Barnwell Industries Inc. (BRN) 2023年年度報告「AMEX」.pdf

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1、UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended September 30,2023or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1

2、934Commission File Number 1-5103 BARNWELL INDUSTRIES,INC.(Exact name of registrant as specified in its charter)Delaware 72-0496921(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)1100 Alakea Street,Suite 500,Honolulu,Hawaii96813-2840(Address of princip

3、al executive offices)(Zip code)Registrants telephone number,including area code:(808)531-8400 Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.50 par valueBRNNYSE AmericanSecurities registered pursu

4、ant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes NoIndicate by

5、check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requiremen

6、ts for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant w

7、as required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growthcompany.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller report

8、ing company”and emerging growth company in Rule 12b-2 of the ExchangeAct.Large accelerated filer Accelerated filerNon-accelerated filer Smaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transitio

9、n period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the Registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over finan

10、cialreporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant inc

11、luded in the filing reflect thecorrection of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of theregistrants executive officers during

12、 the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes NoThe aggregate market value of the voting common stock held by non-affiliates of the registrant,computed by reference to the closing price

13、 of a share of common stock onMarch 31,2023(the last business day of the registrants most recently completed second fiscal quarter)was$10,251,000.As of December 12,2023 there were 10,000,106 shares of common stock outstanding.Documents Incorporated by Reference1.Proxy statement,to be forwarded to st

14、ockholders on or about January 12,2024,is incorporated by reference in Part III hereof.TABLE OF CONTENTS Page Glossary of Terms3 Discussion of Forward-Looking Statements4PART I Item 1.Business5 Item 1A.Risk Factors19 Item 1B.Unresolved Staff Comments31 Item 2.Properties31 Item 3.Legal Proceedings31

15、Item 4.Mine Safety Disclosures31 PART II Item 5.Market For Registrants Common Equity,Related Stockholder Matters and IssuerPurchases of Equity Securities32 Item 6.Reserved33 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations34 Item 7A.Quantitative and Qualita

16、tive Disclosures About Market Risk53 Item 8.Financial Statements and Supplementary Data54 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure111 Item 9A.Controls and Procedures111 Item 9B.Other Information111Item 9C.Disclosure Regarding Foreign Jurisdictions T

17、hat Prevent Inspections112 PART III Item 10.Directors,Executive Officers and Corporate Governance113 Item 11.Executive Compensation113 Item 12.Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters113 Item 13.Certain Relationships and Related Transactions,and D

18、irector Independence114 Item 14.Principal Accounting Fees and Services114 PART IV Item 15.Exhibits,Financial Statement Schedules115 Signatures118 Index to Exhibits1202GLOSSARY OF TERMSUnless otherwise indicated,all references to“dollars”in this Form 10-K are to U.S.dollars.Defined below are certain

19、terms used in this Form 10-K:Terms DefinitionsAER-Alberta Energy RegulatorARO-Asset retirement obligationASC-Accounting Standards CodificationASU-Accounting Standards UpdateBarnwell of Canada-Barnwell of Canada,LimitedBbl(s)-stock tank barrel(s)of oil equivalent to 42 U.S.gallonsBoe-barrel of oil eq

20、uivalent at the rate of 6 Mcf per Bbl of oil or NGLConsolidated Balance Sheets-The consolidated balance sheets of Barnwell Industries,Inc.and its subsidiaries.FASB-Financial Accounting Standards BoardGAAP-U.S.generally accepted accounting principlesGross-Total number of acres or wells in which Barnw

21、ell owns an interest;includes interests owned of record by Barnwelland,in addition,the portion(s)owned by others;for example,a 50%interest in a 320 acre lease represents 320gross acres and a 50%interest in a well represents 1 gross well.In the context of production volumes,grossrepresents amounts be

22、fore deduction of the royalty share due others.InSite-InSite Petroleum Consultants Ltd.KD I-KD Acquisition,LLLP,formerly known as WB KD Acquisition,LLCKD II-KD Acquisition II,LP,formerly known as WB KD Acquisition,II,LLCKD DevelopmentKD Development,LLCKD Kona-KD Kona 2013 LLLPKKM Makai-KKM Makai,LLL

23、PKukio Resort LandDevelopment Partnerships-The following partnerships in which Barnwell owns non-controlling interest:KD Kukio Resorts,LLLP(“KD Kukio Resorts”)KD Maniniowali,LLLP(“KD Maniniowali”)KD Kaupulehu,LLLP,which consists of KD I and KD II(“KDK”)LCA-Licensee Capability AssessmentLGX-LGX Oil&G

24、as Ltd.MBbls-thousands of barrels of oilMcf-one thousand cubic feet of natural gas at 14.65 pounds per square inch absolute and 60 degrees FahrenheitMcfe-Mcf equivalent at the rate of 1 Bbl=6 McfMMcf-one million cubic feet of natural gasNet-Barnwells aggregate interest in the total acres or wells;fo

25、r example,a 50%interest in a 320 acre lease represents160 net acres and a 50%interest in a well represents 0.5 net well.In the context of production volumes,netrepresents amounts after deduction of the royalty share due others.NGL(s)-natural gas liquid(s)Octavian Oil-Octavian Oil,Ltd.OWAOrphan Well

26、AssociationRyder Scott-Ryder Scott Company,L.P.SEC-United States Securities and Exchange CommissionU.S.-United StatesVIE-Variable interest entityWater Resources-Water Resources International,Inc.WIPWorking Interest Partners3CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATIONFOR THE PURPOSE

27、OF“SAFE HARBOR”PROVISIONS OF THEPRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This Form 10-K,and the documents incorporated herein by reference,contain“forward-looking statements”within themeaning of the Private Securities Litigation Reform Act of 1995(PSLRA).A forward-looking statement is one wh

28、ich is basedon current expectations of future events or conditions and does not relate to historical or current facts.These statements includevarious estimates,forecasts,projections of Barnwell Industries,Inc.s(referred to herein together with its majority-ownedsubsidiaries as“Barnwell,”“we,”“our,”“

29、us”or the“Company”)future performance,statements of Barnwells plans andobjectives and other similar statements.All such statements we make are forward-looking statements made under the safe harborof the PSLRA,except to the extent such statements relate to the operations of a partnership or limited l

30、iability company.Forward-looking statements include phrases such as“expects,”“anticipates,”“intends,”“plans,”“believes,”“predicts,”“estimates,”“assumes,”“projects,”“may,”“will,”“will be,”“should,”or similar expressions.Although Barnwell believesthat its current expectations are based on reasonable a

31、ssumptions,it cannot assure that the expectations contained in suchforward-looking statements will be achieved.Forward-looking statements involve risks,uncertainties and assumptions whichcould cause actual results to differ materially from those contained in such statements.Investors should not plac

32、e undue relianceon these forward-looking statements,as they speak only as of the date of filing of this Form 10-K,and Barnwell expresslydisclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements containedherein.Among the important factors t

33、hat could cause actual results to differ materially from those in the forward-lookingstatements are domestic and international general economic conditions,such as recessionary trends and inflation;domestic andinternational political,legislative,economic,regulatory and legal actions,including changes

34、 in the policies of the Organizationof the Petroleum Exporting Countries or other developments involving or affecting oil and natural gas producing countries;military conflict,embargoes,internal instability or actions or reactions of the governments of the U.S.and/or Canada inanticipation of or in r

35、esponse to such developments;interest costs,restrictions on production,restrictions on imports and exportsin both the U.S.and Canada,the maintenance of specified reserves,tax increases and retroactive tax claims,royalty increases,expropriation of property,cancellation of contract rights,environmenta

36、l protection controls,environmental compliancerequirements and laws pertaining to workers health and safety;the condition of Hawaiis real estate market,including the levelof real estate activity and prices,the demand for new housing and second homes on the island of Hawaii,the rate of increase inthe

37、 cost of building materials and labor,the introduction of building code modifications,changes to zoning laws,the condition ofHawaiis tourism industry and the level of confidence in Hawaiis economy;levels of land development activity in Hawaii;levelsof demand for water well drilling and pump installa

38、tion in Hawaii;the potential liability resulting from pending or futurelitigation;the Companys acquisition or disposition of assets;the effects of changed accounting rules under GAAP promulgatedby rule-setting bodies;and the factors set forth under the heading“Risk Factors”in this Form 10-K,in other

39、 portions of thisForm 10-K,in the Notes to Consolidated Financial Statements,and in other documents filed by Barnwell with the SEC.Inaddition,unpredictable or unknown factors not discussed in this report could also cause actual results to materially andadversely differ from those discussed in the fo

40、rward-looking statements.4PART I ITEM 1.BUSINESS OverviewBarnwell was incorporated in Delaware in 1956 and fiscal 2023 represented Barnwells 67th year of operations.Barnwelloperates in the following three principal business segments:Oil and Natural Gas Segment -Barnwell engages in oil and natural ga

41、s development,production,acquisitions andsales in Canada and in the U.S.states of Oklahoma and Texas.Land Investment Segment -Barnwell invests in land interests in Hawaii.Contract Drilling Segment -Barnwell provides well drilling services and water pumping system installation andrepairs in Hawaii.Oi

42、l and Natural Gas SegmentOverviewBarnwell acquires and develops crude oil and natural gas assets in the province of Alberta,Canada via two corporateentities,Barnwell of Canada and Octavian Oil.Barnwell of Canada is a U.S.incorporated company that has been active inCanada for over 50 years,primarily

43、as a non-operator participating in exploration projects operated by others.Octavian Oil is aCanadian company incorporated in 2016 to achieve growth through the acquisition and development of crude oil reserves.Additionally,through its wholly-owned subsidiaries BOK Drilling,LLC(“BOK”),established in

44、February 2021,and BarnwellTexas,LLC(“Barnwell Texas”),established in November 2022,Barnwell is involved in oil and natural gas investments inOklahoma and Texas,respectively.StrategyBarnwells Canadian oil and natural gas assets are currently managed as two categories based on their differing attribut

45、esand strategies:Twining and Legacy.Twining represents 73%of Barnwells fiscal 2023 Boe production and consists of assets in the Twining field,in Alberta,Canada.These assets were purchased in August 2018 and were augmented with subsequent smaller acquisitions of partners.These assets are partially op

46、erated by the Company and partially operated by Pine Cliff Energy Ltd.The oil wells operated by theCompany have largely less than 15%per year decline rates,and due to these lower decline rates,require less capital investmentto replace decline.This lower capital requirement along with the fact that t

47、he land is largely held indefinitely,enablesdevelopment drilling to be done when commodity prices support it.Since Barnwells entry into the Twining property,we haveparticipated in drilling 11 gross horizontal development wells that were completed with multi-stage sand fracs,all of which havebeen or

48、are forecast to be profitable.Of these 11 wells,two are 100%-owned operated wells in locations selected by Barnwell andnine gross(2.6 net)are non-operated wells.Barnwell plans to continue to develop the pool with more horizontal wells ifcommodity prices continue to support their profitability.5The L

49、egacy assets represent 8%of Barnwells fiscal 2023 Boe production and consist of the largely non-operatedCanadian oil and natural gas assets not in the Twining area.The Legacy assets are located throughout Alberta,Canada,andproduce shallow gas and conventional oil from a variety of pools.These assets

50、 have been accumulated over decades of Barnwellactivity.Barnwell continues to evaluate opportunities to either divest the legacy Canadian assets or add to them through acquiringworking interests depending on technical and economic evaluations.Minimal capital is expected to be invested in theseproper

51、ties.In Oklahoma,which produced 9%of Barnwells fiscal 2023 Boe production,the Company has non-operated workinginterests in seven wells varying from 1.2%to 4.2%and a minor overriding royalty interest,0.07%,in one well.In December 2022,the Company entered into a purchase and sale agreement with an ind

52、ependent third party to acquire a22.3%non-operated working interest in oil and natural gas leasehold acreage in the Permian Basin in Texas.In connection withthe purchase of such leasehold interests,Barnwell acquired a 15.4%non-operated working interest in two oil wells in theWolfcamp Formation in Lo

53、ving and Ward Counties,Texas.Two gross(0.3 net)wells were drilled and began producing in lateApril 2023.Additional drilling opportunities in the U.S.are being investigated.These wells produced 10%of Barnwells fiscal2023 Boe production,but were only producing for five months.OperationsAll acquisition

54、s,operational and developmental activities in the Twining area are the responsibility of the President andChief Operating Officer of Barnwell of Canada and Octavian Oil with approvals for major expenditures secured from Barnwellsexecutive management and,when applicable,the Board of Directors.Our oil

55、 and natural gas segment revenues,profitability,and future rate of growth are dependent upon oil and natural gasprices and the Companys ability to use its current cash,obtain external financing or generate sufficient cash flows to fund thedevelopment of our reserves.In the recent past,the industry e

56、xperienced a period of low oil and natural gas prices that negativelyimpacted our past operating results,cash flows and liquidity.Credit and capital markets for oil and natural gas markets arevolatile.We may seek to raise additional capital if such proceeds are considered attractive and would suppor

57、t potential growth.Natural gas prices are typically higher in the winter than at other times due to increased heating demand.Oil prices alsoare subject to seasonal fluctuations,but to a lesser degree.Oil and natural gas unit sales are based on the quantity produced fromthe properties by the respecti

58、ve property operators.Prices received in Canada also have been negatively impacted by the lack ofexport pipeline capacity.Preparation of Reserve EstimatesBarnwells reserves are estimated by our independent petroleum reserve engineers,InSite Petroleum Consultants Ltd.(“InSite”)in Canada and Ryder Sco

59、tt Company,L.P.(“Ryder Scott”)in the U.S.,in accordance with generally acceptedpetroleum engineering and evaluation principles and techniques and rules and regulations of the SEC.All information withrespect to the Companys Canadian reserves in this Form 10-K is derived from the report of InSite,whic

60、h is filed with thisForm 10-K as Exhibit 99.1.All information with respect to the Companys U.S.reserves in this Form 10-K is derived from thereports of Ryder Scott,which are filed with this Form 10-K as Exhibits 99.2 and 99.3.6 The preparation of data used by the independent petroleum reserve engine

61、ers to compile our oil and natural gas reserveestimates was completed in accordance with various internal control procedures which include verification of data input intoreserves evaluation software,reconciliations and reviews of data provided to the independent petroleum reserve engineers toensure

62、completeness,and management review controls,including an independent internal review of the final reserve report forcompleteness and accuracy.Barnwell has a Reserves Committee consisting of two independent directors and Barnwells CEO.The ReservesCommittee was established to ensure the independence o

63、f the Companys petroleum reserve engineers.The Reserves Committeeis responsible for reviewing the annual reserve evaluation reports prepared by the independent petroleum reserve engineeringfirms and ensuring that the reserves are reported fairly in a manner consistent with applicable standards.The R

64、eserves Committeemeets annually to discuss reserve issues and policies and to meet with Company personnel and the independent petroleum reserveengineers.The President and Chief Operating Officer of Barnwell of Canada and Octavian Oil is a professional engineer with over25 years of relevant experienc

65、e in the oil and natural gas industry in Canada and is a member of the Association of ProfessionalEngineers and Geoscientists of Alberta.ReservesAt September 30,2023,Barnwells reserves were approximately 43%operated and consisted of 52%conventional oil andnatural gas liquids and 48%natural gas.At Se

66、ptember 30,2022,Barnwells reserves were approximately 54%operated andconsisted of 56%conventional oil and natural gas liquids and 44%natural gas.This change in reserves was largely due to ourTexas investment in two non-operated wells.The amounts set forth in the following table,based on our independ

67、ent reserve engineers evaluation of our reserves,summarize our estimated proved reserves of oil(including natural gas liquids)and natural gas as of September 30,2023 for allproperties located in Canada and the U.S.in which Barnwell has an interest.All of our oil and natural gas reserves are based on

68、constant dollar price and cost assumptions.The Company emphasizes that reserve estimates are inherently imprecise and thatestimates of new discoveries and undeveloped locations are more imprecise than estimates of established proved producing oiland natural gas properties.Accordingly,these estimates

69、 are expected to change as future information becomes available.Provedoil and natural gas reserves are the estimated quantities of oil and natural gas that geological and engineering data demonstrate,with reasonable certainty,to be recoverable in future years from known reservoirs under economic and

70、 operating conditions(i.e.,prices and costs)existing at the time the estimate is made.Proved developed oil and natural gas reserves are proved reserves thatcan be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at thetime the estimate

71、s were made.No estimates of total proved net oil or natural gas reserves have been filed with,or included inreports to,any federal authority or agency,other than the SEC,since October 1,2022.7As of September 30,2023Estimated NetProved DevelopedReservesEstimated NetProved UndevelopedReservesEstimated

72、 NetProved ReservesOil,including natural gas liquids(Bbls)1,116,000 110,000 1,226,000 Natural gas(Mcf)6,093,000 608,000 6,701,000 Total(Boe)2,132,000 211,000 2,343,000 During fiscal 2023,Barnwells total net proved developed reserves of oil and natural gas liquids increased by 70,000 Bbls(7%)and tota

73、l net proved developed reserves of natural gas increased by 1,236,000 Mcf(25%),for a combined increase of249,000 Boe(13%).The increase in natural gas reserves were primarily the result of the wells drilled in Texas and Canada in thecurrent year.The following table sets forth Barnwells oil and natura

74、l gas net reserves at September 30,2023,by location and propertyname,based on information prepared by our independent reserve engineers,as well as net production and net revenues bylocation and property name for the year ended September 30,2023.The reserve data in this table is based on constant dol

75、larswhere reserve estimates are based on sales prices,costs and statutory tax rates using a historical average price of the first daypricing of the last 12-months ending with September 2023.As of September 30,2023For the year ended September 30,2023Net Proved ProducingReservesNet Proved ReservesNet

76、ProductionNet RevenuesProperty NameOil&NGL(MBbls)Gas(MMcf)Oil&NGL(MBbls)Gas(MMcf)Oil&NGL(MBbls)Gas(MMcf)Oil&NGLGasCanada:Twining656 3,024 813 3,882 192 902$12,605,000$2,581,000 Bonanza/Balsam27 24 27 24 4 15 265,000 30,000 Kaybob22 101 22 101 3 14 211,000 42,000 Medicine River58 623 58 623 5 20 216,

77、000 50,000 Thornbury 287 344 52 136,000 Wood River17 33 17 33 6 9 436,000 32,000 Other properties 4 3 11 2,000 24,000 United States:Oklahoma116 734 116 734 22 119 1,037,000 355,000 Texas173 957 173 957 24 121 1,163,000 191,000 Total1,069 5,787 1,226 6,701 256 1,263$15,935,000$3,441,000 Net proved re

78、serves that are attributable to existing producing wells are primarily determined using decline curve analysisand rate transient analysis,which incorporates the principles of hydrocarbon flow.Net proved reserves attributable to producingwells with limited production history and for undeveloped locat

79、ions are estimated using performance from analogous wells in thesurrounding area and geologic data to assess the reservoir continuity.Technologies relied on to establish reasonable certainty ofeconomic producibility include electrical logs,radioactivity logs,core analyses,geologic maps and available

80、 production data,seismic data and well test data.8Standardized Measure of Discounted Future Net Cash FlowsThe following table sets forth Barnwells“Estimated Future Net Revenues”from total proved oil,natural gas and naturalgas liquids reserves located in Canada and the U.S.and the present value of Ba

81、rnwells“Estimated Future Net Revenues”(discounted at 10%)as of September 30,2023.Estimated future net revenues for total proved reserves are net of estimated futureexpenditures of developing and producing the proved reserves,and assume the continuation of existing economic conditions.Netrevenues hav

82、e been calculated using the average first-day-of-the-month price during the 12-month period ending as of thebalance sheet date and current costs,after deducting all royalties,operating costs,future estimated capital expenditures(includingabandonment costs),and income taxes.The amounts below include

83、future cash flows from reserves that are currently provedundeveloped reserves and do not deduct general and administrative or interest expenses.Year ending September 30,2024$7,993,000 20255,654,000 20263,900,000 Thereafter2,413,000 Undiscounted future net cash flows,after income taxes$19,960,000 Sta

84、ndardized measure of discounted future net cash flows$19,913,000*_*This amount does not purport to represent,nor should it be interpreted as,the fair value of Barnwells oil and natural gas reserves.An estimate of fair value would alsoconsider,among other items,the value of Barnwells undeveloped land

85、 position,the recovery of reserves not presently classified as proved,anticipated future changes in oiland natural gas prices(these amounts were based on a natural gas price of$2.54 per Mcf and an oil price of$69.66 per Bbl)and costs,and a discount factor morerepresentative of the time value of mone

86、y and the risks inherent in reserve estimates.Barnwell has included all abandonment,decommissioning and reclamation costs and inactive well costs into theCompanys reserve reports in accordance with best practice recommendations.Oil and Natural Gas ProductionThe following table summarizes(a)Barnwells

87、 net production for the last three fiscal years,based on sales of natural gas,oil and natural gas liquids,from all wells in which Barnwell has or had an interest,and(b)the average sales prices and averageproduction costs for such production during the same periods.Production amounts reported are net

88、 of royalties.All of Barnwellsnet production in fiscal 2023 was derived in Alberta,Canada and in the U.S.states of Oklahoma and Texas.Barnwells netproduction in fiscal 2022 and 2021 was derived in Alberta,Canada and in Oklahoma.For a discussion regarding our total annualproduction volumes,average sa

89、les prices,and related production costs,see Item 7,“Managements Discussion and Analysis ofFinancial Condition and Results of Operations.”9 Year ended September 30,202320222021Annual net production:Natural gas(Mcf)1,263,000 964,000 694,000 Oil(Bbls)204,000 182,000 147,000 Natural gas liquids(Bbls)52,

90、000 48,000 24,000 Total(Boe)467,000 396,000 291,000 Total(Mcfe)2,799,000 2,296,000 1,685,000 Annual average sales price per unit of production:Mcf of natural gas*$2.64$4.63$2.62Bbl of oil*$69.77$86.73$51.74Bbl of natural gas liquids*$32.24$48.06$31.92Annual average production cost per Boe produced*$

91、22.10$23.66$22.40Annual average production cost per Mcfe produced*$3.68$4.08$3.86_*Calculated on revenues net of pipeline charges before royalty expense divided by gross production.*Calculated on revenues before royalty expense divided by gross production.*Calculated on production costs,excluding na

92、tural gas pipeline charges,divided by the combined total production of natural gas liquids,oil and natural gas.Capital Expenditures and AcquisitionsBarnwell invested$10,729,000 in oil and natural gas properties during fiscal 2023,including accrued capital expendituresand acquisitions of oil and natu

93、ral gas properties and excluding additions and revisions to estimated asset retirement obligations.Barnwells capital expenditures were primarily for the drilling of new wells in Texas and the Twining area.Barnwell invested$11,052,000 in oil and natural gas properties during fiscal 2022,including acc

94、rued capital expendituresand acquisitions of oil and natural gas properties and excluding additions and revisions to estimated asset retirement obligations.Barnwells capital expenditures were primarily for the drilling of wells in the Twining area,for facilities expansion and upgradecosts in the Twi

95、ning area and the acquisition of additional working interests in several wells in the Twining area.Well Drilling ActivitiesThe Company participated in the drilling of three gross(0.9 net)non-operated development wells in the Twining area ofAlberta,Canada during the year ended September 30,2023.Total

96、 capital expenditures for the year ended September 30,2023totaled approximately$4,770,000 and included the drilling,completion and equipping of the three gross(0.9 net)wells alongwith various upgrades to the Twining facilities.Additionally,the Company participated in the drilling of two gross(0.3 ne

97、t)non-operated development oil wells in Texas which began producing in late April 2023.Capital expenditures incurred for the drillingof these two wells totaled approximately$4,293,00 during the year ended September 30,2023.The Company did not drill orparticipate in the drilling of wells in Oklahoma

98、during the year ended September 30,2023.In fiscal 2022,the Company participated in the drilling of six gross(1.7 net)non-operated development wells in theTwining area.Capital expenditures incurred by the Company for these non-operated development wells totaled$4,366,000 forthe year ended September 3

99、0,2022.Five gross(1.410net)wells were producing at September 30,2022 and the remaining one gross(0.3 net)well was awaiting tie-in and startedproducing in fiscal 2023.The Company drilled one gross(1.0 net)operated development well in the Twining area which wasproducing at September 30,2022.Capital ex

100、penditures incurred by the Company for this operated well was$2,852,000.TheCompany did not drill or participate in the drilling of wells in Oklahoma during the year ended September 30,2022.In fiscal 2021,the Company participated in the drilling of seven gross(0.2 net)non-operated development wells i

101、nOklahoma.Capital expenditures incurred by the Company for these Oklahoma wells totaled$1,178,000 for the year endedSeptember 30,2021.The Company did not drill or participate in the drilling of wells in Canada during the year ended September30,2021.Producing WellsAs of September 30,2023,Barnwell has

102、 interests in 145 gross(65.7 net)producing wells in Alberta,Canada,of which 95gross(59.3 net)were oil wells and 50 gross(6.4 net)were natural gas wells.Additionally,Barnwell has interests in seven gross(0.2 net)and two gross(0.3 net)producing oil wells in Oklahoma and Texas,respectively,as of Septem

103、ber 30,2023.Developed Acreage and Undeveloped AcreageThe following table sets forth the gross and net acres of both developed and undeveloped oil and natural gas leases inCanada which Barnwell held as of September 30,2023.The acreage of developed and undeveloped oil and natural gas leases inthe U.S.

104、are not significant and are therefore not included in the table below.Developed Acreage*Undeveloped Acreage*TotalLocationGrossNetGrossNetGrossNetCanada136,22033,98027,1108,710163,33042,690_*“Developed Acreage”includes the acres covered by leases upon which there are one or more producing wells.“Unde

105、veloped Acreage”includes acres covered by leasesupon which there are no producing wells and which are maintained by the payment of delay rentals or the commencement of drilling thereon.Eighty-three percent of Barnwells undeveloped acreage is not subject to expiration at September 30,2023.Seventeenpe

106、rcent of Barnwells leasehold interests in undeveloped acreage is subject to expiration and may expire over the next five fiscalyears,if not developed,as follows:6%expire during fiscal 2024;no expirations during fiscal 2025;2%expire during fiscal 2026;5%expire during fiscal 2027;and 4%expire during f

107、iscal 2028.There can be no assurance that Barnwell will be successful inrenewing its leasehold interests in the event of expiration.Barnwells undeveloped acreage includes a significant concentration in the Twining area(4,040 net acres).The remainingundeveloped acreage is at non-operated properties o

108、ver which we do not have control,and the value of such acreage is notestimated to be significant at current commodity prices.Marketing of Oil and Natural Gas Barnwell sells its Canadian oil,natural gas,and natural gas liquids production,including under short-term contractsbetween itself and two main

109、 oil purchasers,one natural gas purchaser,and one natural gas liquids purchaser.The prices receivedare freely negotiated between buyers and sellers and are11determined from transparent posted prices adjusted for quality and transportation differentials.In fiscal 2023,95%of BarnwellsCanadian oil and

110、natural gas revenues were from products sold at spot prices.In November 2023,to provide partial protection against the risk of declining natural gas prices during the second half ofour fiscal 2024,the Company amended certain of its Canadian purchase and sales contracts to change the sales price on a

111、 portionof the natural gas it sells to a fixed price during the period from April 1,2024 to October 31,2024.With these changes,theCompany anticipates that during that period approximately 25%of its Canadian natural gas production will be sold at fixedprices while the remaining 75%of such production

112、will continue to be sold at spot prices.Additionally,in December 2023,the Company amended certain of its Canadian purchase and sales contract to change thesales price on a portion of the oil it sells to a fixed price during the period from January 1,2024 to June 30,2024.With thesechanges,the Company

113、 anticipates that during that period approximately 40%of its Canadian oil production will be sold at fixedprices while the remaining 60%of such production will continue to be sold at spot prices.In fiscal 2023 and 2022,Barnwell took most of its Canadian oil,natural gas liquids and natural gas“in kin

114、d”whereBarnwell markets the products instead of having the operator of a producing property market the products on Barnwells behalf.We sell oil,natural gas and natural gas liquids to a variety of energy marketing companies.Because our products are commoditiesfor which there are numerous marketers,we

115、 are not dependent upon one purchaser or a small group of purchasers.Accordingly,the loss of any single purchaser would not materially affect our revenues.Governmental RegulationThe jurisdictions in which the oil and natural gas properties of Barnwell are located have regulatory provisions relating

116、topermits for the drilling of wells,the spacing of wells,the prevention of oil and natural gas waste,allowable rates of production,environmental protection,and other matters.The amount of oil and natural gas produced is subject to control by regulatoryagencies in each province.The province of Albert

117、a and the Government of Canada also monitor the volume of natural gas thatmay be removed from the province and the conditions of removal;currently all our Canadian natural gas is sold within Alberta.All of Barnwells Canadian gross revenues were derived from properties located within Alberta,which ch

118、arges oil andnatural gas producers a royalty for production within the province.Provincial royalties are calculated as a percentage of revenueand vary depending on production volumes,selling prices and the date of discovery.Barnwell also pays gross overriding royaltiesand leasehold royalties on a po

119、rtion of its oil and natural gas sales to parties other than the province of Alberta.Under the current royalty framework for newly drilled wells,the same royalty calculation applies to both oil and naturalgas wells and royalties are determined on a revenue minus cost basis where producers pay a flat

120、 royalty rate of 5%of grossrevenues until a well reaches payout after which an increased post-payout royalty applies.Post payout royalties vary withcommodity prices and well production rates.In fiscal 2023,76%of Canadian royalties were related to Alberta government charges and 24%of royalties were r

121、elatedto freehold,overriding royalties and other charges.12In fiscal 2023,the weighted-average royalty rate paid on all of Barnwells Canadian natural gas was 10%,and theweighted-average royalty rate paid on oil was 17%.In fiscal 2023,the weighted-average royalty rate paid on all of Oklahomasand Texa

122、ss production was 23%and 26%,respectively.In June 2021,the AER announced that the previous Licensee Liability Program(“LLP”)would be replaced by a LicenseeLife-Cycle Management Program via a Licensee Capability Assessment(“LCA”).The LCA is intended to be a morecomprehensive assessment of corporate h

123、ealth and considers a wider variety of factors than those considered under the LLP andestablishes clear expectations for industry with regards to the management of liabilities throughout the entire lifecycle of oil andgas projects.Factors considered are grouped into six factor groups,these being cur

124、rent financial distress,liability magnitude,resources lifespan,operations compliance,closure efficiency,and administrative compliance.These factors are compared to peeroperators and ranked into three“Tiers.”Barnwells assessment under the LCA Program is currently favorable with Tier 1 or 2overall ran

125、kings in the six factor groups.Barnwell believes it can continue to manage its operations to maintain a favorableranking.Importantly,an inventory reduction program also has been implemented which requires mandatory annual minimumexpenditures towards outstanding decommissioning and reclamation obliga

126、tions in accordance with AER targets which areadjusted by the AER on an annual basis.The target for 2024 is 6.6%of an individual companys inactive liability.These targetsbecame effective January 1,2022.Barnwell believes the targets assessed by the AER are within estimated forecasts forBarnwells futu

127、re ARO spending and therefore the Company will be in compliance with spend targets under the InventoryReduction Program.In September 2019,the AER issued an abandonment/closure order for all wells and facilities in the Manyberries areawhich had been largely operated by LGX,an operating company that w

128、ent into receivership in 2016.The estimated assetretirement obligation for the Companys interest in the wells and facilities in the Manyberries area is included in“Assetretirement obligation”in the Consolidated Balance Sheets.After the abandonment/closure order was issued for Manyberries,the OWA cre

129、ated a Working Interest Partners(“WIP”)program for specific areas where there are a significant number of orphaned wells to abandon.The OWA has the ability andexpertise to abandon wells using its internal resources and network of service providers resulting in efficiencies that companiessuch as Barn

130、well would not be able to obtain on its own.Under the WIP program,the Company would be required to providepayment for only Barnwells working interest share,however,all WIPs would have to participate in the program for the OWA tobegin its work.In March 2021,the Company was notified by the OWA that Ba

131、rnwells Manyberries wells were confirmed to bein the WIP program.Under the agreement with the OWA,the Company is required to pay the abandonment and reclamation costs in advancethrough a cash deposit.The total cash deposit amount was calculated to be approximately$1,525,000 and the Company paid$888,

132、000 of the total deposit in July and August 2021 and may need to pay the remaining balance of$637,000 by August 2024.The Company revised its Manyberries ARO liability based on the OWAs revised abandonment and reclamation estimates.Basedon a review of the details of the cash deposit calculation provi

133、ded by the OWA,which includes amounts added for possiblecontingencies,the Company believes the required cash deposit amount by the OWA is higher than the actual costs of the assetretirement obligation for the Manyberries wells and that any excess of the deposit over actual asset retirement costs for

134、 the firstphase of the work would be credited toward the second phase of the work.A remaining excess deposit,if any,would ultimatelybe refunded to the Company upon completion of all of the work.As at September 30,2023,the Company recognized acumulative reduction in the deposit balance of$300,000 for

135、 work performed under this program.13Over the past seven years,the Company has worked to reduce its abandonment and reclamation obligations associatedwith its oil and natural gas segment,both by divesting low-productivity assets and actively closing wells and sites.Twenty-threeBarnwell-operated site

136、s have been certified as fully reclaimed or exempt since 2016.To aid in this regard,and as a stimulusresponse to the COVID-19 pandemic,the Canadian Federal Government created and funded the Alberta-administered SiteRehabilitation Program(“SRP”)in spring 2020.The SRP has been designed to reduce oil a

137、nd gas industry liabilities by fundingvendors who perform closure work.In partnership with its vendors,Barnwell-operated sites have received$388,000 in netfunding to date,to be directed to ARO reduction activities.Barnwell has further benefited from grants allocated to its non-operated property part

138、ners amounting to$120,000.CompetitionBarnwell competes in the sale of oil and natural gas on the basis of price and on the ability to deliver products.The oiland natural gas industry is intensely competitive in all phases,including the acquisition and development of new production andreserves and th

139、e acquisition of equipment and labor necessary to conduct drilling activities.The competition comes fromnumerous major oil companies as well as numerous other independent operators.There also is competition between the oil andnatural gas industry and other industries in supplying the energy and fuel

140、 requirements of industrial,commercial and individualconsumers.Barnwell is a minor participant in the industry and competes in its oil and natural gas activities with many othercompanies having far greater financial,technical and other resources.Land Investment SegmentOverviewBarnwell owns a 77.6%in

141、terest in Kaupulehu Developments,a Hawaii general partnership(“Kaupulehu Developments”)that has the right to receive payments from KD I and KD II resulting from the sale of lots and/or residential units by KD I andKD II within the approximately 870 acres of the Kaupulehu Lot 4A area in two increment

142、s(“Increment I”and“Increment II”),located approximately six miles north of the Kona International Airport in the North Kona District of the island of Hawaii.Kaupulehu Developments also holds an interest in approximately 1,000 acres of vacant leasehold land zoned conservationlocated adjacent to Lot 4

143、A under a lease that terminates in December 2025,which currently has no development potential withoutboth a development agreement with the lessor and zoning reclassification.Barnwell,through two limited liability limited partnerships,KD Kona and KKM Makai(“KKM”),holds a non-controllingownership inte

144、rest in the Kukio Resort Land Development Partnerships comprised of KD Kukio Resorts,KD Maniniowali,andKDK.The Kukio Resort Land Development Partnerships own certain real estate and development rights interests in the Kukio,Maniniowali and Kaupulehu portions of Kukio Resort,a private residential com

145、munity on the Kona coast of the island of Hawaii,as well as Kukio Resorts real estate sales office operations.KDK holds interests in KD I and KD II.KD I is the developer ofIncrement I,and KD II is the developer of Increment II.Barnwells ownership interests in the Kukio Resort Land DevelopmentPartner

146、ships are accounted for using the equity method of accounting.14OperationsIn the 1980s,Kaupulehu Developments obtained the state and county zoning changes necessary to permit development ofthe Four Seasons Resort Hualalai at Historic Kaupulehu and Hualalai Golf Club,which opened in 1996,a second gol

147、f course,and single-family and multi-family residential units.These projects were developed by an unaffiliated entity on leasehold landacquired from Kaupulehu Developments.In the 1990s and 2000s,Kaupulehu Developments obtained the state and county zoning changes necessary to permitdevelopment of sin

148、gle-family and multi-family residential units,a golf course and a limited commercial area on approximately870 leasehold acres,known as Lot 4A,zoned for resort/residential development,located adjacent to and north of the FourSeasons Resort Hualalai at Historic Kaupulehu.In 2004 and 2006,Kaupulehu Dev

149、elopments sold its leasehold interest inKaupulehu Lot 4A to KD Is and KD IIs predecessors in interest,which was prior to Barnwells affiliation with KD I and KD IIwhich commenced on November 27,2013,the acquisition date of our ownership interest in the Kukio Resort Land DevelopmentPartnerships.Increm

150、ent I is an area of 80 single-family lots,78 of which were sold from 2006 to 2023,and a beach club on the portionof the property bordering the Pacific Ocean.The purchasers of the 80 single-family lots also have the right to apply formembership in the Kukio Golf and Beach Club,which is located adjace

151、nt to and south of the Four Seasons Resort Hualalai atHistoric Kaupulehu.Increment II is the remaining portion of the approximately 870-acre property and is zoned for single-familyand multi-family residential units and a golf course and clubhouse.Two residential lots of approximately two to three ac

152、res insize fronting the ocean were developed within Increment II and sold by KD II,and the remaining acreage within Increment II isnot yet under development.It is uncertain when or if KD II will develop the other areas of Increment II,and there is no assurancewith regards to the amounts of future sa

153、les from Increments I and II.The remaining 420 developable acres at Increment II areentitled for up to 350 homesites.No definitive development plans have been made by KDII,the developer of Increment II,as ofthe date of this report.Kaupulehu Developments is entitled to receive payments from KD I base

154、d on 10%of the gross receipts from KD Is salesof single-family residential lots in Increment I.In fiscal 2023,one single-family lot was sold and two single-family lots,of the 80lots developed within Increment I,remained to be sold as of September 30,2023.The developer had consolidated these tworemai

155、ning lots into one large lot but has since split them back into the original two lots.In March 2019,KD II admitted a new development partner,Replay Kaupulehu Development,LLC(“Replay”),a partyunrelated to Barnwell,in an effort to move forward with development of the remainder of Increment II at Kaupu

156、lehu.KDK andReplay hold ownership interests of 55%and 45%,respectively,of KD II and Barnwell has a 10.8%indirect non-controllingownership interest in KD II through KDK,which is accounted for using the equity method of accounting.Barnwell continues tohave an indirect 19.6%non-controlling ownership in

157、terest in KD Kukio Resorts,KD Maniniowali,and KD I.Under the terms of the Increment II agreement with KD II,Kaupulehu Developments is entitled to 15%of thedistributions of KD II,the cost of which is to be solely borne by KDK out of its 55%ownership interest in KD II,plus a prioritypayout of 10%of KD

158、Ks cumulative net profits derived from Increment II sales subsequent to Phase 2A,up to a maximum of$3,000,000 as to the priority payout.Such interests are limited to distributions or net profits interests and Barnwell does not haveany partnership interests in KD II or KDK through its interest in Kau

159、pulehu Developments.The arrangement15also gives Barnwell rights to three single-family residential lots in Phase 2A of Increment II,and four single-family residentiallots in phases subsequent to Phase 2A when such lots are developed by KD II,all at no cost to Barnwell.Barnwell is committedto commenc

160、e construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2Aas a condition of the transfer of such lots.Also,in addition to Barnwells existing obligations to pay professional fees to certainparties based on percentages of its gross receipts,Kaup

161、ulehu Developments also is obligated to pay an amount equal to 0.72%and 0.2%of the cumulative net profits of KD II to KD Development and a pool of various individuals,respectively,all of whomare partners of KKM and are unrelated to Barnwell,in compensation for the agreement of these parties to admit

162、 the newdevelopment partner,Replay,for Increment II.Such compensation will be reflected as the obligation becomes probable and theamount of the obligation can be reasonably estimated.In fiscal 2023,the Kukio Resort Land Development Partnerships sold one lot in Increment I and as a result of the lot

163、sale,made cash distributions to its partners of which Barnwell received$758,000 resulting in a net amount of$674,000,afterdistributing$84,000 to non-controlling interests.CompetitionBarnwells land investment segment is subject to intense competition in all phases of its operations including theacqui

164、sition of new properties,the securing of approvals necessary for land rezoning,and the search for potential buyers ofproperty interests presently owned.The competition comes from numerous independent land development companies and otherindustries involved in land investment activities.The principal

165、factors affecting competition are the location of the project andpricing.Barnwell is a minor participant in the land development industry and competes in its land investment activities withmany other entities having far greater financial and other resources.Contract Drilling SegmentOverviewBarnwells

166、 wholly-owned subsidiary,Water Resources,drills water and water monitoring wells of varying depths inHawaii,installs and repairs water pumping systems,and is the distributor for Trillium Flow Technologies,previously known asFloway,pumps and equipment in the state of Hawaii.OperationsWater Resources

167、owns and operates three water well drilling rigs,two pump rigs and other ancillary drilling and pumpequipment.Additionally,Water Resources leases month-to-month a storage facility in Honolulu,Hawaii,and a one-acremaintenance and storage facility with 2,800 square feet of interior space in Kawaihae,H

168、awaii.Water Resources also maintains aninventory of uninstalled materials for jobs in progress and an inventory of drilling materials and pump supplies.Water Resources currently operates in Hawaii and is not subject to seasonal fluctuations.The demand for WaterResources services is primarily depende

169、nt upon land development activities in Hawaii.Water Resources markets its services toland developers and government agencies,and identifies potential contracts through public notices,and referrals.Contracts areusually fixed price per lineal foot drilled and are negotiated with private entities or ob

170、tained through competitive bidding withprivate entities or local,state and federal agencies.Contract revenues are not dependent upon the discovery of water or other16similar targets,and contracts are not subject to renegotiation of profits or termination at the election of the governmental entitiesi

171、nvolved.Contracts provide for arbitration in the event of disputes.In fiscal 2023,Water Resources sold a drilling rig to an independent third party for proceeds of$551,000,net of relatedcosts,and recognized a$551,000 gain on the sale of the drilling rig during the year ended September 30,2023,as the

172、 rig wasfully depreciated.In fiscal 2022,Water Resources sold a drilling rig and related ancillary equipment to an independent third partyfor proceeds of$687,000,net of related costs,which was equivalent to its net carrying value.In fiscal 2023,Water Resources started two well drilling and three pum

173、p installation and repair contracts and completedthree well drilling and nine pump installation and repair contracts.Of the three completed well drilling contracts,two werestarted in fiscal 2021 and one was started in fiscal 2022.Of the nine completed pump installation and repair contracts,one wasst

174、arted in fiscal 2015,one was started in fiscal 2017,two were started in fiscal 2021,two were started in fiscal 2022,and threewere started in the current year.Fifty-two percent of well drilling and pump installation and repair jobs,representing 8%of totalcontract drilling revenues in fiscal 2023,have

175、 been pursuant to government contracts.At September 30,2023,there was a backlog of four well drilling and seven pump installation and repair contracts,ofwhich three well drilling and four pump installation and repair contracts were in progress as of September 30,2023.The approximate dollar amount of

176、 Water Resources backlog of firm well drilling and pump installation and repaircontracts at December 1,2023 and 2022 was as follows:December 1,20232022Well drilling$5,900,000$10,000,000 Pump installation and repair900,000 1,200,000$6,800,000$11,200,000 Of the contracts in backlog at December 1,2023,

177、$6,300,000 is expected to be recognized in fiscal 2024 with theremainder to be recognized in the following fiscal year.Sale of Water ResourcesIn December 2023,the Company entered into an agreement with a construction company for the sale of Water Resourcesfor gross proceeds of$2,000,000,subject to c

178、ustomary post-closing price adjustments and the purchasers completion of duediligence.The sale is expected to close in the first half of our fiscal 2024.CompetitionWater Resources competes with other drilling contractors in Hawaii,some of which use drill rigs similar to WaterResources.These competit

179、ors also are capable of installing and repairing vertical turbine and submersible water pumpingsystems in Hawaii.These contractors compete actively with Water Resources for government and private contracts.Pricing isWater Resources major method of competition;reliability of service also is a signifi

180、cant factor.17Competitive pressures are expected to remain high,thus there is no assurance that the quantity or values of available orawarded jobs which occurred in fiscal 2023 will continue.Financial Information About Industry Segments and Geographic AreasNote 11 in the“Notes to Consolidated Financ

181、ial Statements”in Item 8 contains information on our segments andgeographic areas.EmployeesAt December 1,2023,Barnwell employed 37 individuals;36 on a full time basis and 1 on a part-time basis.Environmental CostsBarnwell is subject to extensive environmental laws and regulations.U.S.Federal and sta

182、te and Canadian Federal andprovincial governmental agencies issue rules and regulations and enforce laws to protect the environment which are oftendifficult and costly to comply with and which carry substantial penalties for failure to comply,particularly in regard to thedischarge of materials into

183、the environment.These laws,which are constantly changing,regulate the discharge of materials intothe environment and maintenance of surface conditions and may require Barnwell to remove or mitigate the environmentaleffects of the disposal or release of petroleum or chemical substances at various sit

184、es where it has a working interest.For further information on environmental remediation,see the Contingencies section included in Item 7,“ManagementsDiscussion and Analysis of Financial Condition and Results of Operations”and the notes to our consolidated financial statementsincluded in Item 8,“Fina

185、ncial Statements and Supplementary Data.”Available InformationWe maintain a website at .We make available on our website free of charge our annual reports onForm 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K,and any amendments to those reports as soon aspracticable after we electro

186、nically file such reports with,or furnish them to,the SEC.The contents of our website are not part ofthis Annual Report on Form 10-K and are not incorporated by reference into this document.Our filings with the SEC areavailable to the public through the SECs website at www.sec.gov.The Companys refer

187、ences to URLs for these websites areintended to be textual references only.18ITEM 1A.RISK FACTORS The business of Barnwell and its subsidiaries face numerous risks,including those set forth below or those describedelsewhere in this Form 10-K or in Barnwells other filings with the SEC.The risks descr

188、ibed below are not the only risks thatBarnwell faces.If any of the following risk factors should occur,our profitability,financial condition or liquidity could bematerially negatively impacted.Entity-Wide RisksStockholders may be diluted significantly through our efforts to obtain financing,satisfy

189、obligations through the issuanceof securities or use our stock as consideration in certain transactions.Our Board of Directors has authority,without action or vote of the stockholders,subject to the requirements of the NYSEAmerican and applicable law,to issue all shares of our common stock or warran

190、ts or other instruments to purchase such shares ofour common stock.In addition,we may raise capital by selling shares of our common stock,possibly at a discount to market inthe future.These actions would result in dilution of the ownership interests of existing stockholders and may further dilutecom

191、mon stock book value,and that dilution may be material.A related effect of such issuances may enhance existing largestockholders influence on the Company,including that of Alexander Kinzler,our Chief Executive Officer.A small number of stockholders,including our CEO,own a significant amount of our c

192、ommon stock and may haveinfluence over the Company.As of September 30,2023,the CEO,who is a member of the Board of Directors,and two other stockholders holdapproximately 44%of our outstanding common stock.The interests of one or more of these stockholders may not alwayscoincide with the interests of

193、 other stockholders.These stockholders have significant influence over all matters submitted to ourstockholders,including the election of our directors,and could accelerate,delay,deter or prevent a change of control of theCompany.Our operations are subject to currency rate fluctuations.Our operation

194、s are subject to fluctuations in foreign currency exchange rates between the U.S.dollar and the Canadiandollar.Our financial statements,presented in U.S.dollars,may be affected by foreign currency fluctuations through bothtranslation risk and transaction risk.Volatility in exchange rates may adverse

195、ly affect our results of operations,particularlythrough the weakening of the U.S.dollar relative to the Canadian dollar which may affect the relative prices at which we sell ouroil and natural gas and may affect the cost of certain items required in our operations.To date,we have not entered into fo

196、reigncurrency hedging transactions to control or minimize these risks.Adverse changes in actuarial assumptions used to calculate retirement plan costs due to economic or other factors,orlower returns on plan assets could adversely affect Barnwells results and financial condition.Retirement plan cash

197、 funding obligations and plan expenses and obligations are subject to a high degree of uncertaintyand could increase in future years depending on numerous factors,including the performance of the financial markets,specifically the equity markets,levels of interest rates,and the cost of health care i

198、nsurance premiums.19The price of our common stock has been volatile and could continue to fluctuate substantially.The market price of our common stock has been volatile and could fluctuate based on a variety of factors,including:fluctuations in commodity prices;variations in results of operations;an

199、nouncements by us and our competitors;legislative or regulatory changes;general trends in the industry;general market conditions;litigation;andother events applicable to our industries.Failure to retain key personnel could hurt our operations.We require highly skilled and experienced personnel to op

200、erate our business.In addition to competing in highlycompetitive industries,we compete in a highly competitive labor market.Our business could be adversely affected by an inabilityto retain personnel or upward pressure on wages as a result of the highly competitive labor market.Further,there are sig

201、nificantpersonal liability risks to Barnwell of Canadas individual officers and directors related to well clean-up costs that may affect ourability to attract or retain the necessary people.We are a smaller reporting company and benefit from certain reduced governance and disclosure requirements,inc

202、ludingthat our independent registered public accounting firm is not required to attest to the effectiveness of our internal controlover financial reporting.We cannot be certain if the omission of reduced disclosure requirements applicable to smallerreporting companies will make our common stock less

203、 attractive to investors.Currently,we are a“smaller reporting company,”meaning that our outstanding common stock held by nonaffiliates had avalue of less than$250 million at the end of our most recently completed second fiscal quarter.As a smaller reporting company,we are not required to comply with

204、 the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,meaning ourauditors are not required to attest to the effectiveness of the Companys internal control over financial reporting.As a result,investors and others may be less comfortable with the effectiveness of the Companys

205、 internal controls and the risk that materialweaknesses or other deficiencies in internal controls go undetected may increase.In addition,as a smaller reporting company,wetake advantage of our ability to provide certain other less comprehensive disclosures in our SEC filings,including,among otherthi

206、ngs,providing only two years of audited financial statements in annual reports and simplified executive compensationdisclosures.Consequently,it may be more challenging for investors to analyze our results of operations and financial prospects,as the information we provide to stockholders may be diff

207、erent from what one might receive from other public companies inwhich one hold shares.As a smaller reporting company,we are not required to provide this information.20We face various risks and uncertainties related to public health crises,including the COVID-19 pandemic.The COVID-19 pandemic and its

208、 consequences may have a material adverse effect on us.We face various risks and uncertainties related to public health crises,including the global COVID-19 pandemic,whichhas disrupted financial markets and significantly impacted worldwide economic activity.The future impact of the COVID-19pandemic

209、as well as mandatory and voluntary actions taken to mitigate the public health impact of the pandemic may have amaterial adverse effect on our financial condition.The COVID-19 pandemic and social and governmental responses to thepandemic have caused,and may continue to cause,severe economic,market a

210、nd other disruptions worldwide.Although theCOVID-19 pandemic and related societal and government responses have not,to date,had a material impact on our business orfinancial results,the extent to which COVID-19 and related actions may,in the future,impact our operations cannot be predictedwith any d

211、egree of confidence.As a result,we cannot at this time predict the direct or indirect impact on us of the COVID-19pandemic,but it could have a material adverse effect on our business,financial condition,liquidity,results of operations andprospects.Risks Related to Oil and Natural Gas Segment Acquisi

212、tions or discoveries of additional reserves are needed to increase our oil and natural gas segment operating resultsand cash flow.In August 2018,Barnwell made a significant reinvestment into its oil and natural gas segment with the acquisition of theTwining property in Alberta,Canada.The Company bel

213、ieves there are potential undeveloped reserves for which significantfuture capital expenditures will be needed to convert those potential undeveloped reserves into developed reserves.If futurecircumstances are such that we are not able to make the capital expenditures necessary to convert potential

214、undeveloped reservesto developed reserves,we will not replace the amount of reserves produced and sold and our reserves and oil and natural gassegment operating results and cash flows will decline accordingly,and we may be forced to sell some of our oil and natural gassegment assets under untimely o

215、r unfavorable terms.Any such curtailment or sale could have a material adverse effect on ourbusiness,financial condition and results of operations.Future oil and natural gas operating results and cash flow are highly dependent upon our level of success in acquiring orfinding additional reserves on a

216、n economic basis.We cannot guarantee that we will be successful in developing or acquiringadditional reserves and our current financial resources may be insufficient to make such investments.Furthermore,if oil ornatural gas prices increase,our cost for additional reserves also could increase.We may

217、not realize an adequate return on oil and natural gas investments.Drilling for oil and natural gas involves numerous risks,including the risk that we will not encounter commerciallyproductive oil or natural gas reservoirs.The wells we drill or participate in may not be productive,and we may not reco

218、ver all orany portion of our investment in those wells.If future oil and natural gas segment acquisition and development activities are notsuccessful it could have an adverse effect on our future results of operations and financial condition.21Oil and natural gas prices are highly volatile and furth

219、er declines,or extended low prices will significantly affect ourfinancial condition and results of operations.Much of our revenues and cash flow are greatly dependent upon prevailing prices for oil and natural gas.Lower oil andnatural gas prices not only decrease our revenues on a per unit basis,but

220、 also reduce the amount of oil and natural gas we canproduce economically,if any.Prices that do not produce sufficient operating margins will have a material adverse effect on ouroperations,financial condition,operating cash flows,borrowing ability,reserves,and the amount of capital that we are able

221、 toallocate for the acquisition and development of oil and natural gas reserves.Various factors beyond our control affect prices of oil and natural gas including,but not limited to,changes in supply anddemand,market uncertainty,weather,worldwide political instability,foreign supply of oil and natura

222、l gas,the level of consumerproduct demand,government regulations and taxes,the price and availability of alternative fuels and the overall economicenvironment.Energy prices also are subject to other political and regulatory actions outside our control,which may includechanges in the policies of the

223、Organization of the Petroleum Exporting Countries or other developments involving or affectingoil-producing countries,or actions or reactions of the government of the U.S.in anticipation of or in response to suchdevelopments.The inability of one or more of our working interest partners to meet their

224、 obligations may adversely affect our financialresults.For our operated properties,we pay expenses and bill our non-operating partners for their respective shares of costs.Someof our non-operating partners may experience liquidity problems and may not be able to meet their financial obligations.Nonp

225、erformance by a non-operating partner could result in significant financial losses.Liquidity problems encountered by our working interest partners or the third party operators of our non-operatedproperties also may result in significant financial losses as the other working interest partners or thir

226、d party operators may beunwilling or unable to pay their share of the costs of projects as they become due.In the event a third party operator of a non-operated property becomes insolvent,it may result in increased operating expenses and cash required for abandonment liabilitiesif the Company is req

227、uired to take over operatorship.We may incur material costs to comply with or as a result of health,safety,and environmental laws and regulations.The oil and natural gas industry is subject to extensive environmental regulation pursuant to local,provincial and federallegislation.A violation of that

228、legislation may result in the imposition of fines or the issuance of“clean up”orders.Legislationregulating the oil and natural gas industry may be changed to impose higher standards and potentially more costly obligations.Although we have recorded a provision in our financial statements relating to

229、our estimated future environmental and reclamationobligations that we believe is reasonable,we cannot guarantee that we will be able to satisfy our actual future environmental andreclamation obligations.Barnwells oil and natural gas segment is subject to the provisions of the AERs Licensee Life-Cycl

230、e ManagementProgram via a Licensee Capability Assessment(“LCA”).Under this program the AER assesses the corporate health of theCompany and considers a wider variety of factors than those considered under the previous program.The LCA establishes clearexpectations for industry with regards22to the man

231、agement of liabilities throughout the entire lifecycle of oil and gas projects.Factors considered are grouped into sixfactor groups,these being current financial distress,liability magnitude,resources lifespan,operations compliance,closureefficiency and administrative compliance.These factors are co

232、mpared to peer operators and ranked into three“Tiers”.Under theLCA Program,an inventory reduction program has also been implemented which requires mandatory annual minimumexpenditures towards outstanding decommissioning and reclamation obligations in accordance with AER targets which areadjusted by

233、the AER on an annual basis.The target for 2024 is 6.6%of an individual companys inactive liability.These targetsbecame effective January 1,2022.The AER may require purchasers of AER licensed oil and natural gas assets to be within Tiers 1 or 2 overall rankings inthe six factors group.This requiremen

234、t for well transfers hinders our ability to generate capital by selling oil and natural gasassets as there are less qualified buyers.The AER may require the Company to provide a security deposit if assessed at Tier 3.Diverting funds to the AER in thefuture would result in the diversion of cash on ha

235、nd and operating cash flows that could otherwise be used to fund oil and naturalgas reserve replacement efforts,which could in turn have a material adverse effect on our business,financial condition and resultsof operations.If Barnwell fails to comply with the requirements of the LCA program,Barnwel

236、ls oil and natural gas subsidiarywould be subject to the AERs enforcement provisions which could include suspension of operations and non-compliance feesand could ultimately result in the AER serving the Company with a closure order to shut-in all operated wells.Additionally,ifBarnwell is non-compli

237、ant,the Company would be prohibited from transferring well licenses which would prohibit us fromselling any oil and natural gas assets until the required cash deposit is made with the AER.We are not fully insured against certain environmental risks,either because such insurance is not available or b

238、ecause ofhigh premium costs.In particular,insurance against risks from environmental pollution occurring over time,as opposed tosudden and catastrophic damages,is not available on economically reasonable terms.Accordingly,any site reclamation orabandonment costs actually incurred in the ordinary cou

239、rse of business in a specific period could negatively impact our cash flow.Should we be unable to fully fund the cost of remedying an environmental problem,we might be required to suspend operationsor enter into interim compliance measures pending completion of the required remedy.We may fail to ful

240、ly identify potential problems related to acquired reserves or to properly estimate those reserves.We periodically evaluate acquisitions of reserves,properties,prospects and leaseholds and other strategic transactions thatappear to fit within our overall business strategy.Our evaluation includes an

241、assessment of reserves,future oil and natural gasprices,operating costs,potential for future drilling and production,validity of the sellers title to the properties and potentialenvironmental issues,litigation and other liabilities.In connection with these assessments,we perform a review of the subj

242、ect properties that we believe to be generallyconsistent with industry practices.Our review will not reveal all existing or potential problems nor will it permit us to becomesufficiently familiar with the properties to fully assess their deficiencies and potential recoverable reserves.Inspections ma

243、y notalways be performed on every well,and environmental problems are not necessarily observable even when an inspection isundertaken.Even when problems are identified,the seller of the properties may be unwilling or unable to provide effectivecontractual protection against all or part of the proble

244、ms.We often are not entitled to contractual23indemnification for environmental liabilities or title defects in excess of the amounts claimed by us before closing and acquireproperties on an“as is”basis.There are numerous uncertainties inherent in estimating quantities of proved oil and gas reserves

245、and future productionrates and costs with respect to acquired properties,and actual results may vary substantially from those assumed in the estimates.If oil and natural gas prices decline and remain low,we may be required to take write-downs of the carrying values of ouroil and natural gas properti

246、es.Oil and natural gas prices affect the value of our oil and natural gas properties as determined in our full cost ceilingcalculation.Any future ceiling test write-downs will result in reductions of the carrying value of our oil and natural gas propertiesand an equivalent charge to earnings.The oil

247、 and natural gas industry is highly competitive.We compete for capital,acquisitions of reserves,undeveloped lands,skilled personnel,access to drilling rigs,service rigsand other equipment,access to processing facilities,pipeline capacity and in many other respects with a substantial number ofother o

248、rganizations,most of which have greater technical and financial resources than we do.Some of these organizationsexplore for,develop and produce oil and natural gas,carry on refining operations and market oil and other products on aworldwide basis.As a result of these complementary activities,some of

249、 our competitors may have competitive resources that aregreater and more diverse than ours.Furthermore,many of our competitors may have a competitive advantage when responding tofactors that affect demand for oil and natural gas production,such as changing prices and production levels,the cost andav

250、ailability of alternative fuels and the application of government regulations.If our competitors are able to capitalize on thesecompetitive resources,it could adversely affect our revenues and profitability.An increase in operating costs greater than anticipated could have a material adverse effect

251、on our results of operationsand financial condition.Higher operating costs for our properties will directly decrease the amount of cash flow received by us.Electricity,supplies,and labor costs are a few of the operating costs that are susceptible to material fluctuation.The need for significantrepai

252、rs and maintenance of infrastructure may increase as our properties age.A significant increase in operating costs couldnegatively impact operating results and cash flow.Our operating results are affected by our ability to market the oil and natural gas that we produce.Our business depends in part up

253、on the availability,proximity and capacity of oil and natural gas gathering systems,pipelines and processing facilities.Canadian federal and provincial,as well as U.S.federal and state,regulation of oil and naturalgas production,processing and transportation,tax and energy policies,general economic

254、conditions,and changes in supply anddemand could adversely affect our ability to produce and market oil and natural gas.If market factors change and inhibit themarketing of our production,overall production or realized prices may decline.24We are not the operator and have limited influence over the

255、operations of certain of our oil and natural gas properties.We hold minority interests in certain of our oil and natural gas properties.As a result,we cannot control the pace ofexploration or development,major decisions affecting the drilling of wells,the plan for development and production at non-o

256、perated properties,or the timing and amount of costs related to abandonment and reclamation activities although contractprovisions give Barnwell certain consent rights in some matters.The operators influence over these matters can affect the pace atwhich we incur capital expenditures.Additionally,as

257、 certain underlying joint venture data is not accessible to us,we depend onthe operators at non-operated properties to provide us with reliable accounting information.We also depend on operators andjoint operators to maintain the financial resources to fund their share of all abandonment and reclama

258、tion costs.Actual reserves will vary from reserve estimates.Estimating reserves is inherently uncertain and the reserves estimation process involves significant decisions andassumptions in the evaluation of available geological,geophysical,engineering and economic data.The reserve data andstandardiz

259、ed measures set forth herein are only estimates.Ultimately,actual reserves attributable to our properties will vary fromestimates,and those variations may be material.The estimation of reserves involves a number of factors and assumptions,including,among others:oil and natural gas prices as prescrib

260、ed by SEC regulations;historical production from our wells compared with production rates from similar producing wells in the area;future commodity prices,production and development costs,royalties and capital expenditures;initial production rates;production decline rates;ultimate recovery of reserv

261、es;success of future development activities;marketability of production;effects of government regulation;andother government levies that may be imposed over the producing life of reserves.If these factors,assumptions and prices prove to be inaccurate,actual results may vary materially from reserve e

262、stimates.Part of our strategy involves using some of the latest available horizontal drilling and completion techniques.The resultsof our drilling are subject to drilling and completion technique risks,and results may not meet our expectations forreserves or production.Many of our operations involve

263、,and are planned to utilize,the latest drilling and completion techniques as developed by ourservice providers in order to maximize production and ultimate recoveries and therefore generate the highest possible returns.Risks we face while completing our wells include,but are not limited to,the inabi

264、lity to fracture the planned number of stages,the inability to run tools and other equipment the entire length of the well bore during completion operations,the inability torecover such tools and other equipment,and the inability to successfully clean out the well bore after completion of the finalf

265、racture stimulation.Ultimately,the success of these drilling and completion techniques can only be evaluated over time as morewells are drilled and production profiles are established over a sufficiently25long time period.If our drilling results are less than anticipated or we are unable to execute

266、our drilling program because ofcapital constraints,lease expirations,limited access to gathering systems and takeaway capacity,and/or prices for crude oil,natural gas,and natural gas liquids decline,then the return on our investment for a particular project may not be as attractive aswe anticipated

267、and we could incur material write-downs of oil and gas properties and the value of our undeveloped acreage coulddecline in the future.Production and reserves,if any,attributable to the use of enhanced recovery methods are inherently difficult to predict.If ourenhanced recovery methods do not allow f

268、or the extraction of crude oil,natural gas,and associated liquids in a manner or to theextent that we anticipate,we may not realize an acceptable return on our investments in such projects.Delays in business operations could adversely affect the amount and timing of our cash inflows.In addition to t

269、he usual delays in payment by purchasers of oil and natural gas to the operators of our properties,and thedelays of those operators in remitting payment to us,payments between any of these parties may also be delayed by:restrictions imposed by lenders;accounting delays;delays in the sale or delivery

270、 of products;delays in the connection of wells to a gathering system;blowouts or other accidents;adjustments for prior periods;recovery by the operator of expenses incurred in the operation of the properties;andthe establishment by the operator of reserves for these expenses.Any of these delays coul

271、d expose us to additional third party credit risks.The oil and natural gas market in which we operate exposes us to potential liabilities that may not be covered byinsurance.Our operations are subject to all of the risks associated with the operation and development of oil and natural gasproperties,

272、including the drilling of oil and natural gas wells,and the production and transportation of oil and natural gas.Theserisks include encountering unexpected formations or pressures,premature declines of reservoirs,blow-outs,equipment failuresand other accidents,cratering,sour gas releases,uncontrolla

273、ble flows of oil,natural gas or well fluids,adverse weatherconditions,pollution,other environmental risks,fires and spills.A number of these risks could result in personal injury,loss oflife,or environmental and other damage to our property or the property of others.While we carry various levels of

274、insurance,we could be affected by civil,criminal,regulatory or administrative actions,claims or proceedings.We cannot fully protect against all of the risks listed above,nor are all of these risks insurable.There is noassurance that any applicable insurance or indemnification agreements will adequat

275、ely protect us against liability for the riskslisted above.We could face substantial losses if an event occurs for which we are not fully insured or are not indemnified againstor a customer or insurer fails to meet its indemnification or insurance obligations.In addition,there can be no assurance th

276、atinsurance will continue to be available to cover any or all of these risks,or,even if available,that insurance premiums or othercosts will not rise significantly in the future,so as to make the cost of such insurance prohibitive.26 Deficiencies in operating practices and record keeping,if any,may

277、increase our risks and liabilities relating to incidentssuch as spills and releases and may increase the level of regulatory enforcement actions.Our operations are subject to domestic and foreign government regulation and other risks,particularly in Canada andthe U.S.Barnwells oil and natural gas op

278、erations are affected by political developments and laws and regulations,particularly inCanada and the U.S.,such as restrictions on production,restrictions on imports and exports,the maintenance of specifiedreserves,tax increases and retroactive tax claims,expropriation of property,cancellation of c

279、ontract rights,environmentalprotection controls,environmental compliance requirements and laws pertaining to workers health and safety.Further,the rightto explore for and develop oil and natural gas on lands in Alberta is controlled by the government of that province.Changes inroyalties and other te

280、rms of provincial leases,permits and reservations may have a substantial effect on Barnwells operations.We derive a significant portion of our revenues from our operations in Canada;67%in fiscal 2023.Additionally,our ability to compete in the Canadian oil and natural gas industry may be adversely af

281、fected bygovernmental regulations or other policies that favor the awarding of contracts to contractors in which Canadian nationals havesubstantial ownership interests.Furthermore,we may face governmentally imposed restrictions or fees from time to time on thetransfer of funds to the U.S.Government

282、regulations control and often limit access to potential markets and impose extensive requirements concerningemployee safety,environmental protection,pollution control and remediation of environmental contamination.Environmentalregulations,in particular,prohibit access to some markets and make others

283、 less economical,increase equipment and personnelcosts and often impose liability without regard to negligence or fault.In addition,governmental regulations may discourage ourcustomers activities,reducing demand for our products and services.Legislation,regulation,and other government actions and sh

284、ifting customer preferences and other private efforts relatedto greenhouse gas(“GHG”)emissions and climate change could increase our operational costs and reduce demand forour oil and natural gas,resulting in a material adverse effect on the Companys results of operations and financialcondition.Barn

285、well may experience challenges from the impacts of international and domestic legislation,regulation,or othergovernment actions relating to GHG emissions(e.g.,carbon dioxide and methane)and climate change.International agreementsand national,regional,and state legislation and regulatory measures tha

286、t aim to directly or indirectly limit or reduce GHGemissions are in various stages of implementation.Many of these actions,as well as customers preferences and use of oil andnatural gas or substitute products,are beyond the Companys control.Similar to any significant changes in the regulatoryenviron

287、ment,GHG emissions and climate change-related legislation,regulation,or other government actions may curtailprofitability in the oil and gas sector,or render the extraction of the Companys hydrocarbon resources economically infeasible.In particular,GHG emissions-related legislation,regulations,and o

288、ther government actions and shifting consumer preferencesand other private efforts aimed at reducing GHG emissions may result in increased and substantial capital,compliance,operating,and maintenance costs and could,among other things,reduce demand for the Companys oil and natural gas;adversely affe

289、ct theeconomic feasibility of the Companys resources;impact or limit our27business plans;and adversely affect the Companys sales volumes,revenues,margins and reputation.The ultimate impact of GHG emissions and climate change-related agreements,legislation,regulation,and governmentactions on the Comp

290、anys financial performance is highly uncertain because the Company is unable to predict with certainty,theoutcome of political decision-making processes,including the actual laws and regulations enacted,the variables and tradeoffsthat inevitably occur in connection with such processes,and market con

291、ditions.Compliance with foreign tax and other laws may adversely affect our operations.Tax and other laws and regulations are not always interpreted consistently among local,regional and national authorities.Income tax laws,other legislation or government incentive programs relating to the oil and n

292、atural gas industry may in the futurebe changed or interpreted in a manner that adversely affects us and our stockholders.It also is possible that in the future we willbe subject to disputes concerning taxation and other matters in Canada,including the manner in which we calculate our incomefor tax

293、purposes,and these disputes could have a material adverse effect on our financial performance.Unforeseen title defects may result in a loss of entitlement to production and reserves.Although we conduct title reviews in accordance with industry practice prior to any purchase of resource assets orprop

294、erty,such reviews do not guarantee that an unforeseen defect in the chain of title will not arise and defeat our title to thepurchased assets.If such a defect were to occur,our entitlement to the production from such purchased assets could bejeopardized.Risks Related to Land Investment Segment Recei

295、pt of future payments from KD I and KD II and cash distributions from the Kukio Resort Land DevelopmentPartnerships is dependent upon the developers continued efforts and ability to develop and market the property.We are entitled to receive future payments based on a percentage of the sales prices o

296、f residential lots sold within theKaupulehu area by KD I and KD II as well as a percentage of future distributions KD II makes to its members.However,in orderto collect such payments we are reliant upon the developer,KD I and KD II,in which we own a non-controlling ownershipinterest,to continue to m

297、arket the remaining lots within Increment I and to proceed with the development or sale of the remainingportion of Increment II.Additionally,future cash distributions from the Kukio Resort Land Development Partnerships,whichincludes KD I and KD II,are also dependent on future lot sales in Increment

298、I by KD I and the development or sale of IncrementII by KD II.It is uncertain when or if KD II will develop or sell the remaining portion of Increment II,and there is no assurancewith regards to the amounts of future sales from Increments I and II.We do not have a controlling interest in the partner

299、ships,andtherefore are dependent on the general partner for development decisions.The receipt of future payments and cash distributionscould be jeopardized if the developer fails to proceed with development and marketing of the property.28We hold investment interests in unconsolidated land developme

300、nt partnerships,which are accounted for using the equitymethod of accounting,in which we do not have a controlling interest.These investments involve risks and are highlyilliquid.These investments involve risks which include:the lack of a controlling interest in these partnerships and,therefore,the

301、inability to require that the entities sell assets,return invested capital or take any other action without obtaining the majority vote of partners;potential for future additional capital contributions to fund operations and development activities;the adverse impact on overall profitability if the e

302、ntities do not achieve the financial results projected;the reallocation of amounts of capital from other operating initiatives and/or an increase in indebtedness to paypotential future additional capital contributions,which could in turn restrict our ability to access additional capitalwhen needed o

303、r to pursue other important elements of our business strategy;undisclosed,contingent or other liabilities or problems,unanticipated costs,and an inability to recover or managesuch liabilities and costs and which could delay or prevent development of the real estate held by the landdevelopment partne

304、rships;andcertain underlying partnership data is not accessible to us,therefore we depend on the general partner to provide uswith reliable accounting information.Our land investment business is concentrated in the state of Hawaii.As a result,our financial results are dependent on theeconomic growth

305、 and health of Hawaii,particularly the island of Hawaii.Barnwells land investment segment is impacted by the condition of Hawaiis real estate market,which is affected byHawaiis economy and Hawaiis tourism industry,as well as the U.S.and world economies in general.Any future cash flowsfrom Barnwells

306、land development activities are subject to,among other factors,the level of real estate activity and prices,thedemand for new housing and second homes on the island of Hawaii,the rate of increase in the cost of building materials andlabor,the introduction of building code modifications,changes to zo

307、ning laws,and the level of confidence in Hawaiis economy.The occurrence of natural disasters in Hawaii could adversely affect our business.The occurrence of a natural disaster in Hawaii such as,but not limited to,earthquakes,landslides,hurricanes,tornadoes,tsunamis,volcanic activity,droughts and flo

308、ods,could have a material adverse effect on our land investments.The occurrence ofa natural disaster could also cause property and flood insurance rates and deductibles to increase,which could reduce demand forreal estate in Hawaii.Risks Related to Contract Drilling Segment Demand for water well dri

309、lling and/or pump installation is volatile.A decrease in demand for our services couldadversely affect our revenues and results of operations.Demand for services is highly dependent upon land development activities in the state of Hawaii.The real estatedevelopment industry is cyclical in nature and

310、is particularly vulnerable to shifts in local,regional,and national economicconditions outside of our control such as interest rates,housing demand,29population growth,employment levels and job growth and property taxes.A decrease in water well drilling and/or pumpinstallation contracts will result

311、in decreased revenues and operating results.If we are unable to accurately estimate the overall risks,requirements or costs when bidding on or negotiating a contractthat is ultimately awarded,we may achieve a lower than anticipated profit or incur a loss on the contract.Contracts are usually fixed p

312、rice per lineal foot drilled and require the provision of line-item materials at a fixed unit pricebased on approved quantities irrespective of actual per unit costs.Under such contracts,prices are established in part on cost andscheduling estimates,which are based on a number of assumptions,many of

313、 which are beyond our control.Expected profits oncontracts are realized only if costs are accurately estimated and successfully controlled.We may not be able to obtaincompensation for additional work performed or expenses incurred as a result of changes or inaccuracies in these estimates andunderlyi

314、ng assumptions,such as unanticipated sub-surface site conditions,unanticipated technical problems,equipment failures,inefficiencies,cost of raw materials,schedule delays due to constraints on drilling hours,weather delays,or accidents.If costestimates for a contract are inaccurate,or if the contract

315、 is not performed within cost estimates,then cost overruns may result inlosses or cause the contract not to be as profitable as expected.A significant portion of our contract drilling business is dependent on municipalities and a decline in municipal spendingcould adversely impact our business.A sig

316、nificant portion of our contract drilling division revenues is derived from water and infrastructure contracts withgovernmental entities or agencies;8%in fiscal 2023.Reduced tax revenues and governmental budgets may limit spending bylocal governments which in turn will affect the demand for our serv

317、ices.Material reductions in spending by a significant numberof local governmental agencies could have a material adverse effect on our business,results of operations,liquidity and financialposition.Our contract drilling operations face significant competition.We face competition for our services fro

318、m a variety of competitors.Many of our competitors utilize drilling rigs that drillas quickly as our equipment but require less labor.Our strategy is to compete based on pricing and to a lesser degree,quality ofservice.If we are unable to compete effectively with our competitors,our financial result

319、s could be adversely affected.Supply chain and manufacturing issues of well drilling and pump installation equipment could adversely affect ouroperating results.We are dependent on various well drilling and pump installation equipment to conduct our contract drilling segmentoperations.The shortage o

320、f and/or delay in delivery of such equipment,such as pumps,interruptions in supply,and priceincreases of such equipment and materials due to supply chain issues and manufacturing disruptions could adversely impact ourgross margin and results of operations.Awarding of contracts is dependent upon our

321、ability to obtain contract bid and performance bonds from insurers.There can be no assurance that our ability to obtain such bonds will continue on the same basis as the past.Additionally,bonding insurance rates may increase and have an impact on our ability to win competitive bids,which could have

322、acorresponding material impact on contract drilling operating results.30 The contracts in our backlog are subject to change orders and cancellation.Our backlog consists of the uncompleted portion of services to be performed under contracts that have been started andnew contracts not yet started.Our

323、contracts are subject to change orders and cancellations,and such changes could adverselyaffect our operations.The occurrence of natural disasters in Hawaii could adversely affect our business.The occurrence of a natural disaster in Hawaii such as,but not limited to,earthquakes,landslides,hurricanes

324、,tornadoes,tsunamis,volcanic activity,droughts and floods,could have a material adverse effect on our ability to complete our contracts.ITEM 1B.UNRESOLVED STAFF COMMENTS None.ITEM 2.PROPERTIES Oil and Natural Gas and Land Investment Properties The location and character of Barnwells oil and natural

325、gas properties and its land investment properties,are describedabove under Item 1,“Business.”Corporate Offices Barnwells corporate headquarters is located in Honolulu,Hawaii,in a commercial office building under a lease thatexpires in February 2024.ITEM 3.LEGAL PROCEEDINGS Barnwell is routinely invo

326、lved in disputes with third parties that occasionally require litigation.In addition,Barnwell isrequired to maintain compliance with all current governmental controls and regulations in the ordinary course of business.Barnwells management is not aware of any claims or litigation involving Barnwell t

327、hat are likely to have a material adverseeffect on its results of operations,financial position or liquidity.ITEM 4.MINE SAFETY DISCLOSURES Disclosure is not applicable to Barnwell.31PART II ITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURIT

328、IES Market Information The principal market on which Barnwells common stock is being traded is the NYSE American under the ticker symbol“BRN.”The following tables present the quarterly high and low sales prices,on the NYSE American,for Barnwells commonstock during the periods indicated:Quarter Ended

329、HighLowQuarter EndedHighLowDecember 31,2021$3.50$2.30December 31,2022$3.33$2.70March 31,2022$6.38$2.38March 31,2023$2.97$1.89June 30,2022$3.40$2.29June 30,2023$3.10$2.47September 30,2022$3.32$2.12September 30,2023$2.79$2.18 Holders As of December 12,2023,there were 10,000,106 shares of common stock,

330、par value$0.50,outstanding.As ofDecember 12,2023,there were approximately 81 shareholders of record and approximately 1,000 beneficial owners.Dividends The following table sets forth the cash dividends paid per share of common stock during fiscal 2023 and 2022.Record DateDate of PaymentDividend Paid

331、August 24,2023September 11,2023$0.015May 25,2023June 12,2023$0.015February 23,2023March 13,2023$0.015December 27,2022January 11,2023$0.015August 23,2022September 6,2022$0.015The payment of future cash dividends will depend on,among other things,our financial condition,operating cash flows,the amount

332、 of cash inflows from land investment activities,and the level of our oil and natural gas capital expenditures and anyother investments.Securities Authorized for Issuance Under Equity Compensation Plans See information included in Part III,Item 12,under the caption“Equity Compensation Plan Informati

333、on.”Stock Performance Graph and Cumulative Total Return Disclosure is not required as Barnwell qualifies as a smaller reporting company.32 ITEM 6.RESERVED33ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS The following discussion is intended to assist in the understanding of the Consolidated Balance Sheets of BarnwellIndustries,Inc.and subsidiaries(collect