10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q 

☒              Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2023

or

☐              Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-5103 

BARNWELL INDUSTRIES, INC.

(Exact name of registrant as specified in its charter) 

Delaware	72-0496921
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1100 Alakea Street, Suite 500, Honolulu, Hawaii	96813
(Address of principal executive offices)	(Zip code)
(808) 531-8400
(Registrant’s telephone number, including area code)

 Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value	BRN	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes   ☐ No

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     ☒ Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         ☐ Yes   ☒ No

As of February 7, 2024 there were 10,028,090 shares of common stock, par value $0.50, outstanding.

BARNWELL INDUSTRIES, INC.

AND SUBSIDIARIES

INDEX 

PART I.	FINANCIAL INFORMATION:
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets - December 31, 2023 and September 30, 2023	3
	Condensed Consolidated Statements of Operations - three months ended December 31, 2023 and 2022	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income - three months ended December 31, 2023 and 2022	5
	Condensed Consolidated Statements of Equity - three months ended December 31, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows - three months ended December 31, 2023 and 2022	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 4.	Controls and Procedures	33
PART II.	OTHER INFORMATION:
Item 6.	Exhibits	34
	Signature	35
	Index to Exhibits	36

PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31, 2023		September 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	3,223,000	$	2,830,000
Accounts and other receivables, net of allowance for credit losses of:   $334,000 at December 31, 2023; $284,000 at September 30, 2023	3,278,000		3,246,000
Other current assets	2,622,000		3,009,000
Total current assets	9,123,000		9,085,000
Asset for retirement benefits	4,561,000		4,471,000
Operating lease right-of-use assets	34,000		54,000
Property and equipment:
Proved oil and natural gas properties (full cost method)	83,348,000		80,851,000
Drilling rigs and other property and equipment	7,231,000		7,223,000
Total property and equipment	90,579,000		88,074,000
Accumulated depletion, impairment, depreciation, and amortization	(69,292,000)		(66,263,000)
Total property and equipment, net	21,287,000		21,811,000
Total assets	$	35,005,000	$	35,421,000
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,344,000	$	881,000
Accrued capital expenditures	587,000		1,099,000
Accrued compensation	673,000		726,000
Accrued operating and other expenses	1,747,000		1,747,000
Current portion of asset retirement obligation	1,825,000		1,536,000
Other current liabilities	469,000		609,000
Total current liabilities	6,645,000		6,598,000
Operating lease liabilities	36,000		47,000
Liability for retirement benefits	1,687,000		1,664,000
Asset retirement obligation	8,416,000		8,297,000
Deferred income tax liabilities	56,000		58,000
Total liabilities	16,840,000		16,664,000
Commitments and contingencies
Equity:
Common stock, par value $0.50 per share; authorized, 40,000,000 shares:     10,168,006 issued at December 31, 2023; 10,158,678 issued at September 30, 2023	5,084,000		5,079,000
Additional paid-in capital	7,747,000		7,687,000
Retained earnings	5,496,000		6,160,000
Accumulated other comprehensive income, net	2,113,000		2,104,000
Treasury stock, at cost: 167,900 shares at December 31, 2023 and September 30, 2023	(2,286,000)		(2,286,000)
Total stockholders' equity	18,154,000		18,744,000
Non-controlling interests	11,000		13,000
Total equity	18,165,000		18,757,000
Total liabilities and equity	$	35,005,000	$	35,421,000

See Notes to Condensed Consolidated Financial Statements

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BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended December 31,
	2023		2022
Revenues:
Oil and natural gas	$	5,130,000	$	5,226,000
Contract drilling	993,000		1,948,000
Sale of interest in leasehold land	—		265,000
Gas processing and other	32,000		72,000
	6,155,000		7,511,000
Costs and expenses:
Oil and natural gas operating	2,791,000		2,444,000
Contract drilling operating	1,169,000		1,857,000
General and administrative	1,404,000		2,249,000
Depletion, depreciation, and amortization	1,511,000		840,000
Foreign currency gain	(126,000)		(78,000)
Interest expense	2,000		—
Gain on sale of assets	—		(551,000)
	6,751,000		6,761,000
(Loss) earnings before equity in income of affiliates and income taxes	(596,000)		750,000
Equity in income of affiliates	—		538,000
(Loss) earnings before income taxes	(596,000)		1,288,000
Income tax provision	66,000		79,000
Net (loss) earnings	(662,000)		1,209,000
Less: Net earnings attributable to non-controlling interests	2,000		120,000
Net (loss) earnings attributable to Barnwell Industries, Inc.	$	(664,000)	$	1,089,000
Basic and diluted net (loss) earnings per common share attributable to Barnwell Industries, Inc. stockholders	$	(0.07)	$	0.11
Weighted-average number of common shares outstanding:
Basic and diluted	9,996,760		9,956,687

See Notes to Condensed Consolidated Financial Statements

4

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Three months ended December 31,
	2023		2022
Net (loss) earnings	$	(662,000)	$	1,209,000
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes of $0	30,000		2,000
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	(21,000)		(20,000)
Total other comprehensive income (loss)	9,000		(18,000)
Total comprehensive (loss) income	(653,000)		1,191,000
Less: Comprehensive income attributable to non-controlling interests	(2,000)		(120,000)
Comprehensive (loss) income attributable to Barnwell Industries, Inc.	$	(655,000)	$	1,071,000

See Notes to Condensed Consolidated Financial Statements

5

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three months ended December 31, 2023 and 2022

(Unaudited)

	Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Non-controlling Interests		Total Equity
Balance at September 30, 2022	9,956,687	$	5,062,000	$	7,351,000	$	7,720,000	$	1,294,000	$	(2,286,000)	$	20,000	$	19,161,000
Net earnings	—	—		—		1,089,000		—		—		120,000		1,209,000
Foreign currency translation adjustments, net of taxes of $0	—	—		—		—		2,000		—		—		2,000
Distributions to non-controlling interests	—	—		—		—		—		—		(108,000)		(108,000)
Share-based compensation	—	—		115,000		—		—		—		—		115,000
Dividends declared, $0.015 per share	—	—		—		(149,000)		—		—		—		(149,000)
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	—	—		—		—		(20,000)		—		—		(20,000)
Balance at December 31, 2022	9,956,687	$	5,062,000	$	7,466,000	$	8,660,000	$	1,276,000	$	(2,286,000)	$	32,000	$	20,210,000
Balance at September 30, 2023	9,990,778	$	5,079,000	$	7,687,000	$	6,160,000	$	2,104,000	$	(2,286,000)	$	13,000	$	18,757,000
Net (loss) earnings	—	—		—		(664,000)		—		—		2,000		(662,000)
Foreign currency translation adjustments, net of taxes of $0	—	—		—		—		30,000		—		—		30,000
Distributions to non-controlling interests	—	—		—		—		—		—		(4,000)		(4,000)
Share-based compensation	—	—		65,000		—		—		—		—		65,000
Issuance of common stock for restricted stock units vested	9,328	5,000		(5,000)		—		—		—		—		—
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	—	—		—		—		(21,000)		—		—		(21,000)
Balance at December 31, 2023	10,000,106	$	5,084,000	$	7,747,000	$	5,496,000	$	2,113,000	$	(2,286,000)	$	11,000	$	18,165,000

See Notes to Condensed Consolidated Financial Statements

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BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 

	Three months ended December 31,
	2023		2022
Cash flows from operating activities:
Net (loss) earnings	$	(662,000)	$	1,209,000
Adjustments to reconcile net (loss) earnings to net cash
provided by operating activities:
Depletion, depreciation, and amortization	1,511,000		840,000
Equity in income of affiliates	—		(538,000)
Gain on sale of assets	—		(551,000)
Sale of interest in leasehold land, net of fees paid	—		(233,000)
Distributions of income from equity investees	—		319,000
Retirement benefits income	(86,000)		(63,000)
Accretion of asset retirement obligation	200,000		194,000
Non-cash rent income	(7,000)		(5,000)
Deferred income tax benefit	(2,000)		(12,000)
Asset retirement obligation payments	(160,000)		(76,000)
Share-based compensation expense	65,000		115,000
Retirement plan contributions and payments	(1,000)		(1,000)
Credit loss expense	37,000		18,000
Foreign currency gain	(126,000)		(78,000)
Increase (decrease) from changes in current assets and liabilities	606,000		(241,000)
Net cash provided by operating activities	1,375,000		897,000
Cash flows from investing activities:
Distribution from equity investees in excess of earnings	—		219,000
Proceeds from sale of interest in leasehold land, net of fees paid	—		233,000
Capital expenditures - oil and natural gas	(1,018,000)		(3,870,000)
Capital expenditures - all other	(1,000)		(9,000)
Advances to operators for capital expenditures	—		(3,464,000)
Net cash used in investing activities	(1,019,000)		(6,891,000)
Cash flows from financing activities:
Distributions to non-controlling interests	(4,000)		(108,000)
Net cash used in financing activities	(4,000)		(108,000)
Effect of exchange rate changes on cash and cash equivalents	41,000		34,000
Net increase (decrease) in cash and cash equivalents	393,000		(6,068,000)
Cash and cash equivalents at beginning of period	2,830,000		12,804,000
Cash and cash equivalents at end of period	$	3,223,000	$	6,736,000

See Notes to Condensed Consolidated Financial Statements

7

BARNWELL INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    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 a variable interest entity (Teton Barnwell Fund I, LLC) for which the Company is deemed to be the primary beneficiary. All significant intercompany accounts and transactions have been eliminated.

Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in variable interest entities 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, 2023 Annual Report on Form 10-K, as amended by our Form 10-K/A Amendment No. 1 (our “2023 Annual Report”). The Condensed Consolidated Balance Sheet as of September 30, 2023 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 December 31, 2023, results of operations, comprehensive (loss) income, equity and cash flows for the three months ended December 31, 2023 and 2022, have been made. The results of operations for the period ended December 31, 2023 are not necessarily indicative of the operating results for the full year.

Use of Estimates in the Preparation of Condensed Consolidated Financial Statements

    The preparation of the condensed consolidated 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 assumptions are required in the

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valuation of deferred tax assets, asset retirement obligations, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded.

Significant Accounting Policies

Other than as set forth below, 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 2023 Annual Report.

Accounts and Other Receivables

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is Barnwell’s best estimate of the amount of current expected credit losses in Barnwell’s existing accounts receivable and is based on the aging of the receivable balances, analysis of historical credit loss rates, and current and future economic conditions affecting collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Barnwell does not have any off-balance sheet credit exposure related to its customers.

Derivative Instruments

Barnwell utilizes physical forward commodity contracts to mitigate market price risk on its oil and natural gas output when deemed appropriate. Purchase and sale contracts with a fixed price determined at inception are recorded on the consolidated balance sheet as derivative financial instruments if such contracts are readily convertible to cash - unless the contracts are eligible for and elected as the normal purchases and normal sales exception (“NPNS”); in which case, the contracts are recorded on an accrual basis and the Company recognizes the amounts relating to such transactions during the period when the commodities are physically delivered. The Company generally applies the NPNS exception to eligible oil and natural gas contracts to purchase or sell quantities it expects to use or sell in the normal course of business. The Company has not traded in any derivative contracts other than where the NPNS exception is applied, and it does not apply hedge accounting.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss model with an expected loss model referred to as the current expected credit loss (“CECL”) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including but not limited to trade receivables. The FASB has subsequently issued other related ASUs which amend ASU 2016-13 to provide clarification and additional guidance. The Company adopted the provisions of this ASU effective October 1, 2023. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements.

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2.    (LOSS) EARNINGS PER COMMON SHARE

Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding for the period. Diluted (loss) earnings 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 and nonvested restricted stock units. Potentially dilutive shares are excluded from the computation of diluted (loss) earnings per share if their effect is anti-dilutive.

Options to purchase 465,000 shares of common stock and 76,336 restricted stock units were excluded from the computation of diluted shares for the three months ended December 31, 2023, as their inclusion would have been anti-dilutive. Options to purchase 615,000 shares of common stock were excluded from the computation of diluted shares for the three months ended December 31, 2022, as their inclusion would have been anti-dilutive.

Reconciliations between net (loss) earnings attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net (loss) earnings per share computations are detailed in the following tables:

	Three months ended December 31, 2023
	Net Loss (Numerator)		Shares (Denominator)	Per-Share Amount
Basic net loss	$	(664,000)	9,996,760	$	(0.07)
Effect of dilutive securities -
common stock options and restricted stock units	—		—
Diluted net loss	$	(664,000)	9,996,760	$	(0.07)

	Three months ended December 31, 2022
	Net Earnings (Numerator)		Shares (Denominator)	Per-Share Amount
Basic net earnings	$	1,089,000	9,956,687	$	0.11
Effect of dilutive securities -
common stock options	—		—
Diluted net earnings	$	1,089,000	9,956,687	$	0.11

3.    INVESTMENTS

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 (“KD Kona”) and KKM Makai, LLLP (“KKM”), and indirectly acquired a 19.6% non-controlling ownership interest in each of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP (“KDK”) for $5,140,000. These entities, collectively referred to hereinafter as the “Kukio Resort Land Development Partnerships,” 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. KDK holds interests in KD Acquisition, LLLP (“KD I”) and KD Acquisition II,

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LP, formerly KD Acquisition II, LLLP (“KD II”). KD I is the developer of Kaupulehu Lot 4A Increment I (“Increment I”), and KD II is the developer of Kaupulehu Lot 4A Increment II (“Increment II”). Barnwell's ownership interests in the Kukio Resort Land Development Partnerships is accounted for using the equity method of accounting.

In March 2019, KD II admitted a new development partner, Replay Kaupulehu Development, LLC (“Replay”), a party unrelated to Barnwell, in an effort to move forward with development of the remainder of Increment II at Kaupulehu. KDK and Replay hold ownership interests of 55% and 45%, respectively, of KD II and Barnwell has a 10.8% indirect non-controlling ownership interest in KD II through KDK, which is accounted for using the equity method of accounting. Barnwell continues to have an indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP, and KD I.

The partnerships derive income from the sale of residential parcels in Increment I, of which only two lots remain to be sold as of December 31, 2023, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships.

Increment II is not yet under development, and there is no assurance that development of such acreage will occur. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.

    Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interests in KD Kona and KKM, based on its respective partnership sharing ratios of 75% and 34.45%, respectively. No cash distributions were received during the three months ended December 31, 2023. During the three months ended December 31, 2022, Barnwell received cash distributions $538,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $478,000, after distributing $60,000 to non-controlling interests.

Equity in income of affiliates was nil for the three months ended December 31, 2023, as compared to equity in income of affiliates of $538,000 for the three months ended December 31, 2022.

Summarized financial information for the Kukio Resort Land Development Partnerships is as follows:

	Three months ended December 31,
	2023		2022
Revenue	$	1,886,000	$	3,712,000
Gross profit	$	817,000	$	2,422,000
Net earnings	$	354,000	$	1,307,000

In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnership investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development

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Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnership’s cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnership’s income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized during the three months ended December 31, 2023.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $630,000 at December 31, 2023 and $708,000 at September 30, 2023.

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 Increment I and Increment II by KD I and KD II (see Note 15).

With respect to Increment I, Kaupulehu Developments is entitled to receive payments from KD I based on 10% of the gross receipts from KD I’s sales of single-family residential lots in Increment I. No lots were sold during the three months ended December 31, 2023 and two single-family lots, of the 80 lots developed within Increment I, remained to be sold as of December 31, 2023.

The following table summarizes the Increment I revenues from KD I and the amount of fees directly related to such revenues:

	Three months ended December 31,
	2023		2022
Sale of interest in leasehold land:
Revenues - sale of interest in leasehold land	$	—	$	265,000
Fees - included in general and administrative expenses	—		(32,000)
Sale of interest in leasehold land, net of fees paid	$	—	$	233,000

There is no assurance with regards to the amounts of future payments from Increment I or Increment II to be received, or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.

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, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025. 

4.    CONSOLIDATED VARIABLE INTEREST ENTITY

In February 2021, Barnwell Industries, Inc. established a new wholly-owned subsidiary named BOK Drilling, LLC (“BOK”) for the purpose of indirectly investing in oil and natural gas exploration and

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development in Oklahoma. BOK and Gros Ventre Partners, LLC (“Gros Ventre”) entered into the Limited Liability Agreement (the “Teton Operating Agreement”) of Teton Barnwell Fund I, LLC (“Teton Barnwell”), an entity formed for the purpose of directly entering into such oil and natural gas investments. Under the terms of the Teton Operating Agreement, the profits of Teton Barnwell are split between BOK and Gros Ventre at 98% and 2%, respectively, and as the manager of Teton Barnwell, Gros Ventre is paid an annual asset management fee equal to 1% of the cumulative capital contributions made to Teton Barnwell as compensation for its management services. BOK is responsible for 100% of the capital contributions made to Teton Barnwell.

The Company has determined that Teton Barnwell is a variable interest entity (“VIE”) as the entity is structured with non-substantive voting rights and that the Company is the primary beneficiary. This is due to the fact that even though Teton Barnwell has a unanimous consent voting structure, BOK is responsible for 100% of the capital contributions required to fund Teton Barnwell’s future oil exploration and development investments pursuant to the Teton Operating Agreement and thus, BOK has the power to steer the decisions that most significantly impact Teton Barnwell’s economic performance and has the obligation to absorb any potential losses that could be significant to Teton Barnwell. As BOK is the primary beneficiary of the VIE, Teton Barnwell’s operating results, assets and liabilities are consolidated by the Company.

The following table summarizes the carrying value of the assets and liabilities of Teton Barnwell that are consolidated by the Company. Intercompany balances are eliminated in consolidation and thus, are not reflected in the table below.

	December 31, 2023		September 30, 2023
ASSETS
Cash and cash equivalents	$	84,000	$	83,000
Accounts and other receivables	147,000		175,000
Property and equipment:
Proved oil and natural gas properties, net (full cost method)	522,000		544,000
Total assets	$	753,000	$	802,000
LIABILITIES
Accounts payable	$	12,000	$	10,000
Accrued operating and other expenses	13,000		15,000
Total liabilities	$	25,000	$	25,000

5.    OIL AND NATURAL GAS PROPERTIES

Fiscal 2023 Investments and Acquisitions

In December 2022, Barnwell Texas, LLC (“Barnwell Texas”), a new wholly-owned subsidiary of the Company, entered into a purchase and sale agreement with an independent third party whereby Barnwell Texas acquired a 22.3% non-operated working interest in oil and natural gas leasehold acreage in the Permian Basin in Texas for cash consideration of $806,000. Additionally, in connection with the purchase of such leasehold interests, Barnwell Texas acquired a 15.4% non-operated working interest in two oil wells in the Wolfcamp Formation in Loving and Ward Counties, Texas and had paid $4,293,000 for its share of the costs to drill, complete, and equip the wells in the three months ended December 31, 2022.

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Impairment of Oil and Natural Gas Properties

Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. There were no reductions to the carrying value of our oil and natural gas properties during the three months ended December 31, 2023 and 2022. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices, the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties. Based on the 12-month rolling average first-day-of-the-month prices for January and February 2024, it is reasonably possible that we will incur a ceiling test impairment in the Company's second quarter ending March 31, 2024. The Company is currently unable to estimate a range of the amount of any potential future reduction in carrying value as variables that impact the ceiling limitation are dependent upon actual results through the end of March 2024.

6.    RETIREMENT PLANS

Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees and a noncontributory Supplemental Executive Retirement Plan (“SERP”), which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan. Effective December 31, 2019, the accrual of benefits for all participants in the Pension Plan and SERP was frozen and the plans were closed to new participants from that point forward.

The following table details the components of net periodic benefit (income) cost for Barnwell’s retirement plans:

	Pension Plan				SERP
	Three months ended December 31,
	2023		2022		2023		2022
Interest cost	$	103,000	$	102,000	$	24,000	$	22,000
Expected return on plan assets	(192,000)		(167,000)		—		—
Amortization of net actuarial gain	—		—		(21,000)		(20,000)
Net periodic benefit (income) cost	$	(89,000)	$	(65,000)	$	3,000	$	2,000

The net periodic benefit (income) cost is included in “General and administrative” expenses in the Company's Condensed Consolidated Statements of Operations.

Currently, no contributions are planned to be made to the Pension Plan during fiscal 2024. The SERP plan is unfunded and Barnwell funds benefits when payments are made. Expected payments under the SERP for fiscal 2024 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.

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7.    INCOME TAXES

The components of (loss) earnings before income taxes, after adjusting the (loss) earnings for non-controlling interests, are as follows:

	Three months ended December 31,
	2023		2022
United States	$	(689,000)	$	18,000
Canada	91,000		1,150,000
	$	(598,000)	$	1,168,000

The components of the income tax provision are as follows:

	Three months ended December 31,
	2023		2022
Current	$	68,000	$	91,000
Deferred	(2,000)		(12,000)
	$	66,000	$	79,000

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, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. 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. Income from our investment in the Oklahoma oil venture is 100% allocable to Oklahoma. As such, Barnwell receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes. Our operations in Texas are subject to a franchise tax assessed by the state of Texas, however no significant amounts have been incurred to date.

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8.    REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

    The following tables provides information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition for the three months ended December 31, 2023 and 2022.

		Three months ended December 31, 2023
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,892,000	$	—	$	—	$	—	$	3,892,000
	Natural gas	712,000		—		—		—		712,000
	Natural gas liquids	526,000		—		—		—		526,000
	Drilling and pump	—		993,000		—		—		993,000
	Other	—		—		—		17,000		17,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Geographical regions:
	United States	$	754,000	$	993,000	$	—	$	1,000	$	1,748,000
	Canada	4,376,000		—		—		16,000		4,392,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	5,130,000	$	—	$	—	$	17,000	$	5,147,000
	Services transferred over time	—		993,000		—		—		993,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000

		Three months ended December 31, 2022
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,484,000	$	—	$	—	$	—	$	3,484,000
	Natural gas	1,302,000		—		—		—		1,302,000
	Natural gas liquids	440,000		—		—		—		440,000
	Drilling and pump	—		1,948,000		—		—		1,948,000
	Contingent residual payments	—		—		265,000		—		265,000
	Other	—		—		—		43,000		43,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000
Geographical regions:
	United States	$	517,000	$	1,948,000	$	265,000	$	2,000	$	2,732,000
	Canada	4,709,000		—		—		41,000		4,750,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	5,226,000	$	—	$	265,000	$	43,000	$	5,534,000
	Services transferred over time	—		1,948,000		—		—		1,948,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000

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Contract Balances

    The following table provides information about accounts receivables, contract assets and contract liabilities from contracts with customers:

	December 31, 2023		September 30, 2023		September 30, 2022
Accounts receivables from contracts with customers	$	2,902,000	$	2,931,000	$	4,038,000
Contract assets	881,000		958,000		580,000
Contract liabilities	232,000		377,000		1,087,000

    Accounts receivables from contracts with customers are included in "Accounts and other receivables, net of allowance for credit losses," in the accompanying Condensed Consolidated Balance Sheets and contract assets, which includes costs and estimated earnings in excess of billings and retainage, are included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets. Contract liabilities, which includes billings in excess of costs and estimated earnings are included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

    Retainage, included in contract assets, represents amounts due from customers, but where payments are withheld contractually until certain construction milestones are met. Amounts retained typically range from 5% to 10% of the total invoice, up to contractually-specified maximums. The Company classifies as a current asset those retainages that are expected to be collected in the next twelve months.

    Contract assets represent the Company’s rights to consideration in exchange for services transferred to a customer that have not been billed as of the reporting date. The Company’s rights are generally unconditional at the time its performance obligations are satisfied.

    When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. Such deferred revenue typically results from billings in excess of costs and estimated earnings on uncompleted contracts. As of December 31, 2023 and September 30, 2023, the Company had $232,000 and $377,000, respectively, included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets for those performance obligations expected to be completed in the next twelve months.

During the three months ended December 31, 2023 and 2022, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $229,000 and $523,000, respectively.

    Contracts are sometimes modified for a change in scope or other requirements. The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of the Company’s contract modifications are for goods and services that are not distinct from the existing performance obligations. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or decrease) on a cumulative catchup basis.

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Performance Obligations

    The Company’s remaining performance obligations for drilling and pump installation contracts (hereafter referred to as “backlog”) represent the unrecognized revenue value of the Company’s contract commitments. The Company’s backlog may vary significantly each reporting period based on the timing of major new contract commitments. In addition, our customers have the right, under some infrequent circumstances, to terminate contracts or defer the timing of the Company’s services and their payments to us. Nearly all of the Company's contract drilling segment contracts have original expected durations of one year or less. At December 31, 2023, the Company had three contract drilling jobs with original expected durations of greater than one year. For these contracts, approximately 100% of the remaining performance obligation of $371,000 is expected to be recognized as revenue in the next twelve months.

Contract Fulfillment Costs

Preconstruction costs, which include costs such as set-up and mobilization, are capitalized and allocated across all performance obligations and deferred and amortized over the contract term on a progress towards completion basis. As of December 31, 2023 and September 30, 2023, the Company had $423,000 and $504,000, respectively, in unamortized preconstruction costs related to contracts that were not completed. During the three months ended December 31, 2023 and 2022, the amortization of preconstruction costs related to contracts were not material and were included in the accompanying Condensed Consolidated Statements of Operations. Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the three months ended December 31, 2023 and 2022.

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9.    SEGMENT INFORMATION

Barnwell operates the following segments: 1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S. (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.

	Three months ended December 31,
	2023		2022
Revenues:
Oil and natural gas	$	5,130,000	$	5,226,000
Contract drilling	993,000		1,948,000
Land investment	—		265,000
Other	17,000		43,000
Total before interest income	6,140,000		7,482,000
Interest income	15,000		29,000
Total revenues	$	6,155,000	$	7,511,000
Depletion, depreciation, and amortization:
Oil and natural gas	$	1,458,000	$	796,000
Contract drilling	52,000		43,000
Other	1,000		1,000
Total depletion, depreciation, and amortization	$	1,511,000	$	840,000
Operating profit (loss) (before general and administrative expenses):
Oil and natural gas	$	881,000	$	1,986,000
Contract drilling	(228,000)		48,000
Land investment	—		265,000
Other	16,000		42,000
Gain on sale of assets	—		551,000
Total operating profit	669,000		2,892,000
Equity in income of affiliates:
Land investment	—		538,000
General and administrative expenses	(1,404,000)		(2,249,000)
Foreign currency gain	126,000		78,000
Interest expense	(2,000)		—
Interest income	15,000		29,000
(Loss) earnings before income taxes	$	(596,000)	$	1,288,000

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10.    ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in each component of accumulated other comprehensive income were as follows:

	Three months ended December 31,
	2023		2022
Foreign currency translation:
Beginning accumulated foreign currency translation	$	220,000	$	222,000
Change in cumulative translation adjustment before reclassifications	30,000		2,000
Income taxes	—		—
Net current period other comprehensive income	30,000		2,000
Ending accumulated foreign currency translation	250,000		224,000
Retirement plans:
Beginning accumulated retirement plans benefit income	1,884,000		1,072,000
Amortization of net actuarial gain	(21,000)		(20,000)
Income taxes	—		—
Net current period other comprehensive loss	(21,000)		(20,000)
Ending accumulated retirement plans benefit income	1,863,000		1,052,000
Accumulated other comprehensive income, net of taxes	$	2,113,000	$	1,276,000

    The amortization of net actuarial gain for the retirement plans are included in the computation of net periodic benefit (income) cost which is a component of “General and administrative” expenses on the accompanying Condensed Consolidated Statements of Operations (see Note 6 for additional details).

11.    FAIR VALUE MEASUREMENTS

The carrying values of cash and cash equivalents, accounts and other receivables, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The estimated fair values of oil and natural gas properties and the asset retirement obligation incurred in the drilling of oil and natural gas wells or assumed in the acquisitions of additional oil and natural gas working interests are based on an estimated discounted cash flow model and market assumptions. The assumptions used in the calculation of estimated discounted cash flows were primarily Level 3 assumptions; assumptions included future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates.

Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar

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well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements.

12.                                   STOCKHOLDERS' EQUITY

Restricted Stock Units

On November 2, 2023, the Board of Directors of the Company granted a total of 76,336 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board. The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting dates.

The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2023 through December 31, 2023:

Restricted Stock Units	Shares	Weighted-Average Grant Date Fair Value
Nonvested at October 1, 2023	—	$	—
Granted	76,336	2.62
Vested	—	—
Forfeited	—	—
Nonvested at December 31, 2023	76,336	$	2.62

Compensation cost for restricted stock unit awards is measured at fair value and is recognized as an expense over the requisite service period. During the three months ended December 31, 2023, the Company recognized share-based compensation expense related to restricted stock units of $30,000. There was no share-based compensation expense related to restricted stock units recognized during the three months ended December 31, 2022. As of December 31, 2023, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $170,000, which is expected to be recognized over the weighted-average remaining requisite service period of 1.8 years.

Cash Dividend

No dividends were declared or paid during the three months ended December 31, 2023. During the three months ended December 31, 2022, the Company's Board of Directors declared a cash dividend of $0.015 per share that was paid on January 11, 2023 to stockholders of record on December 27, 2022.

13.                           CONTINGENCIES

Legal and Regulatory Matters

Barnwell is routinely involved in disputes with third parties that occasionally require litigation. In addition, Barnwell is required to maintain compliance with all current governmental controls and regulations in the ordinary course of business. Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity.

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In the quarter ended December 31, 2021, it was determined that a contract drilling segment well completed in the period did not meet the contract specifications for plumbness under a gyroscopic plumbness test which the contract required. While the well did pass the cage plumbness test, the contract uses the gyroscopic test as the measure of plumbness. Barnwell and the customer currently have an arrangement where Barnwell will provide for centralizers, armored cabling and a pump installation and removal test to confirm that plumbness is satisfactory. The pump installation and removal test was successfully completed. Barnwell’s management believes the plumbness deviation is not impactful to the performance of the submersible pumps that will be installed in the well. Accordingly, while costs for the centralizers, armored cabling and the pump installation and removal test have been accrued, no accrual has been recorded as of December 31, 2023 for any further costs related to this contract as there is no related probable or estimable contingent liability.

14.    INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three months ended December 31,
	2023		2022
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes paid	$	44,000	$	—

Capital expenditure accruals related to oil and natural gas exploration and development decreased $523,000 and $1,405,000 during the three months ended December 31, 2023 and 2022, respectively. Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $115,000 and $150,000 during the three months ended December 31, 2023 and 2022, respectively.

15.    RELATED PARTY TRANSACTIONS

Kaupulehu Developments is entitled to receive payments from the sales of lots and/or residential units by KD I and KD II. KD I and KD II are part of the Kukio Resort Land Development Partnerships in which Barnwell holds indirect 19.6% and 10.8% non-controlling ownership interests, respectively, accounted for under the equity method of investment. The percentage of sales 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. Changes to the arrangement above, effective March 7, 2019, are discussed in Note 3.

No lots were sold during the three months ended December 31, 2023. During the three months ended December 31, 2022, Kaupulehu Developments received $265,000 in percentage of sales payments from KD I from the sale of one single-family lot within Phase II of Increment I.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Relevant to Forward-Looking Information

For the Purpose Of “Safe Harbor” Provisions Of The

Private Securities Litigation Reform Act of 1995

This Form 10-Q, and the documents incorporated herein by reference, contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is one which is based on current expectations of future events or conditions and does not relate to historical or current facts. These statements include various estimates, forecasts, projections of Barnwell’s future performance, statements of Barnwell’s plans and objectives, and other similar statements. All such statements we make are forward-looking statements made under the safe harbor of the PSLRA, except to the extent such statements relate to the operations of a partnership or limited liability company. Forward-looking statements include phrases such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “predicts,” “estimates,” “assumes,” “projects,” “may,” “will,” “will be,” “should,” or similar expressions. Although Barnwell believes that its current expectations are based on reasonable assumptions, it cannot assure that the expectations contained in such forward-looking statements will be achieved. Forward-looking statements involve risks, uncertainties and assumptions which could cause actual results to differ materially from those contained in such statements. The risks, uncertainties and other factors that might cause actual results to differ materially from Barnwell’s expectations are set forth in the “Forward-Looking Statements” and “Risk Factors” sections of Barnwell’s 2023 Annual Report. Investors should not place undue reliance on these forward-looking statements, as they speak only as of the date of filing of this Form 10-Q, and Barnwell expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein.

Critical Accounting Policies and Estimates

Management has determined that our most critical accounting policies and estimates are those related to the full-cost ceiling calculation and depletion of our oil and natural gas properties, the estimation of our contract drilling segment's revenues and expenses, and the calculation of our income taxes, all of which are discussed in our 2023 Annual Report. There have been no significant changes to these critical accounting policies and estimates during the three months ended December 31, 2023. We continue to monitor our accounting policies to ensure proper application of current rules and regulations.

Impact of COVID-19

We face various risks and uncertainties related to public health crises, including the global COVID-19 pandemic, which has disrupted financial markets and significantly impacted worldwide economic activity. The future impact of the COVID-19 pandemic as well as mandatory and voluntary actions taken to mitigate the public health impact of the pandemic may have a material adverse effect on our financial condition. The COVID-19 pandemic and social and governmental responses to the pandemic have caused, and may continue to cause, severe economic, market and other disruptions worldwide. Although the COVID-19 pandemic and related societal and government responses have not, to date, had a material impact on our business or financial results, the extent to which COVID-19 and related actions may, in the future, impact our operations cannot be predicted with any degree of confidence. As a result, we cannot at this time predict the direct or indirect impact on us of the COVID-19 pandemic, but it could

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have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

Impact of Recently Issued Accounting Standards on Future Filings

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which expands reportable segment disclosure requirements on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this standard on Barnwell’s consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires disclosure of incremental income tax information within the tax rate reconciliation and expanded disclosures of income taxes paid both in the U.S. and foreign jurisdiction, among other disclosure requirements. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this standard on Barnwell’s consolidated financial statements.

Overview

Barnwell is engaged in the following lines of business: 1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S. (oil and natural gas segment), 2) investing in land interests in Hawaii (land investment segment), and 3) drilling wells and installing and repairing water pumping systems in Hawaii (contract drilling segment).

Oil and Natural Gas Segment

Barnwell is involved in the acquisition and development of oil and natural gas properties in Canada where we initiate and participate in acquisition and developmental operations for oil and natural gas on properties in which we have an interest, and evaluate proposals by third parties with regard to participation in exploratory and developmental operations elsewhere. Additionally, through its wholly-owned subsidiaries, Barnwell is involved in several non-operated oil and natural gas investments in Oklahoma and Texas.

Land Investment Segment

Through Barnwell’s 77.6% interest in Kaupulehu Developments, 75% interest in KD Kona, and 34.45% non-controlling interest in KKM Makai, the Company’s land investment interests include the following:

•The right to receive percentage of sales payments from KD I resulting from the sale of single-family residential lots by KD I, within Increment I 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 10% of the gross receipts from KD I’s sales at Increment I. Increment I is an area zoned for approximately 80 single-family lots, of which two remained to be sold at December 31, 2023.

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•The right to receive 15% of the distributions of KD II, the cost of which is to be solely borne by KDK out of its 55% ownership interest in KD II, plus a priority payout of 10% of KDK's cumulative net profits derived from Increment II sales subsequent to Phase 2A, up to a maximum of $3,000,000. Such interests are limited to distributions or net profits interests and Barnwell does not have any partnership interest in KD II or KDK through its interest in Kaupulehu Developments. Barnwell also has rights to three single-family residential lots in Phase 2A of Increment II, and four single-family residential lots in phases subsequent to Phase 2A when such lots are developed by KD II, all at no cost to Barnwell. Barnwell is committed to commence construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2A as a condition of the transfer of such lots. Also, in addition to Barnwell's existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is also obligated to pay an amount equal to 0.72% and 0.20% of the cumulative net profits of KD II to KD Development, LLC and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell. The remaining acreage within Increment II is not yet under development, and there is no assurance that development of such acreage will occur. No definitive development plans have been made by KDII, the developer of Increment II, as of the date of this report.

•An indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD I and an indirect 10.8% non-controlling ownership interest in KD II through KDK. 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. KDK was the developer of Kaupulehu Lot 4A Increments I and II. 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 and revenues resulting from the sale of private club memberships.

•Approximately 1,000 acres of vacant leasehold land zoned conservation in the Kaupulehu Lot 4C area, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025. 

Contract Drilling Segment

Barnwell’s wholly-owned subsidiary, Water Resources International, Inc. (“Water Resources”), drills water and water monitoring wells and installs and repairs water pumping systems in Hawaii. Contract drilling results are highly dependent upon the quantity, dollar value and timing of contracts awarded by governmental and private entities and can fluctuate significantly.

Results of Operations

Summary

The net loss attributable to Barnwell for the three months ended December 31, 2023 totaled $664,000, a $1,753,000 decrease in operating results from net earnings of $1,089,000 for the three months ended December 31, 2022. The following factors affected the results of operations for the three months ended December 31, 2023 as compared to the same period in the prior year:

•A $1,105,000 decrease in oil and natural gas segment operating results, before income taxes, due primarily to significant decreases in natural gas, oil, and natural gas liquid prices, partially offset

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by an increase in new production from wells in Texas and from wells in the Twining area in the current period as compared to the same period in the prior year;

•Equity in income from affiliates decreased $538,000 and land investment segment operating results, before non-controlling interests’ share of such profits, decreased $265,000 due to the Kukio Resort Development Partnerships' sale of one lot in the prior year period, whereas there were no lot sales in the current year period;

•A $551,000 gain recognized in the prior year period from the sale of a contract drilling segment drilling rig, whereas there was no such gain in the current period; and

•General and administrative expenses decreased $845,000 primarily due to decreases in professional fees, accrued bonus expense, and share-based compensation in the current period as compared to the same period in the prior year.

General

Barnwell conducts operations in the U.S. and Canada. Consequently, Barnwell is subject to foreign currency translation and transaction gains and losses due to fluctuations of the exchange rates between the Canadian dollar and the U.S. dollar. Barnwell cannot accurately predict future fluctuations of the exchange rates and the impact of such fluctuations may be material from period to period. To date, we have not entered into foreign currency hedging transactions. Foreign currency gains or losses on intercompany loans and advances that are not considered long-term investments in nature because management intends to settle these intercompany balances in the future are included in our statements of operations.

The average exchange rate of the Canadian dollar to the U.S. dollar remained unchanged in the three months ended December 31, 2023 as compared to the same period in the prior year, and the exchange rate of the Canadian dollar to the U.S. dollar increased 3% at December 31, 2023 as compared to September 30, 2023. Accordingly, the assets, liabilities, stockholders’ equity and revenues and expenses of Barnwell’s subsidiaries operating in Canada have been adjusted to reflect the change in the exchange rates. Other comprehensive income and losses are not included in net earnings and net loss. Other comprehensive income due to foreign currency translation adjustments, net of taxes, for the three months ended December 31, 2023 was $30,000, a $28,000 change from other comprehensive income due to foreign currency translation adjustments, net of taxes, of $2,000 for the same period in the prior year. There were no taxes on other comprehensive (loss) income due to foreign currency translation adjustments in the three months ended December 31, 2023 and 2022 due to a full valuation allowance on the related deferred tax assets.

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Oil and natural gas

The following tables set forth Barnwell’s average prices per unit of production and net production volumes. Production amounts reported are net of royalties.

	Average Price Per Unit
	Three months ended				Increase
	December 31,				(Decrease)
	2023		2022		$		%
Natural Gas (Mcf)*	$	1.82	$	4.25	$	(2.43)	(57	%)
Oil (Bbls)**	$	67.08	$	72.32	$	(5.24)	(7	%)
Natural gas liquids (Bbls)**	$	29.23	$	44.01	$	(14.78)	(34	%)

	Net Production
	Three months ended		Increase
	December 31,		(Decrease)
	2023	2022	Units	%
Natural Gas (Mcf)*	379,000	300,000	79,000	26	%
Oil (Bbls)**	58,000	48,000	10,000	21	%
Natural gas liquids (Bbls)**	18,000	10,000	8,000	80	%

_______________________________________

*            Mcf = 1,000 cubic feet.  Natural gas price per unit is net of pipeline charges.

**          Bbl = stock tank barrel equivalent to 42 U.S. gallons

The oil and natural gas segment generated an $881,000 operating profit before general and administrative expenses in the three months ended December 31, 2023, a decrease in operating results of $1,105,000 as compared to a $1,986,000 operating profit before general and administrative expenses generated during the same period of the prior year.

The following table sets forth Barnwell’s oil and natural gas segment operating profit before general and administrative expenses by geographic location:

	Three months ended December 31,
	2023		2022
Operating profit (before general and administrative expenses)
Canada	$	536,000	$	1,599,000
Oklahoma	177,000		387,000
Texas	168,000		—
Total operating profit	$	881,000	$	1,986,000

Oil and natural gas segment revenues decreased $96,000 (2%) for the three months ended December 31, 2023, as compared to the same period in the prior year, primarily due to significant decreases in natural gas, oil, and natural gas liquid prices, which decreased 57%, 7%, and 34%, respectively, as compared to the same period in the prior year. The decrease was partially offset by increases of 26%, 21%, and 80% in natural gas, oil, and natural gas liquid production, respectively, as compared to the same period in the prior year.

In the quarter ended December 31, 2023, the Company amended certain of its Canadian purchase and sales contracts to change the sales price on 1,055 gross Mcf per day of the Canadian natural gas that it

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will sell during the period from April 1, 2024 to October 31, 2024 to a fixed price of $2.55 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under fixed price contract is equivalent to approximately 30% of what Canadian natural gas gross production per day was for the three months ended December 31, 2023. Additionally, the Company also amended the sales price on 225 gross barrels per day of the Canadian oil that it will sell during the period from January 1, 2024 to June 30, 2024 to a fixed price of $69.46 per net barrel, with remaining volumes continuing to be sold at spot prices. This per day volume of oil under fixed price contract is equivalent to approximately 30% of what Canadian oil gross production per day was for the three months ended December 31, 2023. These natural gas and oil contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.

Oil and natural gas segment operating expenses increased $347,000 (14%) for the three months ended December 31, 2023, as compared to the same period in the prior year, primarily due to costs associated with new production from wells in Texas and from wells in the Twining area.

Oil and natural gas segment depletion increased $662,000 (83%) for the three months ended December 31, 2023, as compared to the prior year period. The increase was due to depletion attributable to production in Texas, whereas there was no such depletion in the prior year period, and was due to an increase in the depletion rate for Canadian properties and also new production from those properties, both of which were the result of the drilling of new wells and facilities expansion and upgrade costs, all in the Twining area.

Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. There were no reductions to the carrying value of our oil and natural gas properties during the three months ended December 31, 2023 and 2022. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices, the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties. Based on the 12-month rolling average first-day-of-the-month prices for January and February 2024, it is reasonably possible that we will incur a ceiling test impairment in the Company's second quarter ending March 31, 2024. The Company is currently unable to estimate a range of the amount of any potential future reduction in carrying value as variables that impact the ceiling limitation are dependent upon actual results through the end of March 2024.

Sale of interest in leasehold land

Kaupulehu Developments is entitled to receive a percentage of the gross receipts from the sales of lots and/or residential units in Increment I by KD I.

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The following table summarizes the revenues received from KD I and the amount of fees directly related to such revenues:

	Three months ended December 31,
	2023		2022
Sale of interest in leasehold land:
Revenues – sale of interest in leasehold land	$	—	$	265,000
Fees - included in general and administrative expenses	—		(32,000)
Sale of interest in leasehold land, net of fees paid	$	—	$	233,000

No lots were sold during the three months ended December 31, 2023. During the three months ended December 31, 2022, Barnwell received $265,000 in percentage of sales payments from KD I from the sale of one single-family lot within Increment I.

As of December 31, 2023, only two single-family lots of the 80 lots developed within Increment I remain to be sold. The Company does not have a controlling interest in Increments I and II, and there is no assurance with regards to the amounts of future sales from Increments I and II, or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.

Contract drilling

The contract drilling segment generated a $228,000 operating loss before general and administrative expenses in the three months ended December 31, 2023, a decrease in operating results of $276,000 as compared to a $48,000 operating profit during the same period of the prior year. Contract drilling revenues and contract drilling costs decreased $955,000 (49%) and $688,000 (37%), respectively, for the three months ended December 31, 2023, as compared to the same period in the prior year. These decreases were primarily due to less water well drilling activity in the current year period as compared to the same period in the prior year; additionally, contract drilling costs did not decrease as much as contract drilling revenues as additional costs were incurred on one of the well drilling jobs due to operational issues during drilling.

On December 13, 2023, the Company entered into a stock purchase agreement with a construction company for the sale of Water Resources for gross proceeds of $2,000,000, subject to customary post-closing price adjustments and the purchaser’s completion of due diligence. On December 27, 2023, the stock purchase agreement was terminated by the buyer prior to closing.

The Company continues to investigate strategies regarding Water Resources' future including, but not limited to, other potential opportunities for a sale of its stock or assets to any other interested parties, or the potential for eventual wind-down after all contracts in backlog are completed along with liquidation of its drilling rigs and equipment. No definitive plans have been made as of the date of this Quarterly Report as to the future direction of Water Resources. Management estimates that contracts in backlog will be completed in December 2024 or soon thereafter.

In January 2024, a significant well drilling contract, which previously had an estimated contract drilling revenue backlog of $2,400,000 and which had not yet started, was cancelled by mutual agreement of Water Resources and the counterparty.

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General and administrative expenses

General and administrative expenses decreased $845,000 (38%) for the three months ended December 31, 2023, as compared to the same period in the prior year. The decrease was due to decreases of $694,000 in professional fees primarily related to legal and consulting services, $75,000 in accrued bonus expense, and $50,000 in share-based compensation in the current year period as compared to the same period in the prior year.

Depletion, depreciation, and amortization

Depletion, depreciation, and amortization increased $671,000 (80%) for the three months ended December 31, 2023, as compared to the same period in the prior year, primarily due to depletion attributable to production in Texas and increases in the depletion rate for Canadian properties and also new production from those properties as discussed in the “Oil and natural gas” section above.

Foreign currency gain

Foreign currency gain was $126,000 and $78,000 during the three months ended December 31, 2023 and 2022, respectively, due to the effects of foreign exchange rate changes on intercompany loans and advances as a result of the weakening of the U.S. dollar against the Canadian dollar. The foreign currency gain from intercompany balances was included in our condensed consolidated net earnings as the intercompany balances were not considered long-term in nature because management estimates that these intercompany balances will be settled in the future.

Gain on sale of assets

In October 2022, the Company completed the sale of a contract drilling segment drilling rig to an independent third part for proceeds of $551,000, net of related costs. The drilling rig was fully depreciated and had a net book value of zero and as a result of the sale, the Company recognized a $551,000 gain during the three months ended December 31, 2022.

Equity in income of affiliates

Equity in income of affiliates was nil for the three months ended December 31, 2023, as compared to $538,000 for the three months ended December 31, 2022. The decrease in partnership income was primarily due to the Kukio Resort Land Development Partnerships' sale of one lot during the prior year period, whereas there were no lot sales in the current year period.

No cash distributions were received from the Kukio Resort Land Development Partnerships during the three months ended December 31, 2023. During the three months ended December 31, 2022, Barnwell received cash distributions $538,000 from from the Kukio Resort Land Development Partnerships resulting in a net amount of $478,000, after distributing $60,000 to non-controlling interests.

In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnership investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the

30

obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnership’s cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnership’s income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized during the three months ended December 31, 2023.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $630,000 at December 31, 2023 and $708,000 at September 30, 2023.

Income taxes

Barnwell’s effective consolidated income tax rate for the three months ended December 31, 2023, after adjusting earnings before income taxes for non-controlling interests, was (11)%, as compared to an effective income tax rate of 7% for the three months ended December 31, 2022. 

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, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. 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. Income from our investment in the Oklahoma oil venture is 100% allocable to Oklahoma. As such, Barnwell receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes. Our operations in Texas are subject to a franchise tax assessed by the state of Texas, however no significant amounts have been incurred to date.

Net earnings attributable to non-controlling interests

    Earnings and losses attributable to non-controlling interests represent the non-controlling interests’ share of revenues and expenses related to the various partnerships and joint ventures in which Barnwell has controlling interests and consolidates.

Net earnings attributable to non-controlling interests for the three months ended December 31, 2023 totaled $2,000, as compared to net earnings attributable to non-controlling interests of $120,000 for the same period in the prior year. The decrease of $118,000 is primarily due to decreases in the amount of equity in income of affiliates and percentage of sales revenue received in the current year period as compared to the same period in the prior year.

Liquidity and Capital Resources

Barnwell’s primary sources of liquidity are cash on hand, cash flow generated by operations and land investment segment proceeds. At December 31, 2023, Barnwell had $2,478,000 in working capital.

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Cash Flows

Cash flows provided by operating activities increased $478,000 to $1,375,000 for the three months ended December 31, 2023, as compared to cash flows provided by operating activities of $897,000 for the three months ended December 31, 2022. This increase was primarily due to the timing of the collection of current assets, partially offset by lower operating results for the oil and natural gas segment in the current year period as compared to the same period in the prior year.

Cash flows used in investing activities totaled $1,019,000 during the three months ended December 31, 2023, as compared to cash flows used in investing activities of $6,891,000 during the same period of the prior year. This $5,872,000 change in investing cash flows was due to a decrease of $6,316,000 in cash paid for investments in oil and natural gas properties, partially offset by a decrease of $219,000 in distributions from equity investees in excess of earnings and a decrease of $233,000 in proceeds from sale of interest in leasehold land in the current year period as compared to same period in the prior year.

Cash flows used in financing activities totaled $4,000 during the three months ended December 31, 2023, as compared to cash flows used in financing activities of $108,000 for the same period in the prior year. The $104,000 change in financing cash flows was primarily due to a decrease in distributions to non-controlling interests in the current year period as compared to the same period in the prior year.

Cash Dividend

No dividends were declared or paid during the three months ended December 31, 2023. During the three months ended December 31, 2022, the Company's Board of Directors declared a cash dividend of $0.015 per share that was paid on January 11, 2023 to stockholders of record on December 27, 2022.

At The Market Offering

On March 16, 2021, the Company entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P,”), with respect to an at-the-market offering program (“ATM”) pursuant to which the Company may offer and sell, from time to time, shares of its common stock, par value $0.50 per share, having an aggregate sales price of up to $25 million (subject to certain limitations set forth in the Sales Agreement and applicable securities laws, rules and regulations), through or to A.G.P as the Company’s sales agent or as principal. Sales of our common stock under the ATM, if any, will be made by any methods deemed to be “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the NYSE American, on any other existing trading market for our Common Stock, or to or through a market maker. Shares of common stock sold under the ATM are offered pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-254365), filed with the Securities and Exchange Commission on March 16, 2021, and declared effective on March 26, 2021 (the "Registration Statement”), and the prospectus dated March 26, 2021, included in the Registration Statement. In August 2022, the Company’s Board of Directors suspended the sales of our common stock under the ATM until further notice.

Oil and Natural Gas Capital Expenditures

Barnwell’s oil and natural gas capital expenditures, including accrued capital expenditures and excluding additions and revisions to estimated asset retirement obligations, totaled $495,000 for the three months ended December 31, 2023, as compared to $5,928,000 for the same period in the prior year.

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In December 2022, Barnwell Texas, LLC (“Barnwell Texas”), a new wholly-owned subsidiary of the Company, entered into a purchase and sale agreement with an independent third party whereby Barnwell Texas acquired a 22.3% non-operated working interest in oil and natural gas leasehold acreage in the Permian Basin in Texas for cash consideration of $806,000. Additionally, in connection with the purchase of such leasehold interests, Barnwell Texas acquired a 15.4% non-operated working interest in two oil wells in the Wolfcamp Formation in Loving and Ward Counties, Texas and had paid $4,293,000 for its share of the costs to drill, complete, and equip the wells in the three months ended December 31, 2022.

Barnwell estimates that investments in oil and natural gas properties for fiscal 2024 will range from $4,000,000 to $6,000,000. This estimated amount may increase or decrease as dictated by cash flows and management's assessment of the oil and natural gas environment and prospects.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to Barnwell, including its consolidated subsidiaries, is made known to the officers who certify Barnwell’s financial reports and to other members of executive management and the Board of Directors.

As of December 31, 2023, an evaluation was carried out by Barnwell’s Chief Executive Officer and Chief Financial Officer of the effectiveness of Barnwell’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that Barnwell’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of December 31, 2023 to ensure that information required to be disclosed by Barnwell in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Act of 1934 and the rules thereunder.

Changes in Internal Control Over Financial Reporting

There was no change in Barnwell’s internal control over financial reporting during the quarter ended December 31, 2023 that materially affected, or is reasonably likely to materially affect, Barnwell’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 6.    EXHIBITS

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	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

34

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BARNWELL INDUSTRIES, INC.
		(Registrant)
Date:	February 12, 2024	/s/ Russell M. Gifford
		Russell M. Gifford
		Executive Vice President,
		Chief Financial Officer,
		Treasurer and Secretary

35

INDEX TO EXHIBITS

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	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

36

EX-31.1

Exhibit No. 31.1

Certifications

I, Alexander C. Kinzler, certify that:

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:	February 12, 2024	/s/ Alexander C. Kinzler
		Alexander C. Kinzler
		President, Chief Executive Officer, Chief Operating Officer, General Counsel

EX-31.2

Exhibit No. 31.2

Certifications

I, Russell M. Gifford, certify that:

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:	February 12, 2024	/s/ Russell M. Gifford
		Russell M. Gifford
		Executive Vice President, Chief Financial Officer, Treasurer and Secretary

EX-32

Exhibit No. 32

Barnwell Industries, Inc.

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Barnwell Industries, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2023 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned officers of the Company does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(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:	February 12, 2024	/s/ Alexander C. Kinzler
		Name: Alexander C. Kinzler
		Title: President, Chief Executive Officer, Chief Operating Officer, General Counsel
Dated:	February 12, 2024	/s/ Russell M. Gifford
		Name: Russell M. Gifford
		Title: Executive Vice President, Chief Financial Officer, Treasurer and Secretary

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

A signed original of the written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	3 Months Ended
	Dec. 31, 2023	Feb. 07, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	1-5103
Entity Registrant Name	BARNWELL INDUSTRIES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	72-0496921
Entity Address, Address Line One	1100 Alakea Street
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Honolulu
Entity Address, State or Province	HI
Entity Address, Postal Zip Code	96813
City Area Code	808
Local Phone Number	531-8400
Title of 12(b) Security	Common Stock, $0.50 par value
Trading Symbol	BRN
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,028,090
Entity Central Index Key	0000010048
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
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XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Current assets:
Cash and cash equivalents	$ 3,223	$ 2,830
Accounts and other receivables, net of allowance for credit losses of: $334,000 at December 31, 2023; $284,000 at September 30, 2023	3,278	3,246
Other current assets	2,622	3,009
Total current assets	9,123	9,085
Asset for retirement benefits	4,561	4,471
Operating lease right-of-use assets	34	54
Property and equipment:
Proved oil and natural gas properties (full cost method)	83,348	80,851
Drilling rigs and other property and equipment	7,231	7,223
Total property and equipment	90,579	88,074
Accumulated depletion, impairment, depreciation, and amortization	(69,292)	(66,263)
Total property and equipment, net	21,287	21,811
Total assets	35,005	35,421
Current liabilities:
Accounts payable	1,344	881
Accrued capital expenditures	587	1,099
Accrued compensation	673	726
Accrued operating and other expenses	1,747	1,747
Current portion of asset retirement obligation	1,825	1,536
Other current liabilities	469	609
Total current liabilities	6,645	6,598
Operating lease liabilities	36	47
Liability for retirement benefits	1,687	1,664
Asset retirement obligation	8,416	8,297
Deferred income tax liabilities	56	58
Total liabilities	16,840	16,664
Commitments and contingencies
Equity:
Common stock, par value $0.50 per share; authorized, 40,000,000 shares: 10,168,006 issued at December 31, 2023; 10,158,678 issued at September 30, 2023	5,084	5,079
Additional paid-in capital	7,747	7,687
Retained earnings	5,496	6,160
Accumulated other comprehensive income, net	2,113	2,104
Treasury stock, at cost: 167,900 shares at December 31, 2023 and September 30, 2023	(2,286)	(2,286)
Total stockholders' equity	18,154	18,744
Non-controlling interests	11	13
Total equity	18,165	18,757
Total liabilities and equity	$ 35,005	$ 35,421

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit losses	$ 334	$ 284
Common stock, par value (in dollars per share)	$ 0.50	$ 0.50
Common stock, authorized shares (in shares)	40,000,000	40,000,000
Common stock, issued shares (in shares)	10,168,006	10,158,678
Treasury stock, shares (in shares)	167,900	167,900

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenues:
Revenues	$ 6,155	$ 7,511
Costs and expenses:
General and administrative	1,404	2,249
Depletion, depreciation, and amortization	1,511	840
Foreign currency gain	(126)	(78)
Interest expense	2	0
Gain on sale of assets	0	(551)
Total costs and expenses	6,751	6,761
(Loss) earnings before equity in income of affiliates and income taxes	(596)	750
Equity in income of affiliates	0	538
(Loss) earnings before income taxes	(596)	1,288
Income tax provision	66	79
Net (loss) earnings	(662)	1,209
Less: Net earnings attributable to non-controlling interests	2	120
Net (loss) earnings attributable to Barnwell Industries, Inc.	$ (664)	$ 1,089
Basic net (loss) earnings per common share attributable to Barnwell Industries, Inc. stockholders (in dollars per share)	$ (0.07)	$ 0.11
Diluted net (loss) earnings per common share attributable to Barnwell Industries, Inc. stockholders (in dollars per share)	$ (0.07)	$ 0.11
Weighted-average number of common shares outstanding:
Basic (in shares)	9,996,760	9,956,687
Diluted (in shares)	9,996,760	9,956,687
Oil and natural gas
Revenues:
Revenues	$ 5,130	$ 5,226
Costs and expenses:
Costs and expenses	2,791	2,444
Depletion, depreciation, and amortization	1,458	796
Contract drilling
Revenues:
Revenues	993	1,948
Costs and expenses:
Costs and expenses	1,169	1,857
Depletion, depreciation, and amortization	52	43
Sale of interest in leasehold land
Revenues:
Revenues	0	265
Gas processing and other
Revenues:
Revenues	32	72
Costs and expenses:
Depletion, depreciation, and amortization	$ 1	$ 1

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) NCOME - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Comprehensive Income [Abstract]
Net (loss) earnings	$ (662)	$ 1,209
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes of $0	30	2
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	(21)	(20)
Total other comprehensive income (loss)	9	(18)
Total comprehensive (loss) income	(653)	1,191
Less: Comprehensive income attributable to non-controlling interests	(2)	(120)
Comprehensive (loss) income attributable to Barnwell Industries, Inc.	$ (655)	$ 1,071

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Comprehensive Income [Abstract]
Foreign currency translation adjustments, taxes	$ 0	$ 0
Amortization of accumulated other comprehensive gain into net periodic benefit cost, taxes	$ 0	$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Stock	Non-controlling Interests
Balance, beginning of period (in shares) at Sep. 30, 2022		9,956,687
Balance, beginning of period at Sep. 30, 2022	$ 19,161	$ 5,062	$ 7,351	$ 7,720	$ 1,294	$ (2,286)	$ 20
Increase (Decrease) in Stockholders' Equity
Net (loss) earnings	1,209			1,089			120
Foreign currency translation adjustments, net of taxes of $0	2				2
Distributions to non-controlling interests	(108)						(108)
Share-based compensation	115		115
Dividends declared, $0.015 per share	(149)			(149)
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	(20)				(20)
Balance, end of period (in shares) at Dec. 31, 2022		9,956,687
Balance, end of period at Dec. 31, 2022	20,210	$ 5,062	7,466	8,660	1,276	(2,286)	32
Balance, beginning of period (in shares) at Sep. 30, 2023		9,990,778
Balance, beginning of period at Sep. 30, 2023	18,757	$ 5,079	7,687	6,160	2,104	(2,286)	13
Increase (Decrease) in Stockholders' Equity
Net (loss) earnings	(662)			(664)			2
Foreign currency translation adjustments, net of taxes of $0	30				30
Distributions to non-controlling interests	(4)						(4)
Share-based compensation	65		65
Issuance of common stock for restricted stock units vested (in shares)		9,328
Issuance of common stock for restricted stock units	0	$ 5	(5)
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	(21)				(21)
Balance, end of period (in shares) at Dec. 31, 2023		10,000,106
Balance, end of period at Dec. 31, 2023	$ 18,165	$ 5,084	$ 7,747	$ 5,496	$ 2,113	$ (2,286)	$ 11

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Stockholders' Equity [Abstract]
Foreign currency translation adjustments, taxes	$ 0	$ 0
Dividends declared, cash paid per share (in dollars per share)	$ 0	$ 0.015
Amortization of accumulated other comprehensive gain into net periodic benefit cost, taxes	$ 0	$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net (loss) earnings	$ (662)	$ 1,209
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Depletion, depreciation, and amortization	1,511	840
Equity in income of affiliates	0	(538)
Gain on sale of assets	0	(551)
Sale of interest in leasehold land, net of fees paid	0	(233)
Distributions of income from equity investees	0	319
Retirement benefits income	(86)	(63)
Accretion of asset retirement obligation	200	194
Non-cash rent income	(7)	(5)
Deferred income tax benefit	(2)	(12)
Asset retirement obligation payments	(160)	(76)
Share-based compensation expense	65	115
Retirement plan contributions and payments	(1)	(1)
Credit loss expense	37	18
Foreign currency gain	(126)	(78)
Increase (decrease) from changes in current assets and liabilities	606	(241)
Net cash provided by operating activities	1,375	897
Cash flows from investing activities:
Distribution from equity investees in excess of earnings	0	219
Proceeds from sale of interest in leasehold land, net of fees paid	0	233
Capital expenditures - oil and natural gas	(1,018)	(3,870)
Capital expenditures - all other	(1)	(9)
Advances to operators for capital expenditures	0	(3,464)
Net cash used in investing activities	(1,019)	(6,891)
Cash flows from financing activities:
Distributions to non-controlling interests	(4)	(108)
Net cash used in financing activities	(4)	(108)
Effect of exchange rate changes on cash and cash equivalents	41	34
Net increase (decrease) in cash and cash equivalents	393	(6,068)
Cash and cash equivalents at beginning of period	2,830	12,804
Cash and cash equivalents at end of period	$ 3,223	$ 6,736

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Dec. 31, 2023

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 a variable interest entity (Teton Barnwell Fund I, LLC) for which the Company is deemed to be the primary beneficiary. All significant intercompany accounts and transactions have been eliminated.

Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in variable interest entities 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, 2023 Annual Report on Form 10-K, as amended by our Form 10-K/A Amendment No. 1 (our “2023 Annual Report”). The Condensed Consolidated Balance Sheet as of September 30, 2023 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 December 31, 2023, results of operations, comprehensive (loss) income, equity and cash flows for the three months ended December 31, 2023 and 2022, have been made. The results of operations for the period ended December 31, 2023 are not necessarily indicative of the operating results for the full year.

Use of Estimates in the Preparation of Condensed Consolidated Financial Statements

    The preparation of the condensed consolidated 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 assumptions are required in the

valuation of deferred tax assets, asset retirement obligations, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded.

Significant Accounting Policies

Other than as set forth below, 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 2023 Annual Report.

Accounts and Other Receivables

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is Barnwell’s best estimate of the amount of current expected credit losses in Barnwell’s existing accounts receivable and is based on the aging of the receivable balances, analysis of historical credit loss rates, and current and future economic conditions affecting collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Barnwell does not have any off-balance sheet credit exposure related to its customers.

Derivative Instruments

Barnwell utilizes physical forward commodity contracts to mitigate market price risk on its oil and natural gas output when deemed appropriate. Purchase and sale contracts with a fixed price determined at inception are recorded on the consolidated balance sheet as derivative financial instruments if such contracts are readily convertible to cash - unless the contracts are eligible for and elected as the normal purchases and normal sales exception (“NPNS”); in which case, the contracts are recorded on an accrual basis and the Company recognizes the amounts relating to such transactions during the period when the commodities are physically delivered. The Company generally applies the NPNS exception to eligible oil and natural gas contracts to purchase or sell quantities it expects to use or sell in the normal course of business. The Company has not traded in any derivative contracts other than where the NPNS exception is applied, and it does not apply hedge accounting.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss model with an expected loss model referred to as the current expected credit loss (“CECL”) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including but not limited to trade receivables. The FASB has subsequently issued other related ASUs which amend ASU 2016-13 to provide clarification and additional guidance. The Company adopted the provisions of this ASU effective October 1, 2023. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements.

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(LOSS) EARNINGS PER COMMON SHARE

3 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

(LOSS) EARNINGS PER COMMON SHARE

(LOSS) EARNINGS PER COMMON SHARE

Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding for the period. Diluted (loss) earnings 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 and nonvested restricted stock units. Potentially dilutive shares are excluded from the computation of diluted (loss) earnings per share if their effect is anti-dilutive.

Options to purchase 465,000 shares of common stock and 76,336 restricted stock units were excluded from the computation of diluted shares for the three months ended December 31, 2023, as their inclusion would have been anti-dilutive. Options to purchase 615,000 shares of common stock were excluded from the computation of diluted shares for the three months ended December 31, 2022, as their inclusion would have been anti-dilutive.

Reconciliations between net (loss) earnings attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net (loss) earnings per share computations are detailed in the following tables:

	Three months ended December 31, 2023
	Net Loss (Numerator)		Shares (Denominator)	Per-Share Amount
Basic net loss	$	(664,000)	9,996,760	$	(0.07)
Effect of dilutive securities -
common stock options and restricted stock units	—		—
Diluted net loss	$	(664,000)	9,996,760	$	(0.07)

	Three months ended December 31, 2022
	Net Earnings (Numerator)		Shares (Denominator)	Per-Share Amount
Basic net earnings	$	1,089,000	9,956,687	$	0.11
Effect of dilutive securities -
common stock options	—		—
Diluted net earnings	$	1,089,000	9,956,687	$	0.11

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INVESTMENTS

3 Months Ended

Dec. 31, 2023

Investments, All Other Investments [Abstract]

INVESTMENTS

INVESTMENTS

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 (“KD Kona”) and KKM Makai, LLLP (“KKM”), and indirectly acquired a 19.6% non-controlling ownership interest in each of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP (“KDK”) for $5,140,000. These entities, collectively referred to hereinafter as the “Kukio Resort Land Development Partnerships,” 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. KDK holds interests in KD Acquisition, LLLP (“KD I”) and KD Acquisition II,

LP, formerly KD Acquisition II, LLLP (“KD II”). KD I is the developer of Kaupulehu Lot 4A Increment I (“Increment I”), and KD II is the developer of Kaupulehu Lot 4A Increment II (“Increment II”). Barnwell's ownership interests in the Kukio Resort Land Development Partnerships is accounted for using the equity method of accounting.

In March 2019, KD II admitted a new development partner, Replay Kaupulehu Development, LLC (“Replay”), a party unrelated to Barnwell, in an effort to move forward with development of the remainder of Increment II at Kaupulehu. KDK and Replay hold ownership interests of 55% and 45%, respectively, of KD II and Barnwell has a 10.8% indirect non-controlling ownership interest in KD II through KDK, which is accounted for using the equity method of accounting. Barnwell continues to have an indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP, and KD I.

The partnerships derive income from the sale of residential parcels in Increment I, of which only two lots remain to be sold as of December 31, 2023, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships.

Increment II is not yet under development, and there is no assurance that development of such acreage will occur. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.

    Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interests in KD Kona and KKM, based on its respective partnership sharing ratios of 75% and 34.45%, respectively. No cash distributions were received during the three months ended December 31, 2023. During the three months ended December 31, 2022, Barnwell received cash distributions $538,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $478,000, after distributing $60,000 to non-controlling interests.

Equity in income of affiliates was nil for the three months ended December 31, 2023, as compared to equity in income of affiliates of $538,000 for the three months ended December 31, 2022.

Summarized financial information for the Kukio Resort Land Development Partnerships is as follows:

	Three months ended December 31,
	2023		2022
Revenue	$	1,886,000	$	3,712,000
Gross profit	$	817,000	$	2,422,000
Net earnings	$	354,000	$	1,307,000

In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnership investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development

Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnership’s cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnership’s income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized during the three months ended December 31, 2023.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $630,000 at December 31, 2023 and $708,000 at September 30, 2023.

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 Increment I and Increment II by KD I and KD II (see Note 15).

With respect to Increment I, Kaupulehu Developments is entitled to receive payments from KD I based on 10% of the gross receipts from KD I’s sales of single-family residential lots in Increment I. No lots were sold during the three months ended December 31, 2023 and two single-family lots, of the 80 lots developed within Increment I, remained to be sold as of December 31, 2023.

The following table summarizes the Increment I revenues from KD I and the amount of fees directly related to such revenues:

	Three months ended December 31,
	2023		2022
Sale of interest in leasehold land:
Revenues - sale of interest in leasehold land	$	—	$	265,000
Fees - included in general and administrative expenses	—		(32,000)
Sale of interest in leasehold land, net of fees paid	$	—	$	233,000

There is no assurance with regards to the amounts of future payments from Increment I or Increment II to be received, or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.

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, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025.

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CONSOLIDATED VARIABLE INTEREST ENTITY

3 Months Ended

Dec. 31, 2023

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

CONSOLIDATED VARIABLE INTEREST ENTITY

CONSOLIDATED VARIABLE INTEREST ENTITY

In February 2021, Barnwell Industries, Inc. established a new wholly-owned subsidiary named BOK Drilling, LLC (“BOK”) for the purpose of indirectly investing in oil and natural gas exploration and

development in Oklahoma. BOK and Gros Ventre Partners, LLC (“Gros Ventre”) entered into the Limited Liability Agreement (the “Teton Operating Agreement”) of Teton Barnwell Fund I, LLC (“Teton Barnwell”), an entity formed for the purpose of directly entering into such oil and natural gas investments. Under the terms of the Teton Operating Agreement, the profits of Teton Barnwell are split between BOK and Gros Ventre at 98% and 2%, respectively, and as the manager of Teton Barnwell, Gros Ventre is paid an annual asset management fee equal to 1% of the cumulative capital contributions made to Teton Barnwell as compensation for its management services. BOK is responsible for 100% of the capital contributions made to Teton Barnwell.

The Company has determined that Teton Barnwell is a variable interest entity (“VIE”) as the entity is structured with non-substantive voting rights and that the Company is the primary beneficiary. This is due to the fact that even though Teton Barnwell has a unanimous consent voting structure, BOK is responsible for 100% of the capital contributions required to fund Teton Barnwell’s future oil exploration and development investments pursuant to the Teton Operating Agreement and thus, BOK has the power to steer the decisions that most significantly impact Teton Barnwell’s economic performance and has the obligation to absorb any potential losses that could be significant to Teton Barnwell. As BOK is the primary beneficiary of the VIE, Teton Barnwell’s operating results, assets and liabilities are consolidated by the Company.

The following table summarizes the carrying value of the assets and liabilities of Teton Barnwell that are consolidated by the Company. Intercompany balances are eliminated in consolidation and thus, are not reflected in the table below.

	December 31, 2023		September 30, 2023
ASSETS
Cash and cash equivalents	$	84,000	$	83,000
Accounts and other receivables	147,000		175,000
Property and equipment:
Proved oil and natural gas properties, net (full cost method)	522,000		544,000
Total assets	$	753,000	$	802,000
LIABILITIES
Accounts payable	$	12,000	$	10,000
Accrued operating and other expenses	13,000		15,000
Total liabilities	$	25,000	$	25,000

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OIL AND NATURAL GAS PROPERTIES

3 Months Ended

Dec. 31, 2023

Oil and Natural Gas Properties [Abstract]

OIL AND NATURAL GAS PROPERTIES

OIL AND NATURAL GAS PROPERTIES

Fiscal 2023 Investments and Acquisitions

In December 2022, Barnwell Texas, LLC (“Barnwell Texas”), a new wholly-owned subsidiary of the Company, entered into a purchase and sale agreement with an independent third party whereby Barnwell Texas acquired a 22.3% non-operated working interest in oil and natural gas leasehold acreage in the Permian Basin in Texas for cash consideration of $806,000. Additionally, in connection with the purchase of such leasehold interests, Barnwell Texas acquired a 15.4% non-operated working interest in two oil wells in the Wolfcamp Formation in Loving and Ward Counties, Texas and had paid $4,293,000 for its share of the costs to drill, complete, and equip the wells in the three months ended December 31, 2022.

Impairment of Oil and Natural Gas Properties

Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. There were no reductions to the carrying value of our oil and natural gas properties during the three months ended December 31, 2023 and 2022. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices, the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties. Based on the 12-month rolling average first-day-of-the-month prices for January and February 2024, it is reasonably possible that we will incur a ceiling test impairment in the Company's second quarter ending March 31, 2024. The Company is currently unable to estimate a range of the amount of any potential future reduction in carrying value as variables that impact the ceiling limitation are dependent upon actual results through the end of March 2024.

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RETIREMENT PLANS

3 Months Ended

Dec. 31, 2023

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 and a noncontributory Supplemental Executive Retirement Plan (“SERP”), which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan. Effective December 31, 2019, the accrual of benefits for all participants in the Pension Plan and SERP was frozen and the plans were closed to new participants from that point forward.

The following table details the components of net periodic benefit (income) cost for Barnwell’s retirement plans:

	Pension Plan				SERP
	Three months ended December 31,
	2023		2022		2023		2022
Interest cost	$	103,000	$	102,000	$	24,000	$	22,000
Expected return on plan assets	(192,000)		(167,000)		—		—
Amortization of net actuarial gain	—		—		(21,000)		(20,000)
Net periodic benefit (income) cost	$	(89,000)	$	(65,000)	$	3,000	$	2,000

The net periodic benefit (income) cost is included in “General and administrative” expenses in the Company's Condensed Consolidated Statements of Operations.

Currently, no contributions are planned to be made to the Pension Plan during fiscal 2024. The SERP plan is unfunded and Barnwell funds benefits when payments are made. Expected payments under the SERP for fiscal 2024 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.

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INCOME TAXES

3 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The components of (loss) earnings before income taxes, after adjusting the (loss) earnings for non-controlling interests, are as follows:

	Three months ended December 31,
	2023		2022
United States	$	(689,000)	$	18,000
Canada	91,000		1,150,000
	$	(598,000)	$	1,168,000

The components of the income tax provision are as follows:

	Three months ended December 31,
	2023		2022
Current	$	68,000	$	91,000
Deferred	(2,000)		(12,000)
	$	66,000	$	79,000

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, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. 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. Income from our investment in the Oklahoma oil venture is 100% allocable to Oklahoma. As such, Barnwell receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes. Our operations in Texas are subject to a franchise tax assessed by the state of Texas, however no significant amounts have been incurred to date.

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REVENUE FROM CONTRACTS WITH CUSTOMERS REVENUE FROM CONTACTS WITH CUSTOMERS

3 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

    The following tables provides information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition for the three months ended December 31, 2023 and 2022.

		Three months ended December 31, 2023
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,892,000	$	—	$	—	$	—	$	3,892,000
	Natural gas	712,000		—		—		—		712,000
	Natural gas liquids	526,000		—		—		—		526,000
	Drilling and pump	—		993,000		—		—		993,000
	Other	—		—		—		17,000		17,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Geographical regions:
	United States	$	754,000	$	993,000	$	—	$	1,000	$	1,748,000
	Canada	4,376,000		—		—		16,000		4,392,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	5,130,000	$	—	$	—	$	17,000	$	5,147,000
	Services transferred over time	—		993,000		—		—		993,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000

		Three months ended December 31, 2022
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,484,000	$	—	$	—	$	—	$	3,484,000
	Natural gas	1,302,000		—		—		—		1,302,000
	Natural gas liquids	440,000		—		—		—		440,000
	Drilling and pump	—		1,948,000		—		—		1,948,000
	Contingent residual payments	—		—		265,000		—		265,000
	Other	—		—		—		43,000		43,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000
Geographical regions:
	United States	$	517,000	$	1,948,000	$	265,000	$	2,000	$	2,732,000
	Canada	4,709,000		—		—		41,000		4,750,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	5,226,000	$	—	$	265,000	$	43,000	$	5,534,000
	Services transferred over time	—		1,948,000		—		—		1,948,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000

Contract Balances

    The following table provides information about accounts receivables, contract assets and contract liabilities from contracts with customers:

	December 31, 2023		September 30, 2023		September 30, 2022
Accounts receivables from contracts with customers	$	2,902,000	$	2,931,000	$	4,038,000
Contract assets	881,000		958,000		580,000
Contract liabilities	232,000		377,000		1,087,000

    Accounts receivables from contracts with customers are included in "Accounts and other receivables, net of allowance for credit losses," in the accompanying Condensed Consolidated Balance Sheets and contract assets, which includes costs and estimated earnings in excess of billings and retainage, are included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets. Contract liabilities, which includes billings in excess of costs and estimated earnings are included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

    Retainage, included in contract assets, represents amounts due from customers, but where payments are withheld contractually until certain construction milestones are met. Amounts retained typically range from 5% to 10% of the total invoice, up to contractually-specified maximums. The Company classifies as a current asset those retainages that are expected to be collected in the next twelve months.

    Contract assets represent the Company’s rights to consideration in exchange for services transferred to a customer that have not been billed as of the reporting date. The Company’s rights are generally unconditional at the time its performance obligations are satisfied.

    When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. Such deferred revenue typically results from billings in excess of costs and estimated earnings on uncompleted contracts. As of December 31, 2023 and September 30, 2023, the Company had $232,000 and $377,000, respectively, included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets for those performance obligations expected to be completed in the next twelve months.

During the three months ended December 31, 2023 and 2022, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $229,000 and $523,000, respectively.

    Contracts are sometimes modified for a change in scope or other requirements. The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of the Company’s contract modifications are for goods and services that are not distinct from the existing performance obligations. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or decrease) on a cumulative catchup basis.

Performance Obligations

    The Company’s remaining performance obligations for drilling and pump installation contracts (hereafter referred to as “backlog”) represent the unrecognized revenue value of the Company’s contract commitments. The Company’s backlog may vary significantly each reporting period based on the timing of major new contract commitments. In addition, our customers have the right, under some infrequent circumstances, to terminate contracts or defer the timing of the Company’s services and their payments to us. Nearly all of the Company's contract drilling segment contracts have original expected durations of one year or less. At December 31, 2023, the Company had three contract drilling jobs with original expected durations of greater than one year. For these contracts, approximately 100% of the remaining performance obligation of $371,000 is expected to be recognized as revenue in the next twelve months.

Contract Fulfillment Costs

Preconstruction costs, which include costs such as set-up and mobilization, are capitalized and allocated across all performance obligations and deferred and amortized over the contract term on a progress towards completion basis. As of December 31, 2023 and September 30, 2023, the Company had $423,000 and $504,000, respectively, in unamortized preconstruction costs related to contracts that were not completed. During the three months ended December 31, 2023 and 2022, the amortization of preconstruction costs related to contracts were not material and were included in the accompanying Condensed Consolidated Statements of Operations. Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the three months ended December 31, 2023 and 2022.

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SEGMENT INFORMATION

3 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Barnwell operates the following segments: 1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S. (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.

	Three months ended December 31,
	2023		2022
Revenues:
Oil and natural gas	$	5,130,000	$	5,226,000
Contract drilling	993,000		1,948,000
Land investment	—		265,000
Other	17,000		43,000
Total before interest income	6,140,000		7,482,000
Interest income	15,000		29,000
Total revenues	$	6,155,000	$	7,511,000
Depletion, depreciation, and amortization:
Oil and natural gas	$	1,458,000	$	796,000
Contract drilling	52,000		43,000
Other	1,000		1,000
Total depletion, depreciation, and amortization	$	1,511,000	$	840,000
Operating profit (loss) (before general and administrative expenses):
Oil and natural gas	$	881,000	$	1,986,000
Contract drilling	(228,000)		48,000
Land investment	—		265,000
Other	16,000		42,000
Gain on sale of assets	—		551,000
Total operating profit	669,000		2,892,000
Equity in income of affiliates:
Land investment	—		538,000
General and administrative expenses	(1,404,000)		(2,249,000)
Foreign currency gain	126,000		78,000
Interest expense	(2,000)		—
Interest income	15,000		29,000
(Loss) earnings before income taxes	$	(596,000)	$	1,288,000

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ACCUMULATED OTHER COMPREHENSIVE INCOME

3 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in each component of accumulated other comprehensive income were as follows:

	Three months ended December 31,
	2023		2022
Foreign currency translation:
Beginning accumulated foreign currency translation	$	220,000	$	222,000
Change in cumulative translation adjustment before reclassifications	30,000		2,000
Income taxes	—		—
Net current period other comprehensive income	30,000		2,000
Ending accumulated foreign currency translation	250,000		224,000
Retirement plans:
Beginning accumulated retirement plans benefit income	1,884,000		1,072,000
Amortization of net actuarial gain	(21,000)		(20,000)
Income taxes	—		—
Net current period other comprehensive loss	(21,000)		(20,000)
Ending accumulated retirement plans benefit income	1,863,000		1,052,000
Accumulated other comprehensive income, net of taxes	$	2,113,000	$	1,276,000

    The amortization of net actuarial gain for the retirement plans are included in the computation of net periodic benefit (income) cost which is a component of “General and administrative” expenses on the accompanying Condensed Consolidated Statements of Operations (see Note 6 for additional details).

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FAIR VALUE MEASUREMENTS

3 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The carrying values of cash and cash equivalents, accounts and other receivables, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The estimated fair values of oil and natural gas properties and the asset retirement obligation incurred in the drilling of oil and natural gas wells or assumed in the acquisitions of additional oil and natural gas working interests are based on an estimated discounted cash flow model and market assumptions. The assumptions used in the calculation of estimated discounted cash flows were primarily Level 3 assumptions; assumptions included future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates.

Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar

well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements.

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STOCKHOLDERS' EQUITY

3 Months Ended

Dec. 31, 2023

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

Restricted Stock Units

On November 2, 2023, the Board of Directors of the Company granted a total of 76,336 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board. The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting dates.

The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2023 through December 31, 2023:

Restricted Stock Units	Shares	Weighted-Average Grant Date Fair Value
Nonvested at October 1, 2023	—	$	—
Granted	76,336	2.62
Vested	—	—
Forfeited	—	—
Nonvested at December 31, 2023	76,336	$	2.62

Compensation cost for restricted stock unit awards is measured at fair value and is recognized as an expense over the requisite service period. During the three months ended December 31, 2023, the Company recognized share-based compensation expense related to restricted stock units of $30,000. There was no share-based compensation expense related to restricted stock units recognized during the three months ended December 31, 2022. As of December 31, 2023, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $170,000, which is expected to be recognized over the weighted-average remaining requisite service period of 1.8 years.

Cash Dividend

No dividends were declared or paid during the three months ended December 31, 2023. During the three months ended December 31, 2022, the Company's Board of Directors declared a cash dividend of $0.015 per share that was paid on January 11, 2023 to stockholders of record on December 27, 2022.

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CONTINGENCIES

3 Months Ended

Dec. 31, 2023

Loss Contingency [Abstract]

CONTINGENCIES

CONTINGENCIES

Legal and Regulatory Matters

Barnwell is routinely involved in disputes with third parties that occasionally require litigation. In addition, Barnwell is required to maintain compliance with all current governmental controls and regulations in the ordinary course of business. Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity.

In the quarter ended December 31, 2021, it was determined that a contract drilling segment well completed in the period did not meet the contract specifications for plumbness under a gyroscopic plumbness test which the contract required. While the well did pass the cage plumbness test, the contract uses the gyroscopic test as the measure of plumbness. Barnwell and the customer currently have an arrangement where Barnwell will provide for centralizers, armored cabling and a pump installation and removal test to confirm that plumbness is satisfactory. The pump installation and removal test was successfully completed. Barnwell’s management believes the plumbness deviation is not impactful to the performance of the submersible pumps that will be installed in the well. Accordingly, while costs for the centralizers, armored cabling and the pump installation and removal test have been accrued, no accrual has been recorded as of December 31, 2023 for any further costs related to this contract as there is no related probable or estimable contingent liability.

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INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

3 Months Ended

Dec. 31, 2023

Supplemental Cash Flow Elements [Abstract]

INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS

INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three months ended December 31,
	2023		2022
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes paid	$	44,000	$	—

Capital expenditure accruals related to oil and natural gas exploration and development decreased $523,000 and $1,405,000 during the three months ended December 31, 2023 and 2022, respectively. Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $115,000 and $150,000 during the three months ended December 31, 2023 and 2022, respectively.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Kaupulehu Developments is entitled to receive payments from the sales of lots and/or residential units by KD I and KD II. KD I and KD II are part of the Kukio Resort Land Development Partnerships in which Barnwell holds indirect 19.6% and 10.8% non-controlling ownership interests, respectively, accounted for under the equity method of investment. The percentage of sales 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. Changes to the arrangement above, effective March 7, 2019, are discussed in Note 3.

No lots were sold during the three months ended December 31, 2023. During the three months ended December 31, 2022, Kaupulehu Developments received $265,000 in percentage of sales payments from KD I from the sale of one single-family lot within Phase II of Increment I.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Dec. 31, 2023

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 a variable interest entity (Teton Barnwell Fund I, LLC) for which the Company is deemed to be the primary beneficiary. All significant intercompany accounts and transactions have been eliminated.

Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in variable interest entities 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, 2023 Annual Report on Form 10-K, as amended by our Form 10-K/A Amendment No. 1 (our “2023 Annual Report”). The Condensed Consolidated Balance Sheet as of September 30, 2023 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 December 31, 2023, results of operations, comprehensive (loss) income, equity and cash flows for the three months ended December 31, 2023 and 2022, have been made. The results of operations for the period ended December 31, 2023 are not necessarily indicative of the operating results for the full year.

Use of Estimates in the Preparation of Condensed Consolidated Financial Statements

Use of Estimates in the Preparation of Condensed Consolidated Financial Statements

    The preparation of the condensed consolidated 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 assumptions are required in the

valuation of deferred tax assets, asset retirement obligations, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded.

Accounts and Other Receivables

Accounts and Other Receivables

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is Barnwell’s best estimate of the amount of current expected credit losses in Barnwell’s existing accounts receivable and is based on the aging of the receivable balances, analysis of historical credit loss rates, and current and future economic conditions affecting collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Barnwell does not have any off-balance sheet credit exposure related to its customers

Derivative Instruments

Derivative Instruments

Barnwell utilizes physical forward commodity contracts to mitigate market price risk on its oil and natural gas output when deemed appropriate. Purchase and sale contracts with a fixed price determined at inception are recorded on the consolidated balance sheet as derivative financial instruments if such contracts are readily convertible to cash - unless the contracts are eligible for and elected as the normal purchases and normal sales exception (“NPNS”); in which case, the contracts are recorded on an accrual basis and the Company recognizes the amounts relating to such transactions during the period when the commodities are physically delivered. The Company generally applies the NPNS exception to eligible oil and natural gas contracts to purchase or sell quantities it expects to use or sell in the normal course of business. The Company has not traded in any derivative contracts other than where the NPNS exception is applied, and it does not apply hedge accounting.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss model with an expected loss model referred to as the current expected credit loss (“CECL”) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including but not limited to trade receivables. The FASB has subsequently issued other related ASUs which amend ASU 2016-13 to provide clarification and additional guidance. The Company adopted the provisions of this ASU effective October 1, 2023. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements.

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(LOSS) EARNINGS PER COMMON SHARE (Tables)

3 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Reconciliations between net (loss) earnings attributable to the entity's stockholders and common shares outstanding of the basic and diluted net (loss) earnings per share computations

Reconciliations between net (loss) earnings attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net (loss) earnings per share computations are detailed in the following tables:

	Three months ended December 31, 2023
	Net Loss (Numerator)		Shares (Denominator)	Per-Share Amount
Basic net loss	$	(664,000)	9,996,760	$	(0.07)
Effect of dilutive securities -
common stock options and restricted stock units	—		—
Diluted net loss	$	(664,000)	9,996,760	$	(0.07)

	Three months ended December 31, 2022
	Net Earnings (Numerator)		Shares (Denominator)	Per-Share Amount
Basic net earnings	$	1,089,000	9,956,687	$	0.11
Effect of dilutive securities -
common stock options	—		—
Diluted net earnings	$	1,089,000	9,956,687	$	0.11

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INVESTMENTS (Tables)

3 Months Ended

Dec. 31, 2023

Investments, All Other Investments [Abstract]

Summarized financial information for the land development partnerships

Summarized financial information for the Kukio Resort Land Development Partnerships is as follows:

	Three months ended December 31,
	2023		2022
Revenue	$	1,886,000	$	3,712,000
Gross profit	$	817,000	$	2,422,000
Net earnings	$	354,000	$	1,307,000

Summary of increment I and increment II percentage of sales payment revenues received

The following table summarizes the Increment I revenues from KD I and the amount of fees directly related to such revenues:

	Three months ended December 31,
	2023		2022
Sale of interest in leasehold land:
Revenues - sale of interest in leasehold land	$	—	$	265,000
Fees - included in general and administrative expenses	—		(32,000)
Sale of interest in leasehold land, net of fees paid	$	—	$	233,000

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CONSOLIDATED VARIABLE INTEREST ENTITY (Tables)

3 Months Ended

Dec. 31, 2023

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

Schedule of assets and liabilities of variable interest entity

The following table summarizes the carrying value of the assets and liabilities of Teton Barnwell that are consolidated by the Company. Intercompany balances are eliminated in consolidation and thus, are not reflected in the table below.

	December 31, 2023		September 30, 2023
ASSETS
Cash and cash equivalents	$	84,000	$	83,000
Accounts and other receivables	147,000		175,000
Property and equipment:
Proved oil and natural gas properties, net (full cost method)	522,000		544,000
Total assets	$	753,000	$	802,000
LIABILITIES
Accounts payable	$	12,000	$	10,000
Accrued operating and other expenses	13,000		15,000
Total liabilities	$	25,000	$	25,000

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RETIREMENT PLANS (Tables)

3 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Schedule of components of net periodic benefit cost (income)

The following table details the components of net periodic benefit (income) cost for Barnwell’s retirement plans:

	Pension Plan				SERP
	Three months ended December 31,
	2023		2022		2023		2022
Interest cost	$	103,000	$	102,000	$	24,000	$	22,000
Expected return on plan assets	(192,000)		(167,000)		—		—
Amortization of net actuarial gain	—		—		(21,000)		(20,000)
Net periodic benefit (income) cost	$	(89,000)	$	(65,000)	$	3,000	$	2,000

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INCOME TAXES (Tables)

3 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of income (loss) before income taxes, after adjusting the income (loss) for non-controlling interests

The components of (loss) earnings before income taxes, after adjusting the (loss) earnings for non-controlling interests, are as follows:

	Three months ended December 31,
	2023		2022
United States	$	(689,000)	$	18,000
Canada	91,000		1,150,000
	$	(598,000)	$	1,168,000

Schedule of components of the income tax provision (benefit)

The components of the income tax provision are as follows:

	Three months ended December 31,
	2023		2022
Current	$	68,000	$	91,000
Deferred	(2,000)		(12,000)
	$	66,000	$	79,000

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

3 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Summary of disaggregation of revenue

The following tables provides information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition for the three months ended December 31, 2023 and 2022.

		Three months ended December 31, 2023
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,892,000	$	—	$	—	$	—	$	3,892,000
	Natural gas	712,000		—		—		—		712,000
	Natural gas liquids	526,000		—		—		—		526,000
	Drilling and pump	—		993,000		—		—		993,000
	Other	—		—		—		17,000		17,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Geographical regions:
	United States	$	754,000	$	993,000	$	—	$	1,000	$	1,748,000
	Canada	4,376,000		—		—		16,000		4,392,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	5,130,000	$	—	$	—	$	17,000	$	5,147,000
	Services transferred over time	—		993,000		—		—		993,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000

		Three months ended December 31, 2022
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,484,000	$	—	$	—	$	—	$	3,484,000
	Natural gas	1,302,000		—		—		—		1,302,000
	Natural gas liquids	440,000		—		—		—		440,000
	Drilling and pump	—		1,948,000		—		—		1,948,000
	Contingent residual payments	—		—		265,000		—		265,000
	Other	—		—		—		43,000		43,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000
Geographical regions:
	United States	$	517,000	$	1,948,000	$	265,000	$	2,000	$	2,732,000
	Canada	4,709,000		—		—		41,000		4,750,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	5,226,000	$	—	$	265,000	$	43,000	$	5,534,000
	Services transferred over time	—		1,948,000		—		—		1,948,000
	Total revenues before interest income	$	5,226,000	$	1,948,000	$	265,000	$	43,000	$	7,482,000

Summary of contract with customer, asset and liability

The following table provides information about accounts receivables, contract assets and contract liabilities from contracts with customers:

	December 31, 2023		September 30, 2023		September 30, 2022
Accounts receivables from contracts with customers	$	2,902,000	$	2,931,000	$	4,038,000
Contract assets	881,000		958,000		580,000
Contract liabilities	232,000		377,000		1,087,000

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SEGMENT INFORMATION (Tables)

3 Months Ended

Dec. 31, 2023

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.

	Three months ended December 31,
	2023		2022
Revenues:
Oil and natural gas	$	5,130,000	$	5,226,000
Contract drilling	993,000		1,948,000
Land investment	—		265,000
Other	17,000		43,000
Total before interest income	6,140,000		7,482,000
Interest income	15,000		29,000
Total revenues	$	6,155,000	$	7,511,000
Depletion, depreciation, and amortization:
Oil and natural gas	$	1,458,000	$	796,000
Contract drilling	52,000		43,000
Other	1,000		1,000
Total depletion, depreciation, and amortization	$	1,511,000	$	840,000
Operating profit (loss) (before general and administrative expenses):
Oil and natural gas	$	881,000	$	1,986,000
Contract drilling	(228,000)		48,000
Land investment	—		265,000
Other	16,000		42,000
Gain on sale of assets	—		551,000
Total operating profit	669,000		2,892,000
Equity in income of affiliates:
Land investment	—		538,000
General and administrative expenses	(1,404,000)		(2,249,000)
Foreign currency gain	126,000		78,000
Interest expense	(2,000)		—
Interest income	15,000		29,000
(Loss) earnings before income taxes	$	(596,000)	$	1,288,000

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ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

3 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of changes in each component of accumulated other comprehensive income (loss)

The changes in each component of accumulated other comprehensive income were as follows:

	Three months ended December 31,
	2023		2022
Foreign currency translation:
Beginning accumulated foreign currency translation	$	220,000	$	222,000
Change in cumulative translation adjustment before reclassifications	30,000		2,000
Income taxes	—		—
Net current period other comprehensive income	30,000		2,000
Ending accumulated foreign currency translation	250,000		224,000
Retirement plans:
Beginning accumulated retirement plans benefit income	1,884,000		1,072,000
Amortization of net actuarial gain	(21,000)		(20,000)
Income taxes	—		—
Net current period other comprehensive loss	(21,000)		(20,000)
Ending accumulated retirement plans benefit income	1,863,000		1,052,000
Accumulated other comprehensive income, net of taxes	$	2,113,000	$	1,276,000

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STOCKHOLDERS'EQUITY (Tables)

3 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of the Activity in Restricted Stock Units

The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2023 through December 31, 2023:

Restricted Stock Units	Shares	Weighted-Average Grant Date Fair Value
Nonvested at October 1, 2023	—	$	—
Granted	76,336	2.62
Vested	—	—
Forfeited	—	—
Nonvested at December 31, 2023	76,336	$	2.62

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INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Tables)

3 Months Ended

Dec. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Schedule of supplemental cash flow information

	Three months ended December 31,
	2023		2022
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes paid	$	44,000	$	—

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended
	Dec. 31, 2023
Kaupulehu Developments
Principles of Consolidation
Ownership interest in subsidiaries (as a percent)	77.60%
KD Kona 2013 LLLP
Principles of Consolidation
Ownership interest in subsidiaries (as a percent)	75.00%

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(LOSS) EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Net Earnings (Loss) (Numerator)
Basic	$ (664)	$ 1,089
Effect of dilutive securities - common stock options and restricted stock units	0	0
Diluted	$ (664)	$ 1,089
Shares (Denominator)
Basic (in shares)	9,996,760	9,956,687
Effect of dilutive securities - common stock options and restricted stock units (in shares)	0	0
Diluted (in shares)	9,996,760	9,956,687
Per-Share Amount
Basic net (loss) earnings per share (in dollars per share)	$ (0.07)	$ 0.11
Diluted net (loss) earnings per share (in dollars per share)	$ (0.07)	$ 0.11
Options
Antidilutive shares of common stock excluded from the computation of diluted shares
Antidilutive shares excluded from computation of (loss) earnings per share (in shares)	465,000	615,000
Restricted Stock Units (RSUs)
Antidilutive shares of common stock excluded from the computation of diluted shares
Antidilutive shares excluded from computation of (loss) earnings per share (in shares)	76,336

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INVESTMENTS - INVESTMENT IN KUKIO RESORT LAND DEVELOPMENT PARTNERSHIPS (Details) $ in Thousands		3 Months Ended		12 Months Ended
	Nov. 27, 2013 USD ($) partnership	Dec. 31, 2023 USD ($) lot	Dec. 31, 2022 USD ($)	Sep. 30, 2023 USD ($)	Jun. 30, 2021 USD ($)	Mar. 07, 2019
Investment Holdings [Line Items]
Number of limited liability limited partnerships formed | partnership	2
Cash distribution from equity method investment, gross		$ 0	$ 538
Cash distribution from equity method investment, net			478
Equity in income of affiliates		0	538
Investment in Kukio Resort Land Development Partnerships					$ 0
Cumulative cash distributions from Kukio Resort Land Development Partnerships in excess of our investment balance		$ 630		$ 708
KD Kukio Resorts LLLP
Investment Holdings [Line Items]
Ownership interest acquired	19.60%
KD Kaupulehu, LLLP
Investment Holdings [Line Items]
Ownership interest acquired	19.60%
KD Maniniowali LLLP
Investment Holdings [Line Items]
Ownership interest acquired	19.60%
Indirectly Acquired Interest
Investment Holdings [Line Items]
Aggregate cost	$ 5,140
KD Acquisition, LLLP
Investment Holdings [Line Items]
Ownership interest acquired		19.60%
KD Kona 2013 LLLP
Investment Holdings [Line Items]
Ownership interest acquired	75.00%
KKM Makai LLLP
Investment Holdings [Line Items]
Ownership interest acquired	34.45%
KD Kaupulehu LLLP Increment I
Investment Holdings [Line Items]
Number of residential lots remaining to be sold | lot		2
KD Kaupulehu, LLLP | KD Acquisition II, LP
Investment Holdings [Line Items]
Ownership interest acquired						55.00%
Replay | KD Acquisition II, LP
Investment Holdings [Line Items]
Ownership interest acquired						45.00%
Barnwell Industries Inc | KD Acquisition II, LP
Investment Holdings [Line Items]
Ownership interest acquired		10.80%
Non-controlling Interests
Investment Holdings [Line Items]
Cash distribution from equity method investment, net			$ 60

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INVESTMENTS - SUMMARIZED FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Investment Holdings [Line Items]
Revenues	$ 6,155	$ 7,511
Net earnings	(662)	1,209
Investment in land development partnerships
Investment Holdings [Line Items]
Revenues	1,886	3,712
Gross Profit	817	2,422
Net earnings	$ 354	$ 1,307

XML

INVESTMENTS - SALE OF INTEREST IN LEASEHOLD LAND (Details) - KD Kaupulehu LLLP Increment I - Kaupulehu Developments	3 Months Ended
	Dec. 31, 2023 lot
Investment Holdings [Line Items]
Payments entitled to be received as percentage of gross proceeds from sale of single family lots	10.00%
Number of single family lots sold	0
Number of lots remaining to be sold	2
Number of lots developed	80

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INVESTMENTS - SUMMARY OF REVENUES (Details) - Kaupulehu Developments - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Investment Holdings [Line Items]
Revenues - sale of interest in leasehold land	$ 0	$ 265
Fees - included in general and administrative expenses	0	(32)
Sale of interest in leasehold land, net of fees paid	$ 0	$ 233

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INVESTMENTS - INVESTMENT IN LEASEHOLD LAND INTEREST - LOT 4C (Details)	Dec. 31, 2023 a
Investments, All Other Investments [Abstract]
Area of land (in acres)	1,000

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CONSOLIDATED VARIABLE INTEREST ENTITY NARRATIVE (Details)	Dec. 31, 2023
Variable Interest Entity [Line Items]
Percentage of capital contributions to variable interest entity	100.00%
Gros Ventre Partners, LLC
Variable Interest Entity [Line Items]
Profit sharing ratio of variable interest entity	2.00%
Asset management fee, percent fee of cumulative capital contributions	1.00%
BOK Drilling, LLC
Variable Interest Entity [Line Items]
Profit sharing ratio of variable interest entity	98.00%

XML

CONSOLIDATED VARIABLE INTEREST ENTITY - CARRYING VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
ASSETS
Cash and cash equivalents	$ 3,223	$ 2,830
Accounts and other receivables	3,278	3,246
Total assets	35,005	35,421
Liabilities [Abstract]
Accounts payable	1,344	881
Accrued operating and other expenses	1,747	1,747
Total liabilities	16,840	16,664
Variable Interest Entity, Primary Beneficiary
ASSETS
Cash and cash equivalents	84	83
Accounts and other receivables	147	175
Proved oil and natural gas properties, net (full cost method)	522	544
Total assets	753	802
Liabilities [Abstract]
Accounts payable	12	10
Accrued operating and other expenses	13	15
Total liabilities	$ 25	$ 25

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OIL AND NATURAL GAS PROPERTIES (Details) - Barnwell Texas, LLC - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2022	Dec. 01, 2022
Oil and Natural Gas Properties [Line Items]
Working interest in oil and gas leasehold acreage			22.30%
Cash paid to acquire working interest in oil and gas leasehold acreage	$ 806
Working interest in oil wells			15.40%
Costs incurred		$ 4,293

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RETIREMENT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Pension Plan
Net periodic benefit (income) cost:
Interest cost	$ 103	$ 102
Expected return on plan assets	(192)	(167)
Amortization of net actuarial gain	0	0
Net periodic benefit (income) cost	(89)	(65)
Other disclosures
Estimated future Pension Plan contributions	0
SERP
Net periodic benefit (income) cost:
Interest cost	24	22
Expected return on plan assets	0	0
Amortization of net actuarial gain	(21)	(20)
Net periodic benefit (income) cost	$ 3	$ 2

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Components of earnings (loss) before income taxes, after adjusting the earnings (loss) for non-controlling interests
United States	$ (689)	$ 18
Canada	91	1,150
Total	(598)	1,168
Components of the income tax provision (benefit)
Current	68	91
Deferred	(2)	(12)
Total	$ 66	$ 79

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REVENUE FROM CONTRACTS WITH CUSTOMERS - DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue before interest income	$ 6,140	$ 7,482
Oil
Disaggregation of Revenue [Line Items]
Revenue before interest income	3,892	3,484
Natural gas
Disaggregation of Revenue [Line Items]
Revenue before interest income	712	1,302
Natural gas liquids
Disaggregation of Revenue [Line Items]
Revenue before interest income	526	440
Drilling and pump
Disaggregation of Revenue [Line Items]
Revenue before interest income	993	1,948
Contingent residual payments
Disaggregation of Revenue [Line Items]
Revenue before interest income		265
Other
Disaggregation of Revenue [Line Items]
Revenue before interest income	17	43
United States
Disaggregation of Revenue [Line Items]
Revenue before interest income	1,748	2,732
Canada
Disaggregation of Revenue [Line Items]
Revenue before interest income	4,392	4,750
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenue before interest income	5,147	5,534
Services transferred over time
Disaggregation of Revenue [Line Items]
Revenue before interest income	993	1,948
Oil and natural gas
Disaggregation of Revenue [Line Items]
Revenue before interest income	5,130	5,226
Oil and natural gas | Oil
Disaggregation of Revenue [Line Items]
Revenue before interest income	3,892	3,484
Oil and natural gas | Natural gas
Disaggregation of Revenue [Line Items]
Revenue before interest income	712	1,302
Oil and natural gas | Natural gas liquids
Disaggregation of Revenue [Line Items]
Revenue before interest income	526	440
Oil and natural gas | Drilling and pump
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Oil and natural gas | Contingent residual payments
Disaggregation of Revenue [Line Items]
Revenue before interest income		0
Oil and natural gas | Other
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Oil and natural gas | United States
Disaggregation of Revenue [Line Items]
Revenue before interest income	754	517
Oil and natural gas | Canada
Disaggregation of Revenue [Line Items]
Revenue before interest income	4,376	4,709
Oil and natural gas | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenue before interest income	5,130	5,226
Oil and natural gas | Services transferred over time
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Contract drilling
Disaggregation of Revenue [Line Items]
Revenue before interest income	993	1,948
Contract drilling | Oil
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Contract drilling | Natural gas
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Contract drilling | Natural gas liquids
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Contract drilling | Drilling and pump
Disaggregation of Revenue [Line Items]
Revenue before interest income	993	1,948
Contract drilling | Contingent residual payments
Disaggregation of Revenue [Line Items]
Revenue before interest income		0
Contract drilling | Other
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Contract drilling | United States
Disaggregation of Revenue [Line Items]
Revenue before interest income	993	1,948
Contract drilling | Canada
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Contract drilling | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Contract drilling | Services transferred over time
Disaggregation of Revenue [Line Items]
Revenue before interest income	993	1,948
Land investment
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	265
Land investment | Oil
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Land investment | Natural gas
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Land investment | Natural gas liquids
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Land investment | Drilling and pump
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Land investment | Contingent residual payments
Disaggregation of Revenue [Line Items]
Revenue before interest income		265
Land investment | Other
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Land investment | United States
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	265
Land investment | Canada
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Land investment | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	265
Land investment | Services transferred over time
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Other
Disaggregation of Revenue [Line Items]
Revenue before interest income	17	43
Other | Oil
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Other | Natural gas
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Other | Natural gas liquids
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Other | Drilling and pump
Disaggregation of Revenue [Line Items]
Revenue before interest income	0	0
Other | Contingent residual payments
Disaggregation of Revenue [Line Items]
Revenue before interest income		0
Other | Other
Disaggregation of Revenue [Line Items]
Revenue before interest income	17	43
Other | United States
Disaggregation of Revenue [Line Items]
Revenue before interest income	1	2
Other | Canada
Disaggregation of Revenue [Line Items]
Revenue before interest income	16	41
Other | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenue before interest income	17	43
Other | Services transferred over time
Disaggregation of Revenue [Line Items]
Revenue before interest income	$ 0	$ 0

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS - CONTRACT BALANCES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Accounts receivables from contracts with customers	$ 2,902	$ 2,931	$ 4,038
Contract assets	881	958	580
Contract liabilities	$ 232	$ 377	$ 1,087

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS - NARRATIVE (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Contract with customer, liability, current	$ 232		$ 377
Contract with customer, liability, revenue recognized	$ 229	$ 523
Percentage anticipated to be recognized in next 12 months	100.00%
Revenue, remaining performance obligation (backlog)	$ 371
Capitalized contract cost net, preconstruction	$ 423		$ 504
Minimum
Disaggregation of Revenue [Line Items]
Contract receivable retainage percentage	5.00%
Maximum
Disaggregation of Revenue [Line Items]
Contract receivable retainage percentage	10.00%

XML

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenues:
Revenue before interest income	$ 6,140,000	$ 7,482,000
Interest income	15,000	29,000
Total revenues	6,155,000	7,511,000
Depletion, depreciation, and amortization:
Depletion, depreciation, and amortization	1,511,000	840,000
Operating profit (loss) (before general and administrative expenses):
Operating profit (loss) (before general and administrative expenses):	669,000	2,892,000
Equity in income (loss) of affiliates:
Equity in income of affiliates	0	538,000
General and administrative expenses	(1,404,000)	(2,249,000)
Foreign currency gain	126,000	78,000
Interest Expense	(2,000)	0
Interest income	15,000	29,000
(Loss) earnings before income taxes	(596,000)	1,288,000
Intersegment eliminations | External Customer
Revenues:
Total revenues	0
Oil and natural gas
Revenues:
Revenue before interest income	5,130,000	5,226,000
Total revenues	5,130,000	5,226,000
Depletion, depreciation, and amortization:
Depletion, depreciation, and amortization	1,458,000	796,000
Operating profit (loss) (before general and administrative expenses):
Operating profit (loss) (before general and administrative expenses):	881,000	1,986,000
Contract drilling
Revenues:
Revenue before interest income	993,000	1,948,000
Total revenues	993,000	1,948,000
Depletion, depreciation, and amortization:
Depletion, depreciation, and amortization	52,000	43,000
Operating profit (loss) (before general and administrative expenses):
Operating profit (loss) (before general and administrative expenses):	(228,000)	48,000
Land investment
Revenues:
Revenue before interest income	0	265,000
Total revenues	0	265,000
Operating profit (loss) (before general and administrative expenses):
Operating profit (loss) (before general and administrative expenses):	0	265,000
Other
Revenues:
Revenue before interest income	17,000	43,000
Total revenues	32,000	72,000
Depletion, depreciation, and amortization:
Depletion, depreciation, and amortization	1,000	1,000
Operating profit (loss) (before general and administrative expenses):
Operating profit (loss) (before general and administrative expenses):	16,000	42,000
Gain (Loss) on Sale of Assets
Operating profit (loss) (before general and administrative expenses):
Operating profit (loss) (before general and administrative expenses):	$ 0	$ 551,000

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ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Changes in foreign currency translation
Beginning accumulated foreign currency translation	$ 220	$ 222
Change in cumulative translation adjustment before reclassifications	30	2
Income taxes	0	0
Net current period other comprehensive income	30	2
Ending accumulated foreign currency translation	250	224
Changes in retirement plans
Beginning accumulated retirement plans benefit income	1,884	1,072
Amortization of net actuarial gain	(21)	(20)
Income taxes	0	0
Net current period other comprehensive loss	(21)	(20)
Ending accumulated retirement plans benefit income	1,863	1,052
Accumulated other comprehensive income, net of taxes	$ 2,113	$ 1,276	$ 2,104

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STOCKHOLDERS' EQUITY - SHARE-BASED COMPENSATION (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Thousands		3 Months Ended
	Nov. 02, 2023	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of restricted stock units granted (in shares)		76,336
Share-based compensation expense		$ 30
Total unrecognized compensation cost		$ 170
Period over which unrecognized compensation cost is expected to be recognized		1 year 9 months 18 days
Share-based Payment Arrangement, Independent Director
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of restricted stock units granted (in shares)	76,336

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STOCKHOLDERS' EQUITY - RESTRICTED STOCK UNIT AWARDS (Details) - Restricted Stock Units (RSUs)	3 Months Ended
	Dec. 31, 2023 $ / shares shares
Shares
Nonvested at the beginning of the period (in shares) | shares	0
Granted (in shares) | shares	76,336
Vested (in shares) | shares	0
Forfeited (in shares) | shares	0
Nonvested at the end of the period (in shares) | shares	76,336
Weighted-Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share) | $ / shares	$ 0
Granted (in dollars per share) | $ / shares	2.62
Vested (in dollars per share) | $ / shares	0
Forfeited (in dollars per share) | $ / shares	0
Nonvested at the end of the period (in dollars per share) | $ / shares	$ 2.62

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STOCKHOLDERS' EQUITY NARRATIVE (Details) - $ / shares	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Equity [Abstract]
Dividends declared, cash paid per share (in dollars per share)	$ 0	$ 0.015

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INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Supplemental disclosures of cash flow information:
Income taxes paid	$ 44	$ 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	(523)	(1,405)
Increase (decrease) in capital expenditure accruals related to oil and natural gas asset retirement obligations	$ 115	$ 150

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RELATED PARTY TRANSACTIONS (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) lot	Dec. 31, 2022 USD ($) lot
Kaupulehu Developments
Related party transactions
Revenues - sale of interest in leasehold land	$ 0	$ 265
Kaupulehu Developments | KD Kaupulehu, LLLP | Increment I
Related party transactions
Number of single family lots sold | lot	0	1
Revenues - sale of interest in leasehold land		$ 265
KD Acquisition, LLLP
Related party transactions
Ownership interest acquired	19.60%
KD Acquisition II, LP | Barnwell Industries Inc
Related party transactions
Ownership interest acquired	10.80%