Barnwell Industry (BRN)

[OilStockReport]

Summary



Net earnings attributable to Barnwell for the three months ended June 30, 2010 totaled $314,000, a $3,549,000 increase from a net loss of $3,235,000 for the three months ended June 30, 2009. This increase was largely attributable to the following items:



· The prior year period included a non-cash reduction of the carrying value of oil and natural gas properties before income taxes of $4,260,000;



· A $1,128,000 increase in land investment segment operating profits before income taxes due to increased receipts of percentage of sales payments resulting from sales of residential lots by the developer of the project;



· The current quarter includes a $306,000 share-based compensation benefit as compared to a $46,000 share-based compensation expense in the comparable prior year period; and



· A tax benefit of $213,000 related to an income tax loss carryback.



The aforementioned increases in net earnings were offset by a $583,000 decrease in contract drilling operating results for the three months ended June 30, 2010.



Net earnings attributable to Barnwell for the nine months ended June 30, 2010 totaled $3,756,000, a $23,564,000 increase from a net loss of $19,808,000 for the nine months ended June 30, 2009. This increase was largely attributable to the following items:



· The prior year period included a non-cash reduction of the carrying value of oil and natural gas properties before income taxes of $26,348,000;



· A $4,810,000 increase in land investment segment operating profits before income taxes due to increased receipts of development rights option payments attributable to the timing of receipts, and increased receipts of percentage of sales payments;



· Oil and natural gas segment operating profit (excluding the impact of the reduction in carrying value of oil and natural gas properties discussed above) increased $3,340,000 before taxes, primarily due to lower depletion expense and higher prices received for oil; and



· An approximately $1,465,000 current income tax benefit from recent legislation which expands the number of years Barnwell can carry back U.S. federal income tax losses.



In addition, during the quarter ended December 31, 2009, Barnwell was notified that a non-consent 300% penalty well, of which Barnwell is a non-operator, had reached recovery. Net earnings for the nine months ended June 30, 2010 includes $220,000 related to the operations of this well. The aforementioned increases in net earnings for the nine months ended June 30, 2010 were partially offset by a $798,000 non-cash reduction of the carrying value of Barnwell’s investment in residential parcels.