Blue Dolphin Energy Company (BDCO)

[jmjjw]

I'm posting here in response to a message from '56Chevy', regarding valuation methods for refinery operations.

This is greatly over-simplified, but valuing these operations and assets uses some blended set of techniques, including:

- Replacement Cost New (RCN)
- Complexity/bbl
- pure asset valuation
- market valuation
- income based valuation

Synthesis of these approaches, and comparative measures against similar operations, or a collection of normalized data can provide some insight into the valuation of a particular refinery operation.

RCN approaches require some insight into how one might approach an "equivalent" operation using current technology (modular refining), the cost of environmental permitting, which includes not just the permit/application fee, but the consulting fees, and time-value of money. I don't know much about BDCO's operations, but some of this would be dependent on how long the refinery has been in operation, how much sustaining investment was made, and what upgrades may, or may not be required to keep the unit operating competitively.

Without knowing more about BDCO's operations, it is hard to be more specific.