Blue Dolphin Energy Company (BDCO)

[OilStockReport]

News Update

Entry into a Material Definitive Agreement, Regulation FD Disclosure, Fina


Item 1.01. Entry into a Material Definitive Agreement.
On July 12, 2011, Blue Dolphin Energy Company ("Blue Dolphin") entered into a Purchase and Sale Agreement (the "PSA") with Lazarus Energy Holdings, LLC, a Delaware limited liability company ("LEH"), Lazarus Louisiana Refinery II, LLC, a Delaware limited liability company, Lazarus Texas Refinery II, LLC, a Delaware limited liability company, Lazarus Environmental, LLC, a Delaware limited liability company, Lazarus Energy, LLC, a Delaware limited liability company ("LE") and Lazarus Energy Development, LLC, a Delaware limited liability company. The execution of the PSA did not become effective until Blue Dolphin received the written approval of AP Energy Partners LLC, the sole holder of Series A Preferred Shares of LEH.

Under terms of the PSA, Blue Dolphin agreed to acquire 100% of the membership interest of LE in an all stock transaction. LE's primary asset is the Nixon Crude Processing Facility located in Nixon, Texas. The 56-acre facility has a near term processing capacity of 15,000 barrels per day with a storage capacity of 295,000 barrels.

The number of Blue Dolphin shares to be issued as consideration under the deal will represent 80% of the issued and outstanding common stock of Blue Dolphin at closing, which will constitute a change in control. Closing of the transaction is subject to (i) approval by Blue Dolphin's stockholders and (ii) completion of funding for the final phase of refurbishment of the Nixon Crude Processing Facility.

The foregoing description of the PSA does not purport to be complete and is qualified in its entirety by reference to the full text of the PSA, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.