May 6, 1998



Mr. Warren Steckley
216 Sunmount Bay S.E.
Calgary, Alberta, Canada
    T2X 2M8

Dear Mr. Steckley:

      This letter  will serve to  memorialize  our  discussions  regarding  your
acceptance  of our offer to enter into the  employment  of  Barnwell  of Canada,
Limited ("BOC").

      The terms of your  employment  will be as follows,  in accordance with our
discussions; all dollar amounts in this letter are in Canadian dollars:

      Start:            June 1, 1998 ("Start Date")
      Position:         Executive Vice President and  Chief Operating Officer of
                        BOC
      Annual Salary:    $150,000
      Annual Bonus:     A  guaranteed  minimum  bonus of  $30,000  for the first
                        full  fiscal year of employment.
      Stock Options:    1. 30,000 options to acquire  Barnwell Industries,  Inc.
                           common stock  to  be  granted  at market  price as of
                           the   Start  Date  pursuant  to  action  by  Barnwell
                           Industries,  Inc.'s Board of Directors. These options
                           will be in the normal form used by  Barnwell,  have a
                           ten year term  and vest over a  five year  period  at
                           6,000  shares  per year on the  anniversary of  their
                           grant date.
                        2. 30,000 "phantom"  options in BOC common stock tied to
                           BOC's book value in  accordance  with a summary sheet
                           provided to you on April 30, 1998. The final terms of
                           such phantom  options will be agreed upon between you
                           and BOC on or about your Start  Date.  These  options
                           will  have a ten year  term and vest over a five year
                           period at 6,000 shares per year on the anniversary of
                           their grant date.

      Other perquisites of your position,  including the use of a company car, a
Petroleum Club  membership and basic terms of our vacation,  medical and related
employment  policies  will  be  discussed  with  you  upon  your  entering  into
employment with BOC.

      We are very pleased that you have accepted our offer for employment and we
have great  confidence in your experience and abilities. We look forward to your
having a long and successful career with us.

                                Very truly yours,

                                /s/ Morton H. Kinzler
                                Morton H. Kinzler
                                Chairman, President and CEO
                                Barnwell of Canada, Limited

                                Chairman, President and CEO
                                Barnwell Industries, Inc.

cc:  Russell M. Gifford
     Alexander C. Kinzler