##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 June 30, 2007
 o
    
    Transition Report Under Section 13 or 15(d) of the Exchange Act
  0-15905
 BLUE DOLPHIN ENERGY COMPANY
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    73-1268729
(I.R.S. Employer
Identification No.)
 801 Travis Street, Suite 2100, Houston, Texas 77002
 (713) 227-7660
 þ o
 o þ
  o þ
   1




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TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSCONDENSED CONSOLIDATED BALANCE SHEET UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITEDITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 6. EXHIBITSSIGNATURESExhibit IndexCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906    Table of Contents  BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 
 PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
    2




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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEET
UNAUDITED
 June 30,2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,330,866Accounts receivable
    
    
    437,680Prepaid expenses and other current assets
    
    
    682,659Total current assets
    
    
    6,451,205Property and equipment, at cost:Oil and gas properties (full-cost method)
    
    
    715,970Pipelines
    
    
    4,595,073Onshore separation and handling facilities
    
    
    1,919,402Land
    
    
    860,275Other property and equipment
    
    
    271,6388,362,358Less:Accumulated depletion, depreciation,
amortization and impairment
    
    
    3,717,6464,644,712Other assets
    
    
    10,640TOTAL ASSETS
    
    $
    11,106,557LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    408,236Accrued expenses and other liabilities
    
    
    134,592Current portion of asset retirement obligations
    
    
    297,509Total current liabilities
    
    
    840,337Long-term liabilities:Asset retirement obligations
    
    
    1,745,549Total long-term liabilities
    
    
    1,745,549Common stock, ($.01 par value, 25,000,000 shares authorized,
11,567,813 shares issued and outstanding
    
    
    115,678Additional paid-in capital
    
    
    31,887,613Accumulated deficit
    
    
    (23,482,620
    )8,520,671TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    11,106,557
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
 Three Months EndedJune 30,2007
    
    
    2006Revenue from operations:Pipeline operations
    
    $
    531,762
    
    
    $
    400,267Oil and gas sales
    
    
    89,165
    
    
    
    685,802Total revenue
    
    
    620,927
    
    
    
    1,086,069Cost of operations:Pipeline operating expenses
    
    
    562,692
    
    
    
    295,115Lease operating expenses
    
    
    90,464
    
    
    
    121,263Depletion,
depreciation and amortization
    
    
    152,203
    
    
    
    112,151General and administrative
    
    
    636,830
    
    
    
    476,525Accretion expense
    
    
    30,391
    
    
    
    26,444Total costs and expenses
    
    
    1,472,580
    
    
    
    1,031,498Income (loss) from operations
    
    
    (851,653
    )
    
    
    54,571Other income (expense):Interest and other expense
    
    
    
    
    
    
    (18,365
    )Interest and other income
    
    
    67,168
    
    
    
    31,889Income (loss) before income taxes
    
    
    (784,485
    )
    
    
    68,095Income taxes
    
    
    
    
    
    
    Net income (loss)
    
    $
    (784,485
    )
    
    $
    68,095Income (loss) per common shareBasic
    
    $
    (0.07
    )
    
    $
    0.01Diluted
    
    $
    (0.07
    )
    
    $
    0.01Weighted average number of common shares outstandingBasic
    
    
    11,560,361
    
    
    
    11,422,625Diluted
    
    
    11,560,361
    
    
    
    11,531,377
  4




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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
 Six Months EndedJune 30,2007
    
    
    2006Revenue from operations:Pipeline operations
    
    $
    1,091,575
    
    
    $
    719,675Oil and gas sales
    
    
    384,348
    
    
    
    1,467,418Total revenue
    
    
    1,475,923
    
    
    
    2,187,093Cost of operations:Pipeline operating expenses
    
    
    1,078,863
    
    
    
    522,604Lease operating expenses
    
    
    157,782
    
    
    
    215,824Depletion,
depreciation and amortization
    
    
    289,379
    
    
    
    227,460General and administrative
    
    
    1,120,192
    
    
    
    969,662Accretion expense
    
    
    60,782
    
    
    
    52,888Total costs and expenses
    
    
    2,706,998
    
    
    
    1,988,438Income (loss) from operations
    
    
    (1,231,075
    )
    
    
    198,655Other income (expense):Interest and other expense
    
    
    
    
    
    
    (31,775
    )Interest and other income
    
    
    127,402
    
    
    
    38,180Income (loss) before income taxes
    
    
    (1,103,673
    )
    
    
    205,060Income taxes
    
    
    
    
    
    
    Net income (loss)
    
    $
    (1,103,673
    )
    
    $
    205,060Income (loss) per common shareBasic
    
    $
    (0.10
    )
    
    $
    0.02Diluted
    
    $
    (0.10
    )
    
    $
    0.02Weighted average number of common shares outstandingBasic
    
    
    11,558,754
    
    
    
    10,847,840Diluted
    
    
    11,558,754
    
    
    
    10,943,092
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
 Six Months Ended,June 30,2007
    
    
    2006OPERATING ACTIVITIESNet income (loss)
    
    $
    (1,103,673
    )
    
    $
    205,060Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:Depletion, depreciation and amortization
    
    
    289,379
    
    
    
    227,460Accretion of asset retirement obligations
    
    
    60,782
    
    
    
    52,888Common stock issued for services
    
    
    39,160
    
    
    
    15,000Compensation from issuance of stock options
    
    
    13,440
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    736,639
    
    
    
    394,145Prepaid expenses and other assets
    
    
    (334,133
    )
    
    
    (217,607
    )Abandonment costs incurred
    
    
    (32,133
    )
    
    
    Accounts payable and accrued expenses
    
    
    184,482
    
    
    
    344,566Net cash provided by (used in) operating activities
    
    
    (146,057
    )
    
    
    1,021,512INVESTING ACTIVITIESExploration and development costs
    
    
    
    
    
    
    (14,810
    )Property, equipment and other assets
    
    
    (22,224
    )
    
    
    (235,934
    )Investment in unconsolidated affiliates
    
    
    
    
    
    
    (897
    )Net cash used in investing activities
    
    
    (22,224
    )
    
    
    (251,641
    )FINANCING ACTIVITIESProceeds from the sale of common stock, net of offering costs
    
    
    
    
    
    
    3,848,324Payments on borrowings
    
    
    
    
    
    
    (510,000
    )Net cash provided by financing activities
    
    
    
    
    
    
    3,338,324Increase (decrease) in cash and cash equivalents
    
    
    (168,281
    )
    
    
    4,108,195CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    5,499,147
    
    
    
    1,297,088CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    5,330,866
    
    
    $
    5,405,283
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 1. Liquidity
     
 7
    Table of Contents   BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
  Six Months EndedJune 30,2007
    
    
    2006($ in thousands)Net cash provided by (used in):Operating activities
    
    $
    (146
    )
    
    $
    1,022Investing activities
    
    
    (22
    )
    
    
    (252
    )Financing activities
    
    
    
    
    
    
    3,338Net increase (decrease) in cash
    
    $
    (168
    )
    
    $
    4,108
 2. Commitments and Contingencies
   3. Earnings per Share
 Earnings per Share
 8
    Table of Contents   BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
 Weighted-Average Numberof Common SharesOutstanding and
    
    
    PerNet
    
    
    Potential Dilutive
    
    
    ShareIncome (Loss)
    
    
    Common Shares
    
    
    AmountThree months ended June 30, 2007Basic and diluted loss per share
    
    $
    (784,485
    )
    
    
    11,560,361
    
    
    $
    (0.07
    )Three months ended June 30, 2006Basic earnings per share
    
    $
    68,095
    
    
    
    11,422,625
    
    
    $
    0.01Effect of dilutive potential common shares
    
    
    
    
    
    
    108,752Diluted earnings per share
    
    $
    68,095
    
    
    
    11,531,377
    
    
    $
    0.01Six months ended June 30, 2007Basic and diluted loss per share
    
    $
    (1,103,673
    )
    
    
    11,558,754
    
    
    $
    (0.10
    )Six months ended June 30, 2006Basic earnings per share
    
    $
    205,060
    
    
    
    10,847,840
    
    
    $
    0.02Effect of dilutive potential common shares
    
    
    
    
    
    
    95,252
    
    
    
    Diluted earnings per share
    
    $
    205,060
    
    
    
    10,943,092
    
    
    $
    0.02
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
 4. Business Segment Information
  Depletion,Operating
    
    
    Depreciation andRevenues
    
    
    Income (Loss)(*)
    
    
    AmortizationThree months ended June 30, 2007:Pipeline operations
    
    $
    531,762
    
    
    
    (583,451
    )
    
    
    105,360Oil and gas exploration and production
    
    
    89,165
    
    
    
    (161,239
    )
    
    
    45,484Other
    
    
    
    
    
    
    (106,963
    )
    
    
    1,359Consolidated
    
    $
    620,927
    
    
    
    (851,653
    )
    
    
    152,203Other income, net
    
    
    
    
    
    
    67,168Loss before income taxes
    
    
    
    
    
    
    (784,485
    )Three months ended June 30, 2006:Pipeline operations
    
    $
    400,267
    
    
    
    (115,407
    )
    
    
    78,945Oil and gas exploration and production
    
    
    685,802
    
    
    
    332,376
    
    
    
    31,087Other
    
    
    
    
    
    
    (162,398
    )
    
    
    2,119Consolidated
    
    $
    1,086,069
    
    
    
    54,571
    
    
    
    112,151Other income, net
    
    
    
    
    
    
    13,524Income before income taxes
    
    
    
    
    
    
    68,095Six months ended June 30, 2007:Pipeline operations
    
    $
    1,091,575
    
    
    
    (898,309
    )
    
    
    207,328Oil and gas exploration and production
    
    
    384,348
    
    
    
    (96,012
    )
    
    
    79,373Other
    
    
    
    
    
    
    (236,754
    )
    
    
    2,678Consolidated
    
    $
    1,475,923
    
    
    
    (1,231,075
    )
    
    
    289,379Other income, net
    
    
    
    
    
    
    127,402Loss before income taxes
    
    
    
    
    
    
    (1,103,673
    )Six months ended June 30, 2006:Pipeline operations
    
    $
    719,675
    
    
    
    (233,751
    )
    
    
    157,891Oil and gas exploration and production
    
    
    1,467,418
    
    
    
    716,202
    
    
    
    65,116Other
    
    
    
    
    
    
    (283,796
    )
    
    
    4,453Consolidated
    
    $
    2,187,093
    
    
    
    198,655
    
    
    
    227,460Other income, net
    
    
    
    
    
    
    6,405Income before income taxes
    
    
    
    
    
    
    205,060
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
 June 30, 2007Identifiable assets:Pipeline operations
    
    $
    5,605,922Oil and gas exploration
and production
    
    
    267,393Other
    
    
    5,233,242Consolidated
    
    $
    11,106,557
 
 (*)
    
    Consolidated income or
loss from operations
includes $105,604 and
$160,280 in unallocated
general and administrative
expenses, and $1,359 and
$2,119 in unallocated
depletion, depreciation and
amortization for the three
months ended June 30, 2007
and 2006, respectively. All
unallocated amounts are
included in Other.Consolidated income or loss
from operations includes
$234,077 and $279,343 in
unallocated general and
administrative expenses, and
$2,678 and $4,453 in
unallocated depletion,
depreciation and
amortization for the six
months ended June 30, 2007
and 2006, respectively. All
unallocated amounts are
included in Other. 5. Stock-Based Compensation
  Share-Based Payments Accounting for Stock Issued to Employees
 Accounting for
Stock-Based Compensation
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
   Transition Election Related to Accounting for the Tax Effects of Share-Based Payment
Awards
  Six Months Ended June 30,2007
    
    
    2006Stock options granted
    
    
    200,000
    
    
    
    0Risk-free interest rate
    
    
    4.80
    %
    
    
    N/AExpected term, in years
    
    
    5.97
    
    
    
    N/AExpected volatility
    
    
    92.4
    %
    
    
    N/ADividend yield
    
    
    0.00
    %
    
    
    0.00
    %
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
  Six Months Ended June 30, 2007WeightedWeighted
    
    
    Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicShares
    
    
    Exercise Price
    
    
    Contractual Life
    
    
    ValueOptions outstanding at the beginning
of the period
    
    
    143,997
    
    
    $
    1.56Options granted
    
    
    200,000
    
    
    $
    3.03Options exercised
    
    
    
    
    
    $
    0.00Options expired or cancelled
    
    
    
    
    
    $
    0.00Options outstanding at the end of
the period
    
    
    343,997
    
    
    $
    2.41
    
    
    
    8.1
    
    
    $
    273,291Options exercisable at the end of
the period
    
    
    143,997
    
    
    $
    1.56
    
    
    
    5.5
    
    
    $
    273,291
  WeightedAverageGrant DateShares
    
    
    Fair ValueNonvested at January 1, 2007
    
    
    
    
    
    $
    0.00Granted
    
    
    200,000
    
    
    $
    2.35Canceled or expired
    
    
    
    
    
    $
    0.00Vested
    
    
    
    
    
    $
    0.00Nonvested at June 30, 2007
    
    
    200,000
    
    
    $
    2.35
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
 6. Warrants
  Accounting Recognition for Certain Transactions involving Equity Instruments Granted to
Other Than Employees
  Warrants Outstanding, Fully Vested and Exercisable at June 30, 2007Weighted AverageWeighted Average
    
    Remaining ContractualNumber Outstanding
    
    Exercise Price
    
    Life in Years16,440
    
    
    $
    5.88
    
    
    
    1.8
  7. Recent Accounting Developments
 The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment
of FASB Statement No. 115 Accounting for Certain Investments
in Debt and Equity Securities
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 




Fair Value Measurements










Accounting for Uncertainty in Income Taxes-An
Interpretation of FASB Statement No. 109 Accounting for Income Taxes 15




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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 












Financial Statements Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements


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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
JUNE 30, 2007
 CONTINUED 
 Financial
Statements Materiality
 Accounting Changes and Error
Corrections
   17




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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Cautionary Statements
  
    
    the level of utilization of our pipelines;
    
    availability and cost of capital;
    
    actions or inactions of third party operators for properties where we have an interest;
    
    the risks associated with exploration;
    
    the level of production from oil and gas properties;
    
    oil and gas price volatility;
    
    uncertainties in the estimation of proved reserves and in the projection of future rates
of production and timing of development expenditures;
    
    regulatory developments; and
    
    general economic conditions.
  Executive Summary
   18




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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES








Liquidity and Capital Resources






19



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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
  June 30,
    
    
    December 31,2007
    
    
    2006Amount
    
    
    %
    
    
    Amount
    
    
    %Working capital
    
    $
    5,610
    
    
    
    55
    
    
    $
    6,652
    
    
    
    57Property and equipment, net
    
    
    4,645
    
    
    
    45
    
    
    
    4,912
    
    
    
    43Other noncurrent assets
    
    
    11
    
    
    
    0
    
    
    
    22
    
    
    
    Total
    
    $
    10,266
    
    
    
    100
    
    
    $
    11,586
    
    
    
    100Long-term liabilities
    
    $
    1,745
    
    
    
    17
    
    
    $
    2,014
    
    
    
    17Stockholders equity
    
    
    8,521
    
    
    
    83
    
    
    
    9,572
    
    
    
    83Total
    
    $
    10,266
    
    
    
    100
    
    
    $
    11,586
    
    
    
    100
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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
      21




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BLUE DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
  Payments Due by Period1 Year
    
    
    
    
    
    
    
    
    
    
    5 YearsTotal
    
    
    or Less
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    or MoreOperating leases
    
    $
    411
    
    
    $
    103
    
    
    $
    188
    
    
    $
    120
    
    
    $
    Employment agreement
    
    
    495
    
    
    
    87
    
    
    
    408
    
    
    
    
    
    
    
    Asset retirement obligations
    
    
    2,043
    
    
    
    298
    
    
    
    86
    
    
    
    
    
    
    
    1,659Total contractual obligations
and other commercial commitments
    
    $
    2,949
    
    
    $
    488
    
    
    $
    682
    
    
    $
    120
    
    
    $
    1,659
  Results of Operations
  Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006
 Revenue from Pipeline Operations.
 Revenue from Oil and Gas Sales.
 22




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BLUE
DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 Pipeline Operating Expenses.
 Lease Operating Expenses
 Depletion, Depreciation and Amortization.
 General and Administrative Expenses
 Interest and Other Expense.
 Interest and Other Income.
 Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006
 Revenue from Pipeline Operations.
 Revenue from Oil and Gas Sales.
 Pipeline Operating Expenses.
 23




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BLUE
DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 Lease Operating Expenses
 Depletion, Depreciation and Amortization.
 General and Administrative Expenses
 Interest and Other Expense.
 Interest and Other Income.
 Recent Accounting Developments
  
 ITEM 3. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
  24




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BLUE
DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Votes
    
    VotesFor
    
    Against
    
    Abstentions1) Election of DirectorsLaurence N. Benz
    
    
    9,531,206
    
    
    
    14,560
    
    
    
    65,049John N. Goodpasture
    
    
    9,545,312
    
    
    
    454
    
    
    
    65,049Harris A. Kaffie
    
    
    9,484,696
    
    
    
    61,070
    
    
    
    65,049Erik Ostbye
    
    
    9,545,312
    
    
    
    454
    
    
    
    65,049Ivar Siem
    
    
    9,521,407
    
    
    
    24,359
    
    
    
    65,0492) Amendment to the Companys 2000 Stock Incentive Plan to increase the number
of shares of common stock that can be issued pursuant to the plan.
 Votes
    
    VotesFor
    
    Against
    
    Abstentions3,951,498
    
    
    
    121,910
    
    
    
    45,157
  
 ITEM 6. EXHIBITS
  3.1(1)
    
    Amended and Restated Certificate of Incorporation of the Company.3.2(2)
    
    Amended and Restated Bylaws of the Company.31.1
    
    Ivar Siem Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002.31.2
    
    Gregory W. Starks Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 302 of the Sarbanes-Oxley
Act of 2002.
 25




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##### Table of Contents



BLUE
DOLPHIN ENERGY COMPANY AND SUBSIDIARIES
 32.1
    
    Ivar Siem Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002.32.2
    
    Gregory W. Starks Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002.
 
 (1)
    
    Incorporated herein by reference to Exhibit A filed in
connection with the definitive Proxy Statement of Blue Dolphin
Energy Company under the Securities and Exchange Act of 1934, as
filed on October 13, 2004 (Commission File No. 000-15905).(2)
    
    Incorporated herein by reference to Exhibit 3.1 filed in
connection with Form 10-QSB of Blue Dolphin Energy Company for
the quarter ended June 30, 2004 under the Securities and
Exchange Act of 1934, as filed on August 23, 2004 (Commission
File No. 000-15905). 26




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##### Table of Contents



SIGNATURES
  BLUE DOLPHIN ENERGY COMPANYAugust 10, 2007
    By:
    /s/ IVAR SIEMIvar SiemChairman and Chief Executive Officer By:
    /s/ GREGORY W. STARKSGregory W. StarksVice President, Treasurer
(Principal Accounting and Financial Officer) 27




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##### Table of Contents



Exhibit Index
 EXHIBITS
  3.1(1)
    
    Amended and Restated Certificate of Incorporation of the Company.3.2(2)
    
    Amended and Restated Bylaws of the Company.31.1
    
    Ivar Siem Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002.31.2
    
    Gregory W. Starks Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    
    Ivar Siem Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002.32.2
    
    Gregory W. Starks Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002.
 
 (1)
    
    Incorporated herein by reference to Exhibit A filed in
connection with the definitive Proxy Statement of Blue Dolphin
Energy Company under the Securities and Exchange Act of 1934, as
filed on October 13, 2004 (Commission File No. 000-15905).(2)
    
    Incorporated herein by reference to Exhibit 3.1 filed in
connection with Form 10-QSB of Blue Dolphin Energy Company for
the quarter ended June 30, 2004 under the Securities and
Exchange Act of 1934, as filed on August 23, 2004 (Commission
File No. 000-15905).