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Blue Dolphin Energy Company (OTCMKTS:BDCO) Files An 8-K Entry into a Material Definitive Agreement

Blue Dolphin Energy Company (OTCMKTS:BDCO) Files An 8-K Entry into a Material Definitive AgreementItem 1.01

Entry into a Material Definitive Agreement.

As previously disclosed, on September 26, 2017, Blue Dolphin Energy Company (“Blue Dolphin”), its wholly owned subsidiary Lazarus Energy, LLC (“LE”) and their affiliates Lazarus Energy Holdings, LLC and Jonathan Carroll (collectively, the “Lazarus Parties”) entered into a Letter Agreement with GEL Tex Marketing, LLC (“GEL”), effective September 18, 2017 (the “Letter Agreement”). Among other matters, the Letter Agreement confirmed the parties’ agreement to the continuation of the hearing on confirmation of the final award in the arbitration proceedings between LE and GEL for a period of no more than 90 days (the “Continuance Period”), subject to the terms of the Letter Agreement, in order to facilitate settlement discussions between the parties. The Letter Agreement gave GEL the right to terminate the Letter Agreement on November 1, 2017 if it determined, in its sole discretion, that settlement discussions between the parties were not advancing to an acceptable resolution. On November 1, 2017, the Lazarus Parties and GEL amended the Letter Agreement to extend the date on which GEL has the right to terminate the Letter Agreement from November 1, 2017 to November 28, 2017, in order to facilitate ongoing discussions.

On November 28, 2017, the Lazarus Parties and GEL entered into a second amendment to the Letter Agreement (the “Second Amendment”), which extended the Continuance Period through December 31, 2017, also in order to facilitate ongoing discussions.

Under the Second Amendment, the Lazarus Parties, including Blue Dolphin, remain prohibited from making any pre-payments on indebtedness through the end of the extended Continuance Period other than in the ordinary course of business as described in the Letter Agreement. Additionally, the Lazarus Parties will continue to temporarily suspend, during the Continuance Period, payments to Jonathan Carroll to certain previously disclosed guaranty fee agreements between Mr. Carroll and certain subsidiaries of Blue Dolphin. As previously disclosed, the terms of the guaranty fee agreements were amended in April 2017 to reflect payments 50% in cash and 50% in Blue Dolphin common stock, and subsequently, Mr. Carroll agreed to accept the initial payment under the amended and restated guaranty fee agreements, which occurred in May 2017, 50% in Blue Dolphin common stock. There have been no cash payments to Mr. Carroll under the guaranty fee agreements since August 2016.

Blue Dolphin continues to be unable to provide any assurance as to whether negotiations with GEL will result in a settlement or as to the potential terms of any such settlement.

About Blue Dolphin Energy Company (OTCMKTS:BDCO)
Blue Dolphin Energy Company (Blue Dolphin) is an independent refiner and marketer of petroleum products. The Company’s primary asset is an approximately 15,000 barrels per day (bpd) crude oil and condensate processing facility that is located in Nixon, Texas (the Nixon Facility). The Nixon Facility is situated on approximately 60 acres in Nixon, Wilson County, Texas. The Company operates through two segments: Refinery Operations and Pipeline Transportation. Business activities related to its refinery operations business segment are conducted at the Nixon Facility. Business activities related to its pipeline transportation business segment are primarily conducted in the Gulf of Mexico through the Company’s pipeline assets and leasehold interests in oil and gas properties. As part of its refinery business segment, it conducts petroleum storage and terminaling operations under third-party lease agreements at the Nixon Facility.

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