DELAWARE | 72-0496921 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1100 Alakea Street, Suite 2900, Honolulu, Hawaii | 96813 | |
(Address of principal executive offices) | (Zip code) |
(808) 531-8400 | ||
(Registrant’s telephone number, including area code) |
Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | x |
Emerging growth company | o |
March 31, 2018 | September 30, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 11,393,000 | $ | 16,281,000 | |||
Certificates of deposit | 5,195,000 | 4,413,000 | |||||
Accounts and other receivables, net of allowance for doubtful accounts of: $35,000 at March 31, 2018; $46,000 at September 30, 2017 | 1,528,000 | 1,414,000 | |||||
Income taxes receivable | 2,208,000 | 1,145,000 | |||||
Investment held for sale | 1,000,000 | 1,037,000 | |||||
Other current assets | 1,463,000 | 852,000 | |||||
Total current assets | 22,787,000 | 25,142,000 | |||||
Income taxes receivable, net of current portion | 460,000 | — | |||||
Deferred income tax assets | — | 300,000 | |||||
Investments | 1,976,000 | 2,209,000 | |||||
Property and equipment | 60,262,000 | 79,231,000 | |||||
Accumulated depletion, depreciation, and amortization | (56,201,000 | ) | (73,862,000 | ) | |||
Property and equipment, net | 4,061,000 | 5,369,000 | |||||
Total assets | $ | 29,284,000 | $ | 33,020,000 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,300,000 | $ | 1,185,000 | |||
Accrued capital expenditures | 252,000 | 348,000 | |||||
Accrued operating and other expenses | 865,000 | 1,386,000 | |||||
Accrued compensation | 396,000 | 390,000 | |||||
Current portion of asset retirement obligation | 1,223,000 | 1,231,000 | |||||
Other current liabilities | 105,000 | 258,000 | |||||
Total current liabilities | 4,141,000 | 4,798,000 | |||||
Deferred rent | 64,000 | 21,000 | |||||
Liability for retirement benefits | 4,026,000 | 4,150,000 | |||||
Asset retirement obligation | 3,412,000 | 5,632,000 | |||||
Deferred income tax liabilities | 458,000 | 236,000 | |||||
Total liabilities | 12,101,000 | 14,837,000 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Common stock, par value $0.50 per share; authorized, 20,000,000 shares: 8,445,060 issued at March 31, 2018 and September 30, 2017 | 4,223,000 | 4,223,000 | |||||
Additional paid-in capital | 1,351,000 | 1,350,000 | |||||
Retained earnings | 14,685,000 | 15,023,000 | |||||
Accumulated other comprehensive loss, net | (1,182,000 | ) | (1,058,000 | ) | |||
Treasury stock, at cost: 167,900 shares at March 31, 2018 and September 30, 2017 | (2,286,000 | ) | (2,286,000 | ) | |||
Total stockholders' equity | 16,791,000 | 17,252,000 | |||||
Non-controlling interests | 392,000 | 931,000 | |||||
Total equity | 17,183,000 | 18,183,000 | |||||
Total liabilities and equity | $ | 29,284,000 | $ | 33,020,000 |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Oil and natural gas | $ | 859,000 | $ | 1,409,000 | $ | 1,812,000 | $ | 2,550,000 | |||||||
Contract drilling | 1,016,000 | 1,580,000 | 1,858,000 | 2,986,000 | |||||||||||
Sale of interest in leasehold land | — | — | — | 1,678,000 | |||||||||||
Gas processing and other | 100,000 | 40,000 | 161,000 | 105,000 | |||||||||||
1,975,000 | 3,029,000 | 3,831,000 | 7,319,000 | ||||||||||||
Costs and expenses: | |||||||||||||||
Oil and natural gas operating | 575,000 | 800,000 | 1,233,000 | 1,646,000 | |||||||||||
Contract drilling operating | 883,000 | 850,000 | 1,704,000 | 2,014,000 | |||||||||||
General and administrative | 1,563,000 | 1,754,000 | 3,044,000 | 3,781,000 | |||||||||||
Depletion, depreciation, and amortization | 227,000 | 384,000 | 507,000 | 708,000 | |||||||||||
Impairment of assets | 37,000 | — | 37,000 | — | |||||||||||
Gain on sales of assets | (2,250,000 | ) | — | (2,250,000 | ) | — | |||||||||
1,035,000 | 3,788,000 | 4,275,000 | 8,149,000 | ||||||||||||
Earnings (loss) before equity in (loss) income of affiliates and income taxes | 940,000 | (759,000 | ) | (444,000 | ) | (830,000 | ) | ||||||||
Equity in (loss) income of affiliates | (80,000 | ) | (170,000 | ) | (233,000 | ) | 2,156,000 | ||||||||
Earnings (loss) before income taxes | 860,000 | (929,000 | ) | (677,000 | ) | 1,326,000 | |||||||||
Income tax provision (benefit) | 197,000 | (287,000 | ) | (306,000 | ) | (234,000 | ) | ||||||||
Net earnings (loss) | 663,000 | (642,000 | ) | (371,000 | ) | 1,560,000 | |||||||||
Less: Net (loss) earnings attributable to non-controlling interests | (16,000 | ) | (27,000 | ) | (33,000 | ) | 534,000 | ||||||||
Net earnings (loss) attributable to Barnwell Industries, Inc. | $ | 679,000 | $ | (615,000 | ) | $ | (338,000 | ) | $ | 1,026,000 | |||||
Basic and diluted net earnings (loss) per common share attributable to Barnwell Industries, Inc. stockholders | $ | 0.08 | $ | (0.07 | ) | $ | (0.04 | ) | $ | 0.12 | |||||
Weighted-average number of common shares outstanding: | |||||||||||||||
Basic and diluted | 8,277,160 | 8,277,160 | 8,277,160 | 8,277,160 |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net earnings (loss) | $ | 663,000 | $ | (642,000 | ) | $ | (371,000 | ) | $ | 1,560,000 | |||||
Other comprehensive (loss) income: | |||||||||||||||
Foreign currency translation adjustments, net of taxes of $0 | (181,000 | ) | 22,000 | (187,000 | ) | (48,000 | ) | ||||||||
Retirement plans - amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0 | 39,000 | 96,000 | 63,000 | 193,000 | |||||||||||
Total other comprehensive (loss) income | (142,000 | ) | 118,000 | (124,000 | ) | 145,000 | |||||||||
Total comprehensive income (loss) | 521,000 | (524,000 | ) | (495,000 | ) | 1,705,000 | |||||||||
Less: Comprehensive (loss) income attributable to non-controlling interests | (16,000 | ) | (27,000 | ) | (33,000 | ) | 534,000 | ||||||||
Comprehensive income (loss) attributable to Barnwell Industries, Inc. | $ | 537,000 | $ | (497,000 | ) | $ | (462,000 | ) | $ | 1,171,000 |
Shares Outstanding | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interests | Total Equity | |||||||||||||||||||||||
Balance at September 30, 2016 | 8,277,160 | $ | 4,223,000 | $ | 1,345,000 | $ | 13,852,000 | $ | (3,920,000 | ) | $ | (2,286,000 | ) | $ | 530,000 | $ | 13,744,000 | |||||||||||||
Distributions to non-controlling interests | — | — | — | — | — | — | (616,000 | ) | (616,000 | ) | ||||||||||||||||||||
Net earnings | — | — | — | 1,026,000 | — | — | 534,000 | 1,560,000 | ||||||||||||||||||||||
Share-based compensation | — | — | 3,000 | — | — | — | — | 3,000 | ||||||||||||||||||||||
Foreign currency translation adjustments, net of taxes of $0 | — | — | — | — | (48,000 | ) | — | — | (48,000 | ) | ||||||||||||||||||||
Retirement plans - amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0 | — | — | — | — | 193,000 | — | — | 193,000 | ||||||||||||||||||||||
Balance at March 31, 2017 | 8,277,160 | $ | 4,223,000 | $ | 1,348,000 | $ | 14,878,000 | $ | (3,775,000 | ) | $ | (2,286,000 | ) | $ | 448,000 | $ | 14,836,000 | |||||||||||||
Balance at September 30, 2017 | 8,277,160 | $ | 4,223,000 | $ | 1,350,000 | $ | 15,023,000 | $ | (1,058,000 | ) | $ | (2,286,000 | ) | $ | 931,000 | $ | 18,183,000 | |||||||||||||
Distributions to non-controlling interests | — | — | — | — | — | — | (506,000 | ) | (506,000 | ) | ||||||||||||||||||||
Net loss | — | — | — | (338,000 | ) | — | — | (33,000 | ) | (371,000 | ) | |||||||||||||||||||
Share-based compensation | — | — | 1,000 | — | — | — | — | 1,000 | ||||||||||||||||||||||
Foreign currency translation adjustments, net of taxes of $0 | — | — | — | — | (187,000 | ) | — | — | (187,000 | ) | ||||||||||||||||||||
Retirement plans - amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0 | — | — | — | — | 63,000 | — | — | 63,000 | ||||||||||||||||||||||
Balance at March 31, 2018 | 8,277,160 | $ | 4,223,000 | $ | 1,351,000 | $ | 14,685,000 | $ | (1,182,000 | ) | $ | (2,286,000 | ) | $ | 392,000 | $ | 17,183,000 |
Six months ended March 31, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) earnings | $ | (371,000 | ) | $ | 1,560,000 | ||
Adjustments to reconcile net (loss) earnings to net cash | |||||||
(used in) provided by operating activities: | |||||||
Equity in loss (income) of affiliates | 233,000 | (2,156,000 | ) | ||||
Depletion, depreciation, and amortization | 507,000 | 708,000 | |||||
Gain on sale of oil and natural gas properties | (2,250,000 | ) | — | ||||
Impairment of assets | 37,000 | — | |||||
Distribution of income from equity investees | — | 2,164,000 | |||||
Retirement benefits expense | 148,000 | 345,000 | |||||
Income tax receivable | (460,000 | ) | — | ||||
Deferred rent liability | 43,000 | — | |||||
Accretion of asset retirement obligation | 136,000 | 213,000 | |||||
Deferred income tax expense | 523,000 | 114,000 | |||||
Asset retirement obligation payments | (538,000 | ) | (480,000 | ) | |||
Share-based compensation expense (benefit) | (26,000 | ) | 45,000 | ||||
Retirement plan contributions and payments | (210,000 | ) | (355,000 | ) | |||
Sale of interest in leasehold land, net of fees paid | — | (1,418,000 | ) | ||||
Decrease from changes in current assets and liabilities | (1,233,000 | ) | (424,000 | ) | |||
Net cash (used in) provided by operating activities | (3,461,000 | ) | 316,000 | ||||
Cash flows from investing activities: | |||||||
Purchase of certificates of deposit | (3,958,000 | ) | — | ||||
Proceeds from the maturity of certificates of deposit | 3,176,000 | — | |||||
Distribution from equity investees in excess of earnings | — | 652,000 | |||||
Net (fees paid on) proceeds from sale of interest in leasehold land | (343,000 | ) | 1,418,000 | ||||
Proceeds from sale of oil and natural gas assets | 763,000 | — | |||||
Capital expenditures - oil and natural gas | (288,000 | ) | (447,000 | ) | |||
Capital expenditures - all other | (65,000 | ) | (120,000 | ) | |||
Net cash (used in) provided by investing activities | (715,000 | ) | 1,503,000 | ||||
Cash flows from financing activities: | |||||||
Distributions to non-controlling interests | (506,000 | ) | (616,000 | ) | |||
Net cash used in financing activities | (506,000 | ) | (616,000 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (206,000 | ) | (98,000 | ) | |||
Net (decrease) increase in cash and cash equivalents | (4,888,000 | ) | 1,105,000 | ||||
Cash and cash equivalents at beginning of period | 16,281,000 | 15,550,000 | |||||
Cash and cash equivalents at end of period | $ | 11,393,000 | $ | 16,655,000 |
Three months ended March 31, 2018 | ||||||||||
Net Earnings (Numerator) | Shares (Denominator) | Per-Share Amount | ||||||||
Basic net earnings per share | $ | 679,000 | 8,277,160 | $ | 0.08 | |||||
Effect of dilutive securities - | ||||||||||
common stock options | — | — | ||||||||
Diluted net earnings per share | $ | 679,000 | 8,277,160 | $ | 0.08 |
Six months ended March 31, 2018 | ||||||||||
Net Loss (Numerator) | Shares (Denominator) | Per-Share Amount | ||||||||
Basic net loss per share | $ | (338,000 | ) | 8,277,160 | $ | (0.04 | ) | |||
Effect of dilutive securities - | ||||||||||
common stock options | — | — | ||||||||
Diluted net loss per share | $ | (338,000 | ) | 8,277,160 | $ | (0.04 | ) |
Three months ended March 31, 2017 | ||||||||||
Net Loss (Numerator) | Shares (Denominator) | Per-Share Amount | ||||||||
Basic net loss per share | $ | (615,000 | ) | 8,277,160 | $ | (0.07 | ) | |||
Effect of dilutive securities - | ||||||||||
common stock options | — | — | ||||||||
Diluted net loss per share | $ | (615,000 | ) | 8,277,160 | $ | (0.07 | ) |
Six months ended March 31, 2017 | ||||||||||
Net Earnings (Numerator) | Shares (Denominator) | Per-Share Amount | ||||||||
Basic net earnings per share | $ | 1,026,000 | 8,277,160 | $ | 0.12 | |||||
Effect of dilutive securities - | ||||||||||
common stock options | — | — | ||||||||
Diluted net earnings per share | $ | 1,026,000 | 8,277,160 | $ | 0.12 |
March 31, 2018 | September 30, 2017 | ||||||
Investment in Kukio Resort land development partnerships | $ | 1,926,000 | $ | 2,159,000 | |||
Investment in leasehold land interest – Lot 4C | 50,000 | 50,000 | |||||
Total investments | $ | 1,976,000 | $ | 2,209,000 |
Three months ended March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | 2,230,000 | $ | 1,322,000 | |||
Gross profit | $ | 1,048,000 | $ | 454,000 | |||
Net loss | $ | (185,000 | ) | $ | (598,000 | ) |
Six months ended March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | 3,790,000 | $ | 26,196,000 | |||
Gross profit | $ | 1,734,000 | $ | 11,950,000 | |||
Net (loss) earnings | $ | (688,000 | ) | $ | 10,062,000 |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Sale of interest in leasehold land: | |||||||||||||||
Revenues - sale of interest in leasehold land | $ | — | $ | — | $ | — | $ | 1,678,000 | |||||||
Fees - included in general and administrative expenses | — | — | — | (260,000 | ) | ||||||||||
Proceeds from sale of interest in leasehold land, net of fees paid | $ | — | $ | — | $ | — | $ | 1,418,000 |
Six months ended March 31, 2018 | |||||||
Pro forma (unaudited) | Historical | Pro forma | |||||
Total revenues | $ | 3,831,000 | $ | 3,439,000 | |||
Net loss | $ | (371,000 | ) | $ | (2,223,000 | ) | |
Net loss attributable to Barnwell Industries, Inc. stockholders | $ | (338,000 | ) | $ | (2,190,000 | ) | |
Net loss per common share attributable to Barnwell Industries, Inc. stockholders | $ | (0.04 | ) | $ | (0.26 | ) |
Six months ended March 31, 2017 | |||||||
Pro forma (unaudited) | Historical | Pro forma | |||||
Total revenues | $ | 7,319,000 | $ | 6,794,000 | |||
Net earnings | $ | 1,560,000 | $ | 1,450,000 | |||
Net earnings attributable to Barnwell Industries, Inc. stockholders | $ | 1,026,000 | $ | 916,000 | |||
Net earnings per common share attributable to Barnwell Industries, Inc. stockholders | $ | 0.12 | $ | 0.11 |
Six months ended | |||||
March 31, 2018 | |||||
Asset retirement obligation as of beginning of period | $ | 6,863,000 | |||
Liabilities associated with properties sold | (1,752,000 | ) | |||
Revision of estimated obligation | 47,000 | ||||
Accretion expense | 136,000 | ||||
Payments | (538,000 | ) | |||
Foreign currency translation adjustment | (121,000 | ) | |||
Asset retirement obligation as of end of period | 4,635,000 | ||||
Less current portion | (1,223,000 | ) | |||
Asset retirement obligation, long-term | $ | 3,412,000 |
Pension Plan | SERP | Postretirement Medical | |||||||||||||||||||||
Three months ended March 31, | |||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | 55,000 | $ | 72,000 | $ | 13,000 | $ | 15,000 | $ | — | $ | — | |||||||||||
Interest cost | 89,000 | 87,000 | 23,000 | 20,000 | 19,000 | 22,000 | |||||||||||||||||
Expected return on plan assets | (148,000 | ) | (141,000 | ) | — | — | — | — | |||||||||||||||
Amortization of prior service cost (credit) | 2,000 | 1,000 | (1,000 | ) | (1,000 | ) | — | — | |||||||||||||||
Amortization of net actuarial loss | 27,000 | 41,000 | 7,000 | 8,000 | 3,000 | 47,000 | |||||||||||||||||
Net periodic benefit cost | $ | 25,000 | $ | 60,000 | $ | 42,000 | $ | 42,000 | $ | 22,000 | $ | 69,000 |
Pension Plan | SERP | Postretirement Medical | |||||||||||||||||||||
Six months ended March 31, | |||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | 108,000 | $ | 144,000 | $ | 20,000 | $ | 31,000 | $ | — | $ | — | |||||||||||
Interest cost | 178,000 | 174,000 | 38,000 | 41,000 | 38,000 | 44,000 | |||||||||||||||||
Expected return on plan assets | (296,000 | ) | (282,000 | ) | — | — | — | — | |||||||||||||||
Amortization of prior service cost (credit) | 3,000 | 2,000 | (3,000 | ) | (2,000 | ) | — | — | |||||||||||||||
Amortization of net actuarial loss | 49,000 | 82,000 | 7,000 | 17,000 | 6,000 | 94,000 | |||||||||||||||||
Net periodic benefit cost | $ | 42,000 | $ | 120,000 | $ | 62,000 | $ | 87,000 | $ | 44,000 | $ | 138,000 |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
United States | $ | (982,000 | ) | $ | (651,000 | ) | $ | (2,125,000 | ) | $ | 1,411,000 | ||||
Canada | 1,858,000 | (251,000 | ) | 1,481,000 | (619,000 | ) | |||||||||
$ | 876,000 | $ | (902,000 | ) | $ | (644,000 | ) | $ | 792,000 |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Current | $ | (256,000 | ) | $ | (276,000 | ) | $ | (829,000 | ) | $ | (348,000 | ) | |||
Deferred | 453,000 | (11,000 | ) | 523,000 | 114,000 | ||||||||||
$ | 197,000 | $ | (287,000 | ) | $ | (306,000 | ) | $ | (234,000 | ) |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Oil and natural gas | $ | 859,000 | $ | 1,409,000 | $ | 1,812,000 | $ | 2,550,000 | |||||||
Land investment | — | — | — | 1,678,000 | |||||||||||
Contract drilling | 1,016,000 | 1,580,000 | 1,858,000 | 2,986,000 | |||||||||||
Other | 42,000 | 14,000 | 70,000 | 69,000 | |||||||||||
Total before interest income | 1,917,000 | 3,003,000 | 3,740,000 | 7,283,000 | |||||||||||
Interest income | 58,000 | 26,000 | 91,000 | 36,000 | |||||||||||
Total revenues | $ | 1,975,000 | $ | 3,029,000 | $ | 3,831,000 | $ | 7,319,000 | |||||||
Depletion, depreciation, and amortization: | |||||||||||||||
Oil and natural gas | $ | 157,000 | $ | 292,000 | $ | 356,000 | $ | 527,000 | |||||||
Contract drilling | 53,000 | 70,000 | 114,000 | 136,000 | |||||||||||
Other | 17,000 | 22,000 | 37,000 | 45,000 | |||||||||||
Total depletion, depreciation, and amortization | $ | 227,000 | $ | 384,000 | $ | 507,000 | $ | 708,000 | |||||||
Impairment: | |||||||||||||||
Land investment | $ | 37,000 | $ | — | $ | 37,000 | $ | — | |||||||
Operating profit (loss) (before general and administrative expenses): | |||||||||||||||
Oil and natural gas | $ | 127,000 | $ | 317,000 | $ | 223,000 | $ | 377,000 | |||||||
Land investment | (37,000 | ) | — | (37,000 | ) | 1,678,000 | |||||||||
Contract drilling | 80,000 | 660,000 | 40,000 | 836,000 | |||||||||||
Other | 25,000 | (8,000 | ) | 33,000 | 24,000 | ||||||||||
Gain on sales of assets | 2,250,000 | — | 2,250,000 | — | |||||||||||
Total operating profit | 2,445,000 | 969,000 | 2,509,000 | 2,915,000 | |||||||||||
Equity in income (loss) of affiliates: | |||||||||||||||
Land investment | (80,000 | ) | (170,000 | ) | (233,000 | ) | 2,156,000 | ||||||||
General and administrative expenses | (1,563,000 | ) | (1,754,000 | ) | (3,044,000 | ) | (3,781,000 | ) | |||||||
Interest income | 58,000 | 26,000 | 91,000 | 36,000 | |||||||||||
Earnings (loss) before income taxes | $ | 860,000 | $ | (929,000 | ) | $ | (677,000 | ) | $ | 1,326,000 |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Foreign currency translation: | |||||||||||||||
Beginning accumulated foreign currency translation | $ | 1,047,000 | $ | 836,000 | $ | 1,053,000 | $ | 906,000 | |||||||
Change in cumulative translation adjustment before reclassifications | (181,000 | ) | 22,000 | (187,000 | ) | (48,000 | ) | ||||||||
Income taxes | — | — | — | — | |||||||||||
Net current period other comprehensive (loss) income | (181,000 | ) | 22,000 | (187,000 | ) | (48,000 | ) | ||||||||
Ending accumulated foreign currency translation | 866,000 | 858,000 | 866,000 | 858,000 | |||||||||||
Retirement plans: | |||||||||||||||
Beginning accumulated retirement plans benefit cost | (2,087,000 | ) | (4,729,000 | ) | (2,111,000 | ) | (4,826,000 | ) | |||||||
Amortization of net actuarial loss and prior service cost | 39,000 | 96,000 | 63,000 | 193,000 | |||||||||||
Income taxes | — | — | — | — | |||||||||||
Net current period other comprehensive income | 39,000 | 96,000 | 63,000 | 193,000 | |||||||||||
Ending accumulated retirement plans benefit cost | (2,048,000 | ) | (4,633,000 | ) | (2,048,000 | ) | (4,633,000 | ) | |||||||
Accumulated other comprehensive loss, net of taxes | $ | (1,182,000 | ) | $ | (3,775,000 | ) | $ | (1,182,000 | ) | $ | (3,775,000 | ) |
Six months ended March 31, | |||||||
2018 | 2017 | ||||||
Supplemental disclosure of cash flow information: | |||||||
Cash paid during the year for: | |||||||
Interest | $ | — | $ | 5,000 | |||
Income taxes refunded, net | $ | (20,000 | ) | $ | (180,000 | ) | |
Supplemental disclosure of non-cash investing activities: | |||||||
Canadian income tax withholding on proceeds from the sale of oil and natural gas properties | $ | 789,000 | $ | — |
• | The right to receive percentage of sales payments from KD Acquisition, LLLP ("KD I") resulting from the sale of single-family residential lots by KD I, within Increment I of the approximately 870 acres of the Kaupulehu Lot 4A area located in the North Kona District of the island of Hawaii. Kaupulehu Developments is entitled to receive payments from KD I based on the following percentages of the gross receipts from KD I’s sales: 10% of such aggregate gross proceeds greater than $100,000,000 up to $300,000,000; and 14% of such aggregate gross proceeds in excess of |
• | The right to receive percentage of sales payments from KD Acquisition II, LLLP ("KD II") resulting from the sale of lots and/or residential units by KD II, within Increment II of Kaupulehu Lot 4A. Increment II is the remaining portion of the approximately 870-acre property and is zoned for single-family and multi-family residential units and a golf course and clubhouse. Kaupulehu Developments is entitled to receive payments from KD II based on a percentage of the gross receipts from KD II’s sales ranging from 8% to 10% of the price of improved or unimproved lots or 2.60% to 3.25% of the price of units constructed on a lot, to be determined in the future depending upon a number of variables, including whether the lots are sold prior to improvement. Kaupulehu Developments is also entitled to receive 50% of any future distributions otherwise payable from KD II to it members up to $8,000,000, of which $2,500,000 has been received to date. Two ocean front parcels approximately two to three acres in size fronting the ocean were developed and sold within Increment II by KD II and the remaining acreage within Increment II is not yet under development. |
• | An indirect 19.6% non-controlling ownership interest in the Kukio Resort land development partnerships which is comprised of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP. These entities own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KD Kaupulehu, LLLP, which wholly owns KD I and KD II discussed above, is the developer of Kaupulehu Lot 4A Increments I and II, the area in which Barnwell has interests in percentage of sales payments and percentage of future distributions to KD II's members. The partnerships derive income from the sale of residential parcels as well as from commission on real estate sales by the real estate sales office. As of March 31, 2018, 23 lots remained to be sold at Kaupulehu Increment I. |
• | Approximately 1,000 acres of vacant leasehold land zoned conservation in the Kaupulehu Lot 4C area located adjacent to the 870-acre Lot 4A described above, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. |
• | A $2,250,000 gain recognized in the current quarter primarily from the sale of oil properties in the Red Earth area of Alberta, Canada; and |
• | A $580,000 decrease in contract drilling operating results, before income taxes, primarily due to a high value contract in the prior year period for the plugging and abandonment of two geothermal wells, whereas there was no such high value contract in the current year period. |
• | A $1,715,000 decrease in land investment segment operating profit, before income taxes and non-controlling interests’ share of such profits, due to a percentage of sales receipt in the prior year period from the Kukio Resort land development partnerships’ sale of a two-acre ocean front parcel in Kaupulehu Increment II for $20,975,000 from which we received an 8% percentage of sale payment, as compared to none in the current year period; |
• | A $796,000 decrease in contract drilling operating results, before income taxes, primarily due to a high value contract in the prior year period for the plugging and abandonment of two geothermal wells; |
• | A $737,000 decrease in general and administrative expenses primarily as a result of decreased compensation costs and professional fees; |
• | A $2,250,000 gain recognized in the current year primarily from the sale of oil properties in the Red Earth area of Alberta, Canada; |
• | A $2,389,000 decrease in equity in income from affiliates as a result of decreased Kukio Resort land development partnerships’ operating results; and |
• | The current year period includes a $460,000 income tax benefit due to the enactment of changes to U.S. federal income tax laws in December 2017, whereas there was no such benefit in the prior year period. |
Average Price Per Unit | ||||||||||||||
Three months ended | Increase | |||||||||||||
March 31, | (Decrease) | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Natural Gas (Mcf)* | $ | 1.72 | $ | 2.24 | $ | (0.52 | ) | (23 | %) | |||||
Oil (Bbls)** | $ | 50.21 | $ | 43.00 | $ | 7.21 | 17 | % | ||||||
Liquids (Bbls)** | $ | 46.00 | $ | 30.00 | $ | 16.00 | 53 | % |
Average Price Per Unit | ||||||||||||||
Six months ended | Increase | |||||||||||||
March 31, | (Decrease) | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Natural Gas (Mcf)* | $ | 1.47 | $ | 2.27 | $ | (0.80 | ) | (35 | %) | |||||
Oil (Bbls)** | $ | 47.98 | $ | 41.63 | $ | 6.35 | 15 | % | ||||||
Liquids (Bbls)** | $ | 41.67 | $ | 29.65 | $ | 12.02 | 41 | % |
Net Production | |||||||||||
Three months ended | Increase | ||||||||||
March 31, | (Decrease) | ||||||||||
2018 | 2017 | Units | % | ||||||||
Natural Gas (Mcf)* | 71,000 | 99,000 | (28,000 | ) | (28 | %) | |||||
Oil (Bbls)** | 14,000 | 24,000 | (10,000 | ) | (42 | %) | |||||
Liquids (Bbls)** | 1,000 | 1,000 | — | — | % |
Net Production | |||||||||||
Six months ended | Increase | ||||||||||
March 31, | (Decrease) | ||||||||||
2018 | 2017 | Units | % | ||||||||
Natural Gas (Mcf)* | 153,000 | 203,000 | (50,000 | ) | (25 | %) | |||||
Oil (Bbls)** | 31,000 | 45,000 | (14,000 | ) | (31 | %) | |||||
Liquids (Bbls)** | 2,000 | 2,000 | — | — | % |
Three months ended March 31, | Six months ended March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Sale of interest in leasehold land: | |||||||||||||||
Revenues - sale of interest in leasehold land | $ | — | $ | — | $ | — | $ | 1,678,000 | |||||||
Fees - included in general and administrative expenses | — | — | — | (260,000 | ) | ||||||||||
Proceeds from the sale of interest in leasehold land, net of fees paid | $ | — | $ | — | $ | — | $ | 1,418,000 |
• | A $2,164,000 distribution of income received from the Kukio Resort land development partnerships in the prior year period whereas there was no such distribution in the current year period; |
• | An $818,000 decrease in contract drilling margin before depreciation and income taxes, primarily due to a high value contract in the prior year period for the plugging and abandonment of two geothermal wells, whereas there was no such high value contract in the current year period; and |
• | An $809,000 decrease due to changes in working capital. |
Exhibit Number | Description | |
31.1 | Certification of Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 | |
32 | Certification Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
BARNWELL INDUSTRIES, INC. | ||
(Registrant) | ||
Date: | May 14, 2018 | /s/ Russell M. Gifford |
Russell M. Gifford | ||
Chief Financial Officer, | ||
Executive Vice President, | ||
Treasurer and Secretary |
Exhibit Number | Description | |
31.1 | ||
31.2 | ||
32 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
1. | I have reviewed this quarterly report on Form 10-Q of Barnwell Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 14, 2018 | /s/ Alexander C. Kinzler |
Alexander C. Kinzler | ||
President, Chief Executive Officer, Chief Operating Officer, General Counsel |
1. | I have reviewed this quarterly report on Form 10-Q of Barnwell Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 14, 2018 | /s/ Russell M. Gifford |
Russell M. Gifford | ||
Executive Vice President, Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | May 14, 2018 | /s/ Alexander C. Kinzler |
Alexander C. Kinzler | ||
Title: President, Chief Executive Officer, Chief Operating Officer, General Counsel | ||
Dated: | May 14, 2018 | /s/ Russell M. Gifford |
Name: Russell M. Gifford | ||
Title: Executive Vice President, Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Mar. 31, 2018 |
May 07, 2018 |
|
Document and Entity Information | ||
Entity Registrant Name | BARNWELL INDUSTRIES INC | |
Entity Central Index Key | 0000010048 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,277,160 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Sep. 30, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 35 | $ 46 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, authorized shares (in shares) | 20,000,000 | 20,000,000 |
Common stock, issued shares (in shares) | 8,445,060 | 8,445,060 |
Treasury stock, shares (in shares) | 167,900 | 167,900 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ 663 | $ (642) | $ (371) | $ 1,560 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments, net of taxes of $0 | (181) | 22 | (187) | (48) |
Retirement plans - amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0 | 39 | 96 | 63 | 193 |
Total other comprehensive (loss) income | (142) | 118 | (124) | 145 |
Total comprehensive earnings (loss) | 521 | (524) | (495) | 1,705 |
Less: Comprehensive (loss) earnings attributable to non-controlling interests | (16) | (27) | (33) | 534 |
Comprehensive earnings (loss) attributable to Barnwell Industries, Inc. | $ 537 | $ (497) | $ (462) | $ 1,171 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Amortization of accumulated other comprehensive loss into net periodic benefit cost, taxes | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Foreign currency translation adjustments, taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Amortization of accumulated other comprehensive loss into net periodic benefit cost, taxes | $ 0 | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
---|---|
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of Barnwell Industries, Inc. and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6%-owned land investment general partnership (Kaupulehu Developments), a 75%-owned land investment partnership (KD Kona 2013 LLLP) and an 80%-owned joint venture (Kaupulehu 2007, LLLP). All significant intercompany accounts and transactions have been eliminated. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in variable interest entities (“VIE”) in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method. Unless otherwise indicated, all references to “dollars” in this Form 10-Q are to U.S. dollars. Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and notes have been prepared by Barnwell in accordance with the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Barnwell’s September 30, 2017 Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of September 30, 2017 has been derived from audited consolidated financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at March 31, 2018, results of operations and comprehensive income (loss) for the three and six months ended March 31, 2018 and 2017, and equity and cash flows for the six months ended March 31, 2018 and 2017, have been made. The results of operations for the period ended March 31, 2018 are not necessarily indicative of the operating results for the full year. Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management of Barnwell to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ significantly from those estimates. Significant Accounting Policies There have been no changes to Barnwell’s significant accounting policies as described in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s most recently filed Annual Report on Form 10-K. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-07, “Simplifying the Transition to the Equity Method of Accounting,” which eliminates the requirement that when an investment subsequently qualifies for use of the equity method as a result of an increase in level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. This ASU requires that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and to adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. In addition, the ASU requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The Company adopted the provisions of this ASU effective October 1, 2017. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The Company adopted the provisions of this ASU effective October 1, 2017. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-17, “Interests Held through Related Parties That Are under Common Control,” which modifies existing guidance with respect to how a decision maker that holds an indirect interest in a VIE through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under this ASU, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. The Company adopted the provisions of this ASU effective October 1, 2017. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements. |
EARNINGS (LOSS) PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities, which consist of outstanding stock options. Potentially dilutive shares are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive. Options to purchase 493,750 and 621,250 shares of common stock were excluded from the computation of diluted shares for the three and six months ended March 31, 2018 and 2017, respectively, as their inclusion would have been antidilutive. Reconciliations between net earnings (loss) attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net earnings (loss) per share computations are detailed in the following tables:
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INVESTMENT HELD FOR SALE |
6 Months Ended |
---|---|
Mar. 31, 2018 | |
INVESTMENT HELD FOR SALE [Abstract] | |
INVESTMENT HELD FOR SALE | INVESTMENT HELD FOR SALE At March 31, 2018, Kaupulehu 2007, LLLP owned one residential lot available for sale in the Lot 4A Increment I area located in the North Kona District of the island of Hawaii, north of Hualalai Resort at Historic Ka`upulehu, between the Queen Kaahumanu Highway and the Pacific Ocean. In March 2018, Kaupulehu 2007, LLLP entered into a contract for the sale of the residential lot for net proceeds of $1,000,000. Accordingly, the lot's carrying value at March 31, 2018 was adjusted to the amount of the contract currently in escrow, and a $37,000 impairment of the value of the investment held for sale was recognized in the three and six months ended March 31, 2018. |
INVESTMENTS |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS A summary of Barnwell’s investments is as follows:
Investment in Kukio Resort land development partnerships On November 27, 2013, Barnwell, through a wholly-owned subsidiary, entered into two limited liability limited partnerships, KD Kona 2013 LLLP and KKM Makai, LLLP, and indirectly acquired a 19.6% non-controlling ownership interest in each of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP for $5,140,000. These entities own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KD Kaupulehu, LLLP, which is comprised of KD Acquisition, LLLP (“KD I”) and KD Acquisition II, LLLP (“KD II”), is the developer of Kaupulehu Lot 4A Increments I and II, the area in which Barnwell has interests in percentage of sales payments and percentage of future distributions to KD II's members. Barnwell’s investment in these entities is accounted for using the equity method of accounting. The partnerships derive income from the sale of residential parcels as well as from commission on real estate sales by the real estate sales office. As of March 31, 2018, 23 lots remained to be sold at Kaupulehu Increment I. During the six months ended March 31, 2017, Barnwell received net cash distributions in the amount of $2,509,000 from the Kukio Resort land development partnerships after distributing $307,000 to minority interests. Barnwell's share of the loss of its equity affiliates was $80,000 and $233,000 for the three and six months ended March 31, 2018, respectively, and $170,000 for the three months ended March 31, 2017. Equity in income of affiliates was $2,156,000 for the six months ended March 31, 2017. The equity in the underlying net assets of the Kukio Resort land development partnerships exceeds the carrying value of the investment in affiliates by approximately $319,000 as of March 31, 2018, which is attributable to differences in the value of capitalized development costs and a note receivable. The basis difference will be recognized as the partnerships sell lots and recognize the associated costs and sell memberships for the Kuki`o Golf and Beach Club for which the receivable relates. The basis difference adjustments of $0 and $3,000 for the three and six months ended March 31, 2018, respectively, and $1,000 and $20,000 for the three and six months ended March 31, 2017, respectively, increased equity in income of affiliates. Summarized financial information for the Kukio Resort land development partnerships is as follows:
Sale of interest in leasehold land Kaupulehu Developments has the right to receive payments from KD I and KD II resulting from the sale of lots and/or residential units within approximately 870 acres of the Kaupulehu Lot 4A area by KD I and KD II in two increments (“Increment I” and “Increment II”) (see Note 12). The following table summarizes the percentage of sales payment revenues received from KD I and KD II and the amount of fees directly related to such revenues:
Investment in leasehold land interest - Lot 4C Kaupulehu Developments holds an interest in an area of approximately 1,000 acres of vacant leasehold land zoned conservation located adjacent to Lot 4A. The lease terminates in December 2025. |
RETIREMENT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETIREMENT PLANS | RETIREMENT PLANS Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees. Additionally, Barnwell sponsors a Supplemental Employee Retirement Plan (“SERP”), a noncontributory supplemental retirement benefit plan which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan, and a postretirement medical insurance benefits plan (“Postretirement Medical”) covering eligible U.S. employees. The following tables detail the components of net periodic benefit cost for Barnwell’s retirement plans:
Barnwell contributed $200,000 to the Pension Plan during the six months ended March 31, 2018 and estimates that it will make further contributions of approximately $300,000 during the remainder of fiscal 2018. The SERP and Postretirement Medical plans are unfunded, and Barnwell funds benefits when payments are made. Expected payments under the Postretirement Medical plan and the SERP for fiscal 2018 are not material. Fluctuations in actual equity market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of earnings (loss) before income taxes, after adjusting the earnings (loss) for non-controlling interests, are as follows:
The components of the income tax provision (benefit) are as follows:
Consolidated taxes do not bear a customary relationship to pretax results due primarily to the fact that the Company is taxed separately in Canada based on Canadian source operations and in the U.S. based on consolidated operations, and essentially all deferred tax assets, net of relevant offsetting deferred tax liabilities and any amounts estimated to be realizable through tax carryback strategies, are not estimated to have a future benefit as tax credits or deductions. Income from our non-controlling interest in the Kukio Resort land development partnerships is treated as non-unitary for state of Hawaii unitary filing purposes, thus unitary Hawaii losses provide limited sheltering of such non-unitary income. The Tax Cuts and Jobs Act of 2017 (“TCJA”), enacted on December 22, 2017, contains significant changes including a reduction in the U.S. corporate income tax rate, repeal of the corporate Alternative Minimum Tax (“AMT”), restriction of the deduction for post-TCJA net operating losses to 80% of taxable income and elimination of net operating loss carrybacks, mandatory deemed repatriation and resulting taxation of all undistributed foreign earnings, as well as various other changes that either do not currently have a significant impact to the Company, or that may impact us in the future should those provisions become applicable to the Company. We believe our assessment of the estimated impacts of the TCJA is complete based on information available to date. However, the TCJA makes broad and complex changes to the U.S. tax code and is subject to interpretation until additional guidance is issued by taxation and financial reporting authorities. The ultimate impact of the TCJA may differ from our estimates due to changes in the interpretations and assumptions we used and changes in any future regulatory guidance. The TCJA reduces the U.S. statutory tax rate from 35% to 21% effective January 1, 2018. The Company’s U.S. federal statutory rate for the fiscal year ending September 30, 2018 will be a blended rate of 24.5%, based on a fiscal year blended rate calculation of pre- and post-TJCA rates, and will be 21% for future fiscal years. There was no financial statement impact of the TCJA’s reduction in the U.S. statutory tax rate in the quarter ended December 31, 2017, as the Company has a full valuation allowance on its net deferred tax assets under U.S. federal tax law. The repeal of the corporate AMT provides a mechanism for the refund over time of any unused AMT credit carryovers. Prior to the enactment of the TCJA, it was not more likely than not that the Company’s AMT credit carryovers would provide a future benefit, as such the AMT deferred tax asset had a full valuation allowance. As a result of the new TCJA provision for refundability of the AMT, the Company recorded a current income tax benefit of $460,000 in the quarter ended December 31, 2017 to reflect the undiscounted unused AMT credit carryover balance as a non-current income tax receivable. Respective portions of this balance will be reclassified to current income taxes receivable when amounts are eligible for refund within one year of the balance sheet date. The TCJA restricts the deduction for post-TCJA net operating losses to 80% of taxable income and eliminates the current net operating loss carryback provisions. The Company has determined that all existing pre-TCJA net operating loss carryovers are of sufficient magnitude and life such that they will fully shelter future reversals of U.S. federal deferred tax liabilities. As such, there was no financial statement impact of the TCJA’s changes to net operating losses in the quarter ended December 31, 2017. The TCJA establishes mandatory deemed repatriation and resulting taxation of all post-1986 undistributed foreign earnings. As the Company’s Canadian operations consist of a U.S. corporate subsidiary operating as a branch in Canada and other minor, inactive Canadian corporate subsidiaries there was no impact from this provision. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION Barnwell operates the following segments: 1) acquiring, developing, producing and selling oil and natural gas in Canada (oil and natural gas); 2) investing in land interests in Hawaii (land investment); and 3) drilling wells and installing and repairing water pumping systems in Hawaii (contract drilling). The following table presents certain financial information related to Barnwell’s reporting segments. All revenues reported are from external customers with no intersegment sales or transfers.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in each component of accumulated other comprehensive loss were as follows:
The amortization of accumulated other comprehensive loss components for the retirement plans are included in the computation of net periodic benefit cost which is a component of "General and administrative" expenses on the accompanying Condensed Consolidated Statements of Operations (see Note 6 for additional details). |
FAIR VALUE MEASUREMENTS |
6 Months Ended |
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Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The carrying values of cash and cash equivalents, certificates of deposit, accounts and other receivables, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments. In March 2018, Kaupulehu 2007, LLLP entered into a contract for the sale of the residential lot for net proceeds of $1,000,000. Accordingly, the lot's carrying value at March 31, 2018 was adjusted to the amount of the contract currently in escrow, and a $37,000 impairment of the value of the investment held for sale was recognized in the three and six months ended March 31, 2018. |
INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS | INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Capital expenditure accruals related to oil and natural gas exploration and development decreased $88,000 and $183,000 during the six months ended March 31, 2018 and 2017, respectively. Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations decreased $38,000 and $62,000 during the six months ended March 31, 2018 and 2017, respectively. |
RELATED PARTY TRANSACTIONS |
6 Months Ended |
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Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Kaupulehu Developments is entitled to receive a percentage of the gross receipts from the sales of lots in Increment I from KD I and the sales of lots and/or residential units in Increment II from KD II. Kaupulehu Developments is also entitled to receive 50% of any future distributions otherwise payable from KD II to its members up to $8,000,000, of which $2,500,000 has been received to date. KD I and KD II are part of the Kukio Resort land development partnerships in which Barnwell holds an indirect 19.6% non-controlling ownership interest accounted for under the equity method of investment. The percentage of sales payments and percent of distribution payments are part of transactions which took place in 2004 and 2006 where Kaupulehu Developments sold its leasehold interests in Increment I and Increment II to KD I's and KD II's predecessors in interest, respectively, which was prior to Barnwell’s affiliation with KD I and KD II which commenced on November 27, 2013, the acquisition date of our ownership interest in the Kukio Resort land development partnerships. During the six months ended March 31, 2017, Barnwell received $1,678,000 in percentage of sales payments from KD II from the sale of one lot within Increment II. No lots were sold during the six months ended March 31, 2018. |
SUBSEQUENT EVENTS |
6 Months Ended |
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Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In April 2018, Kaupulehu Developments received a percentage of sales payment of $310,000 from the sale of a lot within Phase II of Increment I. Financial results from the receipt of this payment will be reflected in Barnwell’s quarter ending June 30, 2018. In April 2018, the Kukio Resort land development partnerships made a cash distribution to its partners of which Barnwell received $373,000, after distributing $48,000 to minority interests. The receipt of this distribution, which does not impact net earnings or loss, will be reflected in Barnwell's quarter ending June 30, 2018. In May 2018, the Kilauea volcano on the island of Hawaii erupted in the district of Puna on the eastern part of the island. Barnwell owns approximately sixteen acres of land near the sites of the eruptions with a carrying value of $165,000. Any impact to the carrying value of the land will be reflected in Barnwell’s quarter ending June 30, 2018. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Barnwell Industries, Inc. and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6%-owned land investment general partnership (Kaupulehu Developments), a 75%-owned land investment partnership (KD Kona 2013 LLLP) and an 80%-owned joint venture (Kaupulehu 2007, LLLP). All significant intercompany accounts and transactions have been eliminated. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in variable interest entities (“VIE”) in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method. Unless otherwise indicated, all references to “dollars” in this Form 10-Q are to U.S. dollars. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and notes have been prepared by Barnwell in accordance with the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Barnwell’s September 30, 2017 Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of September 30, 2017 has been derived from audited consolidated financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at March 31, 2018, results of operations and comprehensive income (loss) for the three and six months ended March 31, 2018 and 2017, and equity and cash flows for the six months ended March 31, 2018 and 2017, have been made. The results of operations for the period ended March 31, 2018 are not necessarily indicative of the operating results for the full year. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management of Barnwell to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ significantly from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-07, “Simplifying the Transition to the Equity Method of Accounting,” which eliminates the requirement that when an investment subsequently qualifies for use of the equity method as a result of an increase in level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. This ASU requires that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and to adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. In addition, the ASU requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The Company adopted the provisions of this ASU effective October 1, 2017. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The Company adopted the provisions of this ASU effective October 1, 2017. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-17, “Interests Held through Related Parties That Are under Common Control,” which modifies existing guidance with respect to how a decision maker that holds an indirect interest in a VIE through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under this ASU, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. The Company adopted the provisions of this ASU effective October 1, 2017. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements. |
EARNINGS (LOSS) PER COMMON SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliations between net earnings (loss) attributable to the entity's stockholders and common shares outstanding of the basic and diluted net earnings (loss) per share computations | Reconciliations between net earnings (loss) attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net earnings (loss) per share computations are detailed in the following tables:
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INVESTMENTS (Tables) |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of investments | A summary of Barnwell’s investments is as follows:
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Summarized financial information for the land development partnerships | Summarized financial information for the Kukio Resort land development partnerships is as follows:
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Kaupulehu Developments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of percentage of sales payment revenues received | The following table summarizes the percentage of sales payment revenues received from KD I and KD II and the amount of fees directly related to such revenues:
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OIL AND NATURAL GAS PROPERTIES AND ASSET RETIREMENT OBLIGATION (Tables) |
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Oil and Natural Gas Properties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro forma information |
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Schedule of change in asset retirement obligation | The following is a reconciliation of the asset retirement obligation:
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RETIREMENT PLANS (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit cost | The following tables detail the components of net periodic benefit cost for Barnwell’s retirement plans:
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INCOME TAXES (Tables) |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of income (loss) before income taxes, after adjusting the income (loss) for non-controlling interests | The components of earnings (loss) before income taxes, after adjusting the earnings (loss) for non-controlling interests, are as follows:
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Schedule of components of the income tax benefit | The components of the income tax provision (benefit) are as follows:
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SEGMENT INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial information related to reporting segments | The following table presents certain financial information related to Barnwell’s reporting segments. All revenues reported are from external customers with no intersegment sales or transfers.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in each component of accumulated other comprehensive income (loss) | The changes in each component of accumulated other comprehensive loss were as follows:
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INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Tables) |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental cash flow information |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
6 Months Ended |
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Mar. 31, 2018 | |
Kaupulehu Developments | |
Principles of Consolidation | |
Ownership interest in subsidiaries | 77.60% |
KD Kona 2013 LLLP | |
Principles of Consolidation | |
Ownership interest in subsidiaries | 75.00% |
Kaupulehu 2007, LLLP | |
Principles of Consolidation | |
Ownership interest in subsidiaries | 80.00% |
EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
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Net Earnings (Loss) (Numerator) | ||||
Basic | $ 679 | $ (615) | $ (338) | $ 1,026 |
Effect of dilutive securities - common stock options | 0 | 0 | 0 | 0 |
Diluted | $ 679 | $ (615) | $ (338) | $ 1,026 |
Shares (Denominator) | ||||
Basic (in shares) | 8,277,160 | 8,277,160 | 8,277,160 | 8,277,160 |
Effect of dilutive securities - common stock options (in shares) | 0 | 0 | 0 | 0 |
Diluted (in shares) | 8,277,160 | 8,277,160 | 8,277,160 | 8,277,160 |
Per-Share Amount | ||||
Basic net earnings (loss) per share (in dollars per share) | $ 0.08 | $ (0.07) | $ (0.04) | $ 0.12 |
Diluted net earnings (loss) per share (in dollars per share) | $ 0.08 | $ (0.07) | $ (0.04) | $ 0.12 |
Options | ||||
Antidilutive shares of common stock excluded from the computation of diluted shares | ||||
Antidilutive shares excluded from computation of earnings (loss) per share (in shares) | 493,750 | 621,250 |
INVESTMENT HELD FOR SALE (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
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May 31, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
parcel
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2018
USD ($)
parcel
|
Mar. 31, 2017
USD ($)
|
|
Investment Holdings [Line Items] | |||||
Impairment of assets | $ 37 | $ 0 | $ 37 | $ 0 | |
Residential Parcel | |||||
Investment Holdings [Line Items] | |||||
Number of Real Estate Properties | parcel | 1 | 1 | |||
Impairment of assets | $ 37 | ||||
Subsequent Event [Member] | |||||
Investment Holdings [Line Items] | |||||
Proceeds from sale of property held-for-sale | $ 1,000 | ||||
Subsequent Event [Member] | Residential Parcel | |||||
Investment Holdings [Line Items] | |||||
Proceeds from sale of property held-for-sale | $ 1,000 |
INVESTMENTS - SUMMARY OF INVESTMENTS (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Sep. 30, 2017 |
---|---|---|
Investment Holdings [Line Items] | ||
Investments | $ 1,976 | $ 2,209 |
Investment in Kukio Resort land development partnerships | ||
Investment Holdings [Line Items] | ||
Investments | 1,926 | 2,159 |
Investment in leasehold land interest – Lot 4C | ||
Investment Holdings [Line Items] | ||
Investments | $ 50 | $ 50 |
INVESTMENTS - PERCENTAGE OF SALES PAYMENTS (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018
USD ($)
a
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2018
USD ($)
a
increment
|
Mar. 31, 2017
USD ($)
|
|
Investment Holdings [Line Items] | ||||
Revenues - sale of interest in leasehold land | $ 0 | $ 0 | $ 0 | $ 1,678 |
Kaupulehu Developments | ||||
Investment Holdings [Line Items] | ||||
Area of land (in acres) | a | 870 | 870 | ||
Number of development increments | increment | 2 | |||
Revenues - sale of interest in leasehold land | $ 0 | 0 | $ 0 | 1,678 |
Fees - included in general and administrative expenses | 0 | 0 | 0 | (260) |
Proceeds from sale of interest in leasehold land, net of fees paid | $ 0 | $ 0 | $ 0 | $ 1,418 |
Land Interest | ||||
Investment Holdings [Line Items] | ||||
Area of land (in acres) | a | 1,000 | 1,000 |
INCOME TAXES (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Components of income (loss) before income taxes, after adjusting the income (loss) for non-controlling interests | ||||
United States | $ (982,000) | $ (651,000) | $ (2,125,000) | $ 1,411,000 |
Canada | 1,858,000 | (251,000) | 1,481,000 | (619,000) |
Total | 876,000 | (902,000) | (644,000) | 792,000 |
Components of the income tax provision (benefit) | ||||
Current | (256,000) | (276,000) | (829,000) | (348,000) |
Deferred | 453,000 | (11,000) | 523,000 | 114,000 |
Total | $ 197,000 | $ (287,000) | $ (306,000) | $ (234,000) |
Federal Statutory Income Tax Rate, Percent | 24.50% | |||
Income Tax Expense (Benefit) from remeasurement of net deferred tax assets | $ 0 | |||
Income tax benefit from AMT credit carryover refund provision | (460,000) | |||
Income tax expense (benefit) from TCJA NOL changes | 0 | |||
Transition Tax for Accumulated Foreign Earnings Income Tax Expense Benefit | $ 0 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
Sep. 30, 2017 |
|
Changes in foreign currency translation | |||||
Beginning accumulated foreign currency translation | $ 1,047 | $ 836 | $ 1,053 | $ 906 | |
Change in cumulative translation adjustment before reclassifications | (181) | 22 | (187) | (48) | |
Income taxes | 0 | 0 | 0 | 0 | |
Net current period other comprehensive (loss) income | (181) | 22 | (187) | (48) | |
Ending accumulated foreign currency translation | 866 | 858 | 866 | 858 | |
Changes in retirement plans | |||||
Beginning accumulated retirement plans benefit cost | (2,087) | (4,729) | (2,111) | (4,826) | |
Amortization of net actuarial loss and prior service cost | 39 | 96 | 63 | 193 | |
Income taxes | 0 | 0 | 0 | 0 | |
Net current period other comprehensive income | 39 | 96 | 63 | 193 | |
Ending accumulated retirement plans benefit cost | (2,048) | (4,633) | (2,048) | (4,633) | |
Accumulated other comprehensive loss, net of taxes | $ (1,182) | $ (3,775) | $ (1,182) | $ (3,775) | $ (1,058) |
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
May 31, 2018 |
Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of assets | $ 37 | $ 0 | $ 37 | $ 0 | |
Subsequent Event [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Proceeds from sale of property held-for-sale | $ 1,000 |
INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Supplemental disclosure of cash flow information: | ||
Interest | $ 0 | $ 5 |
Income taxes refunded, net | (20) | (180) |
Canadian income tax withholding on proceeds from the sale of oil and natural gas properties | 789 | 0 |
Oil and natural gas | ||
Supplemental disclosures of cash flow information: | ||
Increase (decrease) in capital expenditure accruals related to oil and natural gas exploration and development | (88) | (183) |
Increase (decrease) in capital expenditure accruals related to oil and natural gas asset retirement obligations | $ (38) | $ (62) |
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