Blue Dolphin Energy Company (BDCO)

[Enterprising Investor]

Lazarus Energy Holdings, LLC Provides $4 Million Credit Facility (8/15/16)

BDPL Credit Facility

On August 15, 2016, Blue Dolphin Pipe Line Company (“BDPL”), a Delaware corporation and wholly-owned subsidiary of Blue Dolphin Energy Company (“Blue Dolphin”), entered into a loan and security agreement with Lazarus Energy Holdings, LLC (“LEH”), as lender, pursuant to which LEH agreed to make a term loan to BDPL in the principal amount of $4.0 million (the “BDPL Credit Facility”). The BDPL Credit Facility has an interest rate of 16% and matures in August 2018. Under the BDPL Credit Facility, BDPL will make a payment of principal and interest in the aggregate amount of $500,000 on or before November 15, 2016 from the annual payment received from FLNG Land II, Inc. (“FLNG”) under a master easement agreement dated December 11, 2013 (the “FLNG Master Easement Agreement”). A final balloon payment of principal and accrued interest will be due at the BDPL Credit Facility’s maturity date. Proceeds of the BDPL Credit Facility will primarily be used for working capital.

The BDPL Credit Facility is secured by: (i) the remaining payments due from FLNG under the FLNG Master Easement Agreement and (ii) approximately 193 acres of land owned by BDPL in Freeport, Texas. The BDPL Credit Facility contains representations and warranties, affirmative and negative covenants, and events of default which are customary for term loans of this type.

LEH owns approximately 81% of Blue Dolphin’s common stock, par value $0.01 per share, and manages and operates all of Blue Dolphin’s properties pursuant to an operating agreement. Jonathan Carroll is Chairman of the Board of Directors, Chief Executive Officer, and President of Blue Dolphin, as well as a majority owner of LEH.

https://www.sec.gov/Archives/edgar/data/793306/000165495416001740/bdco_8k.htm