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SEC rule puts Barnwell in the red


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POSTED: Thursday, May 14, 2009

Barnwell Industries Inc. swung to a $17 million fiscal second-quarter loss following a year-earlier gain after taking a noncash reduction of a net $15.6 million due to new Securities and Exchange Commission accounting rules applicable to oil and natural gas companies.

               

     

 

BY THE NUMBERS

        Second-quarter loss
       

$17 million

       

Year-earlier net

       

$1.7 million

       

The Honolulu-based company, which conducts oil and natural gas operations in Alberta, Canada, said the new SEC rules regarding the calculation of the full-cost ceiling of a company's reserves require the use of 12-month average prices rather than quarter-end prices.

Barnwell's loss per share was $2.06 versus a gain per share of 20 cents a year ago when the company earned $1.7 million.

Barnwell said its financial results were also affected by lower revenue as a result of lower natural gas, oil and natural gas liquid prices.

Oil prices were down 61 percent, natural gas liquids prices decreased 62 percent and natural gas prices fell 47 percent.

Overall, revenue for the company, which also has Big Island real estate holdings and statewide water-drilling operations, fell 49.9 percent to $7.2 million from $14.3 million.