8-K/A 1 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM 8-K/A-4 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): September 6, 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) 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. ("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's 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'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 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's historical and Pro Forma Balance Sheets are not included in the Company's Pro Forma Financial Statements below. 2 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1999
BLUE DOLPHIN BLUE DOLPHIN ENERGY COMPANY PRO FORMA ENERGY COMPANY ASSETS HISTORICAL ADJUSTMENTS PRO FORMA ----------- ----------- ----------- 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 =========== =========== ===========
3 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1998
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 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 ============ ============
4 BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1999
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 ............ $ 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) 1,586,000 529,000 -- (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 =========== ===========
5 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's 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's 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's 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 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. (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 is 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: September 6, 2000 By: /s/ G. BRIAN LLOYD G. Brian Lloyd Vice President, Treasurer 7 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. 8