Barnwell Industries’ profit more than doubles on oil, natural gas operations

Barnwell Industries Inc.'s net income more than doubled in its fiscal first quarter to a record $6.3 million as its oil and natural gas segment, water-drilling unit and real estate division all posted strong results.

The Honolulu-based company, whose stock has doubled in each of the last two years, said yesterday that revenue soared 39.7 percent to $17.6 million from $12.6 million a year earlier.

Barnwell had earnings per share of 73 cents a share compared with 29 cents a share a year earlier when net income was $2.4 million.

The results for the quarter ending Dec. 31, 2005, included deferred tax benefits of about $2.2 million related to foreign tax credit carryforwards affected by Barnwell's projected significantly higher level of oil and natural gas capital expenditures in Canada. There was no such benefit in the fiscal first quarter of 2004.

The board of directors also declared a quarterly dividend of 5 cents a share.

"(This was) a great beginning to the company's 50th year as a public corporation," said Morton Kinzler, Barnwell's chairman and chief executive.

Barnwell, which in fiscal 2005 generated 74 percent of its revenue from its oil and natural gas operations in Alberta, Canada, boosted revenue from those operations $4.4 million, or 58 percent, for the three months ended Dec. 31 compared with the year-earlier period.

"The company utilized the cash flows generated by its operations to make significant investments in the oil and gas exploration and development programs," Kinzler said.

Barnwell's water-drilling segment, which last year accounted for 17 percent of the company's total revenue, also was profitable last quarter and included a $700,000 gain from the sale of a drill rig.

In its land investment segment, Barnwell, which owns 77.6 percent of a Big Island real estate partnership, Kaupulehu Developments, recognized net revenue of $2.7 million after receiving the fifth of 10 scheduled option payments and a portion of a sixth payment related to development rights within Hualalai Resort in Kona.

Separately, Barnwell received $2.5 million last month from the sale of the first of 80 single-family lots in North Kona under development by WB KD Acquisition LLC, which acquired the leasehold interest from Kaupulehu Developments in 2004.