Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | BLUE DOLPHIN ENERGY COMPANY | ||
Entity Central Index Key | 0000793306 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 12,693,514 | ||
Entity Public Float | $ 840,026 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 0-15905 | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 73-1268729 | ||
Entity Interactive Data Current | Yes | ||
Icfr Auditor Attestation Flag | false | ||
Entity Address Address Line 1 | 801 Travis Street | ||
Entity Address Address Line 2 | Suite 2100 | ||
Entity Address City Or Town | Houston | ||
Entity Address State Or Province | TX | ||
Entity Address Postal Zip Code | 77002 | ||
City Area Code | 713 | ||
Local Phone Number | 568-4725 | ||
Security 12g Title | Common Stock, par value $0.01 per share | ||
Auditor Firm Id | 1195 | ||
Auditor Name | UHY LLP | ||
Auditor Location | Sterling Heights, Michigan |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 9,000 | $ 549,000 |
Restricted cash | 48,000 | 48,000 |
Accounts receivable, net | 126,000 | 214,000 |
Prepaid expenses and other current assets | 2,433,000 | 3,564,000 |
Deposits | 110,000 | 124,000 |
Inventory | 3,098,000 | 1,062,000 |
Total current assets | 5,824,000 | 5,561,000 |
LONG-TERM ASSETS | ||
Total property and equipment, net | 59,923,000 | 62,497,000 |
Operating lease right-of-use assets, net | 332,000 | 498,000 |
Restricted cash, noncurrent | 0 | 514,000 |
Surety bonds | 230,000 | 230,000 |
Total long-term assets | 60,485,000 | 63,739,000 |
TOTAL ASSETS | 66,309,000 | 69,300,000 |
CURRENT LIABILITIES | ||
Long-term debt less unamortized debt issue costs, current portion (in default) | 42,953,000 | 33,692,000 |
Line of credit payable (in default) | 0 | 8,042,000 |
Long-term debt, related party, current portion (in default) | 20,042,000 | 16,010,000 |
Interest payable (in default) | 8,689,000 | 6,408,000 |
Interest payable, related party (in default) | 3,454,000 | 2,814,000 |
Accounts payable | 2,548,000 | 3,274,000 |
Accounts payable, related party | 155,000 | 155,000 |
Current portion of lease liabilities | 215,000 | 194,000 |
Asset retirement obligations, current portion | 0 | 2,370,000 |
Accrued expenses and other current liabilities | 6,225,000 | 4,882,000 |
Total current liabilities | 84,281,000 | 77,841,000 |
LONG-TERM LIABILITIES | ||
Asset retirement obligations, net of current | 3,461 | 0 |
Long-term lease liabilities, net of current | 156,000 | 370,000 |
Deferred revenues | 1,200,000 | 1,520,000 |
Long-term debt, net of current portion | 838,000 | 355,000 |
Total long-term liabilities | 5,655,000 | 2,245,000 |
TOTAL LIABILITIES | 89,936,000 | 80,086,000 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock ($0.01 par value, 20,000,000 shares authorized; 12,693,514 shares issued at September 30, 2021 and December 31, 2020) | 127,000 | 127,000 |
Additional paid-in capital | 38,457,000 | 38,457,000 |
Accumulated deficit | (62,211,000) | (49,370,000) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (23,627,000) | (10,786,000) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 66,309,000 | $ 69,300,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
STOCKHOLDERS' DEFICIT | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 12,693,514 | 12,693,514 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUE FROM OPERATIONS | ||
Refinery operations | $ 297,103 | $ 170,601 |
Tolling and terminaling | 3,717 | 4,209 |
Total revenue from operations | 300,820 | 174,810 |
COST OF GOODS SOLD | ||
Crude oil, fuel use, and chemicals | 292,438 | 167,079 |
Other conversion costs | 7,468 | 9,783 |
Total cost of goods sold | 299,906 | 176,862 |
Gross profit (loss) | 914 | (2,052) |
COST OF OPERATIONS | ||
LEH operating fee, related party | 522 | 646 |
Other operating expenses | 198 | 169 |
General and administrative expenses | 3,021 | 2,299 |
Depletion, depreciation and amortization | 2,780 | 2,686 |
Impairment of assets | 1,092 | 0 |
Total cost of operations | 7,613 | 5,800 |
Loss from operations, related party | (6,699) | (7,852) |
OTHER INCOME (EXPENSE) | ||
Easement, interest and other income | 2 | 172 |
Interest and other expense | (6,199) | (6,763) |
Gain on extinguishment of debt | 55 | 0 |
Total other expense | (6,142) | (6,591) |
Loss before income taxes | (12,841) | (14,443) |
Income tax expense | 0 | (15) |
Net Loss | $ (12,841) | $ (14,458) |
Loss per common share: | ||
Basic | $ (1.01) | $ (1.15) |
Diluted | $ (1.01) | $ (1.15) |
Weighted average number of common shares outstanding: | ||
Basic | 12,693,514 | 12,574,465 |
Diluted | 12,693,514 | 12,574,465 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES | ||
Net loss | $ (12,841) | $ (14,458) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depletion, depreciation and amortization | 2,780 | 2,686 |
Deferred income tax | 0 | 15 |
Amortization of debt issue costs | 147 | 348 |
Guaranty fees paid in kind | 608 | 609 |
Related-party interest expense paid in kind | 1,116 | 559 |
Deferred revenues and expenses | (320) | (410) |
Loss (gain) on issuance of shares | 0 | (80) |
Impairment of assets | 1,092 | 0 |
Gain on extinguishment of debt | (55) | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable | 88 | 232 |
Accounts receivable, related party | 0 | 1,364 |
Prepaid expenses and other current assets | 1,131 | (1,288) |
Deposits and other assets | 14 | 34 |
Inventory | (2,036) | 583 |
Accounts payable, accrued expenses and other liabilities | 2,220 | 5,899 |
Accounts payable, related party | 0 | 6 |
Net cash used in operating activities | (6,056) | (3,901) |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | (1,085) |
Net cash used in investing activities | 0 | (1,085) |
FINANCING ACTIVITIES | ||
Proceeds from debt | 10,500 | 370 |
Payments on debt | (4,738) | (3,930) |
Payments of debt issuance costs | (750) | 0 |
Net activity on related-party debt | (10) | 8,989 |
Net cash provided by financing activities | 5,002 | 5,429 |
Net change in cash, cash equivalents, and restricted cash | (1,054) | 443 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD | 1,111 | 668 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | 57 | 1,111 |
Non-cash investing and financing activities: | ||
Financing of line of credit via related-party debt | 2,331 | 2,778 |
Issuance of shares for services and/or to extinguish debt | 0 | 267 |
Conversion of related-party notes to common stock | 0 | 148 |
Line of credit financed by offsetting tank leases less interest | 1,098 | 273 |
Interest paid | 1,252 | 2,311 |
Income taxes paid (refunded) | $ 0 | $ (100) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, amount at Dec. 31, 2019 | $ 3,486 | $ 123 | $ 38,275 | $ (34,912) |
Bbalance, shares at Dec. 31, 2019 | 12,327,365 | |||
Comon stock issued for services | 68 | $ 2 | 66 | 0 |
Common stock issued for services, shares | 135,084 | |||
Common stock issued for extinguishment of related-party debt, amount | 118 | $ 2 | 116 | 0 |
Common stock issued for extinguishment of related-party debt, shares | 231,065 | |||
Net loss | (14,458) | $ 0 | 0 | (14,458) |
Balance, amount at Dec. 31, 2020 | (10,786) | $ 127 | 38,457 | (49,370) |
Balance, shares at Dec. 31, 2020 | 12,693,514 | |||
Net loss | (12,841) | $ 0 | 0 | (12,841) |
Balance, amount at Dec. 31, 2021 | $ (23,627) | $ 127 | $ 38,457 | $ (62,211) |
Balance, shares at Dec. 31, 2021 | 12,693,514 |
1. Organization
1. Organization | 12 Months Ended |
Dec. 31, 2021 | |
1. Organization | |
Organization | (1) Organization Overview Blue Dolphin was formed in 1986 as a Delaware corporation. The company is an independent downstream energy company operating in the Gulf Coast region of the United States. Operations primarily consist of a light sweet-crude, 15,000-bpd crude distillation tower, and approximately 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin trades on the OTCQX under the ticker symbol “BDCO.” Assets are organized in two business segments: ‘refinery operations’ (owned by LE) and ‘tolling and terminaling services’ (owned by LRM and NPS). ‘Corporate and other’ includes subsidiaries BDPL (inactive pipeline and facilities assets), BDPC (inactive leasehold interests in oil and gas wells), and BDSC (administrative services). See “Note (4)” to our consolidated financial statements for more information about our business segments. Unless the context otherwise requires, references in this report to “we,” “us,” “our,” or “ours,” refer to Blue Dolphin, one or more of its consolidated subsidiaries or all of them taken as a whole. Affiliates Affiliates controlled approximately 82% of the voting power of our Common Stock as of the filing date of this report. An Affiliate operates and manages all Blue Dolphin properties and funds working capital requirements during periods of working capital deficits. In addition, an Affiliate is a significant customer of our refined products. Blue Dolphin and certain of its subsidiaries are currently parties to a variety of agreements with Affiliates. See “Note (3)” to our consolidated financial statements for additional disclosures related to Affiliate agreements, arrangements, and risks associated with working capital deficits. Going Concern Management determined that certain factors raise substantial doubt about our ability to continue as a going concern. These factors include defaults under secured loan agreements, substantial current debt, margin volatility, historical net losses and working capital deficits, as discussed more fully below. Our consolidated financial statements assume we will continue as a going concern and do not include any adjustments that might result from this uncertainty. Our ability to continue as a going concern depends on sustained positive operating margins and adequate working capital for, amongst other requirements, purchasing crude oil and condensate and making payments on long-term debt. If we are unable to process crude oil and condensate into sellable refined products or make required debt payments, we may consider other options. These options could include selling assets, raising additional debt or equity capital, cutting costs, reducing cash requirements, restructuring debt obligations, or filing bankruptcy. Defaults Under Secured Loan Agreements Third-Party Defaults · Veritex Loans – For the twelve-months ended December 31, 2021 and 2020, principal and interest payments to Veritex were $0.6 million and $0.9 million, respectively. As of the filing date of this report, LE and LRM were in default under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 for failing to make required monthly principal and interest payments and failing to satisfy financial covenants. In addition, LE was in default under the LE Term Loan Due 2034 for failing to replenish a $1.0 million payment reserve account. Defaults under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 permit Veritex to declare the amounts owed under these loan agreements immediately due and payable, exercise its rights concerning collateral securing obligors’ obligations under these loan agreements, and exercise any other rights and remedies available. · GNCU Loan – For the twelve-months ended December 31, 2021, interest only payments to GNCU were $0.01 million. As of the filing date of this report, NPS was in default under the NPS Term Loan Due 2031 for failing to satisfy financial covenants. · Amended Pilot Line of Credit – On October 4, 2021, NPS repaid all obligations owed to Pilot under the Amended Pilot Line of Credit. However, in a letter from NPS to Pilot dated October 28, 2021, NPS disputed approximately $0.3 million in payments NPS believes Pilot misapplied as part of the Amended Pilot Line of Credit setoff. As of the filing date of this report, the amount remained in dispute between the parties. From June 2020 to October 2021, Pilot applied payments owed to NPS under two terminal services agreements against NPS’ payment obligations to Pilot under the Amended Pilot Line of Credit. For the twelve-month periods ended December 31, 2021 and 2020, the tank lease payment setoff totaled $1.9 million and $1.3 million, respectively. The amount of interest NPS incurred under the Amended Pilot Line of Credit totaled $0.7 million and $1.4 million, respectively, for the twelve months ended December 31, 2021 and 2020. See “Part II, Item 8. Financial Statements and Supplementary Data – Note (11)” and “Note (17)” to our consolidated financial statements for more information related to the Amended Pilot Line of Credit. · Kissick Debt – Under a 2015 subordination agreement, John Kissick agreed to subordinate his right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. To date, LE has made no payments under the subordinated Kissick Debt. Mr. Kissick has taken no action due to the non-payment. As of the filing date of this report, defaults under the Kissick Debt related to payment of past due obligations at maturity. We can provide no assurance that: (i) our assets or cash flow will be sufficient to fully repay borrowings under our secured loan agreements, either upon maturity or if accelerated, (ii) LE, LRM, and NPS will be able to refinance or restructure the debt, and/or (iii) third parties will provide future default waivers. Defaults under our secured loan agreements and any exercise by third parties of their rights and remedies related to such defaults may have a material adverse effect on the trading prices of our Common Stock and on the value of an investment in our Common Stock, and holders of our Common Stock could lose their investment in our Common Stock in its entirety. Management maintains ongoing dialogue with lenders regarding defaults and potential restructuring and refinance opportunities. See “Notes (1) and (11)” to our consolidated financial statements for additional information regarding defaults under our secured loan agreements and their potential effects on our business, financial condition, and results of operations. Related-Party Defaults · Notes and Loan Agreement – As of the filing date of this report, Blue Dolphin was in default concerning past due payment obligations under the March Carroll Note, March Ingleside Note, and June LEH Note. As of the same date, BDPL was also in default related to past due payment obligations under the BDPL-LEH Loan Agreement. Affiliates controlled approximately 82% of the voting power of our Common Stock as of the filing date of this report, an Affiliate operates and manages all Blue Dolphin properties, an Affiliate is a significant customer of our refined products, and we borrow from Affiliates during periods of working capital deficits. Substantial Current Debt Excluding accrued interest, we had current debt of $63.0 million and $57.7 million, respectively, as of December 31, 2021 and 2020. Current debt consists of bank debt, investor debt, and related party debt. Although the line of credit payable to Pilot fell within current debt during 2021, the Pilot debt was repaid in October 2021. Substantial current debt is primarily the result of secured loan agreements being in default. As a result, these debt obligations were classified within the current portion of long-term debt on our consolidated balance sheets at December 31, 2021 and 2020. Margin Volatility Since the beginning of 2020, the COVID-19 pandemic disrupted economies around the world, including the oil and gas industry in which we operate. The rapid spread of the virus led to the implementation of various responses, including federal, state, and local government-imposed quarantines, shelter-in-place mandates, sweeping restrictions on travel, and other public health and safety measures. Actions by members of OPEC and other producer countries in 2020 concerning oil production and pricing significantly impacted supply and demand in global oil and gas markets, which impacted our operational and financial performance. In particular, we experienced net losses due to unfavorable margins per bbl and significantly lower sales volume due to significant refinery downtime. Global oil prices and refined product demand recovered somewhat in 2021 compared to 2020 as COVID-19 cases stabilized, mortality rates decreased, and availability and inoculation rates of vaccines increased. However, recovery of jet fuel demand lagged that of other refined products as airline travel restrictions and consumer hesitancy to fly during the pandemic continued. Despite the uptick in market conditions during the second half of 2021, overall, we experienced operating and net losses due to unfavorable margins and lower sales volume, which affected our liquidity. Cash constraints adversely impacted the frequency of crude oil acquisition, debt payments, and abandonment of pipeline and facilities assets. The extent to which the continued COVID-19 pandemic will impact our operations depends on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, additional or modified government actions, new information that may emerge concerning variants, actions taken to contain the spread of COVID-19 and treat its impact, and the availability and acceptance of vaccines to mitigate such spread, among others. In February 2022, Russia invaded neighboring Ukraine. The conflict has caused turmoil in global markets, resulting in higher oil prices, and injected even more uncertainty into a worldwide economy recovering from the effects of COVID-19. Given the evolving conflict, there are many unknown factors and events that could materially impact our operations. The Russian conflict with Ukraine and the COVID-19 pandemic continue to evolve, and the extent to which these events may impact our business, financial condition, liquidity, results of operations, and prospects will depend highly on future developments, which are very uncertain and cannot be predicted with confidence. Historic Net Losses and Working Capital Deficits Net Losses . Working Capital Deficits . Cash and cash equivalents totaled $0.01 and $0.5 million at December 31, 2021 and 2020, respectively. Restricted cash (current portion) totaled $0.05 million at both December 31, 2021 and 2020. Restricted cash, noncurrent totaled $0 and $0.5 million at December 31, 2021 and 2020, respectively. Our financial health has been materially and adversely affected by defaults in our secured loan agreements, substantial current debt, margin volatility, historical net losses and working capital deficits. If Pilot or Tartan terminate the Crude Supply Agreement or terminal services agreements, our ability to acquire crude oil and condensate could be adversely affected. If producers experience crude supply constraints and increased transportation costs, our crude acquisition costs may rise, or we may not receive sufficient amounts to meet our needs. During the twelve-month periods ended December 31, 2021 and 2020, the refinery experienced 23 days and 42 days of downtime, respectively. During the same time periods, 13 days and 20 days, respectively, related to lack of crude associated with cash constraints. Operating Risks Successful execution of our business strategy depends on several critical factors, including having adequate working capital to meet contractual, operational, regulatory, and safety needs and having favorable margins on refined products. The Russian conflict with Ukraine and the COVID-19 pandemic continue to evolve, and the extent to which these events may impact our business, financial condition, liquidity, results of operations, and prospects will depend highly on future developments, which are very uncertain and cannot be predicted with confidence. Management continues to take steps to mitigate risk, avoid business disruptions, manage cash flow, and remain competitive in a volatile commodity price environment. Mitigation steps include: adjusting throughput and production based on market conditions, optimizing receivables and payables by prioritizing payments, optimizing inventory levels based on demand, monitoring discretionary spending, and delaying capital expenditures. To safeguard personnel, we adopted remote working where possible and social distancing, mask-wearing, and other site-specific precautionary measures where on-site operations are required. We also incentivize personnel to receive the COVID-19 vaccine. We can provide no guarantees that: our business strategy will be successful, Affiliates will continue to fund our working capital needs when we experience working capital deficits, we will meet regulatory requirements to provide additional financial assurance (supplemental pipeline bonds) and decommission offshore pipelines and platform assets, we can obtain additional financing on commercially reasonable terms or at all, or margins on our refined products will be favorable. Further, if third parties exercise their rights and remedies under our secured loan agreements, our business, financial condition, and results of operations will be materially adversely affected. |
2. Principles of Consolidation
2. Principles of Consolidation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
2. Principles of Consolidation and Significant Accounting Policies | |
Principles of Consolidation and Significant Accounting Policies | (2) Principles of Consolidation and Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements, which include Blue Dolphin and its subsidiaries, have been prepared in accordance with U.S. generally accepted accounting principles and the rules and regulations of the SEC. These rules and regulations conform to the accounting principles contained in FASB’s ASC, the single source of GAAP. All significant intercompany items have been eliminated in consolidation. Additionally, any material subsequent events that occurred after the date through which this report covers have been properly recognized or disclosed in our financial statements. In management’s opinion, all adjustments considered necessary for a fair presentation have been included, disclosures are adequate, and the presented information is not misleading. Significant Accounting Policies The summary of significant accounting policies of Blue Dolphin is presented to assist in understanding our consolidated financial statements. Our consolidated financial statements and accompanying notes are representations of management, who is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of our consolidated financial statements. Use of Estimates Cash and Cash Equivalents Restricted Cash Accounts Receivable and Allowance for Doubtful Accounts Inventory. Property and Equipment Refinery and Facilities . Pipelines and Facilities. Oil and Gas Properties . CIP . Leases. For operating leases, we record lease cost on a straight-line basis over the lease term; we record lease expenses in the appropriate line on the income statement based on the leased asset’s intended use. For finance leases (previously referred to under GAAP as capital leases), we amortize lease payments for the ROU asset on a straight-line basis over the lesser of the leased asset’s useful life or the lease term; we record amortization expenses on the income statement in ‘depreciation and amortization expense;’ we record interest expense on the income statement in ‘interest and other expense.’ Revenue Recognition Refinery Operations Revenue . We consider a variety of facts and circumstances in assessing the point of a control transfer, including but not limited to: whether the purchaser can direct the use of the refined product, the transfer of significant risks and rewards, our rights to payment, and transfer of legal title. In each case, the term between the sale and when payment is due is not significant. We include incurred transportation, shipping, and handling costs in the cost of goods sold. We do not include excise and other taxes collected from customers and remitted to governmental authorities in revenue. Tolling and Terminaling Revenue . We typically satisfy performance obligations for tolling and terminaling operations over time. We determine the transaction price at agreement inception based on the guaranteed minimum amount of revenue over the agreement term. We allocate the transaction price to the single performance obligation that exists under the agreement. We recognize revenue in the amount for which we have a right to invoice. Generally, payment terms do not exceed 30 days. Revenue from tank storage customers may, from time to time, include fees for ancillary services, such as in-tank and tank-to-tank blending. These services are considered optional to the customer. The fixed cost under the customer’s tank storage agreement does not include ancillary service fees. We consider ancillary services as a separate performance obligation under the tank storage agreement. We satisfy the performance obligation and recognize the associated fee when we complete the requested service. Deferred Revenue . Income Taxes Management uses significant judgment in evaluating uncertain tax positions and determining the provision for income taxes. As of each reporting date, we consider new evidence, both positive and negative, to assess the realizability of deferred tax assets. We weigh whether there is a more than 50% probability of realizing a portion or all the deferred tax assets. Realization depends on the generation of future taxable income before the expiration of any NOL carryforwards. We record a valuation allowance against deferred income tax assets if there is a more than 50% probability of not realizing some portion of the asset. We recognize an uncertain tax positions benefit in our financial statements if deferred tax assets meet a minimum recognition threshold. First, we determine whether there is a more than 50% probability that our income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If we meet the criteria, we record a benefit in the financial statements equal to the largest amount greater than 50% likely to be realized upon settlement with taxing authorities. A significant piece of objective negative evidence evaluated was cumulative losses incurred over the three-year period ended December 31, 2021. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Based on this evaluation, we recorded a valuation allowance against the deferred tax assets for which realization was not deemed more likely than not as of December 31, 2021 and 2020. In addition, we have NOL carryforwards that remain available for future use. See “Note (14)” to our consolidated financial statements for more information related to income taxes. Impairment or Disposal of Long-Lived Assets Commodity price market volatility associated with the COVID-19 pandemic could affect the value of certain of our long-lived assets. Management evaluated refinery and facilities assets for impairment as of December 31, 2021. We did not record any impairment of our refinery and facilities assets for the periods presented. We recorded an impairment of $1.1 million related to asset retirement costs for our pipeline/platform assets as of December 31, 2021. Additional impairment may be required in the future if losses continue to be material, or as new opportunities arise, such as reconfiguration of the Nixon refinery into a renewable fuels facility. Asset Retirement Obligations Refinery and Facilities . Pipeline and Facilities; Oil and Gas Properties . Computation of Earnings Per Share New Pronouncements Adopted Codification Improvements . New Pronouncements Issued, Not Yet Effective . No new pronouncements issued but not yet effective are not expected to have a material impact on our financial position, results of operations, or liquidity. |
3. Related Party Transactions
3. Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
3. Related Party Transactions | |
Related-Party Transactions | (3) Related-Party Transactions Affiliate Operational Agreements Summary Blue Dolphin and certain of its subsidiaries are parties to several operational agreements with Affiliates. Management believes that these related-party agreements are arm’s-length transactions. Agreement/Transaction Parties Effective Date Key Terms Jet Fuel Sales Agreement LEH LE 04/01/2022 1-year term expiring earliest to occur of 03/31/2023 plus 30-day carryover or delivery of maximum jet fuel quantity; LEH bids on jet fuel contracts under preferential pricing terms due to a HUBZone certification Office Sub-Lease Agreement LEH BDSC 01/01/2018 68-month term expiring 08/31/2023; office lease Houston, Texas; includes 6-month rent abatement period; rent approximately $0.01 million per month Amended and Restated Operating Agreement LEH Blue Dolphin LE LRM NPS BDPL BDPC BDSC 04/01/2020 3-year term; expires 04/01/2023 or notice by either party at any time of material breach or 90 days Board notice; LEH receives management fee of 5% of all consolidated operating costs, excluding crude costs, depreciation, amortization, and interest, of Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC Working Capital We have historically relied on Affiliates for funding when revenue from operations and availability under bank facilities were insufficient to meet our liquidity and working capital needs. We reflect such borrowings in our consolidated balance sheets in accounts payable, related party, or long-term debt, related party. Related-Party Long-Term Debt Loan Description Parties Maturity Date Interest Rate Loan Purpose March Carroll Note (in default) Jonathan Carroll Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to Jonathan Carroll under the guaranty fee agreements March Ingleside Note (in default) Ingleside Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital June LEH Note (in default) LEH Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to LEH under the Amended and Restated Operating Agreement BDPL-LEH Loan Agreement (in default) (1) LEH BDPL Aug 2018 16.00% Blue Dolphin working capital Amended and Restated Guaranty Fee Agreement Jonathan Carroll (2) LE -- 2.00% Tied to payoff of LE $25 million Veritex loan Amended and Restated Guaranty Fee Agreement Jonathan Carroll (2) LRM -- 2.00% Tied to payoff of LRM $10 million Veritex loan (1) The original principal amount of the BDPL-LEH Loan Agreement was $4.0 million. (2) Jonathan Carroll was required to personally guarantee repayment of borrowed funds and accrued interest. (3) Mr. Carroll receives guaranty fees under the guaranty fee agreements. Fees are payable 50% in cash and 50% in Common Stock. We accrue payment of the Common Stock portion quarterly. For the foreseeable future, management does not intend to pay Mr. Carroll the cash portion due to Blue Dolphin’s working capital deficits. The cash portion will continue to accrue and increase the outstanding principal balance owed to Mr. Carroll under the March Carroll Note. Guarantees, Security, and Defaults Loan Description Guarantees Security Event(s) of Default March Carroll Note (in default) --- --- Failure to pay past due obligations at maturity (loan matured January 2019) March Ingleside Note (in default) --- --- Failure to pay past due obligations at maturity (loan matured January 2019) June LEH Note (in default) --- --- Failure to pay past due obligations at maturity (loan matured January 2019) BDPL-LEH Loan Agreement --- Certain BDPL property Failure to pay past due obligations at maturity (loan matured August 2018) Covenants The BDPL-LEH Loan Agreement contains representations and warranties, affirmative and negative covenants, and events of default that we consider usual and customary for a credit facility of this type. There are no covenants associated with the March Carroll Note, March Ingleside Note, or June LEH Note. Related-Party Financial Impact Consolidated Balance Sheets Accounts payable, related party . Long-term debt, related party, current portion (in default) and accrued interest payable, related party . December 31, 2021 2020 (in thousands) LEH June LEH Note (in default) $ 12,672 $ 9,446 BDPL-LEH Loan Agreement 7,454 6,814 LEH Total 20,126 16,260 Ingleside March Ingleside Note (in default) 1,066 1,013 Jonathan Carroll March Carroll Note (in default) 2,304 1,551 23,496 18,824 Less: Long-term debt, related party, current portion, in default (20,042 ) (16,010 ) Less: Accrued interest payable, related party (in default) (3,454 ) (2,814 ) $ - $ - Consolidated Statements of Operations. Total revenue from operations. Twelve Months Ended December 31, 2021 2020 (in thousands, except percent amounts) Refinery operations LEH $ 90,062 29.9 % $ 49,786 28.5 % Third-Parties 207,041 68.8 % 120,815 69.1 % Tolling and terminaling Third-Parties 3,717 1.2 % 4,209 2.4 % $ 300,820 100.0 % $ 174,810 100.0 % Interest expense. Twelve Months Ended December 31, 2021 2020 (in thousands) Jonathan Carroll Guaranty Fee Agreements LE Term Loan Due 2034 $ 451 $ 431 LRM Term Loan Due 2034 178 178 March Carroll Note (in default) 131 103 LEH BDPL-LEH Loan Agreement (in default) 640 640 June LEH Note (in default) 288 40 Ingleside March Ingleside Note (in default) 56 63 $ 1,744 $ 1,455 Other . |
4. Revenue and Segment Informat
4. Revenue and Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
4. Revenue and Segment Information | |
Revenue and Segment Information | (4) Revenue and Segment Information We have two reportable business segments: (i) refinery operations, focused on refining and marketing petroleum products at the Nixon facility, and (ii) tolling and terminaling, focused on tolling and storing petroleum products for third parties at the Nixon facility. Corporate and other includes BDSC, BDPL, and BDPC. Revenue from Contracts with Customers Disaggregation of Revenue Receivables from Contracts with Customers Contract Liabilities Remaining Performance Obligations Segment Information . Twelve Months Ended December 31, 2021 2020 (in thousands) Net revenue (excluding intercompany fees and sales) Refinery operations $ 297,103 $ 170,601 Tolling and terminaling 3,717 4,209 Total net revenue 300,820 174,810 Intercompany fees and sales Refinery operations (2,457 ) (2,384 ) Tolling and terminaling 2,457 2,384 Total intercompany fees - - Operation costs and expenses (1) Refinery operations (298,082 ) (175,201 ) Tolling and terminaling (1,825 ) (1,661 ) Corporate and other (197 ) (169 ) Total operation costs and expenses (300,104 ) (177,031 ) Segment contribution margin (deficit) Refinery operations (3,436 ) (6,984 ) Tolling and terminaling 4,349 4,932 Corporate and other (197 ) (169 ) Total segment contribution margin (deficit) 716 (2,221 ) General and administrative expenses (2) Refinery operations (1,549 ) (1,257 ) Tolling and terminaling (343 ) (307 ) Corporate and other (2,742 ) (1,381 ) Total general and administrative expenses (4,634 ) (2,945 ) Depreciation and amortization Refinery operations (1,214 ) (1,186 ) Tolling and terminaling (1,362 ) (1,296 ) Corporate and other (204 ) (204 ) Total depreciation and amortization (2,780 ) (2,686 ) Interest and other non-operating expenses, net Refinery operations (2,779 ) (2,929 ) Tolling and terminaling (1,649 ) (2,546 ) Corporate and other (1,715 ) (1,116 ) Total interest and other non-operating expenses, net (6,143 ) (6,591 ) Income (loss) before income taxes Refinery operations (8,978 ) (12,356 ) Tolling and terminaling 995 783 Corporate and other (4,858 ) (2,870 ) Total loss before income taxes (12,841 ) (14,443 ) Income tax expense - 15 ) Net loss $ (12,841 ) $ (14,458 ) (1) Operation costs include cost of goods sold. Also, operation costs within: (a) tolling and terminaling includes terminal operating expenses and an allocation of other costs (e.g., insurance and maintenance) and (b) corporate and other includes expenses related to BDSC, BDPC and BDPL. (2) General and administrative expenses within refinery operations include the LEH operating fee. Twelve Months Ended December 31, 2021 2020 (in thousands) Capital expenditures Refinery operations $ - $ 295 Tolling and terminaling - 790 Corporate and other - - Total capital expenditures $ - $ 1,085 December 31, 2021 2020 (in thousands) Identifiable assets Refinery operations $ 47,047 $ 48,521 Tolling and terminaling 17,594 18,722 Corporate and other 1,668 2,057 Total identifiable assets $ 66,309 $ 69,300 |
5. Concentration of Risk
5. Concentration of Risk | 12 Months Ended |
Dec. 31, 2021 | |
5. Concentration of Risk | |
Concentration of Risk | (5) Concentration of Risk Bank Accounts Financial instruments that potentially subject us to concentrations of risk consist primarily of cash, trade receivables and payables. We maintain cash balances at financial institutions in Houston, Texas. The FDIC insures certain financial products up to a maximum of $250,000 per depositor. At December 31, 2021 and 2020, we had cash balances (including restricted cash) that exceeded the FDIC insurance limit per depositor of approximately $0 and $0.6 million, respectively. Key Supplier Operation of the Nixon refinery depends on our ability to purchase adequate amounts of crude oil and condensate. We have a long-term crude supply agreement in place with Tartan. The volume-based Crude Supply Agreement expires when we receive 24.8 million net bbls of crude oil. After that, the Crude Supply Agreement automatically renews for successive one-year terms (each such term, a renewal term). Either party may provide the other with notice of non-renewal at least 60 days before the expiration of any renewal term. As of December 31, 2021, we received 9.0 million bbls, or 36%, of the contracted total volume under the crude supply agreement. Pilot and Tartan store jet fuel and crude oil, respectively, at the Nixon facility under two terminal services agreements: (i) a Terminal Services Agreement dated as of May 2019 (covering Tank Nos. 67, 71, 72, 73, 77, and 78) for jet fuel and (ii) a Terminal Services Agreement dated as of June 1, 2019 (covering Tank Nos. 1 and 56) for crude oil. Under both terminal services agreements, Pilot and Tartan store product at the Nixon facility at a specified rate per bbl of the storage tank’s shell capacity. The terminal services agreements renew on a one-year evergreen basis. Either party may terminate the terminal services agreements by providing the other party 60 days prior written notice. The terminal services agreements will automatically terminate upon expiration or termination of the Crude Supply Agreement. Our financial health has been materially and adversely affected by defaults in our secured loan agreements, substantial current debt, margin volatility, historical net losses and working capital deficits. If Pilot or Tartan terminate the Crude Supply Agreement or terminal services agreements, our ability to acquire crude oil and condensate could be adversely affected. If producers experience crude supply constraints and increased transportation costs, our crude acquisition costs may rise, or we may not receive sufficient amounts to meet our needs. During the twelve-month periods ended December 31, 2021 and 2020, the refinery experienced 23 days and 42 days of downtime, respectively. During the same time periods, 13 days and 20 days, respectively, related to lack of crude associated with cash constraints. Significant Customers We routinely assess the financial strength of our customers. To date, we have not experienced significant write-downs in accounts receivable balances. We believe that our accounts receivable credit risk exposure is limited. Twelve Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at December 31, December 31, 2021 3 71.9 % $ 0 December 31, 2020 3 70.8 % $ 0 One of our significant customers is LEH, an Affiliate. Due to a HUBZone certification, the Affiliate purchases our jet fuel under a Jet Fuel Sales Agreement and bids on jet fuel contracts under preferential pricing terms. The Affiliate accounted for 29.9% and 28.7% of total revenue from operations for the twelve months ended December 31, 2021, and 2020, respectively. The Affiliate represented $0 in accounts receivable at both December 31, 2021, and 2020, respectively. Concentration of Customers Refined Product Sales. Twelve Months Ended December 31, 2021 2020 (in thousands, except percent amounts) LPG mix $ 21 0.0 % $ 2 0.0 % Naphtha 74,683 25.2 % 34,413 20.2 % Jet fuel 90,062 30.3 % 49,786 29.2 % HOBM 65,386 22.0 % 42,777 25.1 % AGO 66,951 22.5 % 43,623 25.5 % $ 297,103 100.0 % $ 170,601 100.0 % An Affiliate, LEH, purchases all of our jet fuel. See “Notes (3) and (16)” to our consolidated financial statements for additional disclosures related to Affiliate transactions. |
6. Prepaid Expenses and Other C
6. Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2021 | |
6. Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | (6) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of the dates indicated consisted of the following: December 31, 2021 2020 (in thousands) Prepaid crude oil and condensate $ 1,368 $ 2,249 Prepaid insurance 953 1,182 Prepaid easement renewal fees 76 99 Other prepaids 36 34 $ 2,433 $ 3,564 |
7. Inventory
7. Inventory | 12 Months Ended |
Dec. 31, 2021 | |
7. Inventory | |
Inventory | (7) Inventory Inventory as of the dates indicated consisted of the following: December 31, 2021 2020 (in thousands) HOBM $ 1,749 $ 54 Crude oil and condensate 660 463 AGO 338 133 Naphtha 189 120 Chemicals 121 271 Propane 27 15 LPG mix 14 6 $ 3,098 $ 1,062 |
8. Property, Plant and Equipmen
8. Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
8. Property, Plant and Equipment, Net | |
Property, Plant and Equipment, Net | (8) Property, Plant and Equipment, Net Property, plant and equipment, net, as of the dates indicated consisted of the following: December 31, 2021 2020 (in thousands) Refinery and facilities $ 72,583 $ 72,184 Land 566 566 Other property and equipment 903 903 74,052 73,653 Less: Accumulated depletion, depreciation, and amortization (17,795 ) (15,220 ) 56,257 58,433 CIP 3,666 4,064 $ 59,923 $ 62,497 Capital expenditures for expansion at the Nixon facility were funded by long-term debt from Veritex, revenue from operations, and working capital from Affiliates. Unused amounts for capital expenditures derived from Veritex loans totaled $0 and $0.5 million at December 31, 2021 and 2020, respectively, and were reflected in restricted cash, non-current on our consolidated balance sheets. See “Note (10)” to our consolidated financial statements for additional disclosures related to working capital deficits and borrowings for capital spending. We recorded an impairment of $1.1 million related to asset retirement costs that were capitalized for our pipeline/platform assets at December 31, 2021. See “Note (12)” to our consolidated financial statements for additional disclosures related to assets retirement costs. |
9. Accrued Expenses and Other C
9. Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
9. Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | (9) Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of the dates indicated consisted of the following: December 31, 2021 2020 (in thousands) Unearned revenue from contracts with customers $ 4,388 $ 3,421 Accrued fines and penalties 407 - Unearned contract renewal income 400 500 Insurance 273 541 Board of director fees payable 230 100 Other payable 218 252 Customer deposits 173 10 Taxes payable 136 58 $ 6,225 $ 4,882 |
10. Third-Party Long-Term Debt
10. Third-Party Long-Term Debt | 12 Months Ended |
Dec. 31, 2021 | |
10. Third-Party Long-Term Debt | |
Third-Party Long-Term Debt | (10) Third-Party Long-Term Debt Loan Agreements Summary Loan Description Parties Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate Loan Purpose Veritex Loans LE Term Loan Due 2034 ( in default (1)(2) LE Veritex $ 25.0 Jun 2034 $0.2 million WSJ Prime + 2.75% Refinance loan; capital improvements LRM Term Loan Due 2034 ( in default (1) LRM Veritex $ 10.0 Dec 2034 $0.1 million WSJ Prime + 2.75% Refinance bridge loan; capital improvements Kissick Debt ( in default (3)(4) LE Kissick $ 11.7 Jan 2018 16.00% Working capital; reduced LE’s obligation to GEL GNCU Loan ( in default NPS Term Loan Due 2031 (5) NPS GNCU $ 10.0 Oct 2031 $0.1 million 5.75% Working capital SBA EIDLs BDEC Term Loan Due 2051 (as modified) (6) Blue Dolphin SBA $ 2.0 Jun 2051 $0.01 million 3.75% Working capital LE Term Loan Due 2050 (7) LE SBA $ 0.15 Aug 2050 $0.0007 million 3.75% Working capital NPS Term Loan Due 2050 (7) NPS SBA $ 0.15 Aug 2050 $0.0007 million 3.75% Working capital Equipment Loan Due 2025 (8) LE Texas First $ 0.07 Oct 2025 $0.0013 million 4.50% Equipment Lease Conversion (1) At December 31, 2021 and 2020, restricted cash, noncurrent was $0 and $0.5 million, respectively; restricted cash noncurrent represents amounts held by Veritex in a disbursement account for the payment of construction-related expenses. (2) At both December 31, 2021 and 2020, restricted cash (current portion) was $0.05 million; restricted cash (current portion) represents amounts paid by LE into a $1.0 million payment reserve account held by Veritex. (3) Original principal amount was $8.0 million; the debt is currently held by John Kissick. Pursuant to a 2017 sixth amendment, the Kissick Debt was amended to increase the principal amount by $3.7 million. (4) Under a 2015 subordination agreement, John Kissick agreed to subordinate his right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. (5) The loan requires monthly interest-only payments for the first thirty-six (36) months. Afterwards, principal and interest payments due monthly through loan maturity. The first payment is due in November 2024. (6) Original principal amount was $0.5 million; the BDEC Term Loan Due 2051 was modified to increase the principal amount by $1.5 million. Payments were initially deferred for twenty-four (24); the deferral period was later extended to thirty (30) months; under the modification, the first payment is due in December 2023; interest accrues during the deferral period. The BDEC Term Loan Due 2051 is not forgivable. See “Note (17)” to our consolidated financial statements for more information regarding the loan modification. (7) For disaster loans made in 2020, the SBA initially deferred payments for the first twelve (12) months. The SBA later extended the payment deferral period from twelve (12) months to twenty-four (24) months and again to thirty (30) months; under the extension, the first payment is due in March 2023; interest accrues during the deferral period. The LE Term Loan Due 2050 and NPS Term Loan Due 2050 are not forgivable. (8) In May 2019, LE entered into a 12-month equipment rental agreement with the option to purchase the backhoe at maturity. The equipment rental agreement matured in May 2020. In October 2020, LE entered into the Equipment Loan Due 2025 to finance the backhoe purchase. We use the backhoe at the Nixon facility. Outstanding Principal, Debt Issue Costs, and Accrued Interest Third-party long-term debt (outstanding principal and accrued interest), as of the dates indicated was as follows: December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 23,789 $ 22,840 LRM Term Loan Due 2034 (in default) 9,861 9,473 Kissick Debt (in default) 10,210 9,413 GNCU Loan NPS Term Loan Due 2031 (in default) 10,094 - SBA EIDLs BDEC Term Loan Due 2051 512 - LE Term Loan Due 2050 156 152 NPS Term Loan Due 2050 156 152 Equipment Loan Due 2025 53 71 54,831 42,101 Less: Current portion of long-term debt, net (42,953 ) (33,692 ) Less: Unamortized debt issue costs (2,351 ) (1,749 ) Less: Accrued interest payable (in default) (8,689 ) (6,305 ) $ 838 $ 355 Unamortized debt issue costs associated with the Veritex and GNCU loans as of the dates indicated consisted of the following: December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in default) 768 768 GNCU Loan NPS Term Loan Due 2031 (in default) 730 - Less: Accumulated amortization (821 ) (693 ) $ 2,351 $ 1,749 Amortization expense was $0.1 million for both twelve-month periods ended December 31, 2021 and 2020. Accrued interest related to third-party long-term debt, reflected as accrued interest payable in our consolidated balance sheets, as of the dates indicated consisted of the following: December 31, 2021 2020 (in thousands) Notre Dame Debt (in default) $ 5,232 $ 4,435 Veritex Loans LE Term Loan Due 2034 (in default) 2,338 1,295 LRM Term Loan Due 2034 (in default) 959 571 GNCU Loan NPS Term Loan Due 2031 (in default) 136 - SBA EIDLs BDEC Term Loan Due 2051 12 - LE Term Loan Due 2050 6 2 NPS Term Loan Due 2050 6 2 8,689 6,305 Less: Accrued interest payable (in default) (8,689 ) (6,305 ) Long-term Interest Payable, Net of Current Portion $ - $ - Payment Deferments Veritex Loans GNCU Loan SBA EIDLs Guarantees and Security Loan Description Guarantees Security Veritex Loans LE Term Loan Due 2034 ( in default · · (1) · · · · · LRM Term Loan Due 2034 ( in default · · (1) · · · · · · Kissick Debt ( in default (2) --- · GNCU Loan NPS Term Loan Due 2031 (in default) · · (1) · · · · SBA EIDLs LE Term Loan Due 2050 --- · NPS Term Loan Due 2050 --- · Equipment Loan Due 2025 --- · (1) Jonathan Carroll was required to personally guarantee repayment of borrowed funds and accrued interest. (2) Pursuant to a 2015 subordination agreement, the holder of the Kissick Debt agreed to subordinate their right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. The USDA, acting through its agencies, administers a federal rural credit program that makes direct loans and guarantees portions of loans made and serviced by USDA-qualified lenders for various purposes. Each USDA guarantee is a full faith and credit obligation of the U.S. with the USDA guaranteeing up to 100% of the principal amount. Lenders of USDA-guaranteed loans are required by regulations to retain both the guaranteed and unguaranteed portions of the loan, to service the entire underlying loan, and to remain mortgage and/or secured party of record. Both the guaranteed and unguaranteed portions of the loan are to be secured by the same collateral with equal lien priority. The USDA-guaranteed portion of a loan cannot be paid later than, or in any way be subordinated to, the related unguaranteed portion. See “Notes (3) and (16)” to our consolidated financial statements for additional disclosures related to Affiliate agreements and transactions, including long-term debt guarantees. Covenants The Veritex loans, GNCU loan, and SBA EIDLs contain representations and warranties, affirmative and negative covenants, and events of default that we consider usual and customary for credit facilities of this type. There are no covenants associated with the Kissick Debt and the Equipment Loan Due 2025. Defaults Loan Description Event(s) of Default Covenant Violations Veritex Loans LE Term Loan Due 2034 ( in default Failing to make principal and interest payments; failing to replenish $1.0 million payment reserve account; events of default under other secured loan agreements with Veritex Financial covenants: · LRM Term Loan Due 2034 ( in default Failing to make principal and interest payments; events of default under other secured loan agreements with Veritex Financial covenants: · GNCU Loan NPS Term Loan Due 2031 (in default) --- Financial covenants: · Kissick Debt ( in default Failure to pay past due obligations at maturity (loan matured January 2019) --- As reflected in the table above and elsewhere in this report, we are in default under the LE Term Loan Due 2034, LRM Term Loan Due 2034, NPS Term Loan Due 2031, and the Kissick Debt. Defaults under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 permit Veritex to declare the amounts owed under these loan agreements immediately due and payable, exercise its rights with respect to collateral securing obligors’ obligations under these loan agreements, and/or exercise any other rights and remedies available. The debt associated with the LE Term Loan Due 2034, LRM Term Loan Due 2034, and the Kissick Debt was classified within the current portion of long-term debt on our consolidated balance sheets at December 31, 2021 and 2020. Any exercise by third parties of their rights and remedies under our secured loan agreements will have a material adverse effect on our business operations, including crude oil and condensate procurement and our customer relationships; financial condition; and results of operations. In such a case, the trading price of our Common Stock and the value of an investment in our Common Stock could significantly decrease, which could lead to holders of our Common Stock losing their investment in our Common Stock in its entirety. We can provide no assurance that: (i) our assets or cash flow will be sufficient to fully repay borrowings under our secured loan agreements, either upon maturity or if accelerated, (ii) LE, LRM, and NPS will be able to refinance or restructure the debt, and/or (iii) third parties will provide future default waivers. Defaults under our secured loan agreements and any exercise by third parties of their rights and remedies related to such defaults may have a material adverse effect on the trading prices of our Common Stock and on the value of an investment in our Common Stock, and holders of our Common Stock could lose their investment in our Common Stock in its entirety. See “Notes (1) and (11)” to our consolidated financial statements for additional information regarding defaults under our secured loan agreements and their potential effects on our business, financial condition, and results of operations. Future annual third-party long-term debt payments, which are reflected as current due to defaults under our secured loan agreements: Years Ending December 31, Principal Debt Issue Costs Total (in thousands) 2022 $ 45,304 $ (2,351 ) $ 42,953 2023 16 - 16 2024 16 - 16 2025 12 - 12 2026 18 Subsequent to 2026 776 - 776 $ 46,142 $ (2,351 ) $ 43,791 |
11. Line of Credit Payable
11. Line of Credit Payable | 12 Months Ended |
Dec. 31, 2021 | |
11. Line of Credit Payable | |
Line of Credit Payable | (11) Line of Credit Payable Line of Credit Agreement Summary Line of Credit Description Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate: Original / Default Loan Purpose Amended Pilot Line of Credit (in default) $13.0 May 2020 ---- 12.00% / 14.00% Pay off LE’s obligation to GEL; NPS purchase of crude oil from Pilot, and working capital On October 4, 2021, NPS repaid all obligations owed to Pilot under the Amended Pilot Line of Credit. However, in a letter from NPS to Pilot dated October 28, 2021, NPS disputed approximately $0.3 million in payments NPS believes Pilot misapplied as part of the Amended Pilot Line of Credit setoff. As of the filing date of this report, the amount remained in dispute between the parties. NPS was in default as of December 31, 2020, for failure of the borrower or any guarantor to pay past due obligations at maturity. Outstanding Principal, Debt Issue Costs, and Accrued Interest Line of credit payable, which represents outstanding principal and accrued interest, as of the dates indicated was as follows: December 31, 2021 2020 (in thousands) Amended Pilot Line of Credit (in default) $ - $ 8,145 Less: Unamortized debt issue costs - - Less: Interest payable, short-term - (103 ) $ - $ 8,042 Guarantees and Security Loan Description Guarantees Security Amended Pilot Line of Credit (in default) · · · · · In an Agreement Regarding Attornment of Tank Leases dated April 30, 2019 between Veritex, LE, NPS, and Pilot, Veritex in its capacity as a secured lender of LE and LRM, agreed to permit the continued performance of obligations under a certain tank lease agreement if it were to foreclose on LE property that NPS was leasing from LE so long as certain conditions were met. The effectiveness of the Agreement Regarding Attornment of Tank Leases was subject to certain conditions, including the agreement and concurrence of the USDA that the Agreement Regarding Attornment of Tank Leases did not impair or void the LE Term Loan Due 2034 and LRM Term Loan Due 2034 or any associated guarantees. Veritex used commercially reasonable efforts to obtain such USDA concurrence, however, the USDA did not provide its concurrence during the term of the agreement. Covenants The Amended Pilot Line of Credit contained customary affirmative and negative covenants and events of default. Defaults Loan Description Event(s) of Default Covenant Violations Amended Pilot Line of Credit ( in default Failure to pay past due obligations at maturity (loan matured May 2020) --- As reflected in the table above and elsewhere in this report, we were in default under the Amended Pilot Line of Credit prior to pay off in October 2021. Upon maturity of the Amended Pilot Line of Credit in May 2020, Pilot sent NPS, as borrower, and LRM, LEH, LE and Blue Dolphin, each a guarantor and collectively guarantors, a notice demanding the immediate payment of the unpaid principal amount and all interest accrued and unpaid, and all other amounts owing or payable (the “Obligations”). Pursuant to the Amended Pilot Line of Credit, commencing on May 4, 2020, the Obligations began accruing interest at a default rate of fourteen percent (14%) per annum. Failure of the borrower or any guarantor of paying the past due Obligations constituted an event of default. Pilot expressly retained and reserved all its rights and remedies available to it at any time, including without limitation, the right to exercise all rights and remedies available to Pilot under the Amended Pilot Line of Credit or applicable law or equity. Pursuant to a June 1, 2020 notice, Pilot applied payment obligations to NPS under each of (a) the Terminal Services Agreement (covering Tank Nos. 67, 71, 72, 73, 77, and 78), dated as of May 2019, between NPS and Pilot for the storage of jet fuel, and (b) the Terminal Services Agreement (covering Tank Nos. 1 and 56), dated as of June 1, 2019, between NPS and Tartan for the storage of crude oil, against NPS’ payment obligations to Pilot under the Amended Pilot Line of Credit. Such tank lease setoff amounts only partially satisfied NPS’ obligations under the Amended Pilot Line of Credit, and Pilot expressly retained and reserved all its rights and remedies available to it at any time, including, without limitation, the right to exercise all rights and remedies available to Pilot under the Amended Pilot Line of Credit or applicable law or equity. For the twelve-month periods ended December 31, 2021 and 2020, the tank lease payment setoff totaled $1.9 million and $1.3 million, respectively. The amount of interest NPS incurred under the Amended Pilot Line of Credit totaled $0.7 million and $1.4 million, respectively, for the twelve months ended December 31, 2021 and 2020. On November 23, 2020, NPS and guarantors received notice from Pilot that the entry into the SBA EIDLs was a breach of the Amended Pilot Line of Credit and Pilot demanded full repayment of the Obligations, including through use of the proceeds of the SBA EIDLs. Pilot also notified the SBA that the liens securing the SBA EIDLs were junior to those securing the Obligations. While the SBA acknowledged this point and indicated a willingness to subordinate the SBA EIDLs, no further action was taken by Pilot. |
12. AROs
12. AROs | 12 Months Ended |
Dec. 31, 2021 | |
12. AROs | |
AROs | (12) AROs Refinery and Facilities Management has concluded that there is no legal or contractual obligation to dismantle or remove refinery and facilities assets. Management believes that refinery and facilities assets have indeterminate lives under FASB ASC guidance for estimating AROs because dates or ranges of dates upon which we would retire these assets cannot reasonably be estimated at this time. When a legal or contractual obligation to dismantle or remove refinery and facilities assets arises and a date or range of dates can reasonably be estimated for the retirement of these assets, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that cost using present value techniques. Pipelines and Facilities and Oil and Gas Properties We have AROs associated with the decommissioning of our pipelines and facilities assets, as well as the plugging and abandonment of our oil and gas properties. We recorded a discounted liability for the fair value of an ARO with a corresponding increase to the carrying value of the related long-lived asset at the time the asset was installed or placed in service, and we depreciated the amount added to property and equipment and recognized accretion expense relating to the discounted liability over the remaining life of the asset. During the twelve months ended December 31, 2021, we determined that the estimated future cost and timing of decommissioning our pipelines and facilities assets has changed. As a result, we recorded an increase in liability at December 31, 2021. ARO liability as of the dates indicated was as follows: December 31, 2021 2020 (in thousands) AROs, at the beginning of the period $ 2,370 $ 2,565 Changes in estimates of existing obligations 1,091 - Liabilities settled - (195 ) 3,461 2,370 Less: AROs, current portion - (2,370 ) Long-term AROs, at the end of the period $ 3,461 $ - Liabilities settled reflects preparatory costs in the period associated with decommissioning our offshore pipelines and platform assets. See “Note (16)” to our consolidated financial statements for disclosures related to decommissioning of our offshore pipelines and platform assets and related risks. |
13. Lease Obligations
13. Lease Obligations | 12 Months Ended |
Dec. 31, 2021 | |
13. Lease Obligations | |
Lease Obligations | (13) Lease Obligations Lease Obligations Office Lease In March 2021, BDSC defaulted on the office lease due to non-payment of rent. In May 2021, BDSC and TR 801 Travis LLC (“Building Lessor”) reached an agreement to cure BDSC’s office lease default. Under the terms of a fourth amendment to the office lease, Building Lessor agreed to defer BDSC’s past due obligations, including rent installments and other charges totaling approximately $0.1 million (the “Past Due Obligations”), in equal monthly installments beginning in June 2021, and continuing through lease expiration The Past Due Obligations are subject to an annual percentage rate of 4.50%. BDSC’s monthly base rent including the prorated portion of the Past Due Obligations is $0.02 million. Building Lessor notified BDSC in an October 11, 2021 letter of a new default under the office lease due to non-payment of rent. As of the filing date of this report, BDSC was in default related to required monthly base rent including Past Due Obligations from April 2021 to March 2022. Default under the office lease permits Building Lessor to declare the amounts owed under the office lease immediately due and payable, exercise its rights concerning collateral securing obligors’ obligations under the office lease, including property placed in or upon the leased premises, and exercise any other rights and remedies available. Although BDSC intends to cure the lease default, we can provide no assurance that our efforts will be successful. An Affiliate, LEH, subleases a portion of the Houston office space. BDSC received sublease income from LEH totaling $0.03 million for both twelve-month periods ended December 31, 2021, and 2020. See “Note (3)” to our consolidated financial statements for additional disclosures related to the Affiliate sub-lease. The following table presents the lease-related assets and liabilities recorded on the consolidated balance sheet: December 31, Balance Sheet Location 2021 2020 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 787 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (455 ) (289 ) Total lease assets 332 498 Liabilities Current Operating lease Current portion of lease liabilities 215 194 Noncurrent Operating lease Long-term lease liabilities, net of current 156 370 Total lease liabilities $ 371 $ 564 Weighted average remaining lease term in years Operating lease 1.67 Weighted average discount rate Operating lease 8.25 % Finance leases 8.25 % The following table presents information related to lease costs for operating and finance leases: Twelve Months Ended December 31, 2021 2020 (in thousands) Operating lease costs $ 206 $ 206 Finance lease costs: Depreciation of leased assets - 13 Interest on lease liabilities - 3 Total lease cost $ 206 $ 222 The table below presents supplemental cash flow information related to leases as follows: December 31, 2021 2020 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 233 $ 230 Operating cash flows for finance leases $ - $ 4 Financing cash flows for finance leases $ - $ 17 As of December 31, 2021, maturities of lease liabilities for the periods indicated were as follows: December 31, Operating Lease Total (in thousands) 2022 $ 214 $ 214 2023 157 157 $ 371 $ 371 Future minimum annual lease commitments that are non-cancelable: Operating December 31, Lease (in thousands) 2022 $ 237 2023 161 $ 398 |
14. Income Taxes
14. Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
14. Income Taxes | |
Income Taxes | (14) Income Taxes Tax Provision The provision for income tax benefit (expense) for the periods indicated was as follows: Twelve Months Ended December 31, 2021 2020 (in thousands) Current Federal $ - $ (15 ) State - - Deferred Federal 2,335 3,033 State - - Change in valuation allowance (2,335 ) (3,033 ) Total provision for income taxes $ - $ (15 ) GAAP treats TMT like an income tax for financial reporting purposes. Effective Tax Rate Our effective tax rate was as follows: December 31, 2021 2020 Expected tax rate 21.00 % 21.00 % Permanent differences 0.00 % 0.00 % State tax 0.00 % 0.00 % Federal tax 0.00 % 0.00 % Change in valuation allowance (21.00 )% (21.00 )% 0.00 % 0.00 % Our effective tax rate differed from the U.S. federal statutory rate primarily due to AMT credits made refundable by the Tax Cuts and Jobs Act. At the date of enactment of the Tax Cuts and Jobs Act, we re-measured our deferred tax assets and liabilities using a rate of 21%, which is the rate expected to be in place when such deferred assets and liabilities are expected to reverse in the future. The re-measurement was offset by a change in our valuation allowance, resulting in there being no impact on our net deferred tax assets. Deferred income taxes as of the dates indicated consisted of the following: December 31, 2021 2020 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 16,818 $ 15,258 Business interest expense 4,680 3,343 Start-up costs (crude oil and condensate processing facility) 424 509 ARO liability/deferred revenue 727 498 AMT credit - - Other 12 3 Total deferred tax assets 22,661 19,611 Deferred tax liabilities: Basis differences in property and equipment (7,945 ) (7,230 ) Total deferred tax liabilities (7,945 ) (7,230 ) 14,716 12,381 Valuation allowance (14,716 ) (12,381 ) Deferred tax assets, net $ - $ - Deferred Income Taxes Balances for deferred income tax represent the effects of temporary differences between carrying amounts and the actual income tax basis of our assets and liabilities; the balances also reflect NOL carryforwards. We record the balances based on tax rates we expect to be in effect when paid. NOL carryforwards and deferred tax assets represent amounts available to reduce future taxable income. NOL Carryforwards NOL Carryforwards . Net Operating Loss Carryforward Pre-Ownership Change Post-Ownership Change Total (in thousands) Balance at December 31, 2019 9,614 43,058 52,672 Net operating losses - 13,305 13,305 Balance at December 31, 2020 $ 9,614 $ 56,363 $ 65,977 Net operating losses (1,717 ) 9,148 7,431 Balance at December 31, 2021 $ 7,897 $ 65,511 $ 73,408 Valuation Allowance . We have NOL carryforwards that remain available for future use. At December 31, 2021 and 2020, there were no uncertain tax positions for which a reserve or liability was necessary. |
15. Earnings Per Share
15. Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
15. Earnings Per Share | |
Earnings Per Share | (15) Earnings Per Share A reconciliation between basic and diluted income per share for the periods indicated was as follows: Twelve Months Ended December 31, 2021 2020 (in thousands, except share and per share amounts) Net income (loss) $ (12,841 ) $ (14,458 ) Basic and diluted income (loss) per share $ (1.01 ) $ (1.15 ) Basic and Diluted Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock 12,693,514 12,574,465 Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted EPS for the twelve months ended December 31, 2021 and 2020 was the same as basic EPS as there were no stock options or other dilutive instruments outstanding. |
16. Commitments and Contingenci
16. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
16. Commitments and Contingencies | |
Commitments and Contingencies | (16) Commitments and Contingencies Amended and Restated Operating Agreement See “Note (3)” to our consolidated financial statements for additional disclosures related to operation and management of all Blue Dolphin properties by an Affiliate under the Amended and Restated Operating Agreement. BSEE Offshore Pipelines and Platform Decommissioning BDPL has pipelines and platform assets that are subject to BSEE’s idle iron regulations. Idle iron regulations mandate lessees and rights-of-way holders to permanently abandon and/or remove platforms and other structures when they are no longer useful for operations. Until such structures are abandoned or removed, lessees and rights-of-way holders are required to inspect and maintain the assets in accordance with regulatory requirements. In December 2018, BSEE issued an INC to BDPL for failure to flush and fill Pipeline Segment No. 13101. Management met with BSEE in August 2019 to address BDPL’s plans with respect to decommissioning its offshore pipelines and platform assets. BSEE proposed that BDPL re-submit pipeline and platform decommissioning permit applications, including a safe boarding plan, by February 2020. BDPL submitted permit applications to BSEE in February 2020 and the USACOE in March 2020. In April 2020, BSEE issued another INC to BDPL for failure to perform the required structural surveys for the GA-288C Platform. BDPL completed the required platform surveys in June 2020. Abandonment operations were delayed due to our cash constraints associated with historical net losses and the ongoing impact of COVID-19. We cannot currently estimate when decommissioning may occur. Lack of permit approvals does not relieve BDPL of its obligations to remedy the BSEE INCs or of BSEE’s authority to impose financial penalties. If BDPL fails to complete decommissioning of the offshore pipelines and platform assets and/or remedy the INCs within a timeframe determined to be prudent by BSEE, BDPL could be subject to regulatory oversight and enforcement, including but not limited to failure to correct an INC, civil penalties, and revocation of BDPL’s operator designation, which could have a material adverse effect on our earnings, cash flows, and liquidity. We are currently unable to predict the outcome of the BSEE INCs. Accordingly, we have not recorded a liability on our consolidated balance sheet as of December 31, 2020. At December 31, 2021 and 2020, BDPL maintained $3.5 million and $2.4 million, respectively, in AROs related to abandonment of these assets. Defaults Under Secured Loan Agreements with Third Parties and Related Parties See “Notes (1), (3), (10), and (11)” to our consolidated financial statements for additional disclosures related to defaults under our secured and unsecured debt agreements. Financing Agreements and Guarantees Indebtedness Guarantees Health, Safety and Environmental Matters The operations of certain Blue Dolphin subsidiaries are subject to extensive federal, state, and local environmental, health, and safety regulations governing, among other things, the generation, storage, handling, use and transportation of petroleum products and hazardous substances; the emission and discharge of materials into the environment; waste management; characteristics and composition of jet fuel and other products; and the monitoring, reporting and control of air emissions. These operations also require numerous permits and authorizations under various environmental, health, and safety laws and regulations. Failure to obtain and comply with these permits or environmental, health, or safety laws generally could result in fines, penalties or other sanctions, or a revocation of our permits. Legal Matters In the ordinary course of business, we are involved in legal matters incidental to the routine operation of our business, such as mechanic’s liens and contract-related disputes. We may also become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters. Large, and sometimes unspecified, damages or penalties may be sought from us in some matters and certain matters may require years to resolve. Although we cannot provide assurance, we believe that an adverse resolution of the matters described below would not have a material impact on our liquidity, consolidated financial position, or consolidated results of operations. Unresolved Matters. BOEM Additional Financial Assurance (Supplemental Pipeline Bonds) . BDPL historically maintained $0.9 million in financial assurance to BOEM for the decommissioning of its trunk pipeline offshore in federal waters. Following an agency restructuring of the financial assurance program, in March 2018 BOEM ordered BDPL to provide additional financial assurance totaling approximately $4.8 million for five (5) existing pipeline rights-of-way. In June 2018, BOEM issued BDPL INCs for each right-of-way that failed to comply. BDPL appealed the INCs to the IBLA. Although the IBLA granted multiple extension requests, the Office of the Solicitor of the U.S. Department of the Interior indicated that BOEM would not consent to further extensions. The solicitor’s office signaled that BDPL’s adherence to milestones identified in an August 2019 meeting between management and BSEE may help in future discussions with BOEM related to the INCs. Decommissioning of these assets will significantly reduce or eliminate the amount of financial assurance required by BOEM, which may serve to partially or fully resolve the INCs. Decommissioning of these assets was delayed due to our cash constraints associated with historical net losses and the ongoing impact of COVID-19. We cannot currently estimate when decommissioning may occur. BDPL’s pending appeal of the BOEM INCs does not relieve BDPL of its obligations to provide additional financial assurance or of BOEM’s authority to impose financial penalties. There can be no assurance that we will be able to meet additional financial assurance (supplemental pipeline bond) requirements. If BDPL is required by BOEM to provide significant additional financial assurance (supplemental pipeline bonds) or is assessed significant penalties under the INCs, we will experience a significant and material adverse effect on our operations, liquidity, and financial condition. We are currently unable to predict the outcome of the BOEM INCs. Accordingly, we did not record a liability on our consolidated balance sheets as of December 31, 2021 and 2020. At both December 31, 2021 and 2020, BDPL maintained approximately $0.9 million in credit and cash-backed pipeline rights-of-way bonds issued to BOEM. TCEQ Proposed Agreed Order . Pilot Dispute Related to Set-Off Payments . Defaults under Secured Loan Agreements . Counterparty Contract-Related Dispute . Resolved Matters. None. Share Issuances (Sales of Unregistered Securities) We are obligated to issue shares of our Common Stock to: (i) non-employee directors for services rendered to the Board and (ii) to Jonathan Carroll pursuant to the Guaranty Fee Agreements. For the foreseeable future, management does not intend to pay Mr. Carroll the cash portion of guaranty fees due to Blue Dolphin’s working capital deficits. The cash portion will continue to accrue and be added to the principal balance of the March Carroll Note. See “Note (3)” to our consolidated financial statements for additional disclosures related to Affiliates and working capital deficits, as well as for information related to the guaranty fee agreements. Set forth below is information regarding the sale or issuance of Common Stock related to the above noted obligations during the twelve months ended December 31, 2021 and 2020: · On April 30, 2020, we issued an aggregate of 231,065 restricted shares of Common Stock to Jonathan Carroll, which represented payment of the common stock component of guaranty fees for the period November 2019 through March 2020. Due to price differences between the shares’ cost basis and the trading price of Blue Dolphin’s common stock on the transaction settlement date, we recorded income of approximately $0.03 million related to the share issuance. · On April 30, 2020, we also issued an aggregate of 135,084 restricted shares of Common Stock to certain of our non-employee, independent directors, which represented payment for services rendered to the Board for the three-month periods ended September 30, 2018, March 31, 2019, September 30, 2019, and March 31, 2020. Due to price differences between the shares’ cost basis and the trading price of Blue Dolphin’s common stock on the transaction settlement date, we recorded income of approximately $0.05 million related to the share issuance. We recognized income on the issuance of shares of approximately $0.08 million and $0 for the twelve months ended December 31, 2021 and 2020, respectively. The sale and issuance of these securities were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act. |
17. Subsequent Events
17. Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
17. Subsequent Events | |
Subsequent Events | (17) Subsequent Events BDEC Term Loan Due 2051 Modification Effective February 18, 2022, BDEC executed a 1st Loan Modification of Note to secure additional monies under the BDEC Term Loan Due 2051. The original principal amount of the loan increased by $1.5 million from $0.5 million to $2.0 million. Proceeds will be used for working capital purposes. With the exception of the monthly principal payment, all loan terms remained materially unchanged. Interest on the loan accrues at the rate of 3.75% per annum and will accrue from the date of loan. Installment payments, including principal and interest, total $0.01 million per month and are due beginning thirty (30) months from the original loan date of May 4, 2021. The balance of principal and interest is payable over a 30-year term; the loan maturity date remains June 7, 2051. SBA EIDLs are not forgivable. Jonathan Carroll, the company’s chief executive officer, and an Affiliate provided guarantees of the debt. The debt is subject to certain customary covenants and default provisions. |
Principles of Consolidation and
Principles of Consolidation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
2. Principles of Consolidation and Significant Accounting Policies | |
Basis of Presentation | The accompanying consolidated financial statements, which include Blue Dolphin and its subsidiaries, have been prepared in accordance with U.S. generally accepted accounting principles and the rules and regulations of the SEC. These rules and regulations conform to the accounting principles contained in FASB’s ASC, the single source of GAAP. All significant intercompany items have been eliminated in consolidation. Additionally, any material subsequent events that occurred after the date through which this report covers have been properly recognized or disclosed in our financial statements. In management’s opinion, all adjustments considered necessary for a fair presentation have been included, disclosures are adequate, and the presented information is not misleading. |
Significant Accounting Policies | The summary of significant accounting policies of Blue Dolphin is presented to assist in understanding our consolidated financial statements. Our consolidated financial statements and accompanying notes are representations of management, who is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of our consolidated financial statements. |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Restricted Cash | Restricted Cash |
Accounts Receivable, Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts |
Inventory | Inventory. |
Property and Equipment | Property and Equipment Refinery and Facilities . Pipelines and Facilities. Oil and Gas Properties . CIP . |
Leases | Leases. For operating leases, we record lease cost on a straight-line basis over the lease term; we record lease expenses in the appropriate line on the income statement based on the leased asset’s intended use. For finance leases (previously referred to under GAAP as capital leases), we amortize lease payments for the ROU asset on a straight-line basis over the lesser of the leased asset’s useful life or the lease term; we record amortization expenses on the income statement in ‘depreciation and amortization expense;’ we record interest expense on the income statement in ‘interest and other expense.’ |
Revenue Recognition | Revenue Recognition Refinery Operations Revenue . We consider a variety of facts and circumstances in assessing the point of a control transfer, including but not limited to: whether the purchaser can direct the use of the refined product, the transfer of significant risks and rewards, our rights to payment, and transfer of legal title. In each case, the term between the sale and when payment is due is not significant. We include incurred transportation, shipping, and handling costs in the cost of goods sold. We do not include excise and other taxes collected from customers and remitted to governmental authorities in revenue. Tolling and Terminaling Revenue . We typically satisfy performance obligations for tolling and terminaling operations over time. We determine the transaction price at agreement inception based on the guaranteed minimum amount of revenue over the agreement term. We allocate the transaction price to the single performance obligation that exists under the agreement. We recognize revenue in the amount for which we have a right to invoice. Generally, payment terms do not exceed 30 days. Revenue from tank storage customers may, from time to time, include fees for ancillary services, such as in-tank and tank-to-tank blending. These services are considered optional to the customer. The fixed cost under the customer’s tank storage agreement does not include ancillary service fees. We consider ancillary services as a separate performance obligation under the tank storage agreement. We satisfy the performance obligation and recognize the associated fee when we complete the requested service. Deferred Revenue . |
Income Taxes | Income Taxes Management uses significant judgment in evaluating uncertain tax positions and determining the provision for income taxes. As of each reporting date, we consider new evidence, both positive and negative, to assess the realizability of deferred tax assets. We weigh whether there is a more than 50% probability of realizing a portion or all the deferred tax assets. Realization depends on the generation of future taxable income before the expiration of any NOL carryforwards. We record a valuation allowance against deferred income tax assets if there is a more than 50% probability of not realizing some portion of the asset. We recognize an uncertain tax positions benefit in our financial statements if deferred tax assets meet a minimum recognition threshold. First, we determine whether there is a more than 50% probability that our income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If we meet the criteria, we record a benefit in the financial statements equal to the largest amount greater than 50% likely to be realized upon settlement with taxing authorities. A significant piece of objective negative evidence evaluated was cumulative losses incurred over the three-year period ended December 31, 2021. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Based on this evaluation, we recorded a valuation allowance against the deferred tax assets for which realization was not deemed more likely than not as of December 31, 2021 and 2020. In addition, we have NOL carryforwards that remain available for future use. See “Note (14)” to our consolidated financial statements for more information related to income taxes. |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived Assets Commodity price market volatility associated with the COVID-19 pandemic could affect the value of certain of our long-lived assets. Management evaluated refinery and facilities assets for impairment as of December 31, 2021. We did not record any impairment of our refinery and facilities assets for the periods presented. We recorded an impairment of $1.1 million related to asset retirement costs for our pipeline/platform assets as of December 31, 2021. Additional impairment may be required in the future if losses continue to be material, or as new opportunities arise, such as reconfiguration of the Nixon refinery into a renewable fuels facility. |
Asset Retirement Obligations | Asset Retirement Obligations Refinery and Facilities . Pipeline and Facilities; Oil and Gas Properties . |
Computation of Earnings Per Share | Computation of Earnings Per Share |
New Pronouncements Adopted | New Pronouncements Adopted Codification Improvements . |
New Pronouncements Issued, Not Yet Effective | New Pronouncements Issued, Not Yet Effective . No new pronouncements issued but not yet effective are not expected to have a material impact on our financial position, results of operations, or liquidity. |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
3. Related Party Transactions | |
Affiliate agreements/transactions | Agreement/Transaction Parties Effective Date Key Terms Jet Fuel Sales Agreement LEH LE 04/01/2022 1-year term expiring earliest to occur of 03/31/2023 plus 30-day carryover or delivery of maximum jet fuel quantity; LEH bids on jet fuel contracts under preferential pricing terms due to a HUBZone certification Office Sub-Lease Agreement LEH BDSC 01/01/2018 68-month term expiring 08/31/2023; office lease Houston, Texas; includes 6-month rent abatement period; rent approximately $0.01 million per month Amended and Restated Operating Agreement LEH Blue Dolphin LE LRM NPS BDPL BDPC BDSC 04/01/2020 3-year term; expires 04/01/2023 or notice by either party at any time of material breach or 90 days Board notice; LEH receives management fee of 5% of all consolidated operating costs, excluding crude costs, depreciation, amortization, and interest, of Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC Loan Description Parties Maturity Date Interest Rate Loan Purpose March Carroll Note (in default) Jonathan Carroll Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to Jonathan Carroll under the guaranty fee agreements March Ingleside Note (in default) Ingleside Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital June LEH Note (in default) LEH Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to LEH under the Amended and Restated Operating Agreement BDPL-LEH Loan Agreement (in default) (1) LEH BDPL Aug 2018 16.00% Blue Dolphin working capital Amended and Restated Guaranty Fee Agreement Jonathan Carroll (2) LE -- 2.00% Tied to payoff of LE $25 million Veritex loan Amended and Restated Guaranty Fee Agreement Jonathan Carroll (2) LRM -- 2.00% Tied to payoff of LRM $10 million Veritex loan Loan Description Guarantees Security Event(s) of Default March Carroll Note (in default) --- --- Failure to pay past due obligations at maturity (loan matured January 2019) March Ingleside Note (in default) --- --- Failure to pay past due obligations at maturity (loan matured January 2019) June LEH Note (in default) --- --- Failure to pay past due obligations at maturity (loan matured January 2019) BDPL-LEH Loan Agreement --- Certain BDPL property Failure to pay past due obligations at maturity (loan matured August 2018) |
Accounts payable, related party | December 31, 2021 2020 (in thousands) LEH June LEH Note (in default) $ 12,672 $ 9,446 BDPL-LEH Loan Agreement 7,454 6,814 LEH Total 20,126 16,260 Ingleside March Ingleside Note (in default) 1,066 1,013 Jonathan Carroll March Carroll Note (in default) 2,304 1,551 23,496 18,824 Less: Long-term debt, related party, current portion, in default (20,042 ) (16,010 ) Less: Accrued interest payable, related party (in default) (3,454 ) (2,814 ) $ - $ - |
Refinery operating expenses | Twelve Months Ended December 31, 2021 2020 (in thousands, except percent amounts) Refinery operations LEH $ 90,062 29.9 % $ 49,786 28.5 % Third-Parties 207,041 68.8 % 120,815 69.1 % Tolling and terminaling Third-Parties 3,717 1.2 % 4,209 2.4 % $ 300,820 100.0 % $ 174,810 100.0 % |
Accrued interest expenses | Twelve Months Ended December 31, 2021 2020 (in thousands) Jonathan Carroll Guaranty Fee Agreements LE Term Loan Due 2034 $ 451 $ 431 LRM Term Loan Due 2034 178 178 March Carroll Note (in default) 131 103 LEH BDPL-LEH Loan Agreement (in default) 640 640 June LEH Note (in default) 288 40 Ingleside March Ingleside Note (in default) 56 63 $ 1,744 $ 1,455 |
Revenue and Segment Information
Revenue and Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
4. Revenue and Segment Information | |
Business segment reporting | Twelve Months Ended December 31, 2021 2020 (in thousands) Net revenue (excluding intercompany fees and sales) Refinery operations $ 297,103 $ 170,601 Tolling and terminaling 3,717 4,209 Total net revenue 300,820 174,810 Intercompany fees and sales Refinery operations (2,457 ) (2,384 ) Tolling and terminaling 2,457 2,384 Total intercompany fees - - Operation costs and expenses (1) Refinery operations (298,082 ) (175,201 ) Tolling and terminaling (1,825 ) (1,661 ) Corporate and other (197 ) (169 ) Total operation costs and expenses (300,104 ) (177,031 ) Segment contribution margin (deficit) Refinery operations (3,436 ) (6,984 ) Tolling and terminaling 4,349 4,932 Corporate and other (197 ) (169 ) Total segment contribution margin (deficit) 716 (2,221 ) General and administrative expenses (2) Refinery operations (1,549 ) (1,257 ) Tolling and terminaling (343 ) (307 ) Corporate and other (2,742 ) (1,381 ) Total general and administrative expenses (4,634 ) (2,945 ) Depreciation and amortization Refinery operations (1,214 ) (1,186 ) Tolling and terminaling (1,362 ) (1,296 ) Corporate and other (204 ) (204 ) Total depreciation and amortization (2,780 ) (2,686 ) Interest and other non-operating expenses, net Refinery operations (2,779 ) (2,929 ) Tolling and terminaling (1,649 ) (2,546 ) Corporate and other (1,715 ) (1,116 ) Total interest and other non-operating expenses, net (6,143 ) (6,591 ) Income (loss) before income taxes Refinery operations (8,978 ) (12,356 ) Tolling and terminaling 995 783 Corporate and other (4,858 ) (2,870 ) Total loss before income taxes (12,841 ) (14,443 ) Income tax expense - 15 ) Net loss $ (12,841 ) $ (14,458 ) Twelve Months Ended December 31, 2021 2020 (in thousands) Capital expenditures Refinery operations $ - $ 295 Tolling and terminaling - 790 Corporate and other - - Total capital expenditures $ - $ 1,085 December 31, 2021 2020 (in thousands) Identifiable assets Refinery operations $ 47,047 $ 48,521 Tolling and terminaling 17,594 18,722 Corporate and other 1,668 2,057 Total identifiable assets $ 66,309 $ 69,300 |
Concentration of Risk (Tables)
Concentration of Risk (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
5. Concentration of Risk | |
Significant customers | Twelve Months Ended Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at December 31, December 31, 2021 3 71.9 % $ 0 December 31, 2020 3 70.8 % $ 0 |
Percentages of all refined petroleum products sales to total sales | Twelve Months Ended December 31, 2021 2020 (in thousands, except percent amounts) LPG mix $ 21 0.0 % $ 2 0.0 % Naphtha 74,683 25.2 % 34,413 20.2 % Jet fuel 90,062 30.3 % 49,786 29.2 % HOBM 65,386 22.0 % 42,777 25.1 % AGO 66,951 22.5 % 43,623 25.5 % $ 297,103 100.0 % $ 170,601 100.0 % |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
6. Prepaid Expenses and Other Current Assets | |
Prepaid expenses and other current assets | December 31, 2021 2020 (in thousands) Prepaid crude oil and condensate $ 1,368 $ 2,249 Prepaid insurance 953 1,182 Prepaid easement renewal fees 76 99 Other prepaids 36 34 $ 2,433 $ 3,564 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
7. Inventory | |
Inventory | December 31, 2021 2020 (in thousands) HOBM $ 1,749 $ 54 Crude oil and condensate 660 463 AGO 338 133 Naphtha 189 120 Chemicals 121 271 Propane 27 15 LPG mix 14 6 $ 3,098 $ 1,062 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
8. Property, Plant and Equipment, Net | |
Schedule of Property, Plant and Equipment, Net | December 31, 2021 2020 (in thousands) Refinery and facilities $ 72,583 $ 72,184 Land 566 566 Other property and equipment 903 903 74,052 73,653 Less: Accumulated depletion, depreciation, and amortization (17,795 ) (15,220 ) 56,257 58,433 CIP 3,666 4,064 $ 59,923 $ 62,497 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
9. Accrued Expenses and Other Current Liabilities | |
Accrued expenses and other current liabilities | December 31, 2021 2020 (in thousands) Unearned revenue from contracts with customers $ 4,388 $ 3,421 Accrued fines and penalties 407 - Unearned contract renewal income 400 500 Insurance 273 541 Board of director fees payable 230 100 Other payable 218 252 Customer deposits 173 10 Taxes payable 136 58 $ 6,225 $ 4,882 |
Third-Party Long-Term Debt (Tab
Third-Party Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
10. Third-Party Long-Term Debt | |
Loan agreements | Loan Description Parties Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate Loan Purpose Veritex Loans LE Term Loan Due 2034 ( in default (1)(2) LE Veritex $ 25.0 Jun 2034 $0.2 million WSJ Prime + 2.75% Refinance loan; capital improvements LRM Term Loan Due 2034 ( in default (1) LRM Veritex $ 10.0 Dec 2034 $0.1 million WSJ Prime + 2.75% Refinance bridge loan; capital improvements Kissick Debt ( in default (3)(4) LE Kissick $ 11.7 Jan 2018 16.00% Working capital; reduced LE’s obligation to GEL GNCU Loan ( in default NPS Term Loan Due 2031 (5) NPS GNCU $ 10.0 Oct 2031 $0.1 million 5.75% Working capital SBA EIDLs BDEC Term Loan Due 2051 (as modified) (6) Blue Dolphin SBA $ 2.0 Jun 2051 $0.01 million 3.75% Working capital LE Term Loan Due 2050 (7) LE SBA $ 0.15 Aug 2050 $0.0007 million 3.75% Working capital NPS Term Loan Due 2050 (7) NPS SBA $ 0.15 Aug 2050 $0.0007 million 3.75% Working capital Equipment Loan Due 2025 (8) LE Texas First $ 0.07 Oct 2025 $0.0013 million 4.50% Equipment Lease Conversion |
Long term debt | December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 23,789 $ 22,840 LRM Term Loan Due 2034 (in default) 9,861 9,473 Kissick Debt (in default) 10,210 9,413 GNCU Loan NPS Term Loan Due 2031 (in default) 10,094 - SBA EIDLs BDEC Term Loan Due 2051 512 - LE Term Loan Due 2050 156 152 NPS Term Loan Due 2050 156 152 Equipment Loan Due 2025 53 71 54,831 42,101 Less: Current portion of long-term debt, net (42,953 ) (33,692 ) Less: Unamortized debt issue costs (2,351 ) (1,749 ) Less: Accrued interest payable (in default) (8,689 ) (6,305 ) $ 838 $ 355 |
Debt issue costs | December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in default) 768 768 GNCU Loan NPS Term Loan Due 2031 (in default) 730 - Less: Accumulated amortization (821 ) (693 ) $ 2,351 $ 1,749 |
Accrued interest related to our long-term debt, net | December 31, 2021 2020 (in thousands) Notre Dame Debt (in default) $ 5,232 $ 4,435 Veritex Loans LE Term Loan Due 2034 (in default) 2,338 1,295 LRM Term Loan Due 2034 (in default) 959 571 GNCU Loan NPS Term Loan Due 2031 (in default) 136 - SBA EIDLs BDEC Term Loan Due 2051 12 - LE Term Loan Due 2050 6 2 NPS Term Loan Due 2050 6 2 8,689 6,305 Less: Accrued interest payable (in default) (8,689 ) (6,305 ) Long-term Interest Payable, Net of Current Portion $ - $ - |
Third-party long-term debt payments | Years Ending December 31, Principal Debt Issue Costs Total (in thousands) 2022 $ 45,304 $ (2,351 ) $ 42,953 2023 16 - 16 2024 16 - 16 2025 12 - 12 2026 18 Subsequent to 2026 776 - 776 $ 46,142 $ (2,351 ) $ 43,791 |
Line of Credit Payable (Tables)
Line of Credit Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
11. Line of Credit Payable | |
Line of credit agreement | Line of Credit Description Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate: Original / Default Loan Purpose Amended Pilot Line of Credit (in default) $13.0 May 2020 ---- 12.00% / 14.00% Pay off LE’s obligation to GEL; NPS purchase of crude oil from Pilot, and working capital |
Line of credit | December 31, 2021 2020 (in thousands) Amended Pilot Line of Credit (in default) $ - $ 8,145 Less: Unamortized debt issue costs - - Less: Interest payable, short-term - (103 ) $ - $ 8,042 |
AROs (Tables)
AROs (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
12. AROs | |
Asset retirement obligations | December 31, 2021 2020 (in thousands) AROs, at the beginning of the period $ 2,370 $ 2,565 Changes in estimates of existing obligations 1,091 - Liabilities settled - (195 ) 3,461 2,370 Less: AROs, current portion - (2,370 ) Long-term AROs, at the end of the period $ 3,461 $ - |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
13. Lease Obligations | |
Lease-related assets and liabilities | December 31, Balance Sheet Location 2021 2020 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 787 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (455 ) (289 ) Total lease assets 332 498 Liabilities Current Operating lease Current portion of lease liabilities 215 194 Noncurrent Operating lease Long-term lease liabilities, net of current 156 370 Total lease liabilities $ 371 $ 564 Weighted average remaining lease term in years Operating lease 1.67 Weighted average discount rate Operating lease 8.25 % Finance leases 8.25 % |
Lease costs | Twelve Months Ended December 31, 2021 2020 (in thousands) Operating lease costs $ 206 $ 206 Finance lease costs: Depreciation of leased assets - 13 Interest on lease liabilities - 3 Total lease cost $ 206 $ 222 |
Supplemental cash flow information related to leases | December 31, 2021 2020 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 233 $ 230 Operating cash flows for finance leases $ - $ 4 Financing cash flows for finance leases $ - $ 17 |
Maturities of lease liabilities | December 31, Operating Lease Total (in thousands) 2022 $ 214 $ 214 2023 157 157 $ 371 $ 371 |
Future minimum annual lease commitments | Operating December 31, Lease (in thousands) 2022 $ 237 2023 161 $ 398 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
14. Income Taxes | |
Income tax benefit (expense) | Twelve Months Ended December 31, 2021 2020 (in thousands) Current Federal $ - $ (15 ) State - - Deferred Federal 2,335 3,033 State - - Change in valuation allowance (2,335 ) (3,033 ) Total provision for income taxes $ - $ (15 ) |
Effective tax rate | December 31, 2021 2020 Expected tax rate 21.00 % 21.00 % Permanent differences 0.00 % 0.00 % State tax 0.00 % 0.00 % Federal tax 0.00 % 0.00 % Change in valuation allowance (21.00 )% (21.00 )% 0.00 % 0.00 % |
Deferred tax assets and deferred tax liabilities | December 31, 2021 2020 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 16,818 $ 15,258 Business interest expense 4,680 3,343 Start-up costs (crude oil and condensate processing facility) 424 509 ARO liability/deferred revenue 727 498 AMT credit - - Other 12 3 Total deferred tax assets 22,661 19,611 Deferred tax liabilities: Basis differences in property and equipment (7,945 ) (7,230 ) Total deferred tax liabilities (7,945 ) (7,230 ) 14,716 12,381 Valuation allowance (14,716 ) (12,381 ) Deferred tax assets, net $ - $ - |
NOL carryforwards | Net Operating Loss Carryforward Pre-Ownership Change Post-Ownership Change Total (in thousands) Balance at December 31, 2019 9,614 43,058 52,672 Net operating losses - 13,305 13,305 Balance at December 31, 2020 $ 9,614 $ 56,363 $ 65,977 Net operating losses (1,717 ) 9,148 7,431 Balance at December 31, 2021 $ 7,897 $ 65,511 $ 73,408 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
15. Earnings Per Share | |
Earnings per share | Twelve Months Ended December 31, 2021 2020 (in thousands, except share and per share amounts) Net income (loss) $ (12,841 ) $ (14,458 ) Basic and diluted income (loss) per share $ (1.01 ) $ (1.15 ) Basic and Diluted Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock 12,693,514 12,574,465 |
Organization (Details Narrative
Organization (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Oct. 04, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Substantial Current Debt | $ 63,000 | $ 57,700 | |
Net loss per common share | $ (1.01) | $ (1.15) | |
Net loss | $ 12,800 | $ 14,500 | |
Working capital deficit | (78,500) | (72,300) | |
Working capital deficit, excluding the current portion of long-term debt | (15,500) | (22,600) | |
Cash and cash equivalents | 10 | 500 | |
Restricted cash current portion | 50 | ||
Restricted cash non current portion | $ 0 | 500 | |
NPS disputed amount | $ 300 | ||
Ownership percentage | 5.00% | ||
Interest incurred | $ 1,252 | 2,311 | |
Terminal Services Agreement [Member] | |||
Tank lease amount | 1,900 | 1,300 | |
Interest incurred | 700 | 1,400 | |
Veritex Loans | |||
Principal and interest payments | 600 | $ 900 | |
Payment reserve account | 1,000 | ||
GNCU Loan [Member] | |||
Interest payments | $ 10 | ||
Affiliates [Member] | |||
Ownership percentage | 82.00% |
Principles of Consolidation a_2
Principles of Consolidation and Significant Accounting Policies (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for doubtful accounts | $ 0 | |
Allowance for doubtful accounts | $ 0.1 | |
Estimated useful life | 25 years | |
Impairment related to asset retirement costs | $ 1.1 | |
Uncertain tax position , description | benefit in the financial statements equal to the largest amount greater than 50% likely to be realized upon settlement | |
Refinery and Facilities | ||
Estimated useful life | 25 years |
RelatedParty Transactions (Deta
RelatedParty Transactions (Details) | 12 Months Ended |
Dec. 31, 2021 | |
LEH - LE | |
Type | Jet Fuel Sales Agreement |
Key terms/purpose | 1-year term expiring earliest to occur of 03/31/2023 plus 30-day carryover or delivery of maximum jet fuel quantity; LEH bids on jet fuel contracts under preferential pricing terms due to a HUBZone certification |
Effective date | 04/01/2022 |
LEH - BDSC | |
Type | Office Sub-Lease Agreement |
Key terms/purpose | 68-month term expiring 08/31/2023; office lease Houston, Texas; includes 6-month rent abatement period; rent approximately $0.01 million per month |
Effective date | 01/01/2018 |
LEH - Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC | |
Type | Amended and Restated Operating Agreement |
Key terms/purpose | 3-year term; expires 04/01/2023 or notice by either party at any time of material breach or 90 days Board notice; LEH receives management fee of 5% of all consolidated operating costs, excluding crude costs, depreciation, amortization, and interest, of Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC |
Effective date | 04/01/2020 |
Jonathan Carroll - Blue Dolphin | |
Type | March Carroll Note (in default) |
Key terms/purpose | Blue Dolphin working capital; reflects amounts owed to Jonathan Carroll under the guaranty fee agreements |
Interest rate | 8.00% |
Maturity date | Jan 2019 |
Ingleside - Blue Dolphin | |
Type | March Ingleside Note (in default) |
Key terms/purpose | Blue Dolphin working capital |
Interest rate | 8.00% |
Maturity date | Jan 2019 |
LEH - Blue Dolphin | |
Type | BDPL-LEH Loan Agreement (in default) |
Key terms/purpose | June LEH Note (in default) |
Interest rate | 8.00% |
Maturity date | Jan 2019 |
LEH - BDPL | |
Type | BDPL-LEH Loan Agreement (in default) |
Key terms/purpose | Blue Dolphin working capital; reflects amounts owed to LEH under the Amended and Restated Operating Agreement |
Interest rate | 16.00% |
Maturity date | Aug 2018 |
Jonathan Carroll - LE | |
Type | Amended and Restated Guaranty Fee Agreement |
Key terms/purpose | Tied to payoff of LE $25 million Veritex loan |
Interest rate | 2.00% |
Fees payable description | Fees are payable 50% in cash and 50% in Common Stock |
Jonathan Carroll - LRM | |
Type | Amended and Restated Guaranty Fee Agreement |
Key terms/purpose | Tied to payoff of LRM $10 million Veritex loan |
Interest rate | 2.00% |
Fees payable description | Fees are payable 50% in cash and 50% in Common Stock |
RelatedParty Transactions (De_2
RelatedParty Transactions (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Less: Long-term debt, related party, current portion, in default | $ (20,042,000) | $ (16,010,000) |
Less: Interest payable, related party, in default | (3,454,000) | (2,814,000) |
Long-term debt - net of current portion, related party | 0 | 0 |
LEH | ||
Prepaid operating expenses, related party | 20,126,000 | 16,260,000 |
June LEH Note (in default) | LEH | ||
Prepaid operating expenses, related party | 12,672,000 | 9,446,000 |
BDPL Loan Agreement (in default) | LEH | ||
Prepaid operating expenses, related party | 7,454,000 | 6,814,000 |
March Ingleside Note (in default) | Ingleside | ||
Prepaid operating expenses, related party | 1,066,000 | 1,013,000 |
March Carroll Note (in default) | Jonathan Carroll | ||
Prepaid operating expenses, related party | $ 2,304,000 | $ 1,551,000 |
RelatedParty Transactions (De_3
RelatedParty Transactions (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total revenues | $ 300,820 | $ 174,810 |
Total revenues, percent | 100.00% | 100.00% |
LEH | ||
Refinery operations revenues | $ 90,062 | $ 49,786 |
Refinery operations revenues, percent | 29.90% | 28.50% |
Third Parties | ||
Refinery operations revenues | $ 207,041 | $ 120,815 |
Refinery operations revenues, percent | 68.80% | 69.10% |
Tolling and terminaling revenues | $ 3,717 | $ 4,209 |
Tolling and terminaling revenues, percent | 1.20% | 2.40% |
RelatedParty Transactions (De_4
RelatedParty Transactions (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Interest expenses under loan and guarantee, related party | $ 1,744 | $ 1,455 |
June LEH Note (in default) | LEH | ||
Interest expenses under loan and guarantee, related party | 288 | 40 |
BDPL Loan Agreement (in default) | LEH | ||
Interest expenses under loan and guarantee, related party | 640 | 640 |
March Ingleside Note (in default) | Ingleside | ||
Interest expenses under loan and guarantee, related party | 56 | 63 |
March Carroll Note (in default) | Jonathan Carroll | ||
Interest expenses under loan and guarantee, related party | 131 | 103 |
Second Term Loan Due 2034 | Jonathan Carroll | ||
Interest expenses under loan and guarantee, related party | 178 | 178 |
Term Loan Due 2034 | Jonathan Carroll | ||
Interest expenses under loan and guarantee, related party | $ 451 | $ 431 |
RelatedParty Transactions (De_5
RelatedParty Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
3. Related Party Transactions | ||
Lease payments received under the office sub-lease agreement with LEH | $ 30,000 | $ 30,000 |
LEH operating fee | $ 500,000 | $ 600,000 |
Revenue and Segment Informati_2
Revenue and Segment Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net revenues (excluding intercompany fees and sales) | $ 300,820,000 | $ 174,810,000 |
Intercompany fees and sales | 0 | 0 |
Operation costs and expenses | (300,104,000) | (177,031,000) |
General and administrative expenses | (3,021,000) | (2,299,000) |
Depreciation and amortization | (2,780,000) | (2,686,000) |
Interest and other non-operating expenses, net | (6,143,000) | (6,591,000) |
Total loss before income taxes | (12,841,000) | (14,443,000) |
Income tax expense | 0 | 15,000 |
Net loss | (12,841,000) | (14,458,000) |
Capital expenditures | 0 | 1,085,000 |
Total assets | 66,309,000 | 69,300,000 |
Tolling and Terminaling | ||
Net revenues (excluding intercompany fees and sales) | 3,717,000 | 4,209,000 |
Operation costs and expenses | (1,825,000) | (1,661,000) |
General and administrative expenses | (343,000) | (307,000) |
Depreciation and amortization | (1,362,000) | (1,296,000) |
Interest and other non-operating expenses, net | (1,649,000) | (2,546,000) |
Total loss before income taxes | 995,000 | 783,000 |
Capital expenditures | 0 | 790,000 |
Total assets | 17,594,000 | 18,722,000 |
Intercompany fees and sales | 2,457,000 | 2,384,000 |
Segment contribution margin (deficit) | 4,349,000 | 4,932,000 |
Refinery Operations | ||
Net revenues (excluding intercompany fees and sales) | 297,103,000 | 170,601,000 |
Operation costs and expenses | (298,082,000) | (175,201,000) |
General and administrative expenses | (1,549,000) | (1,257,000) |
Depreciation and amortization | (1,214,000) | (1,186,000) |
Interest and other non-operating expenses, net | (2,779,000) | (2,929,000) |
Total loss before income taxes | (8,978,000) | (12,356,000) |
Capital expenditures | 0 | 295,000 |
Total assets | 47,047,000 | 48,521,000 |
Intercompany fees and sales | (2,457,000) | (2,384,000) |
Segment contribution margin (deficit) | (3,436,000) | (6,984,000) |
Corporate and Other | ||
Operation costs and expenses | (197,000) | (169,000) |
General and administrative expenses | (2,742,000) | (1,381,000) |
Depreciation and amortization | (204,000) | (204,000) |
Interest and other non-operating expenses, net | (1,715,000) | (1,116,000) |
Total loss before income taxes | (4,858,000) | (2,870,000) |
Capital expenditures | 0 | 0 |
Total assets | 1,668,000 | 2,057,000 |
Segment contribution margin (deficit) | $ (197,000) | $ (169,000) |
Risk Concentration (Details)
Risk Concentration (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration of risk | 100.00% | 100.00% |
3 Significant Customers | ||
Concentration of risk | 71.90% | 70.80% |
Portion of accounts receivable | $ 0 | $ 0 |
Risk Concentration (Details 1)
Risk Concentration (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total refined petroleum product sales | $ 297,103,000 | $ 170,601,000 |
Concentration risk | 100.00% | 100.00% |
AGO | ||
Total refined petroleum product sales | $ 66,951,000 | $ 43,623,000 |
Concentration risk | 22.50% | 25.50% |
Jet Fuel | ||
Total refined petroleum product sales | $ 90,062,000 | $ 49,786,000 |
Concentration risk | 30.30% | 29.20% |
HOBM | ||
Total refined petroleum product sales | $ 65,386,000 | $ 42,777,000 |
Concentration risk | 22.00% | 25.10% |
LPG Mix | ||
Total refined petroleum product sales | $ 21,000 | $ 2 |
Concentration risk | 0.00% | 0.00% |
Naphtha | ||
Total refined petroleum product sales | $ 74,683,000 | $ 34,413,000 |
Concentration risk | 25.20% | 20.20% |
Risk Concentration (Details Nar
Risk Concentration (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
5. Concentration of Risk | ||
Balances in excess of FDIC insurance limit | $ 0 | $ 600,000 |
Cash FDIC insured amount | $ 250,000 | |
Total revenue percentage | The Affiliate accounted for 29% and 28% |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
6. Prepaid Expenses and Other Current Assets | ||
Prepaid crude oil and condensate | $ 1,368 | $ 2,249 |
Prepaid insurance | 953 | 1,182 |
Prepaid easement renewal fees | 76 | 99 |
Other prepaids | 36 | 34 |
Prepaid expenses, net | $ 2,433 | $ 3,564 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory | $ 3,098 | $ 1,062 |
LPG Mix | ||
Inventory | 14 | 6 |
Naphtha | ||
Inventory | 189 | 120 |
HOBM | ||
Inventory | 1,749 | 54 |
AGO | ||
Inventory | 338 | 133 |
Crude Oil and Condensate | ||
Inventory | 660 | 463 |
Propane | ||
Inventory | 27 | 15 |
Chemicals | ||
Inventory | $ 121 | $ 271 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, plant and equipment, gross | $ 74,052 | $ 73,653 |
Less: Accumulated depletion, depreciation, and amortization | 17,795 | 15,220 |
Property, plant and equipment, net excluding CIP | 56,257 | 58,433 |
CIP | 3,666 | 4,064 |
Property, plant and equipment, net | 59,923 | 62,497 |
Refinery and Facilities | ||
Property, plant and equipment, gross | 72,583 | 72,184 |
Land | ||
Property, plant and equipment, gross | 566 | 566 |
Other Property and Equipment | ||
Property, plant and equipment, gross | $ 903 | $ 903 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
8. Property, Plant and Equipment, Net | ||
Unused amount | $ 0 | $ 500,000 |
Impairment related to asset retirement costs | $ 1,100,000 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Expenses and Other Current Liabilities (Details) | ||
Unearned revenue from contracts with customers | $ 4,388 | $ 3,421 |
Accrued fines and penalties | 407 | 0 |
Unearned contract renewal income | 400 | 500 |
Insurance | 273 | 541 |
Board of director fees payable | 230 | 100 |
Other payable | 218 | 252 |
Customer deposits | 173 | 10 |
Taxes payable | 136 | 58 |
Total | $ 6,225 | $ 4,882 |
ThirdParty LongTerm Debt (Detai
ThirdParty LongTerm Debt (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Kissick Debt | |
Original principal amount | $ 11,700,000 |
Maturity date | Jan 2018 |
Interest rate | 16.00% |
BDEC Term Loan Due 2051 | |
Original principal amount | $ 2,000,000 |
Maturity date | Jun 2051 |
Interest rate | 3.75% |
Monthly principal and interest payment | $ 10,000 |
NPS Term Loan Due 2031 | |
Original principal amount | $ 10,000,000 |
Maturity date | Oct 2031 |
Interest rate | 5.75% |
Monthly principal and interest payment | $ 100,000 |
LE Term Loan Due 2034 | |
Original principal amount | $ 25,000,000 |
Maturity date | Jun 2034 |
Monthly principal and interest payment | $ 200,000 |
Interest rate | WSJ Prime + 2.75% |
LRM Term Loan Due 2034 | |
Original principal amount | $ 10,000,000 |
Maturity date | Dec 2034 |
Monthly principal and interest payment | $ 100,000 |
Interest rate | WSJ Prime + 2.75% |
LE Term Loan Due 2050 | |
Original principal amount | $ 150,000 |
Maturity date | Aug 2050 |
Interest rate | 3.75% |
Monthly principal and interest payment | $ 700 |
NPS Term Loan Due 2050 | |
Original principal amount | $ 150,000 |
Maturity date | Aug 2050 |
Interest rate | 3.75% |
Monthly principal and interest payment | $ 700 |
Equipment Loan Due 2025 | |
Original principal amount | $ 70,000 |
Maturity date | Oct 2025 |
Interest rate | 4.50% |
Monthly principal and interest payment | $ 1,300 |
ThirdParty LongTerm Debt (Det_2
ThirdParty LongTerm Debt (Details 1) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Long-term debt, carrying amount | $ 54,831 | $ 42,101 |
Less: current portion of long-term debt, net | (42,953) | (33,692) |
Less: unamortized debt issue costs | (2,351) | (1,749) |
Less: accrued interest payable (in default) | (8,689) | (6,305) |
Long-term debt, noncurrent | 838 | 355 |
Kissick Debt | ||
Long-term debt, carrying amount | 10,210 | 9,413 |
BDEC Term Loan Due 2051 | ||
Long-term debt, carrying amount | 512 | 0 |
Less: accrued interest payable (in default) | (12) | 0 |
NPS Term Loan Due 2031 | ||
Long-term debt, carrying amount | 10,094 | 0 |
Less: accrued interest payable (in default) | (136) | 0 |
LE Term Loan Due 2034 | ||
Long-term debt, carrying amount | 23,789 | 22,840 |
Less: accrued interest payable (in default) | (2,338) | (1,295) |
LRM Term Loan Due 2034 | ||
Long-term debt, carrying amount | 9,861 | 9,473 |
Less: accrued interest payable (in default) | (959) | (571) |
LE Term Loan Due 2050 | ||
Long-term debt, carrying amount | 156 | 152 |
Less: accrued interest payable (in default) | (6) | (2) |
NPS Term Loan Due 2050 | ||
Long-term debt, carrying amount | 156 | 152 |
Less: accrued interest payable (in default) | (6) | (2) |
Equipment Loan Due 2025 | ||
Long-term debt, carrying amount | $ 53 | $ 71 |
ThirdParty LongTerm Debt (Det_3
ThirdParty LongTerm Debt (Details 2) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Less: accumulated amortization | $ (821) | $ (693) |
Unamortized debt issue costs, net | 2,351 | 1,749 |
NPS Term Loan Due 2031 | ||
Unamortized debt issue costs, gross | 730 | 0 |
LE Term Loan Due 2034 | ||
Unamortized debt issue costs, gross | 1,674 | 1,674 |
LRM Term Loan Due 2034 | ||
Unamortized debt issue costs, gross | $ 768 | $ 768 |
ThirdParty LongTerm Debt (Det_4
ThirdParty LongTerm Debt (Details 3) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued interest payable | $ 8,689 | $ 6,305 |
Less: accrued interest payable (in default) | (8,689) | (6,408) |
Long-term interest payable, net of current portion | 0 | 0 |
Accrued interest payable | 8,689 | 6,305 |
BDEC Term Loan Due 2051 | ||
Accrued interest payable | 12 | 0 |
NPS Term Loan Due 2031 | ||
Accrued interest payable | 136 | 0 |
LE Term Loan Due 2034 | ||
Accrued interest payable | 2,338 | 1,295 |
LRM Term Loan Due 2034 | ||
Accrued interest payable | 959 | 571 |
LE Term Loan Due 2050 | ||
Accrued interest payable | 6 | 2 |
NPS Term Loan Due 2050 | ||
Accrued interest payable | 6 | 2 |
Notre Dame Debt | ||
Accrued interest payable | $ 5,232 | $ 4,435 |
ThirdParty LongTerm Debt (Det_5
ThirdParty LongTerm Debt (Details 4) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
2022 | $ 42,953,000 | |
2023 | 16,000 | |
2024 | 16,000 | |
2025 | 12,000 | |
2026 | 0 | |
Subsequent to 2026 | 776,000 | |
Debt, principal amount, current | 46,142,000 | |
Debt, issuance costs | (2,351,000) | |
Long-term debt | 43,791,000 | |
Debt, principal amount | 54,831,000 | $ 42,101,000 |
2022 | ||
Debt, issuance costs | (2,351,000) | |
Debt, principal amount | 45,304,000 | |
2023 | ||
Debt, issuance costs | 0 | |
Debt, principal amount | 16,000 | |
2024 | ||
Debt, issuance costs | 0 | |
Debt, principal amount | 16,000 | |
2025 | ||
Debt, issuance costs | 0 | |
Debt, principal amount | 12,000 | |
2026 | ||
Debt, issuance costs | 0 | |
Debt, principal amount | 18,000 | |
Subsequent to 2026 | ||
Debt, issuance costs | 0 | |
Debt, principal amount | $ 776,000 |
ThirdParty LongTerm Debt (Det_6
ThirdParty LongTerm Debt (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortization expense | $ 100,000 | $ 100,000 | ||
Restricted cash, current | 50,000 | |||
Restricted cash, noncurrent | 0 | 500,000 | ||
BDEC Term Loan Due 2051 | ||||
Original principal amount | 2,000,000 | |||
Debt, increase (decrease), net | 1,500,000 | |||
Original principal amount, before modification | 500,000 | |||
Kissick | ||||
Original principal amount | $ 8,000,000 | |||
Debt, increase (decrease), net | $ 3,700,000 | |||
Veritex | ||||
Restricted cash, current | 50,000 | 50,000 | ||
Amount paid into payment reserve account | 1,000,000 | |||
Restricted cash, noncurrent | $ 0 | $ 500,000 |
Line of Credit Payable (Details
Line of Credit Payable (Details) - Amended Pilot Line Of Credit (in default) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Interest rate default | 14.00% |
Principal amount | $ 13 |
Maturity date | May 2020 |
Interest rate | 12.00% |
Line of Credit Payable (Detai_2
Line of Credit Payable (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Less: Unamortized debt issue costs | $ 2,351,000 | $ 1,749,000 |
Less: accrued interest payable (in default) | 8,689,000 | 6,305,000 |
Line of credit | 0 | 8,042,000 |
Amended Pilot Line Of Credit (in default) | ||
Less: Unamortized debt issue costs | 0 | 0 |
Line of credit, gross | 0 | 8,145,000 |
Less: accrued interest payable (in default) | 0 | 103,000 |
Line of credit | $ 0 | $ 8,042,000 |
Line of Credit Payable (Detai_3
Line of Credit Payable (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lease payment | $ 1,900 | $ 1,300 |
Interest expenses | 6,199 | 6,763 |
Terminal Services Agreement [Member] | ||
Interest expenses | $ 700 | $ 1,400 |
AROS (Details)
AROS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
12. AROs | ||
AROs, at the beginning of the period | $ 2,370 | $ 2,565 |
Changes in estimates of existing obligations | 1,091 | 0 |
Liabilities settled | 0 | 195 |
AROs, at the Ending of the period | 3,461 | 2,370 |
Less: AROs, current portion | 0 | (2,370) |
Long-term AROs, at the end of the period | $ 3,461 | $ 0 |
Lease Obligations (Details)
Lease Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
13. Lease Obligations | ||
Operating lease right-of-use assets, gross | $ 787 | $ 787 |
Less: accumulated amortization on operating lease assets | (455) | (289) |
Operating lease right-of-use assets, net | 332 | 498 |
Current portion of operating lease | 215 | 194 |
Long-term portion of operating lease | 156 | 370 |
Total lease liabilities | $ 371 | $ 564 |
Weighted average remaining lease term in years - operating lease | 1 year 8 months 1 day | |
Weighted average discount rate - operating lease | 8.25% | |
Weighted average discount rate - finance lease | 8.25% |
Lease Obligations (Details 1)
Lease Obligations (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
13. Lease Obligations | ||
Operating lease costs | $ 206,000 | $ 206,000 |
Depreciation of leased assets | 0 | 13,000 |
Interest on lease liabilities | 0 | 3,000 |
Total lease cost | $ 206,000 | $ 222,000 |
Lease Obligations (Details 2)
Lease Obligations (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
13. Lease Obligations | ||
Operating cash flows for operating lease | $ 233,000 | $ 230,000 |
Operating cash flows for finance leases | 0 | 4,000 |
Financing cash flows for finance leases | $ 0 | $ 17,000 |
Lease Obligations (Details 3)
Lease Obligations (Details 3) $ in Thousands | Dec. 31, 2021USD ($) |
Operating Lease | |
2022 | $ 214 |
2023 | 157 |
Total minimum rental payments | 371 |
Operating Lease [Member] | |
Operating Lease | |
2022 | 214 |
2023 | 157 |
Total minimum rental payments | $ 371 |
Lease Obligations (Details 4)
Lease Obligations (Details 4) $ in Thousands | Dec. 31, 2021USD ($) |
13. Lease Obligations | |
2022 | $ 237 |
2022 | 161 |
Total | $ 398 |
Lease Obligations (Details Narr
Lease Obligations (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
13. Lease Obligations | |
Lease term | 5 years |
Rent installments and other charges | $ 100 |
Past obligations of rent | $ 20 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
14. Income Taxes | ||
Current federal | $ 0 | $ (15) |
Current state | 0 | 0 |
Deferred federal | 2,335 | 3,033 |
Deferred state | 0 | 0 |
Change in valuation allowance | (2,335) | (3,033) |
Income tax expense | $ 0 | $ (15) |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
14. Income Taxes | ||
Expected tax rate | 21.00% | 21.00% |
Permanent differences | 0.00% | 0.00% |
State tax | 0.00% | 0.00% |
Federal tax | 0.00% | 0.00% |
Change in valuation allowance | (21.00%) | (21.00%) |
Effective tax rate | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
NOL and capital loss carryforwards | $ 16,818,000 | $ 15,258,000 |
Business interest expense | 4,680,000 | 3,343,000 |
Start-up costs (crude oil and condensate processing facility) | 424,000 | 509,000 |
ARO liability/deferred revenue | 727,000 | 498,000 |
AMT credit | 0 | 0 |
Other | 12,000 | 3,000 |
Total deferred tax assets | 22,661,000 | 19,611,000 |
Deferred tax liabilities: | ||
Basis differences in property and equipment | (7,945,000) | (7,230,000) |
Total deferred tax liabilities | (7,945,000) | (7,230,000) |
Deferred tax assets, gross | 14,716,000 | 12,381,000 |
Valuation allowance | (14,716,000) | (12,381,000) |
Deferred tax assets, net | $ 0 | $ 0 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Beginning balance | $ 65,977,000 | $ 52,672,000 |
Net operating losses | 7,431 | 13,305 |
Ending balance | 73,408,000 | 65,977,000 |
Pre-Ownership Change | ||
Beginning balance | 9,614,000 | 9,614,000 |
Net operating losses | (1,717) | 0 |
Ending balance | 7,897,000 | 9,614,000 |
Post-Ownership Change | ||
Beginning balance | 56,363,000 | 43,058,000 |
Net operating losses | 9,148,000 | 13,305,000 |
Ending balance | $ 65,511,000 | $ 56,363,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
14. Income Taxes | |
Ownership percentage | 5.00% |
NOL and capital loss carryforwards | $ 1,630 |
Annual use limitation | 60 |
NOL carryforwards, annual use limitation | $ 670 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
15. Earnings Per Share | ||
Net loss | $ (12,841) | $ (14,458) |
Basic and diluted income (loss) per share | $ (1.01) | $ (1.15) |
Basic and Diluted | ||
Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock | 12,693,514 | 12,574,465 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Oct. 04, 2021 | Oct. 31, 2021 | Apr. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2018 |
Administrative penalty | $ 400,000 | |||||
NPS disputed payment | $ 300,000 | |||||
Additional financial assurance provided by BDPL | $ 4,800,000 | |||||
Share issued income | $ 80,000 | $ 0 | ||||
BSEE INCs [Member] | ||||||
Trunk pipeline, federal waters | 3,500,000 | $ 2,400,000 | ||||
BOEM INCs [Member] | ||||||
Trunk pipeline, federal waters | $ 900,000 | |||||
Non-Employee [Member] | ||||||
Share issued income | $ 50,000 | |||||
Restricted shares of common stock | 135,084 | |||||
Jonathan Carroll | ||||||
Share issued income | $ 30,000 | |||||
Restricted shares of common stock | 231,065 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Loan Agreement [Member] - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Feb. 18, 2022 | Dec. 31, 2021 | |
Original principal loan amount | $ 0.5 | |
Maturity date remains | Jun. 7, 2051 | |
Debt instrument payment terms, Description | due beginning thirty (30) months from the original loan date of May 4, 2021. | |
Subsequent Event [Member] | ||
Principal amount of the loan increased | $ 1.5 | |
Original principal loan amount | $ 2 | |
Accrues interest Rate | 3.75% | |
Debt instrument term | 30 years |