PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION

12 Months Ended

Sep. 30, 2025

PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION

PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION

Barnwell’s property and equipment is detailed as follows:


	Estimated Useful Lives	Gross Property and Equipment		Accumulated Depletion, Depreciation, Amortization, and Impairment		Net Property and Equipment
At September 30, 2025:

Proved oil and natural gas properties (full cost method)		$	74,511,000	$	(65,358,000)	$	9,153,000




Other property and equipment	3 – 10 years	500,000		(491,000)		9,000
Total		$	75,011,000	$	(65,849,000)	$	9,162,000


	Estimated Useful Lives	Gross Property and Equipment		Accumulated Depletion, Depreciation, Amortization, and Impairment		Net Property and Equipment
At September 30, 2024:

Proved oil and natural gas properties (full cost method)		$	83,557,000	$	(67,003,000)	$	16,554,000




Other property and equipment	3 – 10 years	509,000		(497,000)		12,000
Total		$	84,066,000	$	(67,500,000)	$	16,566,000

See Note 7 for discussion of acquisitions and divestitures of oil and natural gas properties in fiscal 2025 and 2024.

Asset Retirement Obligation

Barnwell recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. The following is a reconciliation of the asset retirement obligation:


	Year ended September 30,
	2025		2024
Asset retirement obligation as of beginning of year	$	8,588,000	$	9,833,000
Obligations incurred on new wells drilled or acquired	—		37,000
Liabilities associated with properties sold	(209,000)		(442,000)
Revision of estimated obligation	(694,000)		(614,000)
Accretion expense	808,000		900,000
Payments	(483,000)		(1,139,000)
Foreign currency translation adjustment	(235,000)		13,000
Asset retirement obligation as of end of year	7,775,000		8,588,000
Less current portion	(613,000)		(798,000)
Asset retirement obligation, long-term	$	7,162,000	$	7,790,000

Asset retirement obligations were reduced by $209,000 and $442,000 in fiscal 2025 and 2024, respectively, for those obligations that were assumed by purchasers of Barnwell's oil and natural gas properties (see Note 7 for additional details on dispositions). Asset retirement obligations were also reduced by $694,000 and $614,000 in fiscal 2025 and 2024, respectively, primarily due to revisions related to the estimated timing of future abandonments. Asset retirement obligations also increased by nil and $37,000 in fiscal 2025 and 2024, respectively, due primarily to our wells drilled and acquisitions. The asset retirement obligation reflects the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with Barnwell's oil and natural gas properties. Barnwell estimates the ultimate productive life of the properties, a credit-adjusted risk-free rate, and an inflation factor in order to determine the current present value of this obligation. The credit-adjusted risk-free rate for the entire asset retirement obligation is a blended rate which ranges from 6% to 13.5%.

In September 2019, the AER issued an abandonment/closure order for all wells and facilities in the Manyberries area which had been largely operated by LGX, an operating company that went into receivership in 2016. The estimated asset retirement obligation for the Company's interest in the wells and facilities in the Manyberries area is included in “Asset retirement obligation” in the Consolidated Balance Sheets.

After the abandonment/closure order was issued for Manyberries, the OWA created a WIP program for specific areas where there are a significant number of orphaned wells to abandon. The OWA has the ability and expertise to abandon wells using its internal resources and network of service providers resulting in efficiencies that companies such as Barnwell would not be able to obtain on its own. Under the WIP program, the Company would be required to provide payment for only Barnwell’s working interest share, however, all WIP’s would have to participate in the program for the OWA to begin its work. In March 2021, the Company was notified by the OWA that Barnwell’s Manyberries wells were confirmed to be in the WIP program.

Under the agreement with the OWA, the Company was required to pay the abandonment and reclamation costs in advance through a cash deposit. 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 $173,000 and $527,000 as of September 30, 2025 and 2024, respectively, and is included in “Other current assets” on the Company’s Consolidated Balance Sheets. The non-current portion of the unused deposit of $222,000 along with $61,000 of non-current receivables at September 30, 2025, is included in “Other non-current assets” on the Company’s Consolidated Balance Sheet at September 30, 2025.