HOUSTON, June 15 /PRNewswire-FirstCall/ -- Blue Dolphin Energy Company (Nasdaq: BDCO) ("Blue Dolphin" or the "Company"), an independent oil and gas company with operations in the Gulf of Mexico, announced today that it has signed a commitment letter with Blue Sky Langsa, Ltd. ("Blue Sky") to acquire 70% working interest in a Technical Assistance Contract for the Langsa area, Offshore Indonesia (the "TAC Langsa") in a non-cash transaction to be effective June 1, 2010.
The TAC Langsa area covers approximately 77 square kilometers within the Sumatra basin and contains two oil fields. Four wells have been completed in the Malacca Formation of which one well is active and three wells are idle. The fields are located in waters less than 325 feet deep. The active well is currently producing at approximately 620 barrels per day and is gathered via a floating production storage and barge vessel operated by Mitsui Ocean Development & Engineering Co., Ltd (MODEC). An April 2010 third-party reserve study affirmed the net proven reserves were greater than 1.925 million barrels of oil.
In exchange for the assets, Blue Dolphin will issue to Blue Sky 24,000,000 shares of the Company's common stock. In addition, if the daily average production exceeds 1,500 barrel per day prior to the end of the first quarter of 2012, Blue Dolphin will issue an additional 16,000,000 shares of the Company's common stock to Blue Sky.
The closing of the transaction, which is subject to shareholder approval, is expected by the middle of August. The lifting of all other conditions and the signing of a definitive purchase and sales agreement is expected by the end of June.
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 our ability to continue as a going concern; collectability of a $2.0 million loan receivable; our ability to regain compliance for continued listing on NASDAQ; our ability to complete a combination with one or more target businesses; our ability to improve pipeline utilization levels; our ability to secure additional working capital to fund operations; performance of third party operators for properties where we have an interest; production from oil and gas properties that we have interests in; volatility of oil and gas prices; uncertainties in the estimation of proved reserves, in the projection of future rates of production, the timing of development expenditures and the amount and timing of property abandonment; costly changes in environmental and other government regulations for which Blue Dolphin is subject; and adverse changes in the global financial markets. 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