 31,
------------------------
2014 2013
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(in millions)
Total revenue from operations $ 387.5 $ 409.5
Total cost of operations (377.9) (413.3)
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Income (loss) from operations 9.6 (3.8)
Total other income 0.6 0.1
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Income (loss) before income taxes 10.2 (3.7)
Income tax benefit (expense) 5.6 (0.1)
----------- -----------
Net income (loss) 15.8 (3.8)
=========== ===========
Income (loss) per common share
Basic $ 1.51 $ (0.36)
=========== ===========
Diluted $ 1.51 $ (0.36)
=========== ===========
2014 Full Year Operational Highlights
- Refinery operating income of $12.8 million; and
- Refinery operating income per barrel sold of $3.40.
Blue Dolphin's refinery operations business segment, which represents more than 99% of total operations, consists of crude oil and condensate processing at the 15,000 bpd Nixon Facility, as well as the storage and terminaling of petroleum under third-party lease agreements. Refinery operating income increased by $13.4 million to $12.8 million for the full year 2014 compared to a refinery operating loss of $0.5 million for the full year 2013. Refinery operating income per barrel sold increased $3.54 to $3.40 for the full year 2014 from a refinery operating loss per barrel sold of $0.14 for the full year 2013. The increase in refinery operating income and refinery operating income per barrel sold was the result of improved refining margins.
Key Nixon Facility Operational Metrics
Year Ended December 31, Increase
------------------------
2014 2013 (Decrease)
----------- ----------- -----------
Operating Days 333 341 (8)
Downtime 32 24 8
Total refinery throughput(1)
bbls 3,862,351 3,822,128 40,223
bpd 11,599 11,209 390
Total refinery production
bbls 3,788,710 3,743,482 45,228
bpd 11,378 10,978 400
Total refined petroleum product sales
bbls 3,779,677 3,709,294 70,383
Fuel and energy losses
bbls 73,641 78,646 (5,005)
bpd 221 231 (9)
Capacity utilization rate
refinery throughput 77.3% 74.7% 2.6%
refinery production 75.9% 73.2% 2.7%
(1) Throughput represents feedstocks. The Nixon Facility's feedstock
consists of crude oil and condensate.
Downtime at the Nixon Facility during 2014 primarily related to a planned maintenance turnaround and repair of an overhead accumulator. Downtime during 2013 primarily related to a planned maintenance turnaround. Despite operating for fewer days, refinery production increased slightly for 2014 compared to 2013, rising 45,228 barrels ("bbls"), or 400 bbls per day ("bpd"), as the Nixon Facility increased throughput volumes to capitalize on lower crude oil and condensate acquisition costs and increase jet fuel production. Capacity utilization rates improved as a result of increased refinery throughput and refinery production. The nominal decrease in fuel and energy losses of 5,005 bbls, or 9 bpd, was the result of operational efficiency improvements.
Non-GAAP Financial Measures
This press release and its accompanying financial schedules report refinery operating income, refinery operating income per barrel sold, and EBITDA, which are financial measures defined as non-GAAP by the Securities and Exchange Commission (the "SEC"). These non-GAAP measures are used by management to assess Blue Dolphin's operating results and the effectiveness of its business segments. Blue Dolphin's financial measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles ("GAAP"). An explanation of Blue Dolphin's non-GAAP financial measure and a reconciliation of the financial measure to the GAAP financial measure that Blue Dolphin considers most comparable are presented in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Performance Measures" and "Part II, Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements, Note (4) Business Segment Information" of Blue Dolphin's annual report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 31, 2015.
About Blue Dolphin
Blue Dolphin Energy Company (OTCQX: BDCO) is an independent refiner and marketer of refined petroleum products in the Eagle Ford Shale. Blue Dolphin's primary business is refinery operations at the 15,000 bpd Nixon Facility, which includes the refining of crude oil and condensate into marketable finished and intermediate products, as well as petroleum storage and terminaling. Blue Dolphin also owns and operates pipeline assets and has leasehold interests in oil and gas properties, which are considered non-core. For additional information, visit Blue Dolphin's corporate website at http://www.blue-dolphin-energy.com.
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. 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: our dependence on Lazarus Energy Holdings, LLC ("LEH") for financing and management of our property and the property of our subsidiaries; capital needs for which our internally generated cash flows and other sources of liquidity may not be adequate; our ability to use net operating loss carryforwards, which are subject to limitation, to offset future taxable income for U.S. federal income tax purposes; dangers inherent in oil and gas operations that could cause disruptions and expose us to potentially significant losses, costs or liabilities and reduce our liquidity; geographic concentration of our assets, which creates a significant exposure to the risks of the regional economy; competition from companies having greater financial and other resources; laws and regulations regarding personnel and process safety, as well as environmental, health and safety, for which failure to comply may result in substantial fines, criminal sanctions, permit revocations, injunctions, facility shutdowns and/or significant capital expenditures; insurance coverage that may be inadequate or expensive; related party transactions with LEH and its affiliates, which may cause conflicts of interest; and loss of executive officers or key employees, as well as a shortage of skilled labor or disruptions in our labor force, which may make it difficult to maintain productivity; and the factors set forth under the heading "Risk Factors" in Part I, Item 1A of Blue Dolphin's previously filed Annual Report on Form 10-K for the fiscal year ended December 31, 2014. 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. Blue Dolphin 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 & Subsidiaries
Consolidated Balance Sheets
December 31,
----------------------------
2014 2013
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,293,233 $ 434,717
Restricted cash 1,008,514 327,388
Accounts receivable 8,340,303 13,487,106
Prepaid expenses and other current assets 771,458 333,683
Deposits 68,498 1,219,660
Inventory 3,200,651 4,686,399
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Total current assets 14,682,657 20,488,953
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Total property and equipment, net 37,371,075 36,388,666
Surety bonds 1,642,000 -
Debt issue costs, net 479,737 498,536
Trade name 303,346 303,346
Deferred tax assets, net 5,928,342 -
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TOTAL ASSETS $ 60,407,157 $ 57,679,501
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 12,370,179 $ 20,783,541
Accounts payable, related party 1,174,168 3,659,340
Notes payable - 11,884
Asset retirement obligations, current portion 85,846 107,388
Accrued expenses and other current liabilities 2,783,704 1,600,444
Interest payable, current portion 56,039 40,272
Long-term debt, current portion 1,245,476 2,215,918
Deferred tax liabilities 168,236 -
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Total current liabilities 17,883,648 28,418,787
Long-term liabilities:
Asset retirement obligations, net of current
portion 1,780,924 1,490,273
Deferred revenues and expenses 691,525 -
Long-term debt, net of current portion 10,808,803 13,889,349
Long-term interest payable, net of current
portion 1,274,789 1,767,381
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Total long-term liabilities 14,556,041 17,147,003
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TOTAL LIABILITIES 32,439,689 45,565,790
Commitments and contingencies (Note 22)
STOCKHOLDERS' EQUITY
Common stock ($0.01 par value, 20,000,000
shares authorized;10,599,444 and 10,580,973
shares issued at December 31, 2014 and 2013,
respectively) 105,995 105,810
Additional paid-in capital 36,718,781 36,623,965
Accumulated deficit (8,057,308) (23,816,064)
Treasury stock, 150,000 shares at cost (800,000) (800,000)
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Total stockholders' equity 27,967,468 12,113,711
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 60,407,157 $ 57,679,501
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See notes to consolidated financial statements in Blue Dolphin's
annual report on Form 10-K for the year ended December 31, 2014.
Blue Dolphin Energy Company & Subsidiaries
Consolidated Statements of Operations
Years Ended December 31,
----------------------------
2014 2013
------------- -------------
REVENUE FROM OPERATIONS
Refined product sales $ 387,304,774 $ 409,239,747
Pipeline operations 220,200 303,122
Oil and gas sales - 200
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Total revenue from operations 387,524,974 409,543,069
COST OF OPERATIONS
Cost of refined products sold 363,762,292 399,101,182
Refinery operating expenses 10,698,023 10,673,722
Pipeline operating expenses 208,037 163,163
Lease operating expenses 26,428 67,923
General and administrative expenses 1,427,707 1,794,053
Depletion, depreciation and amortization 1,570,962 1,342,563
Abandonment expense - 63,767
Accretion expense 211,995 112,686
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Total cost of operations 377,905,444 413,319,059
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Income (loss) from operations 9,619,530 (3,775,990)
OTHER INCOME (EXPENSE)
Tank rental and easement revenue 1,400,898 1,155,064
Interest and other income 47,522 3,105
Interest expense (892,372) (1,100,053)
Loss on disposal of property and equipment (4,400) -
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Total other income 551,648 58,116
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Income (loss) before income taxes 10,171,178 (3,717,874)
Income tax benefit (expense) 5,587,578 (89,255)
------------- -------------
Net income (loss) $ 15,758,756 $ (3,807,129)
============= =============
Income (loss) per common share
Basic $ 1.51 $ (0.36)
Diluted $ 1.51 $ (0.36)
Weighted average number of common shares
outstanding:
Basic 10,441,464 10,445,883
Diluted 10,441,464 10,445,883
See notes to consolidated financial statements in Blue Dolphin's
annual report on Form 10-K for the year ended December 31, 2014.
Blue Dolphin Energy Company & Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31,
----------------------------
2014 2013
------------- -------------
OPERATING ACTIVITIES
Net income (loss) $ 15,758,756 $ (3,807,129)
Adjustments to reconcile net income (loss)
to net cashprovided by (used in) operating
activities:
Depletion, depreciation and amortization 1,570,962 1,342,563
Unrealized gain on derivatives (488,950) (143,050)
Deferred taxes (5,760,106) -
Amortization of debt issue costs 33,799 33,800
Amortization of intangible assets - 9,463
Accretion expense 211,995 112,686
Abandonment costs incurred - 63,767
Common stock issued for services 95,001 100,000
Loss on disposal of assets 4,400 -
Changes in operating assets and liabilities
Restricted cash (681,126) (237,795)
Accounts receivable 5,146,803 1,111,649
Prepaid expenses and other current assets (437,775) (105,369)
Deposits and other assets (505,838) 16,787
Inventory 1,485,748 (2,385,707)
Accounts payable, accrued expenses and
other liabilities (6,770,318) 2,846,834
Accounts payable, related party (2,485,172) 2,065,319
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Net cash provided by operating
activities 7,178,179 1,023,818
INVESTING ACTIVITIES
Capital expenditures (1,720,156) (1,477,729)
Proceeds from sale of assets - 201,000
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Net cash used in investing activities (1,720,156) (1,276,729)
FINANCING ACTIVITIES
Proceeds from issuance of debt - 5,750,611
Payments on long-term debt (6,226,521) (5,274,106)
Proceeds from notes payable 2,000,000 15,032
Payments on notes payable (372,986) (224,805)
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Net cash provided by (used in) financing
activities (4,599,507) 266,732
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Net increase in cash and cash equivalents 858,516 13,821
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 434,717 420,896
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,293,233 $ 434,717
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Supplemental Information:
Non-cash operating activities
Reduction in accounts receivable in exchange
for treasury stock received $ - $ 800,000
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Surety bond funded by seller of pipeline
interest $ 850,000 $ -
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Non-cash investing and financing activities:
New asset retirement obligations $ 300,980 $ -
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Changes in estimates of existing ARO
obligations $ - $ 592,415
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Financing of capital expenditures via
capital lease $ 536,635 $ -
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Accrued services payable converted to common
stock $ - $ 50,000
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Interest paid $ 1,369,197 $ 791,536
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See notes to consolidated financial statements in Blue Dolphin's
annual report on Form 10-K for the year ended December 31, 2014.
Blue Dolphin Energy Company & Subsidiaries
GAAP to Non-GAAP Reconciliation
Refinery Operating Income and Refinery Operating Income Per Barrel Sold. The following table provides a reconciliation of refinery operating income and refinery operating income per barrel sold to refined petroleum product sales, cost of refined petroleum products sold, and refinery operating expenses for the periods indicated. For a reconciliation of refined petroleum product sales to total revenue from operations for our consolidated operations, see "Part II, Item 8. Financial Statements and Supplementary Data - Consolidated Statements of Operations" of this report.
December 31,
----------------------------
2014 2013
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Total refined petroleum product sales $ 387,304,774 $ 409,239,747
Less:
Cost of refined petroleum products sold (363,762,292) (399,101,182)
Refinery operating expenses (10,698,023) (10,673,722)
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(374,460,315) (409,774,904)
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Refinery operating income $ 12,844,459 $ (535,157)
============= =============
Total refined petroleum product sales (bbls) 3,779,677 3,709,294
Refinery operating income per bbl sold $ 3.40 $ (0.14)
EBITDA. EBITDA should be considered in conjunction with net income (loss) and other performance measures such as operating cash flows. Following is a reconciliation of EBITDA, capital expenditures, and identifiable assets by business segment for the year ended December 31, 2014 (and at December 31, 2014) and the year ended December 31, 2013 (and at December 31, 2013):
Year Ended December 31, 2014
----------------------------------------------------------
Segment
-----------------------------
Refinery Pipeline Corporate &
Operations Transportation Other Total
------------- -------------- ------------ -------------
Revenue $ 387,304,774 $ 220,200 $ - $ 387,524,974
Less: Operation
cost(1) (374,613,154) (483,262) (1,242,466) (376,338,882)
Other non-
interest income 1,130,065 270,833 - 1,400,898
------------- -------------- ------------ -------------
EBITDA $ 13,821,685 $ 7,771 $ (1,242,466) $ 12,586,990
============= ============== ============
Depletion,
depreciation
and
amortization (1,570,962)
Interest
expense, net (844,850)
-------------
Income before
income taxes $ 10,171,178
=============
Capital
expenditures $ 1,720,156 $ - $ - $ 1,720,156
============= ============== ============ =============
Identifiable
assets(2) $ 50,950,050 $ 3,028,719 $ 6,428,388 $ 60,407,157
============= ============== ============ =============
(1) Operation cost within the "Refinery Operations" and "Pipeline
Transportation" segments includes related general, administrative, and
accretion expenses. Operation cost within "Corporate and Other"
includes general and administrative expenses associated with corporate
maintenance costs, such as accounting fees, director fees and legal
expense.
(2) Identifiable assets contain related legal obligations of each business
segment including cash, accounts receivable and recorded net assets.
Year Ended December 31, 2013
----------------------------------------------------------
Segment
-----------------------------
Refinery Pipeline Corporate &
Operations Transportation Other Total
------------- -------------- ------------ -------------
Revenue $ 409,239,747 $ 303,322 $ - $ 409,543,069
Less: Operation
cost(1) (409,800,285) (524,051) (1,652,160) (411,976,496)
Other non-
interest income 1,113,397 41,667 - 1,155,064
------------- -------------- ------------ -------------
EBITDA $ 552,859 $ (179,062) $ (1,652,160) $ (1,278,363)
============= ============== ============
Depletion,
depreciation
and
amortization (1,342,563)
Interest
expense, net (1,096,948)
-------------
Loss before
income taxes $ (3,717,874)
=============
Capital
expenditures $ 1,477,729 $ - $ - $ 1,477,729
============= ============== ============ =============
Identifiable
assets(2) $ 54,470,723 $ 2,399,467 $ 809,311 $ 57,679,501
============= ============== ============ =============
(1) Operation cost within the "Refinery Operations" and "Pipeline
Transportation" segments includes related general, administrative, and
accretion expenses. Operation cost within "Corporate and Other"
includes general and administrative expenses associated with corporate
maintenance costs, such as accounting fees, director fees and legal
expense.
(2) Identifiable assets contain related legal obligations of each business
segment including cash, accounts receivable and recorded net assets.
Contact:
Jonathan P. Carroll
Chief Executive Officer and President
713-568-4725
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