Blue Dolphin Energy Company (BDCO)

[Timothy Smith]

Mild price drop. Any idea of they plan to become fully reporting with OTCBB? Financial results are encouraging.

HOUSTON, May 25, 2012 (GLOBE NEWSWIRE) -- Blue Dolphin Energy Company ("Blue Dolphin") (OTCQX:BDCO), which acquired Lazarus Energy, LLC ("LE") from Lazarus Energy Holdings, LLC ("LEH") in a reverse acquisition effective February 15, 2012, announced condensed consolidated financial results for the three month period ended March 31, 2012 (the "current quarter") of a net loss of $1,969,894 on total revenue of $46,041,213.

LE's primary asset is a crude oil processing facility located near Nixon, Texas (the "Nixon Facility"), which began operations on a reduced basis in February 2012. For the current quarter, the Nixon Facility operated for a total of 60 days, during which time equipment was calibrated and the refining process was adjusted. The Nixon Facility had no operations during the quarter ended March 31, 2011. Under reverse acquisition accounting, LE (the legal subsidiary) has been treated as the accounting parent (acquirer) and Blue Dolphin (the legal parent) has been treated as the accounting subsidiary (acquiree). Accordingly, the financial statements subsequent to the date of the transaction are presented as the continuation of LE.

As part of the acquisition of LE, Blue Dolphin entered into a Management Agreement with LEH effective February 15, 2012 (the "Management Agreement") pursuant to which LEH manages and operates the Nixon Facility and Blue Dolphin's other operations (the "Services"). Pursuant to the Management Agreement, Blue Dolphin incurred $1,065,606 in operating expenses (approximately $2.86 per barrel) related to the Services provided by LEH for the current quarter. LEH owns 80% of Blue Dolphin's issued and outstanding common stock.

During the current quarter, throughput at the Nixon Facility increased from an initial rate of approximately 7,500 barrels of oil per day to approximately 10,000 barrels of oil per day. Management anticipates that the Nixon Facility may approach its operating capacity throughput of 15,000 barrels of oil per day on a consistent basis during the second half of 2012. Management is working to optimize the Nixon Facility's operations through: (i) the reduction of crude oil and condensate acquisition costs; (ii) the type, yield, quality and consistency of the products produced and (iii) the ability to capture market opportunities through logistics and fine-tuning of an evolving market and customer base.

Blue Dolphin Energy Company (OTCQX:BDCO) is engaged in crude oil and condensate processing, as well as the gathering and transportation and the exploration and production of oil and natural gas. For additional company information, visit Blue Dolphin's corporate website at http://www.blue-dolphin-energy.com.