Barnwell Industries, Inc. Reports Results for its Second Quarter Ended March 31, 2024
Barnwell Industries reported a net loss of $1.772 million ($0.18 per share) on revenue of $5.774 million for its second fiscal quarter ended March 31, 2024. Despite a revenue increase from $5.239 million in the same quarter of 2023, the net loss widened due to a $1.677 million non-cash impairment of oil and natural gas properties. Production of oil, gas, and natural gas liquids rose by 16%, 47%, and 100%, respectively. General and administrative expenses decreased by 33%, saving $669,000. The company received $1.453 million from land sales and real estate transactions. Despite operating losses in its contract drilling segment, Barnwell ended the quarter with $3.332 million in working capital and remains debt-free, focusing on investment in its Twining property.
- Revenue increased to $5.774 million from $5.239 million year-over-year.
- Oil, gas, and natural gas liquids production increased by 16%, 47%, and 100%, respectively.
- General and administrative expenses decreased by $669,000, a 33% reduction.
- The company received $1.453 million from land sales and real estate transactions.
- Barnwell ended the quarter with $3.332 million in working capital.
- The company remains debt-free, providing flexibility for future investments.
- Plans to drill at least one 100%-owned well in Twining during the remainder of fiscal 2024.
- Net loss widened to $1.772 million ($0.18 per share), up from $1.237 million ($0.12 per share) in the same quarter of 2023.
- A $1.677 million non-cash impairment of oil and natural gas properties significantly affected net income.
- Operating costs increased due to new production and investments.
- Operating loss in the contract drilling segment increased by $424,000 due to operational issues and higher labor costs.
Insights
The latest financial results for Barnwell Industries, Inc. indicate both challenges and opportunities for the company. Revenue increased to
This impairment, linked to the changing rolling average prices used in the ceiling test calculation, highlights the volatility and sensitivity of the oil and gas sector to commodity prices. Despite these losses, production increases in oil (16%), gas (47%) and natural gas liquids (100%) are notable. Yet, the increased operating costs from new production and enhancements offset these gains.
On the positive side, the land investment segment showed significant improvement, generating
Short-term, the company faces challenges due to the impairment and operational issues in the contract drilling segment. Long-term, continued production growth and strategic investments in the Twining property could yield positive results. Retail investors should keep an eye on Barnwell's ability to manage costs and optimize its asset base.
Barnwell Industries' recent quarter highlights significant production increases for oil, gas and natural gas liquids. Now, with oil production up
This impairment is due to rolling average price changes, a common issue in the industry where asset valuations fluctuate with market prices. Investors should note the strategic point of having 100%-owned and operated wells like the one planned for Twining; this gives Barnwell complete control over operations and potential revenue benefits.
Moreover, investing in enhancing existing wells and facilities at Twining shows a focus on improving efficiency and production output, which can be critical in mitigating operational costs. However, maintaining such growth requires careful capital allocation and continued optimization of operations.
Retail investors should be aware of the dual nature of these developments: while production increases are a positive, the inherent sector risks and operational costs must be monitored closely. The company’s strategic plans for new wells and investment in existing assets could provide long-term benefits if successfully executed.
The performance of Barnwell Industries' land investment segment adds a positive dimension to the overall picture. The company received
Real estate sales like these provide a less volatile revenue stream compared to oil and gas, aiding in smoothing out financial performance. This sector's positive results show that Barnwell is effectively diversifying its revenue base—a smart move given the cyclical nature of the oil and gas industry.
For retail investors, this segment's performance suggests a balanced approach by the company, leveraging both high-risk and lower-risk investments to stabilize income. The cash proceeds from real estate can also fuel further investments in core areas, potentially mitigating some risks associated with the oil and gas sector.
Production Increases for All Products
Continued Reduction in General and Administrative Expenses
HONOLULU, May 14, 2024 (GLOBE NEWSWIRE) -- Barnwell Industries, Inc. (NYSE American: BRN) today reported financial results for its second fiscal quarter ended March 31, 2024. For the quarter, the Company had revenue of
Mr. Craig D. Hopkins, Chief Executive Officer of Barnwell, commented “On April 1, 2024, I started in my new role as President and CEO of the Company. I am excited about Barnwell’s prospects in Twining and the growth from our investments in that region. I am also confident we can continue to reduce general and administrative expenses through increased focus on our key business. Along with greater investor engagement and a rigorous focus on capital allocation, I hope to make impactful changes to our operations. The Twining oil property continues to perform well, and plans are in place to drill at least one
Oil and Gas Production Increases Offset by Non-Cash Impairment
Oil, gas and natural gas liquids production increased
Land Segment Generates Cash Proceeds
The land investment segment operating results improved significantly due to the Kukio Resort Development Partnerships sale of the last two remaining single-family lots within Increment I in the second quarter, which resulted in the Company receiving
Contract Drilling Segment
As previously stated, the Company continues to investigate the appropriate strategic, business and financial alternatives for Water Resources which may include, among other things, a sale of its stock or assets, or an orderly wind-down of its operations after all contracts in backlog are complete, along with a liquidation of WRI’s drilling rigs and equipment. The contract drilling segment’s operating loss increased
Continued Reduction in General and Administrative Expenses
General and administrative expenses decreased
The Company ended the quarter with
The information contained in this press release contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. A forward-looking statement is one which is based on current expectations of future events or conditions and does not relate to historical or current facts. These statements include various estimates, forecasts, projections of Barnwell’s future performance, statements of Barnwell’s plans and objectives, and other similar statements. Forward-looking statements include phrases such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “predicts,” “estimates,” “assumes,” “projects,” “may,” “will,” “will be,” “should,” or similar expressions. Although Barnwell believes that its current expectations are based on reasonable assumptions, it cannot assure that the expectations contained in such forward-looking statements will be achieved. Forward-looking statements involve risks, uncertainties and assumptions which could cause actual results to differ materially from those contained in such statements. The risks, uncertainties and other factors that might cause actual results to differ materially from Barnwell’s expectations are set forth in the “Forward-Looking Statements,” “Risk Factors” and other sections of Barnwell’s annual report on Form 10-K for the last fiscal year and Barnwell’s other filings with the Securities and Exchange Commission. Investors should not place undue reliance on the forward-looking statements contained in this press release, as they speak only as of the date of this press release, and Barnwell expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein.
| COMPARATIVE OPERATING RESULTS | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three months ended | Six months ended | ||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| Revenues | $ | 5,774,000 | $ | 5,239,000 | $ | 11,929,000 | $ | 12,750,000 | |||||||||||
| Net loss attributable to Barnwell Industries, Inc. | $ | (1,772,000 | ) | $ | (1,237,000 | ) | $ | (2,436,000 | ) | $ | (148,000 | ) | |||||||
Net loss per | |||||||||||||||||||
| share – basic and diluted | $ | (0.18 | ) | $ | (0.12 | ) | $ | (0.24 | ) | $ | (0.01 | ) | |||||||
| Weighted-average shares and | |||||||||||||||||||
| equivalent shares outstanding: | |||||||||||||||||||
| Basic and diluted | 10,019,172 | 9,956,687 | 10,007,905 | 9,956,687 | |||||||||||||||
| CONTACT: | Craig D. Hopkins |
| Chief Executive Officer and President | |
| Phone: (403) 531-1560 | |
| Email: info@bocl.ca |
FAQ
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