High oil prices nearly
double Barnwell profit
Barnwell Industries Inc.'s net income soared 83.1 percent in its fiscal third quarter as oil prices continued to rise and production remained strong.
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Revenues rose 23.2 percent to $7.6 million from $6.1 million.
Barnwell also declared a dividend of 15 cents a share payable Sept. 15 to stockholders of record on Aug. 27. It was the company's third dividend of the year after previously going two years without any payout.
The dividends paid in January and March of this year were for 20 cents and 50 cents, respectively.
Morton Kinzler, chairman and chief executive of Barnwell, said the company's oil prices jumped 24 percent while oil production increased 18 percent.
He also attributed the rise in earnings to a 7 percent gain in natural gas prices and a 1 percent rise in natural gas production, as well as a 6 percent increase in natural gas liquids prices and a 7 percent gain in natural gas liquids output.
The company's earnings in the quarter included a $200,000 Canadian deferred income tax benefit from a reduction in Alberta's corporate tax rate.
Chief Financial Officer Russell Gifford said the increase in worldwide oil prices generally has benefited the company but also has raised expenses.
"It does help increase the company's revenues, net income and cash flow," Gifford said.
"However, it's also increasing the cost of discovering and developing oil and natural gas."
He also said it's getting more difficult to find oil and gas because the easier properties were found "10, 15, 20 years ago."
Gifford said he expects oil prices to remain high through the spring of next year, while after that, "it's anybody's guess."
"There is a terrorism premium in the price that I feel is roughly 10 percent," he said.
Barnwell, which also is a 78 percent stakeholder in Kaupulehu Developments on the Big Island, had no real estate transactions that closed in the quarter or the year-ago period.
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