What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-14 compared with 2023-05-15 · 143 added, 112 removed, 566 unchanged (31% of the section changed)

7 unchanged sentences

Accounts and other receivables, net of allowance for doubtful accounts of:

$ 249,000 at March 31, 2023;

$ 250,000 at June 30, 2023;

$ 231,000 at September 30, 2022

8 unchanged sentences

Proved properties 81,102,000 67,883,000

Advances to operators for capital expenditures 481,000 —

Unproved properties 4,873,000 —

Drilling rigs and other property and equipment 7,236,000 6,923,000

21 unchanged sentences

authorized, 40,000,000 shares:

10,124,587 issued at March 31, 2023 and September 30, 2022

10,158,678 issued at June 30, 2023;

10,124,587 issued at September 30, 2022

5,079,000 5,062,000

3 unchanged sentences

Treasury stock, at cost:

167,900 shares at March 31, 2023 and September 30, 2022

167,900 shares at June 30, 2023 and September 30, 2022

( 2,286,000 ) ( 2,286,000 )

9 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2023 2022 2023 2022

9 unchanged sentences

Depletion, depreciation, and amortization 1,257,000 814,000 2,858,000 1,915,000

Interest expense 1,000 1,000 1,000 1,000

Foreign currency gain ( 121,000 ) — ( 201,000 ) —

18 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2023 2022 2023 2022

6 unchanged sentences

( 20,000 ) — ( 60,000 ) —

Total other comprehensive (loss) income ( 20,000 ) 12,000 ( 38,000 ) ( 13,000 )

Total other comprehensive loss ( 5,000 ) ( 108,000 ) ( 43,000 ) ( 121,000 )

Total comprehensive (loss) income ( 720,000 ) 2,481,000 ( 784,000 ) 6,206,000

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three months ended March 31, 2023 and 2022

Three months ended June 30, 2023 and 2022

Outstanding Common

1 unchanged sentence

Capital Retained Earnings Accumulated

Comprehensive Income Treasury

Comprehensive (Loss) Income Treasury

Stock Non-controlling

Interests Total

Balance at December 31, 2021 9,446,783 $ 4,807,000 $ 4,846,000 $ 3,429,000 $ 7,000 $ ( 2,286,000 ) $ 24,000 $ 10,827,000

Balance at March 31, 2022 9,956,687 $ 5,062,000 $ 7,121,000 $ 5,481,000 $ 19,000 $ ( 2,286,000 ) $ 64,000 $ 15,461,000

Net earnings — — — 2,531,000 — — 58,000 2,589,000

3 unchanged sentences

Share-based compensation — — 114,000 — — — — 114,000

Issuance of common stock for services 437 — 1,000 — — — — 1,000

Issuance of common stock, net of costs 509,467 255,000 2,101,000 — — — — 2,356,000

Balance at June 30, 2022 9,956,687 $ 5,062,000 $ 7,235,000 $ 8,012,000 $ ( 89,000 ) $ ( 2,286,000 ) $ 50,000 $ 17,984,000

Balance at March 31, 2023 9,956,687 $ 5,062,000 $ 7,541,000 $ 7,273,000 $ 1,256,000 $ ( 2,286,000 ) $ 18,000 $ 18,864,000

Balance at December 31, 2022 9,956,687 $ 5,062,000 $ 7,466,000 $ 8,660,000 $ 1,276,000 $ ( 2,286,000 ) $ 32,000 $ 20,210,000

Net (loss) earnings — — — ( 717,000 ) — — 2,000 ( 715,000 )

Foreign currency translation adjustments, net of taxes of $ 0

— — — — 15,000 — — 15,000

Distributions to non-controlling interests — — — — — — ( 4,000 ) ( 4,000 )

Share-based compensation — — ( 12,000 ) — — — — ( 12,000 )

Issuance of common stock for services 34,091 17,000 73,000 — — — — 90,000

Dividends declared, $ 0.015 per share

3 unchanged sentences

— — — — ( 20,000 ) — — ( 20,000 )

Balance at March 31, 2023 9,956,687 $ 5,062,000 $ 7,541,000 $ 7,273,000 $ 1,256,000 $ ( 2,286,000 ) $ 18,000 $ 18,864,000

Balance at June 30, 2023 9,990,778 $ 5,079,000 $ 7,602,000 $ 6,406,000 $ 1,251,000 $ ( 2,286,000 ) $ 16,000 $ 18,068,000

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Six months ended March 31, 2023 and 2022

Nine months ended June 30, 2023 and 2022

Outstanding Common

1 unchanged sentence

Capital Retained Earnings Accumulated

Comprehensive Income Treasury

Comprehensive (Loss) Income Treasury

Stock Non-controlling

8 unchanged sentences

Issuance of common stock, net of costs 509,467 255,000 2,101,000 — — — — 2,356,000

Balance at March 31, 2022 9,956,687 $ 5,062,000 $ 7,121,000 $ 5,481,000 $ 19,000 $ ( 2,286,000 ) $ 64,000 $ 15,461,000

Balance at June 30, 2022 9,956,687 $ 5,062,000 $ 7,235,000 $ 8,012,000 $ ( 89,000 ) $ ( 2,286,000 ) $ 50,000 $ 17,984,000

Balance at September 30, 2022 9,956,687 $ 5,062,000 $ 7,351,000 $ 7,720,000 $ 1,294,000 $ ( 2,286,000 ) $ 20,000 $ 19,161,000

4 unchanged sentences

Share-based compensation — — 178,000 — — — — 178,000

Issuance of common stock for services 34,091 17,000 73,000 — — — — 90,000

Dividends declared, $ 0.045 per share

3 unchanged sentences

— — — — ( 60,000 ) — — ( 60,000 )

Balance at March 31, 2023 9,956,687 $ 5,062,000 $ 7,541,000 $ 7,273,000 $ 1,256,000 $ ( 2,286,000 ) $ 18,000 $ 18,864,000

Balance at June 30, 2023 9,990,778 $ 5,079,000 $ 7,602,000 $ 6,406,000 $ 1,251,000 $ ( 2,286,000 ) $ 16,000 $ 18,068,000

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

Cash flows from operating activities:

15 unchanged sentences

Retirement plan contributions and payments ( 2,000 ) ( 2,000 )

Bad debt expense 18,000 44,000

Bad debt expense (recovery) 18,000 ( 27,000 )

Foreign currency gain ( 201,000 ) —

Increase (decrease) from changes in current assets and liabilities 365,000 ( 2,096,000 )

Decrease from changes in current assets and liabilities ( 433,000 ) ( 1,245,000 )

Net cash provided by operating activities 157,000 5,669,000

6 unchanged sentences

Capital expenditures - all other ( 305,000 ) ( 13,000 )

Advances to operators for capital expenditures ( 481,000 ) —

Issuance of note receivable — ( 400,000 )

Net cash used in investing activities ( 9,875,000 ) ( 6,063,000 )

5 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 63,000 ( 38,000 )

Net decrease in cash and cash equivalents ( 7,025,000 ) ( 1,653,000 )

Net (decrease) increase in cash and cash equivalents ( 10,232,000 ) 1,295,000

Cash and cash equivalents at beginning of period 12,804,000 11,279,000

19 unchanged sentences

The Condensed Consolidated Balance Sheet as of September 30, 2022 has been derived from audited consolidated financial statements.

In the opinion of management, all adjustments (which include only normal recurring adjustments, with the exception of an out-of-period adjustment for the six months ended March 31, 2023 as described below) necessary to present fairly the financial position at March 31, 2023, results of operations, comprehensive (loss) income, and equity for the three and six months ended March 31, 2023 and 2022, and cash flows for the six months ended March 31, 2023 and 2022, have been made.

The results of operations for the period ended March 31, 2023 are not necessarily indicative of the operating results for the full year.

In the opinion of management, all adjustments (which include only normal recurring adjustments, with the exception of an out-of-period adjustment for the nine months ended June 30, 2023 as described below) necessary to present fairly the financial position at June 30, 2023, results of operations, comprehensive (loss) income, and equity for the three and nine months ended June 30, 2023 and 2022, and cash flows for the nine months ended June 30, 2023 and 2022, have been made.

The results of operations for the period ended June 30, 2023 are not necessarily indicative of the operating results for the full year.

Out-of-Period Adjustment

During the three months ended December 31, 2022, errors were identified related to estimates of accrued oil and natural gas sales and accrued professional fees for the year ended September 30, 2022.

Accordingly, the Company recorded out-of-period adjustments in the three months ended December 31, 2022 for the rollover effect of those differences which were immaterial to the results of that quarter.

For the six months ended March 31, 2023, the rollover effect of those out-of-period adjustments both decreased oil and natural gas revenues and increased general and administrative expenses by a total of $ 147,000 , which accordingly increased our net loss before income taxes and net loss for the six months ended March 31, 2023 by the same amount.

The net earnings per basic and diluted share attributable to Barnwell stockholders would have been $ 0.02 lower for the year ended September 30, 2022 and the net loss per basic and diluted share attributable to Barnwell stockholders would have been $ 0.01 lower for the six months ended March 31, 2023 had the amounts been reflected in the periods to which they relate.

Accordingly, the Company recorded out-of-period adjustments in the three months ended December 31,

2022 for the rollover effect of those differences which were immaterial to the results of that quarter.

For the nine months ended June 30, 2023, the rollover effect of those out-of-period adjustments both decreased oil and natural gas revenues and increased general and administrative expenses by a total of $ 147,000 , which accordingly increased our net loss before income taxes and net loss for the nine months ended June 30, 2023 by the same amount.

In addition, during the three months ended June 30, 2023, an error was identified that resulted from actual state income taxes in our fiscal 2022 state tax returns being $ 106,000 lower than the amounts recorded as fiscal 2022 state income taxes in our income tax provision at September 30, 2022.

The net effect of all of the out-of-period adjustments above amounted to a $ 41,000 increase in our net loss for the nine months ended June 30, 2023.

The net earnings per basic and diluted share attributable to Barnwell stockholders would have been $ 0.01 lower for the year ended September 30, 2022 and the net loss per basic and diluted share attributable to Barnwell stockholders would have been $ 0.01 lower for the nine months ended June 30, 2023 had the amounts been reflected in the periods to which they relate.

Based upon an evaluation of all relevant quantitative and qualitative factors, and after considering the provisions of Staff Accounting Bulletin (SAB) No.

99, “Materiality,” and SAB 108, management believes these out-of-period correcting adjustments were not material to the Company’s results for the six months ended March 31, 2023 or the Company’s trend of operating results.

We evaluated the impact of these out-of-period adjustments on the results of our previously issued financial statements for the year ended September 30, 2022 and first quarter ended December 31, 2022 and concluded that the impact was not material as well.

99, “Materiality,” and SAB 108, management believes these out-of-period correcting adjustments were not material to the Company’s results for the nine months ended June 30, 2023 or the Company’s trend of operating results.

We evaluated the impact of these out-of-period adjustments on the results of our previously issued financial statements for the year ended September 30, 2022, first quarter ended December 31, 2022, and third quarter ended June 30, 2023 and concluded that the impact was not material as well.

Use of Estimates in the Preparation of Condensed Consolidated Financial Statements

5 unchanged sentences

Other than as set forth below, there have been no changes to Barnwell's significant accounting policies as described in the Notes to Consolidated Financial Statements included in Item 8 of the Company's 2022 Annual Report.

Advances to Operators for Capital Expenditures

The Company participates in the drilling of crude oil and natural gas wells with other working interest partners.

Due to the capital-intensive nature of crude oil and natural gas drilling activities, the working interest partner responsible for conducting the drilling operations may request advance payments from other working interest partners for their share of the costs.

The Company expects such advances to be applied by working interest partners against joint interest billings for its share of drilling operations within 90 days from when the advance is paid.

Share-based Compensation

Share-based compensation cost for Barnwell’s equity-classified stock options and restricted stock units is measured at fair value and is recognized as an expense over the requisite service period.

For stock options, Barnwell utilizes a closed-form valuation model to determine the fair value of each option award.

Expected volatilities are based on the historical volatility of Barnwell’s stock over a period consistent with that of the expected terms of the options.

The expected terms of the options represent expectations of future employee exercise and are estimated based on factors such as vesting periods, contractual expiration dates, historical trends in Barnwell’s stock price, and historical exercise behavior.

If the Company does not have sufficient historical data regarding employee exercise behavior, the “simplified method” as permitted by the SEC’s Staff Accounting Bulletin No.

110, Share-Based Payment is utilized to estimate the expected terms of the options.

The risk-free rates for periods within the contractual life of the

options are based on the yields of U.S.

Treasury instruments with terms comparable to the estimated option terms.

Expected dividends are based on historical dividend payments.

For restricted stock units, Barnwell utilizes the closing market price of the Company’s common stock on the day prior to the date of grant reduced by the present value of the dividends expected to be paid on the underlying shares of common stock during the requisite service period (as these awards are not entitled to receive dividends until vested) to determine the fair value of each restricted stock unit award.

The Company's policy is to recognize forfeitures as they occur.

(LOSS) EARNINGS PER COMMON SHARE

Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding for the period.

Diluted (loss) earnings per share is calculated using the treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities, which consist of outstanding stock options.

Potentially dilutive shares are excluded from the computation of diluted (loss) earnings per share if their effect is anti-dilutive.

Options to purchase 615,000 shares of common stock were excluded from the computation of diluted shares for the three and six months ended March 31, 2023 and 2022, respectively, as their inclusion would have been anti-dilutive.

For the three months ended June 30, 2023, options to purchase 493,022 shares of common stock and 37,312 restricted stock units were excluded from the computation of diluted shares as their inclusion would have been anti-dilutive.

For the nine months ended June 30, 2023, options to purchase 574,341 shares of common stock and 12,301 restricted stock units were excluded from the computation of diluted shares as their inclusion would have been anti-dilutive.

For the three and nine months ended June 30, 2022, options to purchase 615,000 shares of common stock were excluded from the computation of diluted shares as their inclusion would have been anti-dilutive.

Reconciliations between net (loss) earnings attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net (loss) earnings per share computations are detailed in the following tables:

Three months ended March 31, 2023

Three months ended June 30, 2023

(Numerator) Shares

2 unchanged sentences

Effect of dilutive securities -

common stock options — —

common stock options and restricted stock units — —

Diluted net loss per share $ ( 717,000 ) 9,975,044 $ ( 0.07 )

Six months ended March 31, 2023

Nine months ended June 30, 2023

(Numerator) Shares

2 unchanged sentences

Effect of dilutive securities -

common stock options — —

common stock options and restricted stock units — —

Diluted net loss per share $ ( 865,000 ) 9,962,806 $ ( 0.09 )

Three months ended March 31, 2022

Three months ended June 30, 2022

(Numerator) Shares

4 unchanged sentences

Diluted net earnings per share $ 2,531,000 9,956,687 $ 0.25

Six months ended March 31, 2022

Nine months ended June 30, 2022

(Numerator) Shares

13 unchanged sentences

Barnwell continues to have an indirect 19.6 % non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP, and KD I.

The partnerships derive income from the sale of residential parcels in Increment I, of which only one lot remains to be sold as of March 31, 2023, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships.

The partnerships derive income from the sale of residential parcels in Increment I, of which only one lot remains to be sold as of June 30, 2023, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships.

Increment II is not yet under development, and there is no assurance that development of such acreage will occur.

1 unchanged sentence

Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interest in KD Kona and KKM, based on its respective partnership sharing ratios of 75 % and 34.45 %, respectively.

No cash distributions were received during the three months ended March 31, 2023.

During the three months ended March 31, 2022, Barnwell received cash distributions of $ 1,760,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 1,568,000 after distributing $ 192,000 to non-controlling interests.

During the six months

ended March 31, 2023, Barnwell received cash distributions of $ 538,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 478,000 , after distributing $ 60,000 to non-controlling interests.

During the six months ended March 31, 2022, Barnwell received cash distributions of $ 2,967,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 2,643,000 after distributing $ 324,000 to non-controlling interests.

Equity in income of affiliates was nil and $ 538,000 for the three and six months ended March 31, 2023, respectively, as compared to equity in income of affiliates of $ 1,760,000 and $ 2,967,000 for the three and six months ended March 31, 2022, respectively.

No cash distributions were received during the three months ended June 30, 2023.

During the three months ended June 30, 2022, Barnwell received cash distributions of $ 433,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 385,000 after distributing $ 48,000 to non-controlling interests.

During the nine months ended June 30, 2023, Barnwell received cash distributions of $ 538,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 478,000 , after distributing $ 60,000 to non-controlling interests.

During the nine months ended June 30, 2022, Barnwell received cash distributions of $ 3,400,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 3,028,000 after distributing $ 372,000 to non-controlling interests.

Equity in income of affiliates was nil and $ 538,000 for the three and nine months ended June 30, 2023, respectively, as compared to equity in income of affiliates of $ 433,000 and $ 3,400,000 for the three and nine months ended June 30, 2022, respectively.

Summarized financial information for the Kukio Resort Land Development Partnerships is as follows:

Three months ended March 31,

Three months ended June 30,

Revenue $ 2,703,000 $ 4,574,000

Gross profit $ 1,694,000 $ 3,004,000

Net (loss) earnings $ ( 82,000 ) $ 5,673,000

Six months ended March 31,

Net earnings $ 951,000 $ 2,209,000

Nine months ended June 30,

Revenue $ 7,699,000 $ 23,492,000

3 unchanged sentences

The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnerships’ cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnerships’ income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates.

Accordingly, the amount of equity in income of affiliates recognized in the six months ended March 31, 2023 was equivalent to the $ 538,000 of distributions received in that period.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 1,211,000 at March 31, 2023 and $ 958,000 at September 30, 2022.

Accordingly, the amount of equity in income of affiliates recognized in the nine months ended June 30, 2023 was equivalent to the $ 538,000 of distributions received in that period.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 993,000 at June 30, 2023 and $ 958,000 at September 30, 2022.

Sale of Interest in Leasehold Land

1 unchanged sentence

With respect to Increment I, Kaupulehu Developments is entitled to receive payments from KD I based on 10 % of the gross receipts from KD I’s sales of single-family residential lots in Increment I.

One single-family lot was sold during the six months ended March 31, 2023 and one single-family lot, of the 79 lots developed within Increment I, remained to be sold as of March 31, 2023.

One single-family lot was sold during the nine months ended June 30, 2023 and one single-family lot, of the 79 lots developed within Increment I, remained to be sold as of June 30, 2023.

The following table summarizes the Increment I revenues from KD I and the amount of fees directly related to such revenues:

Three months ended

March 31, Six months ended

June 30, Nine months ended

2023 2022 2023 2022

15 unchanged sentences

The Company has determined that Teton Barnwell is a variable interest entity (“VIE”) as the entity is structured with non-substantive voting rights and that the Company is the primary beneficiary.

steer the decisions that most significantly impact Teton Barnwell’s economic performance and has the obligation to absorb any potential losses that could be significant to Teton Barnwell.

This is due to the fact that even though Teton Barnwell has a unanimous consent voting structure, BOK is responsible for 100 % of the capital contributions required to fund Teton Barnwell’s future oil exploration and development investments pursuant to the Teton Operating Agreement and thus, BOK has the power to steer the decisions that most significantly impact Teton Barnwell’s economic performance and has the obligation to absorb any potential losses that could be significant to Teton Barnwell.

As BOK is the primary beneficiary of the VIE, Teton Barnwell’s operating results, assets and liabilities are consolidated by the Company.

15 unchanged sentences

No amount was recorded as assets held for sale at September 30, 2022 as the drilling rig was fully depreciated and therefore had a net book value of zero.

In October 2022, the legal title for the drilling rig was transferred to the buyer and as a result, the Company recognized a $ 551,000 gain on the sale of the drilling rig during the six months ended March 31, 2023.

In October 2022, the legal title for the drilling rig was transferred to the buyer and as a result, the Company recognized a $ 551,000 gain on the sale of the drilling rig during the nine months ended June 30, 2023.

OIL AND NATURAL GAS PROPERTIES

Oil and Natural Gas Investments

Fiscal 2023 Investments and Acquisitions

In December 2022, Barnwell Texas, LLC (“Barnwell Texas”), a new wholly-owned subsidiary of the Company, entered into a purchase and sale agreement with an independent third party whereby Barnwell Texas acquired a 22.3 % non-operated working interest in oil and natural gas leasehold acreage in the Permian Basin in Texas for cash consideration of $ 806,000 .

In connection with the purchase of such leasehold interests, Barnwell Texas acquired a 15.4 % non-operated working interest in two oil wells in the Wolfcamp Formation in Loving and Ward Counties, Texas and made a pre-payment of $ 4,293,000 to pay its share of the estimated costs to drill, complete and equip the wells.

During the six months ended March 31, 2023, the total costs incurred for the drilling of these two oil wells as of that date was $ 3,812,000 and thus, the remaining prepaid balance of $ 481,000 was recorded as “Advances to operators for capital expenditures” on the Company's Condensed Consolidated Balance sheet as of March 31, 2023.

Additionally, in connection with the agreement, the Company is obligated to pay a broker’s fee of 5.0 % of the capital invested under this arrangement to Four Pines Exploration LLC - Exploration - Series 1 (“Four Pines”).

In connection with the purchase of such leasehold interests, Barnwell Texas acquired a 15.4 % non-operated working interest in two oil wells in the Wolfcamp Formation in Loving and Ward Counties, Texas and has paid $ 4,293,000 for its share of the costs to drill, complete and equip the wells through the nine months ended June 30, 2023.

The two Texas wells began producing in late April 2023.

Additionally, in connection with the entry into this agreement, the Company is obligated to pay a broker’s fee of 5.0 % of the capital invested under this arrangement to Four Pines Exploration LLC - Exploration - Series 1 (“Four Pines”).

Four Pines is controlled by Mr.

Colin O’Farrell who is an affiliate of Teton Barnwell (see Note 17 for additional details).

As of March 31, 2023, the Company has paid $ 255,000 in broker fees to Four Pines related to this arrangement.

Oil and Natural Gas Acquisitions

There were no oil and natural gas working interest acquisitions during the six months ended March 31, 2023.

As of June 30, 2023, the Company has paid $ 255,000 in broker fees to Four Pines related to this arrangement.

Fiscal 2022 Acquisitions

In the quarter ended December 31, 2021, Barnwell acquired working interests in oil and natural gas properties located in the Twining area of Alberta, Canada, for cash consideration of $ 317,000 .

In January 2022, Barnwell acquired additional working interests in oil and natural gas properties located in the Twining area of Alberta, Canada for consideration of $ 1,246,000 .

In the quarter ended March 31, 2022, Barnwell acquired additional working interests in oil and natural gas properties located in the Twining area of Alberta, Canada for consideration of $ 1,246,000 .

The purchase price per the agreement was adjusted for customary purchase price adjustments to reflect the economic activity from the effective date to the closing date.

5 unchanged sentences

Pension Plan SERP

Three months ended March 31,

Three months ended June 30,

2023 2022 2023 2022

4 unchanged sentences

Pension Plan SERP

Six months ended March 31,

Nine months ended June 30,

2023 2022 2023 2022

10 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2023 2022 2023 2022

4 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2023 2022 2023 2022

7 unchanged sentences

As such, Barnwell receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes.

Consolidated taxes also include the impacts of favorable state jurisdiction provision to tax return true-ups.

In addition, net operating loss carryforwards, the benefit of which had not previously been recognized due to the Company's continuing full valuation allowance, are estimated to be partially utilized in the Canadian tax jurisdiction in the current year periods as the recognized benefit is now considered more likely to occur than not.

1 unchanged sentence

Disaggregation of Revenue

The following tables provide information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition for the three and six months ended March 31, 2023 and 2022.

Three months ended March 31, 2023

Three months ended June 30, 2023

Oil and natural gas Contract drilling Land investment Other Total

14 unchanged sentences

Total revenues before interest income $ 4,503,000 $ 1,134,000 $ — $ 13,000 $ 5,650,000

Three months ended March 31, 2022

Three months ended June 30, 2022

Oil and natural gas Contract drilling Land investment Other Total

4 unchanged sentences

Drilling and pump — 736,000 — — 736,000

Contingent residual payments — — 695,000 — 695,000

Other — — — 32,000 32,000

Total revenues before interest income $ 7,292,000 $ 736,000 $ — $ — $ 8,028,000

7 unchanged sentences

Total revenues before interest income $ 7,292,000 $ 736,000 $ — $ — $ 8,028,000

Six months ended March 31, 2023

Nine months ended June 30, 2023

Oil and natural gas Contract drilling Land investment Other Total

15 unchanged sentences

Total revenues before interest income $ 13,415,000 $ 4,583,000 $ 265,000 $ 85,000 $ 18,348,000

Six months ended March 31, 2022

Nine months ended June 30, 2022

Oil and natural gas Contract drilling Land investment Other Total

17 unchanged sentences

The following table provides information about accounts receivables, contract assets and contract liabilities from contracts with customers:

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Accounts receivables from contracts with customers $ 2,938,000 $ 4,038,000

9 unchanged sentences

Such deferred revenue typically results from billings in excess of costs and estimated earnings on uncompleted contracts.

As of March 31, 2023 and September 30, 2022, the Company had $ 613,000 and $ 1,087,000 , respectively, included in “Other current liabilities” on the balance sheets for those performance obligations expected to be completed in the next twelve months.

During the six months ended March 31, 2023 and 2022, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $ 969,000 and $ 308,000 , respectively.

As of June 30, 2023 and September 30, 2022, the Company had $ 305,000 and $ 1,087,000 , respectively, included in “Other current liabilities” on the balance sheets for those performance obligations expected to be completed in the next twelve months.

During the nine months ended June 30, 2023 and 2022, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $ 1,012,000 and $ 342,000 , respectively.

Contracts are sometimes modified for a change in scope or other requirements.

7 unchanged sentences

Nearly all of the Company's contract drilling segment contracts have original expected durations of one year or less.

At March 31, 2023, the Company had five contract drilling jobs with original expected durations of greater than one year.

For these contracts, 85 % of the remaining performance obligation of $ 4,292,000 is expected to be recognized in the next twelve months and the remaining, thereafter.

At June 30, 2023, the Company had five contract drilling jobs with original expected durations of greater than one year.

For these contracts, 100 % of the remaining performance obligation of $ 4,052,000 is expected to be recognized in the next twelve months.

Contract Fulfillment Costs

Preconstruction costs, which include costs such as set-up and mobilization, are capitalized and allocated across all performance obligations and deferred and amortized over the contract term on a progress towards completion basis.

As of March 31, 2023 and September 30, 2022, the Company had $ 619,000 and $ 689,000 , respectively, in unamortized preconstruction costs related to contracts that were not completed.

During the three and six months ended March 31, 2023 and 2022, the amortization of preconstruction costs related to contracts were not material and were included in the accompanying Condensed Consolidated Statements of Operations.

Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the three and six months ended March 31, 2023 and 2022.

As of June 30, 2023 and September 30, 2022, the Company had $ 581,000 and $ 689,000 , respectively, in unamortized preconstruction costs related to contracts that were not completed.

During the three and nine months ended June 30, 2023 and 2022, the amortization of preconstruction costs related to contracts were not material and were included in the accompanying Condensed Consolidated Statements of Operations.

Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the three and nine months ended June 30, 2023 and 2022.

SEGMENT INFORMATION

7 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2023 2022 2023 2022

22 unchanged sentences

Foreign currency gain 121,000 — 201,000 —

Interest expense ( 1,000 ) ( 1,000 ) ( 1,000 ) ( 1,000 )

Interest income 25,000 — 77,000 2,000

(Loss) earnings before income taxes $ ( 878,000 ) $ 2,664,000 $ ( 828,000 ) $ 6,652,000

ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in each component of accumulated other comprehensive income were as follows:

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in each component of accumulated other comprehensive income (loss) were as follows:

Three months ended

March 31, Six months ended

June 30, Nine months ended

2023 2022 2023 2022

11 unchanged sentences

Ending accumulated retirement plans benefit income (cost) 1,012,000 ( 230,000 ) 1,012,000 ( 230,000 )

Accumulated other comprehensive income, net of taxes $ 1,256,000 $ 19,000 $ 1,256,000 $ 19,000

Accumulated other comprehensive income (loss), net of taxes $ 1,251,000 $ ( 89,000 ) $ 1,251,000 $ ( 89,000 )

The amortization of net actuarial gain for the retirement plans are included in the computation of net periodic benefit (income) cost which is a component of “General and administrative” expenses on the accompanying Condensed Consolidated Statements of Operations (see Note 7 for additional details).

5 unchanged sentences

Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities.

Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted

discount rates, and consideration of changes in legal, regulatory, environmental and political environments.

Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows

required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments.

Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties.

6 unchanged sentences

If the Company repays 66.7 % of the principal amount prior to December 31, 2023, there will be loan forgiveness of 33.3 % up to a maximum of CAD$ 20,000 .

The current loan balance of $ 44,000 is included in “Other current liabilities” in the Company's Condensed Consolidated Balance sheet at March 31, 2023.

The current loan balance of $ 45,000 is included in “Other current liabilities” in the Company's Condensed Consolidated Balance sheet at June 30, 2023.

STOCKHOLDERS' EQUITY

Restricted Stock Units

On June 9, 2023, the Board of Directors of the Company granted a total of 37,312 restricted stock units to the independent directors of the Board as partial payment of fiscal 2023 director fees for their service as members of the Board from the period of April 1, 2023 to September 30, 2023.

The restricted stock units vest and become nonforfeitable on September 30, 2023.

The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2022 through June 30, 2023:

Restricted Stock Units Shares Weighted-Average

Nonvested at October 1, 2022 — $ —

Granted 37,312 2.65

Forfeited — —

Nonvested at June 30, 2023 37,312 $ 2.65

Compensation cost for restricted stock unit awards is measured at fair value and is recognized as an expense over the requisite service period.

During the three and nine months ended June 30, 2023, the Company recognized share-based compensation expense related to restricted stock units of $ 49,000 .

was no share-based compensation expense related to restricted stock units recognized during the three and nine months ended June 30, 2022.

As of June 30, 2023, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $ 50,000 , which is expected to be recognized over the weighted-average remaining requisite service period of 0.3 years.

Stock Options

In the the quarter ended June 30, 2023, 100,000 shares of vested stock options expired and 50,000 shares of outstanding stock options were forfeited prior to the option’s vesting date.

The Company's policy is to recognize forfeitures as they occur.

Thus, when an award is forfeited prior to the vesting date, the Company will recognize an adjustment for the previously recognized expense in the period of the forfeiture.

Accordingly, as a result of the forfeited stock options, the Company recorded a share-based compensation benefit of $ 96,000 during the three and nine months ended June 30, 2023.

Common Stock Issued for Services

In May 2023, the Company issued a total of 34,091 shares of Barnwell common stock to certain independent directors for their services on behalf of the Company and the Board of Directors pertaining to the negotiations of the Cooperation Agreement and the settlement of the potential proxy contest (see Note 17 for additional details).

The total value of the shares issued was $ 90,000 which was valued using the closing price of Barnwell's common stock on May 11, 2023, the date of grant.

Cash Dividends

1 unchanged sentence

In February 2023, the Company's Board of Directors declared a cash dividend of $ 0.015 per share that was paid on March 13, 2023 to stockholders of record on February 23, 2023.

No dividends were declared or paid during the six months ended March 31, 2022.

In May 2023, the Company's Board of Directors declared a cash dividend of $ 0.015 per share that was paid on June 12, 2023 to stockholders of record on May 25, 2023.

No dividends were declared or paid during the nine months ended June 30, 2022.

The Tax Benefits Preservation Plan

6 unchanged sentences

If the Rights become exercisable, all holders of Rights, other than the person or group of persons triggering the Rights, will be entitled to purchase shares of the Company’s common stock at a 50% discount.

Rights held by the person

or group of persons triggering the Rights will become void and will not be exercisable.

Rights held by the person or group of persons triggering the Rights will become void and will not be exercisable.

On January 25, 2023, the Tax Plan was terminated by the Board of Directors and as a result, all Rights distributed to holders of the Company's common stock expired at the time of termination.

4 unchanged sentences

333-254365), filed with the Securities and Exchange Commission on March 16, 2021, and declared effective on March 26, 2021 (the "Registration Statement”), and the prospectus dated March 26, 2021, included in the Registration Statement.

During the six months ended March 31, 2022, the Company sold 509,467 shares of common stock resulting in net proceeds of $ 2,356,000 after commissions and fees of $ 75,000 and ATM-related professional services of $ 22,000 .

During the nine months ended June 30, 2022, the Company sold 509,467 shares of common stock resulting in net proceeds of $ 2,356,000 after commissions and fees of $ 75,000 and ATM-related professional services of $ 22,000 .

In August 2022, the Company’s Board of Directors suspended the sales of our common stock under the ATM until further notice.

8 unchanged sentences

Barnwell’s management believes the plumbness deviation is not impactful to the performance of the submersible pumps that will be installed in the well.

Accordingly, while costs for the centralizers, armored cabling and the pump installation and removal test have been accrued, no accrual has been recorded as of March 31, 2023 for any further costs related to this contract as there is no related probable or estimable contingent liability.

Accordingly, while costs for the centralizers, armored cabling and the pump installation and removal test have been accrued, no accrual has been recorded as of June 30, 2023 for any further costs related to this contract as there is no related probable or estimable contingent liability.

INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

Supplemental disclosure of cash flow information:

1 unchanged sentence

Income taxes paid, net $ 100,000 $ 352,000

Capital expenditure accruals related to oil and natural gas exploration and development decreased $ 105,000 during the six months ended March 31, 2023 and increased $ 443,000 during the six months ended March 31, 2022.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 220,000 and $ 2,341,000 during the six months ended March 31, 2023 and 2022, respectively.

Capital expenditure accruals related to oil and natural gas exploration and development decreased $ 6,000 during the nine months ended June 30, 2023 and increased $ 812,000 during the nine months ended June 30, 2022.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 789,000 and $ 2,476,000 during the nine months ended June 30, 2023 and 2022, respectively.

RELATED PARTY TRANSACTIONS

3 unchanged sentences

Changes to the arrangement above, effective March 7, 2019, are discussed in Note 3.

During the six months ended March 31, 2023, Barnwell received $ 265,000 in percentage of sales payments from KD 1 from the sale of one single-family lot within Increment I.

During the six months ended March 31, 2022, Barnwell received $ 1,295,000 in percentage of sales payments from KD 1 from the sale of six single-family lots within Increment I.

During the nine months ended June 30, 2023, Barnwell received $ 265,000 in percentage of sales payments from KD 1 from the sale of one single-family lot within Increment I.

During the nine months ended June 30, 2022, Barnwell received $ 1,295,000 in percentage of sales payments from KD 1 from the sale of six single-family lots within Increment I.

O'Farrell, formerly a member of the Board of Directors of the Company from July 7, 2021 to March 7, 2022, is the sole member of Four Pines Operating LLC which owns a 25 % interest in Gros Ventre.

3 unchanged sentences

Furthermore, as discussed above, Mr.

O'Farrell controls Four Pines, which, as of March 31, 2023, was paid $ 255,000 in broker fees in connection with the oil and natural gas investment discussed in Note 6.

O'Farrell controls Four Pines, which, as of June 30, 2023, was paid $ 255,000 in broker fees in connection with the oil and natural gas investment discussed in Note 6.

Cooperation and Support Agreement

13 unchanged sentences

Kinzler for their reasonable, documented out-of-pocket fees and expenses (including legal expenses) in connection with the negotiation and execution of the Cooperation Agreement and the transactions contemplated hereby and the proposed nomination of directors at the 2023 Annual Meeting.

In the three and six months ended March 31, 2023, $ 202,000 and $ 149,000 in expenses were recorded for reimbursements to MRMP Stockholders and Mr.

In the nine months ended June 30, 2023 , $ 190,000 and $ 149,000 in expenses were recorded for reimbursements to MRMP Stockholders and Mr.

Kinzler, respectively, under the Cooperation Agreement.

1 unchanged sentence

Grossman and Woodrum for their services on behalf of the Company and the Board pertaining to the negotiations of the Cooperation Agreement and the settlement of the potential proxy contest.

Grossman received a one-time special director fee of $ 100,000 to be paid by a cash payment of $ 40,000 and a stock grant of 22,728 shares of Barnwell common stock (valued at $ 60,000 using the closing price of Barnwell's common stock on May 11, 2023, the date of grant).

Woodrum received a one-time special director fee of $ 50,000 to be paid by a cash payment of $ 20,000 and a stock grant of 11,363 shares of Barnwell common stock (valued at $ 30,000 using the closing price of Barnwell's common stock on May 11, 2023, the date of grant).

Accordingly, these special one-time director fees of $ 150,000 were accrued by the Company as of March 31, 2023 and the amount is recorded in “Accounts payable” on the accompanying Condensed Consolidated Balance Sheet.

Grossman received a one-time special director fee of $ 100,000 , which was paid in $ 40,000 cash and a stock grant of 22,728 shares of Barnwell common stock (valued at $ 60,000 using the closing price of Barnwell's common stock on May 11, 2023, the date of grant).

Woodrum received a one-time special director fee of $ 50,000 , which was paid in $ 20,000 cash and a stock grant of 11,363 shares of Barnwell common stock (valued at $ 30,000 using the closing price of Barnwell's common stock on May 11, 2023, the date of grant).

SUBSEQUENT EVENTS

In May 2023, the Company's Board of Directors declared a cash dividend of $ 0.015 per share payable on June 12, 2023 to stockholders of record on May 25, 2023.

In August 2023, the Company's Board of Directors declared a cash dividend of $ 0.015 per share payable on September 11, 2023 to stockholders of record on August 24, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements