Lower prices for oil and natural gas hurt earnings for Honolulu-based Barnwell Industries Inc. in the three months ended June 30.

The company engaged in energy exploration in Canada and real estate investment and development in Hawaiçi, reported a net loss of $3.2 million, or 39 cents per diluted share, for its fiscal third quarter, compared with a profit of $3.5 million, or 42 cents per share, in the same period last year.
The $6.7 million swing was almost entirely attributable to a noncash reduction in the value of oil and natural gas assets based on prices at the end of the quarter.
Barnwell said the reduction doesn’t fairly reflect the present or future value of its energy deposits, and that the accounting rule mandated by the federal Securities and Exchange Commission for all oil and natural gas companies has no effect on its oil and natural gas reserve volumes or production rates.
However, the lower prices decreased Barnwell revenues, which fell 63 percent to $7.5 million in the quarter from $20.4 million a year earlier.
Alexander Kinzler, company president and chief operating officer, said net oil and gas production was up a little during the recent quarter.
Offsetting the revenue decline were job and wage cuts. Barnwell said it eliminated five positions in its Canadian office plus some employees at its water well drilling subsidiary in Hawaiçi. Nearly all employees took salary reductions, which for senior managers was higher and averaged 20 percent.
The cuts reduced Barnwell’s general and administrative expenses by $2.1 million, or 50 percent.
“Although the company continues to have challenges due to the ongoing global downturn in economic conditions, with the significant reductions in general and administrative expenses and the company’s strong balance sheet, we believe we have taken the steps necessary to prepare the company for the current economic climate,” said Morton Kinzler, chairman and CEO.
Shares of Barnwell stock on the New York Stock Exchange closed today up 2 cents at $4.54 after the earnings announcement. Barnwell stock in the last 52 weeks has traded between $2.40 on March 6 and $12.68 on Aug. 27.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.