SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED)

12 Months Ended

Sep. 30, 2012

SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED)

SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED)

20.SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED)

The following tables summarize information relative to Barnwell’s oil and natural gas operations, which are conducted in Canada.  Proved reserves are the estimated quantities of oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.  Proved producing oil and natural gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.  The estimated net interests in total proved and proved producing reserves are based upon subjective engineering judgments and may be affected by the limitations inherent in such estimations.  The process of estimating reserves is subject to continual revision as additional information becomes available as a result of drilling, testing, reservoir studies and production history.  There can be no assurance that such estimates will not be materially revised in subsequent periods.

(A)Oil and Natural Gas Reserves

The following table summarizes changes in the estimates of Barnwell’s net interests in total proved developed reserves of oil and natural gas liquids and natural gas, which are all in Canada.  The Company has no proved undeveloped reserves.  All of the information regarding reserves in this Form 10-K is derived from the report of our independent petroleum reserve engineers, InSite, and is included as an Exhibit to this Form 10-K.

	OIL & NGL			GAS			Total
	(Bbls)			(Mcf)			(Boe)
Proved reserves:
Balance at September 30, 2010		1,272,000			17,867,000			4,353,000
Revisions of previous estimates		42,000			(298,000)			(10,000)
Extensions, discoveries and other additions		120,000			324,000			176,000
Less production		(250,000	)		(2,950,000	)		(759,000	)
Balance at September 30, 2011		1,184,000			14,943,000			3,760,000
Revisions of previous estimates		97,000			(1,121,000	)		(96,000	)
Extensions, discoveries and other additions		56,000			40,000			63,000
Less production		(259,000	)		(2,753,000	)		(734,000	)
Balance at September 30, 2012		1,078,000			11,109,000			2,993,000

(B)Capitalized Costs Relating to Oil and Natural Gas Producing Activities

All capitalized costs relating to oil and natural gas producing activities, which were being depleted in all years, are summarized as follows:

	September 30,
		2012		2011
Proved properties		$	238,788,000	$	220,362,000
Unproved properties		3,645,000		4,490,000
Total capitalized costs		242,433,000		224,852,000
Accumulated depletion and depreciation		198,768,000		175,715,000
Net capitalized costs		$	43,665,000	$	49,137,000

(C)Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development

	Year ended September 30,
	2012		2011
Acquisition of properties:
Unproved	$	496,000	$	1,455,000
Proved	-		-
Exploration costs	1,778,000		2,253,000
Development costs	2,641,000		9,591,000
Total	$	4,915,000	$	13,299,000

(D)Results of Operations for Oil and Natural Gas Producing Activities

	Year ended September 30,
	2012			2011
Net revenues	$	24,610,000		$	28,804,000
Production costs	10,445,000			11,404,000
Depletion	10,367,000			9,469,000
Reduction of carrying value of oil and natural gas properties	2,551,000			-
Pre-tax results of operations*	1,247,000			7,931,000
Estimated income tax expense	(387,000		)	(2,459,000		)
Results of operations*	$	860,000		$	5,472,000

*   Before general and administrative expenses, interest expense, and foreign exchange gains and losses.

(E)Standardized Measure, Including Year-to-Year Changes Therein, of Estimated Discounted Future Net Cash Flows

The following tables utilize reserve and production data estimated by independent petroleum reserve engineers.  The information may be useful for certain comparison purposes but should not be solely relied upon in evaluating Barnwell or its performance.  Moreover, the projections should not be construed as realistic estimates of future cash flows, nor should the standardized measure be viewed as representing current value.

The estimated future cash flows at September 30, 2012 and 2011 were based on weighted average sales prices, based upon the average of the price in effect on the first day of the month for the preceding twelve month period in accordance with SEC Release No. 33-8995.  The future production and development costs represent the estimated future expenditures that we will incur to develop and produce the proved reserves, assuming continuation of existing economic conditions.  The future income tax expenses were computed by applying statutory income tax rates in existence at September 30, 2012 and 2011 to the future pre-tax net cash flows relating to proved reserves, net of the tax basis of the properties involved.

Material revisions to reserve estimates may occur in the future, development and production of the oil and natural gas reserves may not occur in the periods assumed and actual prices realized and actual costs incurred are expected to vary significantly from those used.  Management does not rely upon this information in making investment and operating decisions; rather, those decisions are based upon a wide range of factors, including estimates of probable reserves as well as proved reserves and price and cost assumptions different than those reflected herein.

Standardized Measure of Discounted Future Net Cash Flows

	September 30,
	2012			2011
Future cash inflows	$	109,253,000		$	142,198,000
Future production costs	(51,603,000		)	(61,271,000		)
Future development costs	(2,044,000		)	(2,428,000		)
Future income tax expenses	(8,260,000		)	(13,839,000		)
Future net cash flows	47,346,000			64,660,000
10% annual discount for timing of cash flows	(12,056,000		)	(16,101,000		)
Standardized measure of discounted future net cash flows	$	35,290,000		$	48,559,000

Changes in the Standardized Measure of Discounted Future Net Cash Flows

	Year ended September 30,
	2012			2011
Beginning of year	$	48,559,000		$	49,626,000
Sales of oil and natural gas produced, net of production costs	(14,165,000		)	(17,400,000		)
Net changes in prices and production costs, net of royalties and wellhead taxes	(17,851,000		)	2,461,000
Extensions and discoveries	2,312,000			4,407,000
Revisions of previous quantity estimates	4,084,000			2,030,000
Net change in income taxes	5,171,000			479,000
Accretion of discount	5,129,000			4,919,000
Other - changes in the timing of future production and other	(307,000		)	1,578,000
Other - net change in Canadian dollar translation rate	2,358,000			459,000
Net change	(13,269,000		)	(1,067,000		)
End of year	$	35,290,000		$	48,559,000