Barnwell Industry (BRN)

[OilStockReport]

Agreed its one I am holding long term. Results are favorable and should help sustain the deal here.

Summary

Net earnings attributable to Barnwell for the three months ended December 31, 2010 totaled $1,085,000, an $867,000 decrease from net earnings of $1,952,000 for the three months ended December 31, 2009. This decrease was largely attributable to the following items:

· Oil and natural gas operating profits before income taxes decreased $1,020,000. 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 quarter ended December 31, 2009 included $220,000 related to the operations of this well; there were no such revenues during the quarter ended December 31, 2010. Also contributing to the decrease was an increase in operating expenses as a result of an increase in workovers and repairs;

· Land investment segment revenues decreased $527,000 due to decreased receipts of percentage of sales payments resulting from a decrease in sales of residential lots by the developer of the project;

· A $484,000 decrease in contract drilling operating profits before income taxes due to a decrease in well drilling activity; and

· The prior year period included a $1,252,000 current income tax benefit from legislation which expanded the number of years Barnwell can carry back U.S. federal income tax losses.

The decreases in earnings above were partially offset by the fact that land investment operating profits before income taxes in the prior year quarter included a $798,000 non-cash reduction of the carrying value of Barnwell’s investment in residential parcels, whereas there was no such reduction in the current year quarter. The decrease in earnings was also partially offset by a decrease in deferred tax expense as income taxes in the prior year quarter included a significant increase in the valuation allowance for deferred tax assets.