Barnwell Industries Reports $1.92 Million Net Loss and Revenue Decline in December 2024

Barnwell Industries, Inc. reported a net loss of $1.92 million for the three months ending December 31, 2024, compared to a loss of $664,000 during the same period in 2023. The company's total revenues decreased to $4.48 million, down from $6.16 million year-over-year. The decline in revenue was primarily driven by a significant drop in the oil and natural gas segment, which saw revenues fall to $3.90 million from $5.13 million, largely due to decreased production and lower commodity prices. The contract drilling segment also experienced a revenue decline, generating $543,000 compared to $993,000 in the prior year.

In terms of operational performance, Barnwell's oil and natural gas production volumes decreased by 17% for natural gas and 21% for oil, reflecting the natural decline of aging wells and temporary shut-ins for maintenance. The company recorded a non-cash ceiling test impairment of $613,000 in its U.S. oil and natural gas properties, contributing to the overall operating loss of $306,000 in this segment. General and administrative expenses decreased by 9% to $1.28 million, attributed to lower professional fees and a credit loss recovery.

Barnwell's total assets decreased to $26.01 million as of December 31, 2024, down from $30.67 million at the end of the previous quarter. Current assets also saw a decline, primarily due to a reduction in cash and cash equivalents, which fell to $1.96 million from $4.51 million. The company’s liabilities decreased to $14.71 million, down from $17.61 million, reflecting a reduction in current liabilities. The equity attributable to Barnwell stockholders decreased to $11.29 million from $13.04 million, largely due to the net loss incurred during the quarter.

Strategically, Barnwell continues to explore opportunities within its contract drilling segment, which has seen reduced activity. The company entered into an agreement for the sale of a drilling rig, receiving a deposit of $585,000, although the sale will not be recognized until the rig is delivered in early 2025. Additionally, Barnwell's land investment segment has no immediate cash inflows expected, as the last lots in its Increment I project have been sold, and there are no definitive plans for development in Increment II.

Looking ahead, Barnwell's management remains cautious about the future, emphasizing the need for sufficient operating cash inflows from its oil and natural gas segment to sustain operations. The company estimates that capital expenditures for oil and natural gas properties will range from $1.5 million to $3 million for fiscal 2025, contingent on cash flows and market conditions. The outlook remains uncertain, particularly regarding the potential for future cash inflows from the land investment segment and the overall performance of the oil and natural gas market.