OIL AND NATURAL GAS PROPERTIES AND ASSET RETIREMENT OBLIGATIONS

9 Months Ended

Jun. 30, 2025

Oil and Natural Gas Properties [Abstract]

OIL AND NATURAL GAS PROPERTIES

OIL AND NATURAL GAS PROPERTIES AND ASSET RETIREMENT OBLIGATIONS

Oil and Natural Gas Property Dispositions

There were no significant oil and natural gas property dispositions during the nine months ended June 30, 2025. The $282,000 of proceeds from the sale of oil and natural gas properties included in the Condensed Consolidated Statement of Cash Flows for the nine months ended June 30, 2025 represents proceeds that were credited to our cash in October 2024 from a sale of properties that closed in late September 2024.

In the quarter ended June 30, 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain natural gas and oil properties located in the Kaybob area of Alberta, Canada. The sales price per the agreement was adjusted for

customary purchase price adjustments to $441,000 in order to, among other things, reflect an economic effective date of May 1, 2024.

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. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements), 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.

During the three and nine months ended June 30, 2025, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $200,000 and $865,000, respectively.

During the three months ended June 30, 2024, the Company incurred a non-cash ceiling test impairment of $599,000, which included impairments for our U.S. and Canadian oil and natural gas properties of $112,000 and $487,000, respectively. During the nine months ended June 30, 2024, the Company incurred a non-cash ceiling test impairment of $2,276,000, which included impairments for our U.S. and Canadian oil and natural gas properties of $112,000 and $2,164,000, respectively.

As discussed above, the ceiling test uses a 12-month historical rolling average first-day-of-the-month prices. As such, declines in the 12-month historical rolling average first-day-of-the-month prices used in our ceiling test calculation in future periods could result in impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected. Based on the oil and gas prices for July 1 and August 1 of 2025, the oil prices used in the 12-month historical rolling first-day-of-the-month average for the ceiling test at September 30, 2025 are likely to be lower than at June 30, 2025. As such, we may incur a further impairment charge in the quarter ending September 30, 2025. The Company is currently unable to estimate a range of the amount of any potential future impairment write-downs as variables that impact the ceiling limitation are dependent upon actual results of activity through the end of September 2025.

Asset Retirement Obligations

In 2021 the Company entered into an agreement with Canada’s Orphan Well Association (“OWA”), where the Company was required to pay abandonment and reclamation costs for certain properties in advance through two cash deposits, one for abandonment and one for reclamation. Barnwell has provided $975,000 in cumulative cash deposits to the OWA since the program began in the fall of 2021, and any amount remaining after completion of the abandonments was to be refunded to the Company, and then upon commencement of the reclamation program a new deposit was to be made for those estimated costs. To date, the excess deposits that relate to abandonment work have not yet been refunded but have been used to fund the reclamation part of the program and the Company now estimates that a portion of the unused deposit will instead be applied to future reclamation work over the next several years. The estimated current portion of the unused deposit was $239,000 and $527,000 at June 30, 2025 and September 30, 2024, respectively, and is included in “Other current assets” on the Company’s Condensed Consolidated Balance Sheets. The non-current portion of the unused deposit of $227,000 along with $54,000 of non-current receivables at June 30, 2025, is included in “Other non-current assets” on the Company’s Condensed Consolidated Balance Sheet at June 30, 2025.