[adamski]

10Q
Blue Dolphin Energy Co., a company engaged in refinery operations and tolling and terminaling, has released its Form 10-Q report for the third quarter. The report outlines significant financial and operational challenges faced by the company, including decreased revenues and profitability, as well as strategic initiatives aimed at navigating macroeconomic uncertainties.

Financial Highlights

Total Revenue: $83.7 million, reflecting a decrease from $91.0 million in the prior year period due to less favorable refining margins and lower sales volumes.
Gross Profit: $6.1 million, calculated as Total Revenue minus Total Cost of Goods Sold ($83.7 million - $77.6 million), indicating a decline in profitability compared to the previous year.
Income from Operations: $4.3 million, down from $9.8 million in the prior year period, primarily due to increased general and administrative expenses and less favorable refining margins.
Net Income: $2.2 million, a significant decrease from $6.6 million in the prior year period, impacted by lower operating income and higher interest expenses.
Basic and Diluted EPS: $0.15, compared to $0.44 in the prior year period, reflecting the decrease in net income.
Business Highlights

Revenue Segments: The company operates in two main segments: refinery operations and tolling and terminaling. Refinery operations generated $82,868,000 in revenue, while tolling and terminaling contributed $1,391,000, with an intercompany elimination of $567,000.
Sales Units: The refinery operations segment processed light sweet crude oil, with a capacity of 15,000 barrels per day. Inventory levels increased due to unfavorable product pricing and limited export opportunities.
Operational Challenges: The company faced less favorable refining margins and lower sales volumes compared to the previous year, impacting net income.
Future Outlook: Management anticipates continued challenges due to macroeconomic uncertainties, including inflation, interest rates, and geopolitical tensions. The company is focused on optimizing its asset base, improving operational efficiencies, and seizing market opportunities.
Business Strategy: The strategic objectives include maintaining safe operations, enhancing health, safety, and environmental systems, reducing variable costs, increasing throughput capacity, and leveraging existing infrastructure for renewable energy projects.

[snow]

I just checked. Last year was a lousy year indeed: "EPS (TTM) -0.5800". I was taken aback.

[downthehatch]

Looks like the crack spread for Jet Fuel (BDCO's main product) has been rising since approximately September 2024, after a slow decline through all of 2023 and most of 2024. Good news for BDCO shareholders.
The spread was over $20 a barrel last week.
https://www.iata.org/en/publications/economics/fuel-monitor/

[downthehatch]

BDCO shares on sale herel, under $2.50
Likely a little depresssed because we are into the period before earnings when insiders cannot buy. And we all know that the CEO already owns over 80% of the shares. I'm comfortable riding out these price swings, knowing the CEO has so much miore invested here than I do.

[snow]

A better buy now when the pps is down almost 14%.

[CashCowMoo]

That makes sense to me. Thanks for the reply. 

[downthehatch]

This is a solid little company, over 80% owned by the CEO and his company.
They've got a good litte refinery, in a good location. Still some debt left over from the collapse of oil during the pandemic, but they are working through it.
As no new refineries are being built, and old ones being retired, the value of BDCO's asset is solid.
Can't really go wrong at this price. If you smooth out earnings, they are trading at less than 4 times earnings.

[CashCowMoo]

Following for 2025

[downthehatch]

The CEO owns more than 80% of the shares, so you are right, he really doesn't much care if there are other investors or not.
But if he ever decides to sell, I think the shares are worth a good deal more, and minority shareholders will have to be paid wahtever he gets for himself.
He's been buying shares steadily for several years, and has paid $5 or more for some of his shares, so I am comfortable just riding along, and getting paid when he does.

[Johnny-5]

The stock would perform much better if it were listed on Nasdaq. Not sure why they don't do this, but they don't seem to want to do this. I'm thinking company leadership must not actually want investors....

[snow]

downthehatch Strangely this sort of dumping in this stock has happened from time to time right from the time this stock was discovered by RD and soared from much less than one dollar to more than two dollars. Fundamentally this stock is of course very cheap in relation to annual earnings per share but the market seems to assume that this reflects future prospects.

[downthehatch]

One 5,000 share dump at 2.21.
Now back up over 3.30 on 4 times the volume. Not worried.

I'm still up over 100% long term on these shares.
Still a good consistent business, 83% owned by the CEO.

I like sharing some of the remaining 17% of the company with the CEO!

[snow]

It is years since the pps traded as low? "Day Range: 2.21 - 3.23"

[downthehatch]

Looks like Jonathan Carrol buying more shares after the 10Q filing this week. Wouldn't be surprised at all to see him pick up another 5-10,000 shares in a 4K filing later this week.

[tbirdman]

Good time to load shares under $4

[downthehatch]

After reviewing the 10Q for the 6/30/24 period, and comapring to the 10K for 2023, I find that BDCO continues on it's path of reducing current debt, improving working cash (now positive by 17 million for the first time in three years), and addressing defaults in its various loans. The Veritex loans were reclassified to LT debt after curing the defaults, resulting in a significant improvement in current debt of $24 million for the first half.
Obviously, the loss per share of .43 is very disappointing. We know that the crack spread was weak in the first half, and we now know that downtime in the first half was 18 days, vs 7 days in the first half of 2023. In 2024, there was a significant planned turnaround in May of 13 days, as well as 3 days of cold weather shutdown in January, and 2 days of maintenance and repairs. In first half 2023, the only downtime was 7 days for maintenance and repairs.
So, many of the reasons for the loss in Q2 will not recur in Q3 and Q4, and BDCO should be profitable the remainder of the year. As management contiues to address debt, I think the shares should be able to reach about $6-7 /share by the end of the year.

[tbirdman]

It’s about to change

[downthehatch]

Crack spread about as low as it has been over the last two years, revenue may be weaker in Q3. Time for BDCO to reduce debt, to keep costs down.
https://www.iata.org/en/publications/economics/fuel-monitor/

[downthehatch]

Welcome back, everybody.
I've been here since we were at just over a buck, and have sold a few thousand and then bought them back. I like the management, and the fact that management owns about 80% of the shares. I'm sure they are going to continue to do the right thing for sharehlders, which will make them wealthy along with us.

[tbirdman]

Back in small. Watching crack spreads

[tbirdman]

Yes:)

[Nebuchadnezzar]

BDCO turned out to be a winner after all :)

remember when it was 25-45 cents

[mrholty]

This moves more or less with other refiners who move more or less with the crack spread.
https://www.energystockchannel.com/quotes/?a=chart&ticker=$CRACK321&period=5y&title=5+Years

That said - there are some who believe that small refiners will benefit from the SCOTUS decision re Chevron. This will help both on the RIN purchases but then again this stock is so small - who knows. (somebody does but its not me).

[shifty50]

Hello guys starting to get interested in this thing again

[snow]

hweb2 Over a number of years there have been big sell-offs without a limit and then the pps has more or less recovered - hard to explain.

[RealDutch]

I told you, it has happened before. Quite a few times. Intraday drop of 40% or more. Because some savage is dumping. On low volume even. But you don't have to believe me.

As for the price, $8 is probably too high anyway. $5 seems more like fair value.

[hweb2]

Ha there's no way to know that is all. A stock crashing nearly 70% in a few weeks on no company news ain't normal. And it prob ain't just crappy market conditions. Because they're not that crappy. Nasdaq over 17,000. Dow pushing 40K. And junky stocks like ASNS flying daily. If anything, I'd call this market extremely frothy!

[RealDutch]

No. Crappy market. That is all.

[hweb2]

Stock touched $8 a few weeks ago. Today it dropped as low as $2.50. Seems like more than weak market conditions. As if something negative has leaked out...but I'm not sure what. Nice rebound today at least. Congrats to those who bought the selloff!

[RealDutch]

Crappy market. This stock does that on occasion.

[hweb2]

Anyone know why the recent selloff?

[snow]

The stock price seems to be down roughly 40% compared with the highest pps not many weeks ago. Sell in May and go away?

[RealDutch]

Don't know.

[tbirdman]

But what happens to the Kissick debt now that he’s dead? They’re paying it down with a reduced interest rate and installments of 0.5M, but I wonder if that will continue with his death.

[snow]

Income down dramatically compared with last year: Income per common share:


"Basic
$ 0.44 $ 1.12"

[RealDutch]

It's amazing that after 2 years making money like water, they still have a number of loans in default. And I see they are building inventory again.

[downthehatch]

10Q is filed.... it's on the IHUB site, under news

[snow]

There seem to be both few sellers and few buyers. The pps is down 9% from the pps you mention. I don't regret I sold my last 2,000 shares because I have made several good investments since then. But I would have been better off than I am if I hade retained all my 44,000 shares from a few years ago.

[downthehatch]

All my gains now long term, so I can let it ride.
I've got a little more than 20,000 shares, although my average cost is a little higher than yours.
As BDCO continues to pay down debt, the company becomes even more attractive, IMO

[adamski]

indeed nice ride i'm in at 1.45 for 1333 shares and not selling yet

[downthehatch]

Starting to feel sorry for those who sold off their BDCO shares, when they thought it was at its high point last year.
Here we are today at 6.90, and I'm now up an average 300%. And it looks like blue skies, with few sellers at these prices.

[downthehatch]

And now that Q1 is over, BDCO should have another decent quarter.
Crack spread for Jet fuel was between $21 and $30 for most of the quarter.
https://www.iata.org/en/publications/economics/fuel-monitor/

Looks like they can continue to generate somewhere between .50 and .60 in earnings /quarter under current conditions.

[Ringrock]

Good day, nice to see the debt pay down!

[downthehatch]

Earnings out today. https://archive.fast-edgar.com/20240401/ARZDT22CZC22I9Z2222L2ZZZCDPCZ6T86262/
Earnings .59/sh Q4 vs. .47/sh Q3
Debt reduced by 9 million for the year, with 5 million of that in Q4.

Good report, with earnings solid, debt down and improved refinery uptime.
This is a great little company, and I'm glad I kept a bunch of shares to keep enjoying the ride.

[tbirdman]

John Kissick is dead. Wonder how happens to the BDCO notes held.

[snow]

Ringrock The quiet board suggests little interest in this stock. The audited annual financials are due very soon. That may have been the reason why some have bought shares in the hope that the pps will pop as a result of better numbers than the stock market expects.

[Ringrock]

Got a little volume today… board’s been very quiet

[snow]

down "I'm looking forward to a positive report for this quarter, and for the year, with earnings somewhere around .40- .45/ share for the quarter." That is very close to my guess for the third quarter. I agree that these shares look cheap. Nevertheless I sold my 2,000 shares about 3 weeks ago. I am up not much less than 100% in my new more risky investment. After having burnt my fingers in TMNA and TIO I will not recommend it to anybody.

[downthehatch]

Crack spread for jet fuel remains inn a range of $25-38. For perspective, that is not as high as the historic highs in 2022, but considerable better than the spread during the Q2 2023 period, when the spread was in the $15-20 range.
https://www.iata.org/en/publications/economics/fuel-monitor/
In the Q3, when the spread rebounded to the $30-40 range, BDCO actually had higher earnings than the Q2 2022, when the spread was even higher, in the $35-45 range. So the company is becoming more profitable, even at a slightly lower spread.
I suspect part of the reason is they are slowly but surely reducing the debt load. I'm looking forward to a positive report for this quarter, and for the year, with earnings somewhere around .40- .45/ share for the quarter. That would make for a second year of annual earning of about $2/share.
At $2/share in earnings, we are trading at a PE of just over 2. Still very cheap.

[downthehatch]

There is also tax loss selling right now, and with almost everything else up, people gotta sell oil stocks.
'Tis the season.....

Happy to make someone else's tax loss selling my bargain-priced shares.