Executive Summary

Q2 2025 was mixed: revenue fell sequentially to $56.6M with gross profit of $0.6M and consolidated EBITDA of $0.1M, but year-over-year results improved materially versus a challenging Q2 2024; EPS was $(0.12) vs $(0.43) YoY .
Management flagged margin and pricing pressure from policy uncertainty and geopolitics, while emphasizing ongoing cost streamlining after maintenance/turnaround execution; inventory and Mexico export constraints drove an intentional inventory build and weaker operating cash flow year-to-date .
Liquidity improved modestly: cash and restricted cash were $1.8M and working capital deficit narrowed to $(16.8)M vs $(19.1)M at year-end, aided by increased related-party credit capacity; however, multiple third-party loans remain in default, creating an overhang .
No formal guidance or earnings call transcript was available; key near-term stock catalysts include resolution of BSEE civil penalties/BOEM bonding, debt forbearance/refinancing progress, and margin normalization in jet/naphtha/HOBM .

What Went Well and What Went Wrong

What Went Well

Year-over-year operational improvement: Q2 2025 gross profit turned positive ($0.6M) from a gross deficit in Q2 2024 ($(4.7)M); consolidated EBITDA improved to $0.1M from $(5.9)M YoY, with smaller refinery losses and stable tolling EBITDA .
Maintenance and turnaround execution supported operational efficiency objectives in H1 2025; leadership continues to focus on optimizing product slate and cost vigilance to capture margins .
Liquidity and working capital improved: cash/restricted cash rose to $1.8M and working capital deficit narrowed by $2.3M vs Dec-2024; related-party revolver capacity increased to $15M effective June 1, bolstering funding flexibility .

What Went Wrong

Sequential deterioration: revenue fell from $83.7M in Q1 to $56.6M, gross profit compressed from $6.1M to $0.6M, and EPS swung from $0.15 to $(0.12), reflecting margin pressure and inventory build .
Legal/regulatory overhang: BSEE finalized civil penalties totaling ~~$2.2M with ongoing accruals (~~$0.3M per quarter per violation), and BOEM’s supplemental bonding appeal remains unresolved, posing liquidity and operational risks .
Debt defaults persist: multiple Veritex and GNCU loans are in default; debt classified current due to default is $33.2M, raising the risk of acceleration and collateral remedies if waivers/forbearances are not secured .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

Metric (USD Thousands, except EPS)	Q2 2024	Q1 2025	Q2 2025
Total Revenue from Operations	69,659	83,692	56,583
Gross Profit (Loss)	(4,699)	6,073	550
Net Income (Loss)	(6,350)	2,244	(1,722)
Diluted EPS	$(0.43)	$0.15	$(0.12)
Consolidated EBITDA	(5,921)	5,057	88

Key drivers:

YoY improvement driven by more favorable refining margins vs Q2 2024 and lower inventory impairment charges; sequential declines reflect macro margin pressure and inventory buildup .

Segment Breakdown (Revenue and EBITDA)

Segment (USD Thousands)	Q2 2024	Q2 2025
Refinery Operations Revenue	68,548	55,795
Tolling & Terminaling Revenue	1,111	788
Refinery Operations EBITDA	(5,975)	(884)
Tolling & Terminaling EBITDA	1,205	1,149
Corporate & Other EBITDA	(1,151)	(177)
Total Consolidated EBITDA	(5,921)	88

KPIs and Balance Sheet Highlights

KPI	Q2 2024	Q2 2025
Inventory Impairment (quarter) (USD Thousands)	5,500	2,100
Cash & Restricted Cash (end of period) (USD Thousands)	1,098	1,819
Working Capital Deficit (end of period) (USD Thousands)	N/A	(16,800)
Accounts Receivable – Related Party (USD Thousands)	5,247	8,398
Debt in Default – Current Portion (USD Thousands)	35,920	33,209
Days of Downtime (YTD)	18 (H1 2024)	15 (H1 2025)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q3	Not disclosed	Not disclosed	Maintained (no guidance provided)
Margins (Refining/Tolling)	FY/Q3	Not disclosed	Not disclosed	Maintained (no guidance provided)
OpEx/LEH Mgmt Fee	FY/Q3	Not disclosed	Ongoing per agreement	Maintained
Tax Rate	FY/Q3	Not disclosed	Not disclosed	Maintained (no guidance provided)
Dividends	FY/Q3	No dividends	No dividends	Maintained

Note: The company did not issue formal quantitative guidance in Q2 materials; forward-looking content is limited to strategy and risk disclosures .

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was available. Themes below reflect press releases and 10-Q MD&A.

Topic	Previous Mentions (Q-2: FY 2024)	Previous Mentions (Q-1: Q1 2025)	Current Period (Q2 2025)	Trend
Margins & Product Slate	2024 refining EBITDA impacted by less favorable margins, lower volume, turnarounds, $8.3M inventory impairment; focus on debt reduction and maintenance completion	“Captured positive refining margins” with focus on operations, product slate selections, and cost vigilance	Margin/pricing pressure persists; continued streamlining and simplification to enhance cost structure	Mixed; strategic cost focus continues
Liquidity & Working Capital	Cash dropped to $1.1M; working capital deficit widened to $(19.1)M; debt reduction of $7.5M in 2024	Cash/restricted cash $2.3M; working capital deficit improved to $(14.5)M	Cash/restricted cash $1.8M; working capital deficit improved to $(16.8)M; affiliate revolver raised to $15M	Gradual improvement, reliant on affiliate support
Regulatory/Legal (BSEE/BOEM)	BOEM supplemental bonding dispute ongoing; operational/penalty exposure flagged	—	Finalized BSEE civil penalties (~$2.2M) with ongoing accruals; BOEM appeal in settlement posture	Elevated regulatory risk; monitoring
Debt/Capital Structure	Emphasis on debt paydown in 2024	Kissick note repaid; pursuing refinancing; caution on defaults	Multiple loans in default; large current portion due to defaults; active forbearance/refinancing efforts	Risk remains; refinancing critical
Operations & Downtime	Turnarounds completed; positioning for 2025	Fundamentals focus; H1 downtime 15 vs 18 days in prior year	Efficiency improvements (flare gas monitoring); continued maintenance focus	Operational execution improving
Market/Geopolitics	Highlighted macro challenges in 2024	Cloudy/volatile macro backdrop	Policy/geopolitical uncertainty continues; impacts margins/pricing	Persistent headwind

Management Commentary

“In the first half of the year Blue Dolphin focused on completing maintenance and turnaround activities to maximize operational efficiencies… As margin and pricing pressure continues due to policy uncertainty and geopolitical tensions, we will continue to streamline and simplify our organization to enhance our cost structure and improve profitability.” — Jonathan P. Carroll, CEO .
“Blue Dolphin effectively captured positive refining margins in the first quarter of 2025… we will continue to focus on the fundamentals – optimizing operations through maintenance activities, product slate selections, and cost vigilance – to maximize refining margins.” — Jonathan P. Carroll, CEO .
Management reiterates strategic objectives to optimize existing assets, improve operational efficiencies, and explore renewable opportunities, while acknowledging financing and regulatory risks that could alter execution paths .

Q&A Highlights

No earnings call transcript was available for Q2 2025; management’s disclosures came via the press release and 10-Q .
Clarifications from filings: intentional inventory build during low margin periods; related-party transactions structure and fees; ongoing debt defaults and covenant requirements; and the scope and accrual treatment of BSEE civil penalties .

Estimates Context

Wall Street consensus (S&P Global) for BDCO Q2 2025 EPS and revenue was unavailable; as a result, no beat/miss assessment vs consensus is provided. Values retrieved from S&P Global.*

Key Takeaways for Investors

Operational recovery YoY but sequential softness: Q2 showed notable improvement vs a weak Q2 2024, yet margins compressed vs Q1; near-term traction hinges on product pricing normalization and inventory drawdowns .
Liquidity improving but fragile: working capital deficit narrowed and affiliate revolver capacity rose, yet defaulted debt with large current portion remains a key risk that could force asset sales or other actions if waivers/refinancing are not achieved .
Regulatory overhang: finalized BSEE penalties and ongoing BOEM bonding dispute create recurring accruals and cash demands; progress on settlements or appeals is a meaningful catalyst .
Segment performance: tolling EBITDA remains stable and supportive; refinery EBITDA narrowed losses YoY; monitoring mix shifts (jet fuel vs naphtha/HOBM/AGO) against PADD 3 market demand .
Execution focus: continued maintenance/turnaround discipline and efficiency upgrades (e.g., flare gas monitoring) point to cost control tailwinds; throughput and product slate optimization remain key to margin capture .
No guidance/no call: absence of formal guidance and a call transcript limits visibility; traders should watch for interim 8-Ks on regulatory outcomes, debt amendments/waivers, and margin commentary from future filings .
Medium-term thesis: if debt is refinanced and regulatory liabilities stabilized, BDCO’s nimble topping unit and cost discipline could leverage margin windows; conversely, adverse legal or lender actions could materially impair operations and equity value .

BLUE DOLPHIN ENERGY CO (BDCO)·Q2 2025 Earnings Summary