Barnwell Industries Inc (BRN, Financial) filed Quarterly Report for the period ended 2008-12-31.
BARNWELL INDUSTRIES is engaged in oil and natural gas exploration development production and sales in Canada and the United States investment in leasehold land in Hawaii and water well drilling and water pumping system installation and repair in Hawaii. Additionally they provide contract labor for the drilling and workovers of geothermal wells. Their oil and natural gas activities comprises its largest business segment. The other business segment is land investment activities and contract drilling activities. Barnwell Industries Inc has a market cap of $43.84 million; its shares were traded at around $4.79 with a P/E ratio of 3.8 and P/S ratio of 0.67. The dividend yield of Barnwell Industries Inc stocks is 5.64%. Barnwell Industries Inc had an annual average earning growth of 20.9% over the past 10 years.
Net earnings for the three months ended December 31, 2008 totaled $424,000, a $2,895,000 (87%) decrease from net earnings of $3,319,000 for the three months ended December 31, 2007. This decrease was largely due to the following items:
The average exchange rate of the Canadian dollar to the U.S. dollar decreased 19% in the three months ended December 31, 2008 as compared to the same period in the prior year, and the exchange rate of the Canadian dollar to the U.S. dollar decreased 13% at December 31, 2008 as compared to September 30, 2008. Accordingly, the assets, liabilities, stockholders equity and revenues and expenses of Barnwells subsidiaries operating in Canada have been adjusted to reflect the change in the exchange rates. Barnwells Canadian dollar assets are greater than its Canadian dollar liabilities; therefore, increases or decreases in the value of the Canadian dollar to the U.S. dollar generate other comprehensive income or losses, respectively. Other comprehensive income and losses are not included in net earnings. The other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the three months ended December 31, 2008 was $6,247,000, a $6,536,000 decrease from other comprehensive income due to foreign currency translation adjustments, net of taxes, of $289,000 for the same period in the prior year.
The decrease in proceeds from the sale of development rights during the three months ended December 31, 2008 as compared to the same period in the prior year is due to the timing of receipt of proceeds of scheduled development right options. $1,770,000 of the $2,656,000 development rights option due on December 31, 2008 was received early, in May 2008. Accordingly, only the remaining portion of $886,000 was received in the three months ended December 31, 2008. During the three months ended December 31, 2007, the entire $2,656,000 development rights option due on December 31, 2007 was received during the quarter ended December 31, 2007.
Contract drilling revenues and costs decreased $1,076,000 (49%) and $680,000 (37%), respectively, for the three months ended December 31, 2008, as compared to the same period in the prior year. The contract drilling segment generated a $110,000 operating loss before general and administrative expenses in the three months ended December 31, 2008, a decrease of $418,000 as compared to the same period of the prior year, primarily due to decreases in well drilling activity in the current quarter as compared to the same period in the prior year.
General and administrative expenses decreased $1,131,000 (37%) for the three months ended December 31, 2008, as compared to the same period in the prior year. The decrease was primarily attributable to: i) a $635,000 decrease in current compensation costs, ii) an $85,000 decrease in professional services, iii) a $136,000 increase in administrative expense reimbursements from oil and natural gas joint venture partners, and iv) a $201,000 decrease due to a 19% decrease in the average exchange rate of the Canadian dollar to the U.S. dollar.
Read the The complete Report
BARNWELL INDUSTRIES is engaged in oil and natural gas exploration development production and sales in Canada and the United States investment in leasehold land in Hawaii and water well drilling and water pumping system installation and repair in Hawaii. Additionally they provide contract labor for the drilling and workovers of geothermal wells. Their oil and natural gas activities comprises its largest business segment. The other business segment is land investment activities and contract drilling activities. Barnwell Industries Inc has a market cap of $43.84 million; its shares were traded at around $4.79 with a P/E ratio of 3.8 and P/S ratio of 0.67. The dividend yield of Barnwell Industries Inc stocks is 5.64%. Barnwell Industries Inc had an annual average earning growth of 20.9% over the past 10 years.
Highlight of Business Operations:
Historically, oil and natural gas prices have been volatile, are difficult to predict and fluctuate significantly. Oil and natural gas prices hit historic high levels in recent years and during the latter half of fiscal 2008. Beginning in the quarter ended September 30, 2008 through the date of this filing, oil and natural gas prices have fallen sharply from the recent record levels and may remain at these lower levels or may continue to decline. Natural gas prices for Barnwell, based on quarterly averages during the three years ended December 31, 2008, have ranged from a low of $5.09 per thousand cubic feet (the average price for the quarters ended September 30, 2007 and September 30, 2006) to a high of $9.70 per thousand cubic feet (the average price for the quarter ended June 30, 2008). Oil prices for Barnwell, based on quarterly averages for the period discussed above, ranged from a low of $47.76 per barrel (the average price for the quarter ended December 31, 2008) to a high of $117.22 per barrel (the average price for the quarter ended June 30, 2008). Significant declines in prices for oil and natural gas could have a material adverse effect on our financial condition, results of operations, and liquidity and cash flows.Net earnings for the three months ended December 31, 2008 totaled $424,000, a $2,895,000 (87%) decrease from net earnings of $3,319,000 for the three months ended December 31, 2007. This decrease was largely due to the following items:
The average exchange rate of the Canadian dollar to the U.S. dollar decreased 19% in the three months ended December 31, 2008 as compared to the same period in the prior year, and the exchange rate of the Canadian dollar to the U.S. dollar decreased 13% at December 31, 2008 as compared to September 30, 2008. Accordingly, the assets, liabilities, stockholders equity and revenues and expenses of Barnwells subsidiaries operating in Canada have been adjusted to reflect the change in the exchange rates. Barnwells Canadian dollar assets are greater than its Canadian dollar liabilities; therefore, increases or decreases in the value of the Canadian dollar to the U.S. dollar generate other comprehensive income or losses, respectively. Other comprehensive income and losses are not included in net earnings. The other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the three months ended December 31, 2008 was $6,247,000, a $6,536,000 decrease from other comprehensive income due to foreign currency translation adjustments, net of taxes, of $289,000 for the same period in the prior year.
The decrease in proceeds from the sale of development rights during the three months ended December 31, 2008 as compared to the same period in the prior year is due to the timing of receipt of proceeds of scheduled development right options. $1,770,000 of the $2,656,000 development rights option due on December 31, 2008 was received early, in May 2008. Accordingly, only the remaining portion of $886,000 was received in the three months ended December 31, 2008. During the three months ended December 31, 2007, the entire $2,656,000 development rights option due on December 31, 2007 was received during the quarter ended December 31, 2007.
Contract drilling revenues and costs decreased $1,076,000 (49%) and $680,000 (37%), respectively, for the three months ended December 31, 2008, as compared to the same period in the prior year. The contract drilling segment generated a $110,000 operating loss before general and administrative expenses in the three months ended December 31, 2008, a decrease of $418,000 as compared to the same period of the prior year, primarily due to decreases in well drilling activity in the current quarter as compared to the same period in the prior year.
General and administrative expenses decreased $1,131,000 (37%) for the three months ended December 31, 2008, as compared to the same period in the prior year. The decrease was primarily attributable to: i) a $635,000 decrease in current compensation costs, ii) an $85,000 decrease in professional services, iii) a $136,000 increase in administrative expense reimbursements from oil and natural gas joint venture partners, and iv) a $201,000 decrease due to a 19% decrease in the average exchange rate of the Canadian dollar to the U.S. dollar.
Read the The complete Report
