Barnwell Industries Inc (BRN, Financial) filed Quarterly Report for the period ended 2009-03-31.
BARNWELL INDUSTRIES is engaged in oil and natural gas exploration development production and sales in Canada and the United States investment in leasehold land in Hawaii and water well drilling and water pumping system installation and repair in Hawaii. Additionally they provide contract labor for the drilling and workovers of geothermal wells. Their oil and natural gas activities comprises its largest business segment. The other business segment is land investment activities and contract drilling activities. Barnwell Industries Inc has a market cap of $39.5 million; its shares were traded at around $4.8 with a P/E ratio of 4.6 and P/S ratio of 0.6. Barnwell Industries Inc had an annual average earning growth of 20.9% over the past 10 years.
Our revenue, profitability, and future rate of growth are substantially dependent on existing oil and natural gas prices. Historically, oil and natural gas prices have been volatile, are difficult to predict, and fluctuate significantly. Oil and natural gas prices hit historic high levels in recent years and during the latter half of fiscal 2008. Beginning in the fourth quarter of fiscal 2008 through the date of this filing, oil and natural gas prices have fallen sharply from their record levels. Natural gas prices for Barnwell, based on quarterly averages during the three years ended March 31, 2009, have ranged from a low of $4.01 per thousand cubic feet (the average price for the current quarter) to a high of $9.70 per thousand cubic feet (the average price for the quarter ended June 30, 2008). Oil prices for Barnwell, based on quarterly averages for the period discussed above, ranged from a low of $35.20 per barrel (the average price for the current quarter) to a high of $117.22 per barrel (the average price for the quarter ended June 30, 2008). Continued or extended declines in prices for oil and natural gas could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
In the three and six months ended March 31, 2009, Barnwell recorded a non-cash reduction of the carrying value of oil and natural gas properties of $22,088,000 (approximately $15,556,000 net of income taxes). The reduction was due to a significant decline in the price of natural gas at March 31, 2009 as compared to December 31, 2008, partially offset by an increase in the price for oil and to a lesser extent the price for natural gas liquids for the same period. At March 31, 2009, the ceiling value of Barnwells reserves was calculated based upon market prices, adjusted for market differentials, of $2.94 for natural gas, $46.36 for oil and $34.45 for natural gas liquids.
For the three months ended March 31, 2009, Barnwell reported a net loss totaling $16,997,000, an $18,682,000 (1109%) decrease from net earnings of $1,685,000 for the three months ended March 31, 2008. This decrease was largely attributable to the following items:
For the six months ended March 31, 2009, Barnwell reported a net loss totaling $16,573,000, a $21,577,000 (431%) decrease from net earnings of $5,004,000 for the six months ended March 31, 2008. This decrease was largely due to the following items:
The average exchange rate of the Canadian dollar to the U.S. dollar decreased 19% in the three and six months ended March 31, 2009 as compared to the same periods in the prior year, and the exchange rate of the Canadian dollar to the U.S. dollar decreased 3% and 16% at March 31, 2009 as compared to December 31, 2008 and September 30, 2008, respectively. Accordingly, the assets, liabilities, stockholders equity and revenues and expenses of Barnwells subsidiaries operating in Canada have been adjusted to reflect the change in the exchange rates. Barnwells Canadian dollar assets are greater than its Canadian dollar liabilities; therefore, increases or decreases in the value of the Canadian dollar to the U.S. dollar generate other comprehensive income or losses, respectively. Other comprehensive income and losses are not included in net (loss) earnings. The other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the three months ended March 31, 2009 was $410,000, a $1,053,000 decrease from the $1,463,000 other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the same period in the prior year. The other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the six months ended March 31, 2009 was $6,657,000, a $5,483,000 increase from the $1,174,000 other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the same period in the prior year.
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BARNWELL INDUSTRIES is engaged in oil and natural gas exploration development production and sales in Canada and the United States investment in leasehold land in Hawaii and water well drilling and water pumping system installation and repair in Hawaii. Additionally they provide contract labor for the drilling and workovers of geothermal wells. Their oil and natural gas activities comprises its largest business segment. The other business segment is land investment activities and contract drilling activities. Barnwell Industries Inc has a market cap of $39.5 million; its shares were traded at around $4.8 with a P/E ratio of 4.6 and P/S ratio of 0.6. Barnwell Industries Inc had an annual average earning growth of 20.9% over the past 10 years.
Highlight of Business Operations:
· Development rights for residentially-zoned leasehold land within and adjacent to the Hualalai Golf Club which are under option to a developer. As of March 31, 2009, the development rights are under option for $5,312,000, comprised of two payments of $2,656,000 due on December 31, 2009 and December 31, 2010.Our revenue, profitability, and future rate of growth are substantially dependent on existing oil and natural gas prices. Historically, oil and natural gas prices have been volatile, are difficult to predict, and fluctuate significantly. Oil and natural gas prices hit historic high levels in recent years and during the latter half of fiscal 2008. Beginning in the fourth quarter of fiscal 2008 through the date of this filing, oil and natural gas prices have fallen sharply from their record levels. Natural gas prices for Barnwell, based on quarterly averages during the three years ended March 31, 2009, have ranged from a low of $4.01 per thousand cubic feet (the average price for the current quarter) to a high of $9.70 per thousand cubic feet (the average price for the quarter ended June 30, 2008). Oil prices for Barnwell, based on quarterly averages for the period discussed above, ranged from a low of $35.20 per barrel (the average price for the current quarter) to a high of $117.22 per barrel (the average price for the quarter ended June 30, 2008). Continued or extended declines in prices for oil and natural gas could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
In the three and six months ended March 31, 2009, Barnwell recorded a non-cash reduction of the carrying value of oil and natural gas properties of $22,088,000 (approximately $15,556,000 net of income taxes). The reduction was due to a significant decline in the price of natural gas at March 31, 2009 as compared to December 31, 2008, partially offset by an increase in the price for oil and to a lesser extent the price for natural gas liquids for the same period. At March 31, 2009, the ceiling value of Barnwells reserves was calculated based upon market prices, adjusted for market differentials, of $2.94 for natural gas, $46.36 for oil and $34.45 for natural gas liquids.
For the three months ended March 31, 2009, Barnwell reported a net loss totaling $16,997,000, an $18,682,000 (1109%) decrease from net earnings of $1,685,000 for the three months ended March 31, 2008. This decrease was largely attributable to the following items:
For the six months ended March 31, 2009, Barnwell reported a net loss totaling $16,573,000, a $21,577,000 (431%) decrease from net earnings of $5,004,000 for the six months ended March 31, 2008. This decrease was largely due to the following items:
The average exchange rate of the Canadian dollar to the U.S. dollar decreased 19% in the three and six months ended March 31, 2009 as compared to the same periods in the prior year, and the exchange rate of the Canadian dollar to the U.S. dollar decreased 3% and 16% at March 31, 2009 as compared to December 31, 2008 and September 30, 2008, respectively. Accordingly, the assets, liabilities, stockholders equity and revenues and expenses of Barnwells subsidiaries operating in Canada have been adjusted to reflect the change in the exchange rates. Barnwells Canadian dollar assets are greater than its Canadian dollar liabilities; therefore, increases or decreases in the value of the Canadian dollar to the U.S. dollar generate other comprehensive income or losses, respectively. Other comprehensive income and losses are not included in net (loss) earnings. The other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the three months ended March 31, 2009 was $410,000, a $1,053,000 decrease from the $1,463,000 other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the same period in the prior year. The other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the six months ended March 31, 2009 was $6,657,000, a $5,483,000 increase from the $1,174,000 other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the same period in the prior year.
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