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Barnwell ends 2009 with loss despite cutbacks


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POSTED: Tuesday, December 15, 2009

Barnwell Industries Inc., which trimmed staff and executive management salaries earlier this year to cut costs, ended both its fiscal fourth quarter and the year with a loss.

The Honolulu-based producer of oil and natural gas in Alberta, Canada, reported yesterday it lost $4.6 million, or 55 cents a share, in the quarter ended Sept. 30 compared with earnings of $3.2 million, or 38 cents a share, in the year-earlier quarter.

For the full year, Barnwell lost $24.4 million, or $2.96 a share, versus a profit of $11.7 million, or $1.39 a share, for fiscal 2008.

The full-year loss included an $18.6 million after-tax write-down in oil and gas properties that occurred in the second and third quarters.

The company also took a $1.5 million after-tax write-down in the fourth quarter related to its real estate investments on the Big Island.

Barnwell, hurt last quarter by “;very low”; oil and natural gas prices, saw its revenue plunge 50.3 percent to $7.6 million from $15.3 million. For the year, revenue sank 51 percent to $32.2 million from $65.6 million.

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In the third quarter, Barnwell laid off four employees and didn't fill one opening out of 20 positions in its Canada operations, and left one position open out of 12 total positions in its Honolulu office.

Barnwell also reduced compensation by an average of 20 percent for management and staff with executive salaries.

“;Although the company continues to have challenges due to the ongoing global economic downturn, with the significant reductions in general and administrative expenses and the company's strong balance sheet, we believe we have taken the steps necessary to navigate the current economic climate,”; said Morton Kinzler, chairman and chief executive officer of Barnwell.

Kinzler also said that recent real estate sales at Kapulehu, the company's 77.8 percent-owned partnership on the Big Island, will be recognized in the quarter ending Dec. 31 “;and will start fiscal 2010 off on a positive note.”;