Revisiting Our Blue Dolphin Energy BDCO Penny Stock Alert

Blue Dolphin Energy Co. (OTCQX: BDCO), one of our penny stock picks from October, 2011, announced financial results for Q1 2012 just before the end of trading Friday. BDCO announced a net loss of $1,97 million on total revenue of $46 million. BDCO stock is currently trading at $7.40, up 288% since our October 17 alert when the shares were only $2.47. Shares of the oil processor are trading 15.07% above the 50 day moving average, 87.63% above the 200 day moving average, and -36.21% below the 52 week high of $11.60 BDCO reached on February 17, 2012.

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BDCO Stock Chart:

Market Cap: 15.53M

52-Week High
(Feb 17, 2012): 11.60
52-Week Low
(Jun 17, 2011): 1.30
50-Day Moving Avg: 7.80
200-Day Moving Avg: 6.32

Avg Vol (3 month): 21,592
Avg Vol (10 day): 3,289
Shares Outstanding: 10.53M

The price spike in February was when BDCO acquired Lazarus Energy, LLC from Lazarus Energy Holdings, LLC (LEH) in a reverse acquisition. The financial results for Q1 are consolidated to include Lazarus Energy.  The primary asset of Lazarus Energy is a crude oil processing facility near Nixon, Texas. The Nixon Facility began operations on a reduced basis in February 2012 during which time equipment was calibrated and the refining process was adjusted.

There is an obvious increase in production since revenues for Q1 2011 were $0 compared to the $46 million reported for Q1 2012. The net loss of 1.97 million works out to be a loss of 0.37 per common share on a diluted basis. The loss increased the accumulated deficit of Blue Dolphin to $3,694,197.

During Q1, BDCO 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 BDCO’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.

About Blue Dolphin Energy

Blue Dolphin Energy Co. 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.

Bottom Line: BDCO is no longer a penny stock. Is it worth noting, of course because without penny stocks which gain as much as BDCO has, it is hard to compare penny stock picks was to revenue and net loss numbers when alerts go out.

The float of BDCO is so small that any outsider purchasing shares would cause a spike in the PPS. The stock has been trading in a range for over a month and any breakout will force BDCO to breakthrough 7.53 and 7.67, the 1st and 2nd resistance points respectfully.

1st Resistance Point

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