Barnwell profits sink
amid falling gas, oil prices

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By Dave Segal
dsegal@starbulletin.com

Barnwell Industries Inc., citing a decrease in natural gas and oil prices, said today that earnings plunged 901 percent in the fiscal 2002 first quarter.

The Honolulu-based company, which generates the majority of its revenues from its energy operations in Canada, earned $150,000, or 11 cents per share, in the period ended Dec. 31, 2001, compared with $1.52 million, or $1.16 per share, in the year-ago quarter.

Revenues for the company, which also has leasehold land on the Big Island, fell 43 percent to $4.01 million from $7.03 million in the fiscal first quarter of 2001.

Barnwell Chairman and Chief Executive Morton H. Kinzler noted, however, that the earnings did not take into account the attainment of development entitlements from the Hawaii State Land Use Commission regarding a 1,000-acre lot of Kaupulehu Developments in North Kona on the Big Island.

"This was a milestone event that is not reflected in the company's earnings for this quarter or on the company's balance sheet, but nonetheless an event that will have significant positive future impact on the company's earnings and balance sheet," he said.

Also in the first quarter, Barnwell increased its stake in Kaupulehu Developments to 77 percent with a 27 percent purchase that totaled about $2.2 million.

During this period, Kau- pulehu received $2.13 million for restructuring the unexercised options granted to Kaupulehu Makai Venture for the development of residential parcels within the Four Season Resort Hualalai at Historic Kaupulehu.

Barnwell did not recognize any operating profit on the transaction during the quarter and won't until cash received exceeds costs and estimated future costs associated with the development rights.

However, earnings for the quarter were increased by $376,000 in deferred tax benefits related to this transaction.

Barnwell's stock closed off 25 cents to $19.90 today on the American Stock Exchange.