XML 27 R16.htm IDEA: XBRL DOCUMENT v3.4.0.3
LONG-TERM DEBT
6 Months Ended
Mar. 31, 2016
Long-term Debt, Unclassified [Abstract]  
LONG-TERM DEBT
LONG-TERM DEBT
  
Canadian revolving credit facility

On September 30, 2015, Barnwell’s revolving credit facility at Royal Bank of Canada was amended and reduced by the bank to $1,000,000 Canadian dollars, or U.S. $771,000 at the March 31, 2016 exchange rate, as a result of the sale of the Company's principal oil and natural gas property, Dunvegan, in September 2015. Barnwell repaid the credit facility in full in September 2015 from the proceeds of the disposition. Borrowings under this facility were U.S. $0 at March 31, 2016 and September 30, 2015. Issued letters of credit were $35,000 at March 31, 2016. Upon the April 2016 review the credit facility was terminated. The termination was due to a tightening credit market for oil and natural gas companies due to current low oil and natural gas prices and reductions in Royal Bank of Canada's forecast of oil and natural gas prices which decreased their valuation of the Company's oil and natural gas assets pledged as security.

In February 2015, Barnwell repaid $2,000,000, representing a portion of the then outstanding borrowings under the Canadian revolving credit facility. During the three and six months ended March 31, 2015, Barnwell realized a foreign currency transaction loss of $146,000 as a result of that repayment of U.S. dollar denominated debt using Canadian dollars.
Real estate loan
 
Barnwell, together with its real estate joint venture, Kaupulehu 2007, had a non-revolving real estate loan with a Hawaii bank. At March 31, 2016 and September 30, 2015, the balance of the real estate loan was $3,440,000. In April 2016, the home collateralizing the loan was sold. In accordance with the terms of the loan agreement a portion of the proceeds from the sale were used to repay the real estate loan in full.

The loan agreement contained provisions requiring us to maintain compliance with certain covenants including a consolidated debt service coverage ratio and a consolidated total liabilities to tangible net worth ratio. However, in June 2015, the bank suspended these financial covenants in exchange for an interest reserve account which had a balance of $181,000 and $242,000 at March 31, 2016 and September 30, 2015, respectively, and is included with other reserve account amounts in "Restricted cash" on the accompanying Condensed Consolidated Balance Sheets. After the real estate loan was repaid in April 2016, the restricted reserve account balances were released.