Barnwell earnings
skyrocket 74 percent

The gas exploration company will
split its stock for the first time

CLARIFICATION Wednesday, December 8, 2004 » Barnwell Industries Inc. declared a two-for-one stock split on Monday. Stories on Page C1 Monday afternoon and yesterday morning did not specify the type of stock split. The Honolulu Star-Bulletin strives to make its news report fair and accurate. If you have a question or comment about news coverage, call Editor Frank Bridgewater at 529-4791 or email him at corrections@starbulletin.com.

Barnwell Industries Inc., riding the wave of its oil, gas and real estate businesses, declared its first stock split ever yesterday after posting a 74 percent jump in fiscal fourth-quarter earnings.

The Honolulu-based company said net income in the quarter ended Sept. 30 rose to $870,000, or 62 cents a share, from $500,000, or 36 cents a share, a year earlier.

Revenue jumped 48.5 percent to $8.3 million from $5.6 million.

Barnwell also declared a dividend of 25 cents a share, marking the fourth time in the last 12 months it will be paying a dividend after going the previous two years without one. Barnwell's previous three dividends were for 15, 50 and 20 cents a share. The company's latest payout will be Jan. 5 to stockholders of record on Dec. 20. Barnwell's stock split will go into effect on Jan 28.

Barnwell's earnings for the year nearly quadrupled to a record $8.7 million, or $6.19 a share, from $2.3 million, or $1.69 a share. Revenue during the 12 months increased 60.3 percent to nearly $38 million from $23.7 million.

The company's shares, which are up about 70 percent this year, are trading at an all-time high of around $54.

"Net revenues and earnings increased for the fourth quarter due to increases in prices of natural gas, oil and natural gas liquids and an increase in natural gas production as compared to the prior year's fourth quarter," said Morton Kinzler, chairman and chief executive of Barnwell.

The company, which conducts its oil and gas operations in Alberta, Canada, didn't break out its quarterly numbers any further.

However, Barnwell noted that its full-year revenue grew by more than $7.3 million from the closing in February of a real estate deal involving Kaupulehu Developments, which is Barnwell's real estate development partnership on the Big Island. Barnwell is entitled to receive payments from the sale of approximately 80 single-family lots from the first increment of that development when the lots are sold to the public beginning next year.

In addition, Kaupulehu Developments received $2.7 million last December from Kaupulehu Makai Venture, which has the right to buy leasehold land in North Kona. It was the third of 10 scheduled option payments related to development rights within Hualalai Resort in Kona. A fourth payment of $2.7 million is scheduled at the end of this month.

Barnwell said it invested nearly $11.9 million in oil and gas exploration and development during the fiscal year to bring its investments in oil and gas properties over the last two years to $22.9 million.

The company also benefited during the year from deferred tax benefits of approximately $1.7 million due to reductions in Canadian corporate income tax rates. A year earlier, Barnwell received a tax benefit of $75,000.