What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-13 compared with 2024-05-14 · 133 added, 119 removed, 540 unchanged (32% of the section changed)

7 unchanged sentences

Accounts and other receivables, net of allowance for credit losses of:

$ 339,000 at March 31, 2024;

$ 344,000 at June 30, 2024;

$ 284,000 at September 30, 2023

29 unchanged sentences

authorized, 40,000,000 shares:

10,195,990 issued at March 31, 2024;

10,195,990 issued at June 30, 2024;

10,158,678 issued at September 30, 2023

4 unchanged sentences

Treasury stock, at cost:

167,900 shares at March 31, 2024 and September 30, 2023

167,900 shares at June 30, 2024 and September 30, 2023

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

9 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2024 2023 2024 2023

16 unchanged sentences

Equity in income of affiliates — — 1,071,000 538,000

(Loss) earnings before income taxes ( 1,450,000 ) ( 1,238,000 ) ( 2,046,000 ) 50,000

Loss before income taxes ( 1,213,000 ) ( 878,000 ) ( 3,259,000 ) ( 828,000 )

Income tax provision (benefit) 21,000 ( 163,000 ) 187,000 ( 87,000 )

12 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2024 2023 2024 2023

15 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three months ended March 31, 2024 and 2023

Three months ended June 30, 2024 and 2023

Outstanding Common

4 unchanged sentences

Interests Total

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

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

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 )

2 unchanged sentences

— — — ( 150,000 ) — — — ( 150,000 )

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

Retirement plans:

1 unchanged sentence

— — — — ( 20,000 ) — — ( 20,000 )

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

Balance at March 31, 2024 10,028,090 $ 5,098,000 $ 7,779,000 $ 3,724,000 $ 2,069,000 $ ( 2,286,000 ) $ 14,000 $ 16,398,000

Balance at December 31, 2023 10,000,106 $ 5,084,000 $ 7,747,000 $ 5,496,000 $ 2,113,000 $ ( 2,286,000 ) $ 11,000 $ 18,165,000

Net (loss) earnings — — — ( 1,246,000 ) — — 12,000 ( 1,234,000 )

2 unchanged sentences

Distributions to non-controlling interests — — — — — — ( 3,000 ) ( 3,000 )

Acquisition of non-controlling interest — — ( 186,000 ) — — — 1,000 ( 185,000 )

Share-based compensation — — 42,000 — — — — 42,000

Issuance of common stock for restricted stock unites vested 27,984 14,000 ( 14,000 ) — — — — —

Retirement plans:

1 unchanged sentence

— — — — ( 21,000 ) — — ( 21,000 )

Balance at March 31, 2024 10,028,090 $ 5,098,000 $ 7,779,000 $ 3,724,000 $ 2,069,000 $ ( 2,286,000 ) $ 14,000 $ 16,398,000

Balance at June 30, 2024 10,028,090 $ 5,098,000 $ 7,635,000 $ 2,478,000 $ 2,060,000 $ ( 2,286,000 ) $ 24,000 $ 15,009,000

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Six months ended March 31, 2024 and 2023

Nine months ended June 30, 2024 and 2023

Outstanding Common

12 unchanged sentences

— — — ( 449,000 ) — — — ( 449,000 )

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

Retirement plans:

1 unchanged sentence

— — — — ( 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

Balance at September 30, 2023 9,990,778 $ 5,079,000 $ 7,687,000 $ 6,160,000 $ 2,104,000 $ ( 2,286,000 ) $ 13,000 $ 18,757,000

3 unchanged sentences

Distributions to non-controlling interests — — — — — — ( 226,000 ) ( 226,000 )

Acquisition of non-controlling interest — — ( 186,000 ) — — — 1,000 ( 185,000 )

Share-based compensation — — 153,000 — — — — 153,000

Issuance of common stock for restricted stock unites vested 37,312 19,000 ( 19,000 ) — — — — —

Issuance of common stock for restricted stock units vested

37,312 19,000 ( 19,000 ) — — — — —

Retirement plans:

1 unchanged sentence

— — — — ( 64,000 ) — — ( 64,000 )

Balance at March 31, 2024 10,028,090 $ 5,098,000 $ 7,779,000 $ 3,724,000 $ 2,069,000 $ ( 2,286,000 ) $ 14,000 $ 16,398,000

Balance at June 30, 2024 10,028,090 $ 5,098,000 $ 7,635,000 $ 2,478,000 $ 2,060,000 $ ( 2,286,000 ) $ 24,000 $ 15,009,000

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:

14 unchanged sentences

Share-based compensation expense 153,000 178,000

Common stock issued for services — 90,000

Retirement plan contributions and payments ( 3,000 ) ( 2,000 )

1 unchanged sentence

Foreign currency loss (gain) 63,000 ( 201,000 )

Increase from changes in current assets and liabilities 273,000 365,000

Increase (decrease) from changes in current assets and liabilities 777,000 ( 433,000 )

Net cash provided by operating activities 3,538,000 157,000

Cash flows from investing activities:

Acquisition of non-controlling interest ( 185,000 ) —

Distribution from equity investees in excess of earnings — 219,000

Proceeds from sale of interest in leasehold land, net of fees paid 439,000 233,000

Proceeds from the sale of oil and natural gas assets 451,000 —

Capital expenditures - oil and natural gas ( 2,434,000 ) ( 10,022,000 )

Capital expenditures - all other ( 2,000 ) ( 305,000 )

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

Net cash used in investing activities ( 1,731,000 ) ( 9,875,000 )

14 unchanged sentences

The condensed consolidated financial statements include the accounts of Barnwell Industries, Inc.

and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6 %-owned land investment general partnership (Kaupulehu Developments), a 75 %-owned land investment partnership (KD Kona 2013 LLLP), and a variable interest entity (Teton Barnwell Fund I, LLC) for which the Company is deemed to be the primary beneficiary.

and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6 %-owned land investment general partnership (Kaupulehu Developments) and a 75 %-owned land investment partnership (KD Kona 2013 LLLP).

All significant intercompany accounts and transactions have been eliminated.

9 unchanged sentences

The Condensed Consolidated Balance Sheet as of September 30, 2023 has been derived from audited consolidated financial statements.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at March 31, 2024, results of operations, comprehensive loss, and equity for the three and six months ended March 31, 2024 and 2023, and cash flows for the six months ended March 31, 2024 and 2023, have been made.

The results of operations for the period ended March 31, 2024 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) necessary to present fairly the financial position at June 30, 2024, results of operations, comprehensive loss, and equity for the three and nine months ended June 30, 2024 and 2023, and cash flows for the nine months ended June 30, 2024 and 2023, have been made.

The results of operations for the period ended June 30, 2024 are not necessarily indicative of the operating results for the full year.

Use of Estimates in the Preparation of Condensed Consolidated Financial Statements

2 unchanged sentences

Actual results could differ significantly from those estimates.

Significant assumptions are required in the

valuation of deferred tax assets, asset retirement obligations, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded.

Significant assumptions are required in the valuation of deferred tax assets, asset retirement obligations, contract drilling estimated costs to complete,

proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded.

Significant Accounting Policies

6 unchanged sentences

Derivative Instruments

Barnwell utilizes physical forward commodity contracts to mitigate market price risk on its oil and natural gas output when deemed appropriate.

Barnwell may utilize physical forward commodity contracts to mitigate market price risk on its oil and natural gas output when deemed appropriate.

Purchase and sale contracts with a fixed price determined at inception are recorded on the consolidated balance sheet as derivative financial instruments if such contracts are readily convertible to cash - unless the contracts are eligible for and elected as the normal purchases and normal sales exception (“NPNS”);

14 unchanged sentences

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

Options to purchase 465,000 shares of common stock and 76,336 restricted stock units were excluded from the computation of diluted shares for the three and six months ended March 31, 2024, as their inclusion would have been 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, as their inclusion would have been anti-dilutive.

Options to purchase 465,000 shares of common stock and 106,006 restricted stock units were excluded from the computation of diluted shares for the three months ended June 30, 2024, as their inclusion would have been anti-dilutive.

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

Options to purchase 465,000 shares of common stock and 86,190 restricted stock units were excluded from the computation of diluted shares for the nine months ended June 30, 2024, as their inclusion would have been anti-dilutive.

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

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

Three months ended March 31, 2024

Three months ended June 30, 2024

(Numerator) Shares

4 unchanged sentences

$ ( 1,246,000 ) 10,028,090 $ ( 0.12 )

Six months ended March 31, 2024

Nine months ended June 30, 2024

(Numerator) Shares

4 unchanged sentences

$ ( 3,682,000 ) 10,014,609 $ ( 0.37 )

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 — —

$ ( 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 — —

$ ( 865,000 ) 9,962,806 $ ( 0.09 )

9 unchanged sentences

The partnerships derive income from the sale of residential parcels in Increment I, which is now completely sold, 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.

During the three months ended March 31, 2024, the last two remaining single-family lots of the 80 lots developed within Increment I were sold.

In the quarter ended March 31, 2024, the last two remaining single-family lots of the 80 lots developed within Increment I were sold.

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.

During the three and six months ended March 31, 2024, Barnwell received cash distributions of $ 1,071,000 (resulting in a net amount of $ 953,000 , after distributing $ 118,000 to non-controlling interests) from the Kukio Resort Land Development Partnerships.

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

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.

Equity in income of affiliates was $ 1,071,000 for the three and six months ended March 31, 2024, as compared to equity in income of affiliates of nil and $ 538,000 for the three and six months ended March 31, 2023, respectively.

No cash distributions were received during the three months ended June 30, 2024 and 2023.

During the nine months ended June 30, 2024, Barnwell received cash distributions of $ 1,071,000 (resulting in a net amount of $ 953,000 , after distributing $ 118,000 to

non-controlling interests) from the Kukio Resort Land Development Partnerships.

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.

Equity in income of affiliates was nil and $ 1,071,000 for the three and nine months ended June 30, 2024, respectively, as compared to equity in income of affiliates of nil and $ 538,000 for the three and nine months ended June 30, 2023, 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 $ 518,000 $ 2,703,000

Gross profit $ 129,000 $ 1,694,000

Net earnings (loss) $ 6,658,000 $ ( 82,000 )

Six months ended March 31,

Net (loss) earnings $ ( 338,000 ) $ 951,000

Nine months ended June 30,

Revenue $ 12,557,000 $ 7,699,000

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, 2024 was equivalent to the $ 1,071,000 of distributions received in that period.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 225,000 at March 31, 2024 and $ 708,000 at September 30, 2023.

Accordingly, the amount of equity in income of affiliates recognized in the nine months ended June 30, 2024 was equivalent to the $ 1,071,000 of distributions received in that period.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 300,000 at June 30, 2024 and $ 708,000 at September 30, 2023.

Sale of Interest in Leasehold Land

1 unchanged sentence

With respect to Increment I, Kaupulehu Developments was 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.

During the three months ended March 31, 2024, the last two remaining single-family lots of the 80 lots developed within Increment I were sold.

In the quarter ended March 31, 2024, the last two remaining single-family lots of the 80 lots developed within Increment I were sold.

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

2024 2023 2024 2023

10 unchanged sentences

In February 2021, Barnwell Industries, Inc.

established a new wholly-owned subsidiary named BOK Drilling, LLC (“BOK”) for the purpose of indirectly investing in oil and natural gas exploration and development in Oklahoma.

established a wholly-owned subsidiary named BOK Drilling, LLC (“BOK”) for the purpose of indirectly investing in oil and natural gas exploration and development in Oklahoma.

BOK and Gros Ventre Partners, LLC (“Gros Ventre”) entered into the Limited Liability Agreement (the “Teton Operating Agreement”) of Teton Barnwell Fund I, LLC (“Teton Barnwell”), an entity formed for the purpose of directly entering into such oil and natural gas investments.

Under the terms of the Teton Operating Agreement, the profits of Teton Barnwell are split between BOK and Gros Ventre at 98 % and 2 %, respectively, and as the manager of Teton Barnwell, Gros Ventre is paid an annual asset management fee equal to 1 % of the cumulative capital contributions made to Teton Barnwell as compensation for its management services.

BOK is responsible for 100 % of the capital contributions made to Teton Barnwell.

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.

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.

The following table summarizes the carrying value of the assets and liabilities of Teton Barnwell that are consolidated by the Company.

Intercompany balances are eliminated in consolidation and, thus, are not reflected in the table below.

2024 September 30,

Cash and cash equivalents $ 19,000 $ 83,000

Accounts and other receivables 213,000 175,000

Property and equipment:

Proved oil and natural gas properties, net (full cost method) 501,000 544,000

Total assets $ 733,000 $ 802,000

Accounts payable $ 10,000 $ 10,000

Accrued operating and other expenses 19,000 15,000

Total liabilities $ 29,000 $ 25,000

Under the terms of the Teton Operating Agreement, the profits of Teton Barnwell were split between BOK and Gros Ventre at 98 % and 2 %, respectively, and as the manager of Teton Barnwell, Gros Ventre was paid an annual asset management fee equal to 1 % of the cumulative capital contributions made to Teton Barnwell as compensation for its management services.

BOK was responsible for 100 % of the capital contributions made to Teton Barnwell.

Teton Barnwell was a variable interest entity for which the Company was deemed the primary beneficiary and thus, was consolidated by the Company.

In the quarter ended June 30, 2024, BOK acquired Gros Ventre’s 2 % non-controlling interest in Teton Barnwell for $ 185,000 and following the acquisition, BOK now owns 100 % interest in Teton Barnwell.

As such, although Teton Barnwell is no longer a variable interest entity as of the acquisition date, it will continue to be consolidated by the Company.

This transaction was accounted for as an equity transaction with no gain or loss recognized and the difference between the carrying amount of Gros

Ventre’s non-controlling interest and the consideration given for the acquisition of the additional equity interest was recorded as a reduction in additional paid-in capital in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Equity.

ASSETS HELD FOR SALE

Contract Drilling Segment Property and Equipment

During the quarter ended March 31, 2024, the Company commenced the marketing of a portion of the contract drilling segment's property and equipment, the majority of which was already fully depreciated.

In the quarter ended March 31, 2024, the Company commenced the marketing of a portion of the contract drilling segment's property and equipment, the majority of which was already fully depreciated.

There was no impairment related to the classification change from held and used to held for sale as the fair value, less estimated selling costs, of the disposal group exceeded its carrying value.

The property and equipment deemed necessary to complete the contract drilling segment's contracts in backlog will continue to be classified as held and used.

The property and equipment deemed necessary to complete the contract drilling segment's contracts in backlog continue to be classified as held and used as of June 30, 2024.

OIL AND NATURAL GAS PROPERTIES

Oil and Natural Gas Property Dispositions

In the quarter ended June 30, 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain natural gas and oil properties located in the Kaybob area of Alberta, Canada.

The sales price per the agreement was adjusted for customary purchase price adjustments to $ 448,000 in order to, among other things, reflect an economic effective date of May 1, 2024.

The final determination of the customary adjustments to the purchase price has not yet been made, however, it is not expected to result in a material adjustment.

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 .

Additionally, 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 had paid $ 4,293,000 for its share of the costs to drill, complete, and equip the wells in the six months ended March 31, 2023.

In December 2022, Barnwell Texas, LLC (“Barnwell Texas”), a 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 .

Additionally, 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 paid $ 4,293,000 for its share of the costs to drill, complete, and equip the wells in the nine months ended June 30, 2023.

Impairment of Oil and Natural Gas Properties

Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations.

During the three and six months ended March 31, 2024, the Company incurred a

non-cash ceiling test impairment for our Canadian oil and natural gas properties of $ 1,677,000 .

There was no ceiling test impairment during the three and six months ended March 31, 2023.

During the three months ended June 30, 2024, the Company incurred a non-cash ceiling test impairment of $ 599,000 , which included impairments for our U.S.

and Canadian oil and natural gas properties of $ 112,000 and $ 487,000 , respectively.

The impairment to our U.S.

oil and natural gas properties was due to a decline in the historical 12-month rolling average first-day-of-the-month prices, primarily attributed to decreases in natural gas prices for our Texas property which is sold at the Waha hub.

The impairment to our Canadian oil and natural gas properties was primarily due to capital expenditures for which there is insufficient operating history to assign a determinable increase in future cash flows from reserves at period-end.

There was no ceiling test impairment during the three months ended June 30, 2023.

During the nine months ended June 30, 2024, the Company incurred a non-cash ceiling test impairment of $ 2,276,000 , which included impairments for our U.S.

and Canadian oil and natural gas properties of $ 112,000 and $ 2,164,000 , respectively.

The impairment to our Canadian oil and natural gas properties during the nine months ended June 30, 2024 was primarily due to a decline in the historical 12-month rolling average first-day-of-the-month prices and due to capital expenditures for which there is insufficient operating history to assign a determinable increase in future cash flows from reserves at period-end.

There was no ceiling test impairment during the nine months ended June 30, 2023.

Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices, the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties.

If oil and natural gas prices decline sufficiently from the 12-month historical rolling average first-day-of-the-month prices used in the ceiling test at March 31, 2024, it is more likely than not that the Company will incur further impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected.

If oil and natural gas prices decline sufficiently from the 12-month historical rolling average first-day-of-the-month prices used in the ceiling test at June 30, 2024, it is more likely than not that the Company will incur further impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected.

RETIREMENT PLANS

4 unchanged sentences

Pension Plan SERP

Three months ended March 31,

Three months ended June 30,

2024 2023 2024 2023

4 unchanged sentences

Pension Plan SERP

Six months ended March 31,

Nine months ended June 30,

2024 2023 2024 2023

7 unchanged sentences

Expected payments under the SERP for fiscal 2024 are not material.

Fluctuations in actual equity market returns as well as changes

in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods.

Fluctuations in actual equity market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods.

The components of loss before income taxes, after adjusting the loss for non-controlling interests, are as follows:

Three months ended

March 31, Six months ended

June 30, Nine months ended

2024 2023 2024 2023

4 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2024 2023 2024 2023

12 unchanged sentences

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, 2024 and 2023.

Three months ended March 31, 2024

Three months ended June 30, 2024

Oil and natural gas Contract drilling Land investment Other Total

4 unchanged sentences

Drilling and pump — 1,021,000 — — 1,021,000

Contingent residual payments — — 500,000 — 500,000

Other — — — 33,000 33,000

8 unchanged sentences

Total revenues before interest income $ 4,452,000 $ 1,021,000 $ — $ 33,000 $ 5,506,000

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

Six months ended March 31, 2024

Nine months ended June 30, 2024

Oil and natural gas Contract drilling Land investment Other Total

15 unchanged sentences

Total revenues before interest income $ 13,726,000 $ 3,084,000 $ 500,000 $ 92,000 $ 17,402,000

Six months ended March 31, 2023

Nine months ended June 30, 2023

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, 2024 September 30, 2023 September 30, 2022

June 30, 2024 September 30, 2023 September 30, 2022

Accounts receivables from contracts with customers $ 2,940,000 $ 2,931,000 $ 4,038,000

10 unchanged sentences

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

As of March 31, 2024 and September 30, 2023, the Company had $ 320,000 and $ 377,000 , respectively, included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets for those performance obligations expected to be completed in the next twelve months.

During the six months ended March 31, 2024 and 2023, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $ 347,000 and $ 969,000 , respectively.

As of June 30, 2024 and September 30, 2023, the Company had $ 18,000 and $ 377,000 , respectively, included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets for those performance obligations expected to be completed in the next twelve months.

During the nine months ended June 30, 2024 and 2023, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $ 377,000 and $ 1,012,000 , 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, 2024, the Company had three contract drilling jobs with original expected durations of greater than one year.

For these contracts, 100 % of the remaining performance obligation of $ 56,000 is expected to be recognized as revenue in the next twelve months.

At June 30, 2024, the remaining performance obligation for contract drilling jobs with original expected durations greater than one year was not material.

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, 2024 and September 30, 2023, the Company had $ 324,000 and $ 504,000 , respectively, in unamortized preconstruction costs related to contracts that were not completed.

During the three months ended March 31, 2024 and 2023, the amortization of preconstruction costs related to contracts were not material.

During the six months ended March 31, 2024 and 2023, the amortization of preconstruction costs related to contracts was $ 155,000 and $ 178,000 , respectively.

As of June 30, 2024 and September 30, 2023, the Company had $ 240,000 and $ 504,000 , respectively, in unamortized preconstruction costs related to contracts that were not completed.

During the three months ended June 30, 2024 and 2023, the amortization of preconstruction costs related to contracts were not material.

During the nine months ended June 30, 2024 and 2023, the amortization of preconstruction costs related to contracts was $ 240,000 and $ 248,000 , respectively.

These amounts have been included in “Contract drilling operating” costs and expenses 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, 2024 and 2023.

Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the three and nine months ended June 30, 2024 and 2023.

SEGMENT INFORMATION

7 unchanged sentences

Three months ended

March 31, Six months ended

June 30, Nine months ended

2024 2023 2024 2023

19 unchanged sentences

Gain on sale of assets — — — 551,000

Total operating (loss) profit ( 1,030,000 ) 787,000 ( 361,000 ) 3,679,000

Total operating profit (loss) 259,000 305,000 ( 102,000 ) 3,984,000

Equity in income of affiliates:

4 unchanged sentences

Interest income 21,000 25,000 54,000 77,000

(Loss) earnings before income taxes $ ( 1,450,000 ) $ ( 1,238,000 ) $ ( 2,046,000 ) $ 50,000

Loss before income taxes $ ( 1,213,000 ) $ ( 878,000 ) $ ( 3,259,000 ) $ ( 828,000 )

ACCUMULATED OTHER COMPREHENSIVE INCOME

1 unchanged sentence

Three months ended

March 31, Six months ended

June 30, Nine months ended

2024 2023 2024 2023

3 unchanged sentences

Income taxes — — — —

Net current period other comprehensive (loss) income ( 22,000 ) — 8,000 2,000

Net current period other comprehensive income 12,000 15,000 20,000 17,000

Ending accumulated foreign currency translation 240,000 239,000 240,000 239,000

23 unchanged sentences

provided that, any unvested restricted stock would vest upon a director’s death, disability, a change in control of the Company resulting in the director not continuing as a director or the director not being renominated for election even though he was willing to stand for re-election.

The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2023 through March 31, 2024:

On May 16, 2024, the Board of Directors of the Company granted 60,000 restricted stock units to the Company’s President and Chief Executive Officer.

The restricted stock units vest ratably over a three-year period, subject to the employee’s continued service through the applicable vesting dates.

The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2023 through June 30, 2024:

Restricted Stock Units Shares Weighted-Average

2 unchanged sentences

Forfeited — —

Nonvested at March 31, 2024

Nonvested at June 30, 2024

136,336 $ 2.62

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 six months ended March 31, 2024, 2024, the Company recognized share-based compensation expense related to restricted stock units of $ 31,000 and $ 61,000 , respectively.

There was no share-based compensation expense related to restricted stock units recognized during the three and six months ended March 31, 2023.

As of March 31, 2024, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $ 139,000 , which is expected to be recognized over the weighted-average remaining requisite service period of 1.7 years.

During the three and nine months ended June 30, 2024, the Company recognized share-based compensation expense related to restricted stock units of $ 42,000 and $ 103,000 , respectively.

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 .

As of June 30, 2024, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $ 255,000 , which is expected to be recognized over the weighted-average remaining requisite service period of 1.8 years.

Stock Options

In 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 and support agreement and the settlement of the potential proxy contest at the 2023 annual meeting of stockholders (see Note 16 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

No dividends were declared or paid during the six months ended March 31, 2024.

No dividends were declared or paid during the nine months ended June 30, 2024.

In December 2022, the Company's Board of Directors declared a cash dividend of $ 0.015 per share that was paid on January 11, 2023 to stockholders of record on December 27, 2022.

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.

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.

CONTINGENCIES

3 unchanged sentences

Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity.

In the quarter ended December 31, 2021, it was determined that a contract drilling segment well completed in the period did not meet the contract specifications for plumbness under a gyroscopic plumbness test which the contract required.

While the well did pass the cage plumbness test, the contract uses the gyroscopic test as the measure of plumbness.

Barnwell and the customer currently have an arrangement where Barnwell will provide for centralizers, armored cabling and a pump installation and removal test to confirm that plumbness is satisfactory.

The pump installation and removal test was successfully completed.

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, 2024 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:

2 unchanged sentences

$ 71,000 $ 100,000

Capital expenditure accruals related to oil and natural gas exploration and development decreased $ 569,000 and $ 105,000 during the six months ended March 31, 2024 and 2023, respectively.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 179,000 and $ 220,000 during the six months ended March 31, 2024 and 2023, respectively.

Capital expenditure accruals related to oil and natural gas exploration and development decreased $ 628,000 and $ 6,000 during the nine months ended June 30, 2024 and 2023, respectively.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 367,000 and $ 789,000 during the nine months ended June 30, 2024 and 2023, 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, 2024, Barnwell received $ 500,000 in percentage of sales payments from KD I from the sale of the last two single-family lots within Increment I.

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

SUBSEQUENT EVENTS

Oil and Natural Gas Property Dispositions

Subsequent to March 31, 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain natural gas and oil properties located in the Kaybob area of Alberta, Canada.

The sales price per the agreement was adjusted for customary purchase price adjustments to $ 448,000 in order to, among other things, reflect an economic effective date of May 1, 2024.

The final determination of the customary adjustments to the purchase price has not yet been made, however, it is not expected to result in a material adjustment.

The financial results of this transaction will be reflected in Barnwell’s quarter ending June 30, 2024.

During the nine months ended June 30, 2024, Barnwell received $ 500,000 in percentage of sales payments from KD I from the sale of the last two 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 I from the sale of one single-family lot within Increment I.

In May 2023, the Company’s Board of Directors approved and ratified the payment of one-time special director fees to directors Kenneth Grossman and Doug Woodrum for their services on behalf of the Company and the Board of Directors pertaining to the negotiations of the cooperation and support agreement and the settlement of the potential proxy contest at the 2023 annual meeting of stockholders.

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 EVENT

In July 2024, the Company commenced the drilling of one gross (1.0 net) 100 %-owned operated development oil well in the Twining area.

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