Blue Dolphin Energy Company Begins Process to Collect on Loan; Negotiating to Sell the Note

HOUSTON, May 6 /PRNewswire-FirstCall/ -- Blue Dolphin Energy Company (Nasdaq: BDCO) ("Blue Dolphin"), an independent oil and gas company with operations in the Gulf of Mexico, announced today that it has begun the process to collect on collateral backing a $2.0 million loan (the "Loan") made to Lazarus Louisiana Refinery II, LLC (the "Borrower") on July 31, 2009.  Blue Dolphin expressed a willingness to forbear the Loan, but the Borrower was not successful in satisfying certain conditions. The Loan was due on January 31, 2010 and is secured by a guarantee from Lazarus Energy Holdings, LLC ("Lazarus") as well as a first and a second lien on properties owned by subsidiaries of Lazarus.  

"Although we believe the Loan will be fully paid in the future, it's in our best interests, as well as that of our stockholders', to reduce our exposure.  To that end, we have initiated the necessary steps associated with foreclosure on the assets and are negotiating to sell the note to a third party investor," said Ivar Siem, Chairman and Chief Executive Officer.

Blue Dolphin previously recorded an allowance against the loan in its most recent annual report on Form 10-K as filed with the Securities and Exchange Commission.

Blue Dolphin Energy Company is engaged in the gathering and transportation of natural gas and condensate and production of oil and gas in the Gulf of Mexico.  For further information visit the Company's website at http://www.blue-dolphin.com.

Certain of the statements included in this press release, which express a belief, expectation or intention, as well as those regarding future financial performance or results, or which are not historical facts, are "forward-looking" statements as that term is defined in the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.  The words "expect", "plan", "believe", "anticipate", "project", "estimate", and similar expressions are intended to identify forward-looking statements.  These forward-looking statements are not guarantees of future performance or events and such statements involve a number of risks, uncertainties and assumptions, including but not limited to industry conditions, prices of crude oil and natural gas, regulatory changes, general economic conditions, interest rates, competition, and other factors.  Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated in the forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

SOURCE Blue Dolphin Energy Company