Barnwell Industries, Inc. Reports Results for the Second Quarter and Six Months Ended March 31, 2020
June 23 2020 - 6:00AM
Barnwell Industries, Inc. (NYSE American: BRN) today reported
losses of $1,514,000, $0.18 per share, and $1,928,000, $0.23 per
share, for the three and six months ended March 31, 2020,
respectively, as compared to net losses of $2,125,000, $0.26 per
share, and $6,725,000, $0.81 per share, for the three and six
months ended March 31, 2019, respectively.
Mr. Alexander Kinzler, Chief Executive Officer
of Barnwell, commented, “Our improved results for this quarter and
six months include a $1,637,000 non-cash impairment of our oil and
natural gas properties due to the negative impact on oil prices and
the extreme uncertainties created by the COVID-19 pandemic during
the three months ended March 31, 2020 on the Company’s financial
outlook and the Company’s financial resources to develop our proved
undeveloped reserves in the Twining area of Alberta, Canada.
Therefore, such proved undeveloped reserves were not included in
the ceiling test calculation for the three months ended March 31,
2020 as they were in prior ceiling test calculations. Oil
prices also fell dramatically in March and April as a result of the
Russian and Saudi Arabian oil price war but have since partially
recovered through late May and early June.
“The reduction in the loss for the three months
ended March 31, 2020 as compared to last year’s loss for the three
months ended March 31, 2019 was largely due to a $1,336,000 gain,
before taxes, in the current period from the sale of the Company’s
leasehold interest in a contract drilling segment storage yard in
Honolulu; whereas there was no such gain in last year’s
quarter. Additionally, Barnwell’s contract drilling segment
operating profit increased $1,035,000 due to increased drilling
activity. Partially offsetting these were the aforementioned
non-cash oil and natural gas property impairment which was
$1,394,000 higher than the prior year’s quarter, and a $570,000
increase in general and administrative expenses due to increased
legal, proxy solicitation and proxy advisory costs. On a
positive note, the Company’s oil and natural gas production
increased 33% and 9%, respectively, in the three months ended March
31, 2020 as compared to last year’s three months ended March 31,
2019 due largely to an oil well drilled in the Spirit River area in
mid-November 2019. However, the Company’s share of recent net
oil production in the first week of June 2020 from this well
averaged approximately 39 barrels per day, a decline in production
due to both natural declines as well as a higher royalty rate due
to expiry of the royalty holiday.
“The decrease in the loss for the six months
ended March 31, 2020 as compared to last year’s loss for the six
months ended March 31, 2019 was due to the aforementioned
$1,336,000 gain, before taxes; a $1,992,000 increase in Barnwell’s
contract drilling segment operating profit due to increased
drilling activity; a $1,226,000 increase in Barnwell’s oil and
natural gas segment operating results, before impairments and
income taxes, due primarily to a 16% increase in oil production and
a 17% increase in oil prices; a $776,000 decrease in the non-cash
impairment of our oil and natural gas properties; and a $518,000
increase in general and administrative expenses due to increased
legal, proxy solicitation and proxy advisory costs.
“The new, 100% owned oil well drilled and
completed in December 2019 in the Twining area began producing oil
and natural gas in January 2020. This well contributed
approximately 3,400 barrels of net oil production from January
through March 2020, representing 8% of total net oil production for
the three months ended March 31, 2020. Net oil production in the
first week of June 2020 from this well averaged approximately 78
barrels per day.
“Barnwell ended the quarter with $2,041,000 in
working capital which includes $3,386,000 in cash and cash
equivalents. However, the Company is investigating potential
sources of funding including non-core oil and gas property sales
and the sale of its Hawaii corporate office in an attempt to
mitigate the substantial doubt about our ability to continue as a
going concern for one year from the date of the filing of our
Quarterly Report on Form 10-Q for the period ended March 31, 2020,
because of uncertainties regarding the potential duration and depth
of the impacts of the COVID-19 pandemic on our business as
described above.”
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.
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COMPARATIVE OPERATING
RESULTS |
(Unaudited) |
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Three months ended |
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Six months ended |
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March 31, |
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March 31, |
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2020 |
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2019 |
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2020 |
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2019 |
|
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Revenues |
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$ |
4,582,000 |
|
|
$ |
2,963,000 |
|
|
$ |
9,432,000 |
|
|
$ |
5,558,000 |
|
|
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|
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|
|
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Net loss
attributable to Barnwell Industries, Inc. |
|
$ |
(1,514,000 |
) |
|
$ |
(2,125,000 |
) |
|
$ |
(1,928,000 |
) |
|
$ |
(6,725,000 |
) |
|
|
|
|
|
|
|
|
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Net loss per
share – basic and diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.81 |
) |
|
|
|
|
|
|
|
|
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Weighted-average shares and equivalent shares outstanding: |
|
|
|
|
|
|
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Basic and diluted |
|
|
8,277,160 |
|
|
|
8,277,160 |
|
|
|
8,277,160 |
|
|
|
8,277,160 |
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CONTACT: |
Alexander C.
KinzlerChief Executive Officer and President |
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Russell M. GiffordExecutive Vice President and Chief Financial
Officer |
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Tel: (808) 531-8400 |
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