Barnwell Industries Inc., which derives about three-quarters of its revenue from its oil and natural gas operations, swung to a loss in the second quarter as prices declined for all of its products.
The Honolulu-based company reported Monday that prices for oil, natural gas and natural gas liquids declined 26%, 34% and 43%, respectively, from the year-earlier quarter. In addition, Barnwell said it also experienced a decline in its land investment results on Hawaii island.
Barnwell posted an overall loss of $1.2 million, or 12 cents a share, compared with a gain of $2 million, or 21 cents a share, in the second quarter of 2022. The company’s revenue fell 21.6% to $5.2 million from $6.7 million.
The company said since there were no real estate sales in the second quarter, it received no percentage of sales payments and no cash distributions in the quarter. There is only one unsold lot remaining within Phase II of Increment I by the Kukio Resort Development Partnerships at Kaupulehu in North Kona. In the year-earlier quarter, Barnwell received $695,000 in percentage of sales payments and $1.6 million in net cash distributions.
Barnwell CEO Alex Kinzler said a silver lining was that “our oil and natural gas production increased from the prior year’s quarter by 2% and 6%, respectively.”
He also noted that Barnwell’s Oklahoma operations generated $212,000, or 30%, from its oil and natural gas segment during the quarter. In 2021, Barnwell entered into a joint venture with two private operators in Oklahoma, with the first of eight oil wells coming online in May of that year.
Barnwell, which conducts most of its oil and natural gas operations in Alberta, recently invested in Texas into a Permian Basin drilling opportunity. The company said its anticipates that production from its Texas venture, as well as additional wells in the Twining area of Alberta, will produce significant new oil and natural gas production and revenue for the company beginning in the fourth quarter.
The company declared a quarterly cash dividend of 1.5 cents a share that will be payable June 12 to stockholders of record as of the close of business May 25.
Barnwell’s stock rose 1 cent to $2.61 after the earnings were announced.
SECOND-QUARTER LOSS
$1.2 million
YEAR-EARLIER NET
$2 million
