OIL AND NATURAL GAS PROPERTIES

6 Months Ended

Mar. 31, 2013

OIL AND NATURAL GAS PROPERTIES

OIL AND NATURAL GAS PROPERTIES

13.       OIL AND NATURAL GAS PROPERTIES

Under the full cost method of accounting, the Company performs quarterly ceiling test calculations. Barnwell’s net capitalized costs exceeded the ceiling limitation at March 31, 2013. As such, Barnwell reduced the carrying value of its oil and natural gas properties by $2,179,000 during the three months ended March 31, 2013. The current quarter’s reduction of the carrying value of oil and natural gas properties combined with the first quarter’s reduction of $2,327,000 resulted in a reduction of $4,506,000 for the six months ended March 31, 2013. No such reduction was necessary during the three and six months ended March 31, 2012. The reduction is included in the Condensed Consolidated Statements of Operations under the caption “Reduction of carrying value of assets.”