Barnwell Industries, Inc. (NYSE American: BRN) today reported net
losses of $856,000, $0.10 per share, and $272,000, $0.03 per share,
for the three and six months ended March 31, 2021, respectively, as
compared to net losses of $1,514,000, $0.18 per share, and
$1,928,000, $0.23 per share, for the three and six months ended
March 31, 2020, respectively.
Mr. Alexander Kinzler, Chief Executive Officer
of Barnwell, commented, “Our improved results for this quarter were
due to a $2,243,000 improvement in oil and natural gas segment
operating results due primarily to a prior year period impairment
of $1,637,000, whereas there was no impairment in the current
period, and the Company benefited from higher oil and natural gas
prices which increased 46% and 65%, respectively. Also, equity in
earnings of affiliates increased $649,000 as compared to the
quarter ended March 31, 2020 as a result of improved operating
results of the Kukio Resort Development Partnerships, in part due
to land sales which occurred during the six months ended March 31,
2021, discussed below.
“Contract drilling operating results decreased
$884,000 due to the completion of a significant drilling contract,
and there was a one-time $1,336,000 gain, before taxes, recognized
in the prior year period from the sale of the Company’s drilling
yard.
“In the current quarter, we incurred
approximately $450,000 in general and administrative expenses
relating to our entry into a Cooperation and Support Agreement with
MRMP Stockholders and certain of its affiliates, which included the
reimbursement of about $300,000 of their expenses incurred in the
2020 and 2021 proxy contests, the Company’s legal fees in resolving
the matter and also an increase in our directors and officers
liability insurance expense due to the proxy contest last year.
“The reduction in the net loss for the six
months ended March 31, 2021 as compared to last year’s loss for the
six months ended March 31, 2020 was largely due to a $1,746,000
increase in earnings of affiliates due to improved real estate
sales, which also led to the Company receiving $2,205,000 in net
cash distributions, $459,000 of which was a preferred return which
contributed to our net earnings. There was also a $1,548,000
improvement in oil and natural gas segment operating results due
primarily to an asset impairment charge of $1,637,000 in the prior
year period as compared to a $630,000 impairment in the current
six-month period. In addition, there was a $485,000 increase in
land investment segment operating results due to the sale of two
lots in the current year period, whereas there were no lot sales in
the same period in the prior year period. Contract drilling
operating results decreased $873,000 due to the completion of a
significant drilling contract, and there was a $1,336,000 gain,
before taxes, recognized in the prior year period from the sale of
the Company’s drilling yard; there was no such gain in the current
period.
“The Company acquired additional production and
acreage at its core Twining property in an agreement with a major
Canadian producer. The agreement closed on April 8, 2021 and the
Company immediately began construction on a pipeline to tie in the
wells to the Company’s battery. The first production from the wells
came on May 5, 2021 and the Company is working to reactivate more
wells acquired in the swap in the near future. As a result of this
transaction the Company acquired eight net additional drilling
locations and now has forty-five net drilling locations identified
at Twining.
“The Company has agreed to participate in an
eight well drilling program in a partnership with an EnCap
Investments L.P.-backed entity in an Oklahoma play. The first well
was spudded in early March 2021 and is expected to be completed by
July 1, 2021.
“The Company has recently engaged an advisory
firm to reinitiate the sale process of the Company’s non-core oil
and gas assets. The sale process previously began in early 2020,
but was delayed due to low commodity prices and the pandemic.
“Over the past two quarters, the Company has
participated in multiple phases of the Canadian Site Rehabilitation
Program, and grants totaling $314,000 were provided to assist the
company in reducing its abandonment and reclamation liabilities.
The Company has completed successful abandonments at 14 gross, 10.3
net, operated wells and 13 gross, 1.9 net, non-operated wells. The
Company continues to work to participate in future phases of the
Site Rehabilitation Program.
“In March 2021, the Company the Alberta Orphan
Well Association (“OWA”) negotiated to commence the abandonment and
reclamation of the Company’s wells located in Manyberries - an area
where the Canadian government mandated the wells be abandoned to
protect a sensitive wildlife environment. The OWA has significant
scale and has a history of lower costs for this type of work than
most industry participants. The costs are to be paid in advance
through a cash deposit of approximately $1,616,000, of which
$936,000 is to be paid August 2021 and the remaining balance of
$680,000 is to be paid August 2022; as the OWA spends these funds
this will result in reductions in the Asset Retirement Obligation
liabilities on our balance sheet on a dollar-for-dollar basis. It
is anticipated that the OWA’s abandonment program for the
Manyberries area wells will commence and be completed in the fall
of 2021 with the reclamation to begin the following fall of
2022.
“In April 2021, the Company's Board of Directors
initiated the termination of the Postretirement Medical plan and
the Company provided all participants of the plan with a sixty-day
notice of termination. The Postretirement Medical plan is an
unfunded plan and the Company currently estimates that it will
recognize a non-cash gain of approximately $2,000,000, as well as a
benefit in other comprehensive income, upon the termination of the
Postretirement Medical plan in the quarter ending June 30,
2021.
“In March 2021, the Company entered into an
at-the-market (ATM) sales agreement with A.G.P./Alliance Global
Partners pursuant to which the Company may sell shares of its
common stock. As of May 12, 2021, the Company has not sold any
shares under this agreement.
“The Company has entered into a contract for the
sale of our Hawaii corporate office which is scheduled to close in
our fourth quarter of fiscal 2021.
“In April and May of 2021, the Company received
$368,000, net of fees, from Kaupulehu Developments, Barnwell’s
77.6% owned joint venture, from the sale of three lots and the
Kukio Resort Land Development Partnerships also made net cash
distributions in the amount of $1,554,000 to Barnwell. The
financial results of these receipts and distributions will be
reflected in Barnwell's quarter ending June 30, 2021.
“In the past year, the Company has made
significant progress on a number of fronts. We have continued to
focus on keeping our cost structure low and optimizing our assets
to build shareholder value.”
The information contained in this press release
contains “forward-looking statements,” within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. A forward-looking
statement is one which is based on current expectations of future
events or conditions and does not relate to historical or current
facts. These statements include various estimates, forecasts,
projections of Barnwell’s future performance, statements of
Barnwell’s plans and objectives, and other similar statements.
Forward-looking statements include phrases such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” “predicts,”
“estimates,” “assumes,” “projects,” “may,” “will,” “will be,”
“should,” or similar expressions. Although Barnwell believes that
its current expectations are based on reasonable assumptions, it
cannot assure that the expectations contained in such
forward-looking statements will be achieved. Forward-looking
statements involve risks, uncertainties and assumptions which could
cause actual results to differ materially from those contained in
such statements. The risks, uncertainties and other factors that
might cause actual results to differ materially from Barnwell’s
expectations are set forth in the “Forward-Looking Statements,”
“Risk Factors” and other sections of Barnwell’s annual report on
Form 10-K for the last fiscal year and Barnwell’s other filings
with the Securities and Exchange Commission. Investors should not
place undue reliance on the forward-looking statements contained in
this press release, as they speak only as of the date of this press
release, and Barnwell expressly disclaims any obligation or
undertaking to publicly release any updates or revisions to any
forward-looking statements contained herein.
COMPARATIVE OPERATING RESULTS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Six months
ended |
|
|
March 31, |
|
March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
3,998,000 |
|
|
$ |
4,582,000 |
|
|
$ |
8,385,000 |
|
|
$ |
9,432,000 |
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to Barnwell Industries, Inc. |
|
$ |
(856,000 |
) |
|
$ |
(1,514,000 |
) |
|
$ |
(272,000 |
) |
|
$ |
(1,928,000 |
) |
|
|
|
|
|
|
|
|
|
Net loss
per |
|
|
|
|
|
|
|
|
share – basic and diluted |
|
$ |
(0.10 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
Weighted-average
shares and |
|
|
|
|
|
|
|
equivalent shares outstanding: |
|
|
|
|
|
|
Basic and diluted |
|
|
8,277,160 |
|
|
|
8,277,160 |
|
|
|
8,277,160 |
|
|
|
8,277,160 |
|
|
|
|
|
|
|
|
|
|
CONTACT: |
Alexander C.
Kinzler |
|
Chief Executive Officer and President |
|
|
|
Russell M. Gifford |
|
Executive Vice President and Chief Financial Officer |
|
|
|
Tel: (808) 531-8400 |
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