Barnwell Industries, Inc. Q1 2026 Financial Results and Strategic Update

Key Highlights for Investors

• Revenue Decline and Reduced Losses: For the quarter ended December 31, 2025, Barnwell Industries, Inc. (NYSE American: BRN) reported revenues from continuing operations of \$2.75 million, down from \$3.93 million in the prior year. Net loss from continuing operations narrowed to \$1.41 million (\$0.13/share) compared to \$1.60 million (\$0.16/share) last year.
• Balance Sheet Strength: The company remains debt-free with \$1.83 million in working capital, including \$3.62 million in cash and cash equivalents.
• Administrative Cost Increases: General and administrative expenses increased by \$453,000 (39%), driven by personnel costs for new Canadian staff, higher non-cash compensation for shares issued to the new CFO, and elevated professional fees related to a past proxy contest and legal matters.
• Operational Performance: Despite lower oil and natural gas revenues, operating results in the segment improved by \$84,000, reflecting cost controls and the absence of prior ceiling test impairments.
• Foreign Currency Gains: The company recorded a \$47,000 foreign currency gain this quarter versus a \$351,000 loss in the prior year, providing a \$398,000 positive swing due to USD/CAD exchange rate movements on intercompany loans.
• Proxy Contest Costs and Insurance Recovery: Barnwell incurred \$169,000 in costs this quarter related to the now-ended proxy contest but received \$250,000 in insurance proceeds since inception as reimbursement for certain related expenses.
• Real Estate Transactions in Hawaii: The company’s subsidiary, Kaupulehu Developments, surrendered interests in Hawaiian real estate (Increment II) for \$2 million in consideration, \$70,000 of which was received during the quarter. Barnwell also holds a 19.6% stake in entities (KDK) that agreed to sell remaining interests in Increment II for \$2.11 million, subject to closing conditions.
• Headquarters Relocation: Barnwell completed its headquarters relocation from Honolulu, Hawaii to Houston, Texas, closing the Honolulu office in January 2026. This move is expected to generate cost savings and administrative efficiencies while keeping Calgary, Alberta, as a key operational hub.
• Leadership Change: Alexander C. Kinzler, long-serving General Counsel and Secretary, retired effective January 31, 2026, as planned, following the office transition.
• Private Placement: In November 2025, Barnwell raised \$2.44 million in gross proceeds from a private placement, issuing 2,221,141 shares and warrants for up to 1,029,104 additional shares. Some directors and an investor participated but did not receive warrants. The registration statement for the resale of these shares was declared effective on January 30, 2026.
• Strategic Alternatives Review: The Board has tasked CFO Philip Patman, Jr. with evaluating strategic alternatives beyond oil and gas, leveraging the company’s public platform, net operating loss carryforwards, and strong balance sheet for value creation in and beyond the energy sector.
• Reduction in SG&A and Non-Core Activities: Management is focused on reducing selling, general, and administrative costs, exiting non-core operations, and allocating capital selectively for risk-adjusted returns.
• Share Details: Weighted average shares outstanding for the quarter were 11.07 million, up from 10.05 million in the prior year, due to the private placement.

Detailed Financial and Operational Review

Quarterly Financials

• Revenue from continuing operations fell to \$2.75 million, reflecting lower oil and gas prices and the impact of asset sales and natural declines in production.
• Net loss from continuing operations improved to \$1.41 million (\$0.13/share), while the prior year’s net loss was \$1.60 million (\$0.16/share).
• No loss from discontinued operations this quarter, compared to a \$319,000 loss last year.
• Total net loss attributable to Barnwell was \$1.43 million (\$0.13/share), an improvement from \$1.92 million (\$0.19/share) in the prior year.
• General and administrative expenses rose sharply due to staff transition, compensation for new CFO, and legal/proxy-related costs, partly offset by improved oil and gas results, land segment performance, and foreign exchange gains.

Oil and Gas Segment

• Segment operating results improved by \$84,000 due to absence of ceiling test impairments (\$613,000 reduction), lower operating expenses (\$425,000), and reduced depletion (\$313,000).
• This was partially offset by a \$1.27 million decrease in oil and natural gas revenues, driven by a 20% drop in oil prices and a 5% decrease in natural gas liquids prices, although natural gas prices rose 64% year-on-year.
• Production volumes declined due to asset sales and natural well declines.

Corporate Actions & Strategic Moves

• Relocation of Headquarters: The closure of the Honolulu office and the move to Houston, Texas aligns the company more closely with industry partners and capital markets and is expected to deliver cost savings and operational efficiencies.
• Leadership Transition: The planned retirement of Alexander C. Kinzler ensures management continuity and reflects the implementation of the company’s succession plan.
• Private Placement and Liquidity: The \$2.44 million capital raise in November 2025 further strengthens Barnwell’s debt-free balance sheet, enhancing liquidity for future growth initiatives. The completed registration statement allows for resale of the newly issued shares.
• Strategic Review: The Board’s directive to explore strategic alternatives, including outside the energy sector, could result in transformative transactions, partnerships, or new ventures, with a focus on cash flow and earnings accretion.

Potential Price-Sensitive Issues for Shareholders

• Strategic Alternatives Process: Any announcements or developments related to mergers, acquisitions, or new business lines could significantly impact the company’s future direction and share value.
• Cost Reduction Initiatives: The relocation, reduction in SG&A, and exit from non-core activities could lead to improved profitability and enhanced shareholder returns.
• Successful Completion of Real Estate Sales: The ultimate closing of Hawaiian real estate transactions (Increment II) could provide additional liquidity and non-operating income.
• Changes in Commodity Prices: The company remains exposed to oil and gas price volatility, which directly affects revenues and profitability.
• Leadership Changes: The retirement of a key executive and strengthening of the management team could affect investor confidence, depending on the transition’s smoothness and future strategic direction.

Summary and Outlook

Barnwell Industries is at an inflection point with a strong balance sheet, ongoing strategic review, and a management team focused on capital discipline, operational efficiency, and unlocking new value-creation opportunities. The outcome of the strategic review, further cost reductions, and successful execution of pending real estate transactions are all potential catalysts for future share price movements. Investors should closely monitor these developments, as they may materially impact the company’s financial position and long-term outlook.

Disclaimer

This article contains forward-looking statements based on current expectations and information provided by Barnwell Industries, Inc. Actual results may differ materially due to risks and uncertainties, including but not limited to commodity price fluctuations, strategic execution risks, and broader economic factors. Investors should consider the company’s filings with the SEC and are advised not to place undue reliance on forward-looking statements. This article does not constitute investment advice.

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