Blue Dolphin Purchases Option to Acquire Ingleside Refinery Site
11 Juin 2012 - 10:30PM
Blue Dolphin Energy Company (OTCQX:BDCO) ("Blue Dolphin"), an
independent energy company with refining, midstream and upstream
operations, today announced its purchase of a 180 day option to
acquire an idled refinery located in Ingleside, Texas (the
"Refinery") from Lazarus Energy Holdings, LLC ("LEH"), its largest
shareholder. The Refinery is currently owned by Lazarus Texas
Refinery I, LLC ("LTRI"), a wholly-owned subsidiary of LEH.
The Refinery was constructed between 1978 and 1980 and was
operated only intermittently thereafter. During its operating phase
the Refinery had an operating capacity of approximately 40,000
barrels per day, producing naphtha, jet fuel, kerosene diesel and
fuel oil. The Refinery consists of crude oil and condensate
processing equipment, pipeline connections, trucking terminals and
related storage, as well as a barge dock and receiving facility
(the "Barge Dock"), which gives the Refinery access to the Gulf
Intracoastal Waterway at Redfish Bay near Corpus Christi,
Texas. An 8-inch active pipeline, approximately half a mile in
length, connects the Refinery to the Barge Dock.
Blue Dolphin also owns a refinery in Wilson County, Texas (the
"Nixon Facility" or "Nixon"), located in the Eagle Ford Shale play,
which is currently running approximately ten thousand (10,000)
barrels per day of a light Eagle Ford crude oil (condensate).
"There is significant strategic value to the combined crude
processing, transportation, as well as supply and distribution
capabilities of the refineries at Nixon and Ingleside, Texas," said
Jonathan Carroll, Blue Dolphin's Chief Executive Officer and
President.
The Refinery sits on over 100 acres of land, including
approximately 87 acres surrounding the Refinery on FM 2725 and
approximately 15 acres with the Barge Dock.
The Refinery initially had 31 above ground storage tanks with a
total capacity of 1,179,250 barrels. Currently, the Refinery has
210,000 barrels of storage capacity under a short term lease and
another 475,000 barrels of storage capacity that is currently being
refurbished and should be completed and available for lease over
the next several months.
Historically, several pipeline systems connected the Refinery to
other sites like the Harbor Island terminal, the former Bronco and
Copano refinery properties and the Flint Hills Resource's ("FHR")
waterborne terminal. FHR's waterborne terminal in Ingleside, Texas
ties into the Koch Pipeline System which also traverses the Nixon
Facility.
"Access to the Barge Dock creates additional product marketing
outlets for the Nixon Facility. We expect this water access to
expand our midstream opportunities, also creating crude oil
marketing opportunities for the Eagle Ford Shale producers near
Nixon and other nearby locations. The storage, terminal,
pipeline, barge, and processing aspects of the Refinery can be
restarted and operated independently of each other depending on the
business case. This flexibility is what makes this option so
valuable to us," noted Mr. Carroll.
The Refinery requires refurbishment and re-commissioning similar
to the work conducted by Blue Dolphin at Nixon. All of the
Refinery's tanks, vessels, pumps, piping, wiring, instrumentation
and equipment will require inspection, repair and/or replacement
prior to operation. In addition, certain areas of the Refinery
require additional environmental remediation prior to
operation. Blue Dolphin, should it exercise the option, will
be required to reimburse LEH or LTRI for the cost of any
refurbishment, re-commissioning or environmental remediation
associated with the Refinery.
Blue Dolphin Energy Company (OTCQX:BDCO) is engaged in crude oil
and condensate processing, as well as the gathering and
transportation and the exploration and production of oil and
natural gas. For additional company information, visit Blue
Dolphin's corporate website at
http://www.blue-dolphin-energy.com.
Certain of the statements included in this press release, which
express a belief, expectation or intention, as well as those
regarding future financial performance or results, or which are not
historical facts, are "forward-looking" statements as that term is
defined in the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended. These
forward-looking statements are not guarantees of future performance
or events and such statements involve a number of risks,
uncertainties and assumptions, including but not limited to: key
supplier failure; loss of market share with or by a key customer;
failure to comply with forbearance agreements relating to long-term
indebtedness under which Blue Dolphin is in default; failure to
realize anticipated benefits of acquired operations; volatility of
refining margins; and the factors set forth under the heading "Risk
Factors" in Part I, Item 1A of Blue Dolphin's annual report on Form
10-K for the twelve month period ended December 31, 2011 and the
heading "Risk Factors" in Part II, Item 1A of Blue Dolphin's
quarterly report on Form 10-Q for the three month period ended
March 31, 2012. Should one or more of these risks or
uncertainties materialize or should the underlying assumptions
prove incorrect, actual results and outcomes may differ materially
from those indicated in the forward-looking
statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. Unless legally required, Blue
Dolphin undertakes no obligation to republish revised
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events.
CONTACT: Jonathan P. Carroll
Chief Executive Officer and President
713-568-4725
Blue Dolphin Energy (QX) (USOTC:BDCO)
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