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Wednesday, June 29, 2022

Blue Dolphin Energy Company (OTCMKTS: BDCO) Powerful Run Northbound as Oil & Gas Operator Reports Record Revenues & Contract to Supply the U.S. military with Jet Fuel

Blue Dolphin Energy Company (OTCMKTS: BDCO) is making a highly explosive move up the charts in recent months since reversing off $0.20 lows. The stock is under heavy accumulation and there are a lot of reasons to get excited about BDCO. Currently trading at a $27 million market valuation, there are just 14,799,041 shares outstanding, 12,720,059 of which are restricted leaving just 2,078,982 free trading BDCO shares worth $3.9 million. 

Earlier this year Blue Dolphin was awarded a contract with the Defense Logistics Agency (DLA) to supply the U.S. military with jet fuel with additives. Under the contract, LEH will sell up to 56,545,000 U.S. gallons of JAA to the DLA. The delivery period for the award will run from April 1, 2021 through March 31, 2022 plus a 30-day carry-over period. Currently jet fuel with additives goes for $5.32 per gallon making this deal potentially worth $300 million.

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Blue Dolphin Energy Company (OTCMKTS: BDCO) operating out of Houston, Texas is an independent downstream energy company operating in the Gulf Coast region of the United States. Subsidiaries operate a light sweet-crude, 15,000-bpd crude distillation tower with more than 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin was formed in 1986 as a Delaware corporation and is traded on the OTCQX under the ticker symbol “BDCO”.  

The controlling shareholder of the Company is CEO Jonathan Carrol who, along with his affiliates (including Ingleside and Lazarus Capital) and/or LEH and its affiliates (including LMT and LTRI) together Johanthan Carrol and LEH own approximately 82% of the common stock of BDCO. 

Blue Dolphin Energy Company operates two business segments – “Refinery Operations” and “Tolling and Terminaling”, both of which are conducted at the Company’s Nixon, Texas facility. The Nixon facility is situated near the border of Gonzalez and Wilson Counties, which lies in the heart of the Eagle Ford Shale and is within close proximity to some of the highest producing wells drilled in the Eagle Ford Shale thus far. 

Lazarus Energy, LLC (LE) – Refinery Operations: LE’s primary operating asset is the 15,000 barrel per day Nixon refinery. As a “topping unit,” the Nixon refinery is primarily comprised of a crude oil distillation tower/unit – the first stage of the crude oil refining process. The refinery separates crude oil and condensate into a single finished product – jet fuel – and several intermediate products, including naphtha, heavy oil mud blendstock, and atmospheric gas oil.  

Nixon Product Storage, LLC (NPS) and Lazarus Refining & Marketing, LLC (LRM) – Tolling and Terminaling Operations: The Nixon facility has a tank farm providing approximately 1.2 million barrels of petroleum storage tank capacity, about half of which is used for tolling and terminating storage.  Tolling and Terminaling operations also consist of loading and unloading facilities. The Nixon Facility includes 60 acres of assets and as of 2014, 45 workers were employed at this facility. 

Blue Dolphin Energy Company also owns pipeline and facilities in Freeport, Texas and has leasehold interests in offshore oil and gas properties in the U.S. Gulf of Mexico.  These assets and wells are currently not operational. Besides LE, NPS, and LRM, Blue Dolphin Energy Company has the following active subsidiaries: 

  • Blue Dolphin Pipe Line Company. 
  • Blue Dolphin Petroleum Company. 
  • Blue Dolphin Services Co. 

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BDCO

Earlier this year Blue Dolphin was awarded a contract with the Defense Logistics Agency (DLA) to supply the U.S. military with jet fuel with additives. Under the contract, LEH will sell up to 56,545,000 U.S. gallons of JAA to the DLA. The delivery period for the award will run from April 1, 2021 through March 31, 2022 plus a 30-day carry-over period. Currently jet fuel with additives goes for $5.32 per gallon making this deal potentially worth $300 million. 

Blue Dolphin also announced a pivot to explore renewable energy opportunities through an affiliate, Lazarus Energy Alternative Fuels LLC (“LEAF”). LEAF will explore potential opportunities to position Blue Dolphin in the global transition to cleaner, lower-carbon alternatives from traditional fossil fuels. These opportunities may include technology, development, or commercial partnerships, as well as the repurposing of assets and facilities, for the production, storage, transportation and sale of alternative fuels and other low-carbon products. 

On May 16 Blue Dolphin Energy Company announced its financial results for the first quarter of 2022. Blue Dolphin had gross profit of $6.6 million for the quarter ended March 31, 2022 (Q1-22) compared to a gross loss of $0.2 million for the quarter ended March 31, 2021 (Q1-21). Net income increased to $3.5 million, or $0.27 per share, for Q1-22 from a net loss of $3.2 million, or a loss of $0.25 per share, for Q1-21. Refining operations segment contribution margin, a non-GAAP financial measure, totaled $5.6 million for Q1-22 compared to a segment contribution deficit of $1.4 million for Q1-21. 

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Currently trading at a $27 million market valuation BDCO has just 14,799,041 shares outstanding, 12,720,059 of which are restricted leaving just 2,078,982 free trading BDCO shares worth $3.9 million. Earlier this year Blue Dolphin was awarded a contract with the Defense Logistics Agency (DLA) to supply the U.S. military with jet fuel with additives. Under the contract, LEH will sell up to 56,545,000 U.S. gallons of JAA to the DLA. The delivery period for the award will run from April 1, 2021 through March 31, 2022 plus a 30-day carry-over period. Currently jet fuel with additives goes for $5.32 per gallon making this deal potentially worth $300 million. Make Sure you are subscribed to Microcapdaily so you get the update on BDCO.

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Disclosure: we hold no position in BDCO either long or short and we have not been compensated for this article.

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