Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 01, 2017 | Mar. 31, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | BARNWELL INDUSTRIES INC | ||
Entity Central Index Key | 10,048 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 7,978 | ||
Entity Common Stock, Shares Outstanding | 8,277,160 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS CAD in Thousands, $ in Thousands | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) |
Current assets: | ||
Cash and cash equivalents | $ 16,281 | $ 15,550 |
Certificates of deposit | 4,413 | 0 |
Restricted cash | 0 | 381 |
Accounts and other receivables, net of allowance for doubtful accounts | 1,414 | 1,228 |
Income taxes receivable | 1,145 | 378 |
Asset held for sale | 0 | 1,829 |
Investment held for sale | 1,037 | 1,192 |
Other current assets | 852 | 556 |
Total current assets | 25,142 | 21,114 |
Deferred income tax assets | 300 | 0 |
Investments | 2,209 | 3,552 |
Property and equipment, net | 5,369 | 6,902 |
Total assets | 33,020 | 31,568 |
Current liabilities: | ||
Accounts payable | 1,185 | 1,423 |
Accrued capital expenditures | 348 | 439 |
Accrued compensation | 390 | 449 |
Accrued operating and other expenses | 1,386 | 1,031 |
Current portion of asset retirement obligation | 1,231 | 1,017 |
Other current liabilities | 258 | 377 |
Total current liabilities | 4,798 | 4,736 |
Deferred rent | 21 | 0 |
Liability for retirement benefits | 4,150 | 6,707 |
Asset retirement obligation | 5,632 | 6,177 |
Deferred income tax liabilities | 236 | 204 |
Total liabilities | 14,837 | 17,824 |
Commitments and contingencies (Note 17) | ||
Equity: | ||
Common stock, par value $0.50 per share; authorized, 20,000,000 shares: 8,445,060 issued at September 30, 2017 and 2016 | 4,223 | 4,223 |
Additional paid-in capital | 1,350 | 1,345 |
Retained earnings | 15,023 | 13,852 |
Accumulated other comprehensive loss, net | (1,058) | (3,920) |
Treasury stock, at cost: 167,900 shares at September 30, 2017 and 2016 | (2,286) | (2,286) |
Total stockholders’ equity | 17,252 | 13,214 |
Non-controlling interests | 931 | 530 |
Total equity | 18,183 | 13,744 |
Total liabilities and equity | $ 33,020 | $ 31,568 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, authorized shares | 20,000,000 | 20,000,000 |
Common stock, issued shares | 8,445,060 | 8,445,060 |
Treasury stock, shares | 167,900 | 167,900 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||
Oil and natural gas | $ 4,383 | $ 3,177 |
Contract drilling | 3,938 | 2,233 |
Sale of interest in leasehold land | 4,503 | 2,255 |
Residential real estate | 0 | 5,700 |
Gas processing and other | 206 | 262 |
Total revenues | 13,030 | 13,627 |
Costs and expenses: | ||
Oil and natural gas operating | 3,028 | 3,142 |
Contract drilling operating | 3,231 | 2,098 |
Residential real estate | 0 | 5,510 |
General and administrative | 6,976 | 6,701 |
Depletion, depreciation, and amortization | 1,203 | 1,607 |
Impairment of assets | 155 | 1,154 |
Gain on sales of assets | (527) | (472) |
Interest expense | 6 | 97 |
Total costs and expenses | 14,072 | 19,837 |
Loss before equity in income of affiliates and income taxes | (1,042) | (6,210) |
Equity in income of affiliates | 2,276 | 2,624 |
Earnings (loss) before income taxes | 1,234 | (3,586) |
Income tax benefit | (1,080) | (722) |
Net earnings (loss) | 2,314 | (2,864) |
Less: Net earnings attributable to non-controlling interests | 1,143 | 751 |
Net earnings (loss) attributable to Barnwell Industries, Inc. stockholders | $ 1,171 | $ (3,615) |
Basic net earnings (loss) per common share attributable to Barnwell Industries, Inc. stockholders (in dollars per share) | $ 0.14 | $ (0.44) |
Diluted net earnings (loss) per common share attributable to Barnwell Industries, Inc. stockholders (in dollars per share) | $ 0.14 | $ (0.44) |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 8,277,160 | 8,277,160 |
Diluted (in shares) | 8,277,160 | 8,277,160 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings (loss) | $ 2,314 | $ (2,864) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments, net of taxes of $0 | 147 | 87 |
Retirement plans: | ||
Amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0 | 326 | 168 |
Net actuarial gains (losses) arising during the period, net of taxes of $0 | 2,389 | (2,053) |
Total other comprehensive income (loss) | 2,862 | (1,798) |
Total comprehensive income (loss) | 5,176 | (4,662) |
Less: Comprehensive income attributable to non-controlling interests | 1,143 | 751 |
Comprehensive income (loss) attributable to Barnwell Industries, Inc. | $ 4,033 | $ (5,413) |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustments, taxes | $ 0 | $ 0 |
Amortization of accumulated other comprehensive loss into net periodic benefit cost, taxes | 0 | 0 |
Net actuarial gains (losses) arising during the period, taxes | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Non-controlling Interests |
Balance at Sep. 30, 2015 | $ 19,262 | $ 4,223 | $ 1,335 | $ 17,467 | $ (2,122) | $ (2,286) | $ 645 |
Balance (in shares) at Sep. 30, 2015 | 8,277,160 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Distributions to non-controlling interests | (866) | (866) | |||||
Net earnings (loss) | (2,864) | (3,615) | 751 | ||||
Share-based compensation | 10 | 10 | |||||
Foreign currency translation adjustments, net of taxes of $0 | 87 | 87 | |||||
Retirement plans: | |||||||
Amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0 | 168 | 168 | |||||
Net actuarial gains (losses) arising during the period, net of taxes of $0 | (2,053) | (2,053) | |||||
Balance at Sep. 30, 2016 | 13,744 | $ 4,223 | 1,345 | 13,852 | (3,920) | (2,286) | 530 |
Balance (in shares) at Sep. 30, 2016 | 8,277,160 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Contributions from non-controlling interests | 6 | 6 | |||||
Distributions to non-controlling interests | (748) | (748) | |||||
Net earnings (loss) | 2,314 | 1,171 | 1,143 | ||||
Share-based compensation | 5 | 5 | |||||
Foreign currency translation adjustments, net of taxes of $0 | 147 | 147 | |||||
Retirement plans: | |||||||
Amortization of accumulated other comprehensive loss into net periodic benefit cost, net of taxes of $0 | 326 | 326 | |||||
Net actuarial gains (losses) arising during the period, net of taxes of $0 | 2,389 | 2,389 | |||||
Balance at Sep. 30, 2017 | $ 18,183 | $ 4,223 | $ 1,350 | $ 15,023 | $ (1,058) | $ (2,286) | $ 931 |
Balance (in shares) at Sep. 30, 2017 | 8,277,160 |
CONSOLIDATED STATEMENTS OF EQU8
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Foreign currency translation adjustments, taxes | $ 0 | $ 0 |
Amortization of accumulated other comprehensive loss into net periodic benefit cost, taxes | 0 | 0 |
Net actuarial gains (losses) arising during the period, taxes | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ 2,314 | $ (2,864) |
Adjustments to reconcile net earnings (loss) to net cash (used in) provided by operating activities: | ||
Equity in income of affiliates | (2,276) | (2,624) |
Depletion, depreciation, and amortization | 1,203 | 1,607 |
Impairment of assets | 155 | 1,154 |
Gain on sale of asset | (527) | 0 |
Gain on sale of oil and natural gas properties | 0 | (472) |
Sale of interest in leasehold land, net of fees paid | (4,198) | (1,915) |
Distributions of income from equity investees | 2,284 | 3,714 |
Retirement benefits expense | 537 | 519 |
Accretion of asset retirement obligation | 433 | 464 |
Deferred income tax benefit | (268) | (71) |
Asset retirement obligation payments | (833) | (459) |
Share-based compensation expense (benefit) | 15 | (22) |
Deferred rent liability | 21 | 0 |
Retirement plan contributions and payments | (365) | (1,106) |
Real estate held for sale | 0 | 5,132 |
Decrease from changes in current assets and liabilities | (614) | (1,287) |
Net cash (used in) provided by operating activities | (2,119) | 1,770 |
Cash flows from investing activities: | ||
Purchases of certificates of deposit | (7,139) | 0 |
Proceeds from the maturity of certificates of deposit | 2,726 | 0 |
Decrease in restricted cash | 0 | 7,089 |
Distributions from equity investees in excess of earnings | 1,335 | 1,646 |
Proceeds from sale of interest in leasehold land, net of fees paid | 4,198 | 1,915 |
Proceeds from the sale of assets, net of closing costs | 2,360 | 0 |
Proceeds from sale of oil and natural gas assets | 619 | 493 |
Payments to acquire oil and natural gas properties | (381) | (769) |
Capital expenditures | (807) | (996) |
Net cash provided by investing activities | 2,911 | 9,378 |
Cash flows from financing activities: | ||
Repayments of long-term debt | 0 | (3,440) |
Decrease in restricted cash | 372 | 54 |
Contributions from non-controlling interests | 6 | 0 |
Distributions to non-controlling interests | (748) | (866) |
Net cash used in financing activities | (370) | (4,252) |
Effect of exchange rate changes on cash and cash equivalents | 309 | 183 |
Net increase in cash and cash equivalents | 731 | 7,079 |
Cash and cash equivalents at beginning of year | 15,550 | 8,471 |
Cash and cash equivalents at end of year | $ 16,281 | $ 15,550 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Barnwell is engaged in the following lines of business: 1) acquiring, developing, producing and selling oil and natural gas in Canada, 2) investing in land interests in Hawaii, and 3) drilling wells and installing and repairing water pumping systems in Hawaii. Principles of Consolidation The consolidated financial statements include the accounts of Barnwell Industries, Inc. and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6% -owned land investment general partnership (Kaupulehu Developments), a 75% -owned land investment partnership (KD Kona 2013 LLLP) and an 80% -owned joint venture (Kaupulehu 2007, LLLP). All significant intercompany accounts and transactions have been eliminated. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in VIEs in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method. Use of Estimates in the Preparation of Financial Statements The preparation of the financial statements in conformity with U.S. GAAP requires management of Barnwell to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ significantly from those estimates. Significant assumptions are required in the valuation of deferred tax assets, asset retirement obligations, share-based payment arrangements, obligations for retirement plans, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded. Reclassification Fees related to percentage of sales payments have been reclassified to general and administrative expenses rather than being presented net with sale of interest in leasehold land revenues for the prior year to conform to the current year presentation. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and short-term investments with original maturities of three months or less. Certificates of deposit Certificates of deposit include certificates of deposit at various financial institutions with original maturities in excess of three months. Restricted Cash Restricted cash at September 30, 2016 consisted of a $500,000 Canadian dollar, or U.S. $381,000 at the September 30, 2016 exchange rate, guaranteed investment certificate pledged to the Royal Bank of Canada as was required by our revolving demand facility. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and certificates of deposit. We maintain bank account balances with high quality financial institutions which often exceed insured limits. We have not experienced any losses with these accounts and believe that we are not exposed to any significant credit risk on cash. Certificates of deposit are maintained at separate high-quality financial institutions within insured limits and are therefore not exposed to any credit risk. Accounts and Other Receivables Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is Barnwell’s best estimate of the amount of probable credit losses in Barnwell’s existing accounts receivable and is based on historical write-off experience and the application of the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Barnwell does not have any off-balance sheet credit exposure related to its customers. Investment Held for Sale Investment held for sale is reported at the lower of the asset carrying value or fair value less costs to sell. The recorded balance is evaluated for impairment whenever events or changes in circumstances indicate that the balance may not be fully recoverable. This evaluation requires management to make assumptions and apply considerable judgments to, among others, estimates of the timing and amount of future cash flows, uncertainty about future events, including changes in economic conditions, changes in operating performance, and ongoing cost of maintenance and improvements of the assets. Changes in these and other assumptions may require impairment charges that may materially impact the Company’s future operating results. Assets are classified as held for sale if management commits to a plan to sell the property, the Company actively markets the property in its current condition for a price that is reasonable in comparison to its fair value and management considers the sale of such property within one year of the balance sheet date to be probable. Investments in Real Estate Barnwell accounts for sales of Increment I and Increment II leasehold land interests under the full accrual method. Gains from such sales were recognized when the buyer’s investments were adequate to demonstrate a commitment to pay for the property, risks and rewards of ownership transferred to the buyer, and Barnwell did not have a substantial continuing involvement with the property sold. With regard to payments Kaupulehu Developments is entitled to receive from KD I and KD II, the percentage of sales payments from KD I and KD II and percentage of distributions from KD II are contingent future profits which will be recognized when they are realized. All costs of the sales of Increment I and Increment II leasehold land interests were recognized at the time of sale and were not deferred to future periods when any contingent profits will be recognized. Equity Method Investments Affiliated companies, which are limited partnerships or similar entities, in which Barnwell holds more than a 3% to 5% ownership interest and does not control, are accounted for as equity method investments. Equity method investment adjustments include Barnwell’s proportionate share of investee income or loss, adjustments to recognize certain differences between Barnwell’s carrying value and Barnwell’s equity in net assets of the investee at the date of investment, impairments and other adjustments required by the equity method. Gains or losses are realized when such investments are sold. Investments in equity method investees are evaluated for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of the assets exceed their respective fair values, additional impairment tests are performed to measure the amounts of the impairment losses, if any. When an impairment test demonstrates that the fair value of an investment is less than its carrying value, management will determine whether the impairment is either temporary or other-than-temporary. Examples of factors which may be indicative of an other-than-temporary impairment include (a) the length of time and extent to which fair value has been less than carrying value, (b) the financial condition and near-term prospects of the investee, and (c) the intent and ability to retain the investment in the investee for a period of time sufficient to allow for any anticipated recovery in fair value. If the decline in fair value is determined by management to be other-than-temporary, the carrying value of the investment is written down to its estimated fair value as of the balance sheet date of the reporting period in which the assessment is made. Variable Interest Entities The consolidation of VIEs is required when an enterprise has a controlling financial interest and is therefore the VIE’s primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE and, if so, whether the Company is primary beneficiary, may require significant judgment. Barnwell analyzes its unconsolidated affiliates in which it has an investment to determine whether the unconsolidated entities are VIEs and, if so, whether the Company is the primary beneficiary. This analysis includes a qualitative review based on an evaluation of the design of the entity, its organizational structure, including decision making ability and financial agreements, as well as a quantitative review. Our unconsolidated affiliates that have been determined to be VIEs are accounted under the equity method because we do not have a controlling financial interest and are therefore not the VIE’s primary beneficiary (see Note 8). Oil and Natural Gas Properties Barnwell uses the full cost method of accounting under which all costs incurred in the acquisition, exploration and development of oil and natural gas reserves, including costs related to unsuccessful wells and estimated future site restoration and abandonment, are capitalized. We capitalize internal costs that can be directly identified with our acquisition, exploration and development activities and do not include any costs related to production, general corporate overhead or similar activities. Under the full cost method of accounting, we review the carrying value of our oil and natural gas properties, on a country-by-country basis, each quarter in what is commonly referred to as the ceiling test. Under the ceiling test, capitalized costs, net of accumulated depletion and oil and natural gas related deferred income taxes, may not exceed an amount equal to the sum of 1) the discounted present value (at 10% ), using average first-day-of-the-month prices during the 12-month period ending as of the balance sheet date held constant over the life of the reserves, of Barnwell’s estimated future net cash flows from estimated production of proved oil and natural gas reserves as determined by independent petroleum reserve engineers, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations; plus 2) the cost of major development projects and unproven properties not subject to depletion, if any; plus 3) the lower of cost or estimated fair value of unproven properties included in costs subject to depletion; less 4) related income tax effects. If net capitalized costs exceed this limit, the excess is expensed. Depletion is computed using the units-of-production method whereby capitalized costs, net of estimated salvage values, plus estimated future costs to develop proved reserves and satisfy asset retirement obligations, are amortized over the total estimated proved reserves on a country-by-country basis. Investments in major development projects are not depleted until either proved reserves are associated with the projects or impairment has been determined. Proceeds from the disposition of oil and natural gas properties are credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves in a particular country. Revenues associated with the sale of oil, natural gas and natural gas liquids are recognized in the Consolidated Statements of Operations when the oil, natural gas and natural gas liquids are delivered and title has passed to the customer. Barnwell’s sales reflect its working interest share after royalties. Barnwell’s production is generally delivered and sold at the plant gate. Barnwell does not have transportation volume commitments with pipelines and does not have natural gas imbalances related to natural gas balancing arrangements with its partners. Acquisitions In accordance with the guidance for business combinations, Barnwell determines whether an acquisition is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method of accounting. If the assets acquired are not a business, the Company accounts for the transaction as an asset acquisition. Under both methods purchase prices are allocated to acquired assets and assumed liabilities based on their estimated fair value at the time of the acquisition. For transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. Long-lived Assets Long-lived assets to be held and used, other than oil and natural gas properties, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Recoverability is measured by comparing the carrying amount of the asset to the future net cash flows expected to result from use of the asset (undiscounted and without interest charges). If it is determined that the asset may not be recoverable, impairment loss is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of the asset carrying value or fair value, less cost to sell. Water well drilling rigs, office and other property and equipment are depreciated using the straight-line method based on estimated useful lives. Share-based Compensation Share-based compensation cost is measured at fair value. Barnwell utilizes a closed-form valuation model to determine the fair value of each option award. Expected volatilities are based on the historical volatility of Barnwell’s stock over a period consistent with that of the expected terms of the options. The expected terms of the options represent expectations of future employee exercise and are estimated based on factors such as vesting periods, contractual expiration dates, historical trends in Barnwell’s stock price, and historical exercise behavior. The risk-free rates for periods within the contractual life of the options are based on the yields of U.S. Treasury instruments with terms comparable to the estimated option terms. Expected dividends are based on current and historical dividend payments. Retirement Plans Barnwell accounts for its defined benefit pension plan, Supplemental Employee Retirement Plan, and postretirement medical insurance benefits plan by recognizing the over-funded or under-funded status as an asset or liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which the changes occur through comprehensive income. See further discussion at Note 12. The estimation of Barnwell’s retirement plan obligations, costs and liabilities requires management to estimate the amount and timing of cash outflows for projected future payments and cash inflows for maturities and expected returns on plan assets. These assumptions may have an effect on the amount and timing of future contributions. At the end of each year, Barnwell determines the discount rate to be used to calculate the present value of plan liabilities and the net periodic benefit cost. The discount rate is an estimate of the current interest rate at which the retirement plan liabilities could be effectively settled at the end of the year. In estimating this rate, Barnwell performs a cash-flow matching discount rate analysis developed using high-quality corporate bonds yield. The discount rate used to value the future benefit obligation as of each year-end is the rate used to determine the periodic benefit cost in the following year. The expected long-term return on assets assumption for the pension plans represents the average rate of return to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. The actual fair value of plan assets and estimated rate of return is used to determine the expected investment return during the year. The estimated rate of return on plan assets is based on an estimate of future experience for plan asset returns, the mix of plan assets, current market conditions, and expectations for future market conditions. A decrease (increase) of 50 basis points in the expected return on assets assumption would increase (decrease) pension expense by approximately $47,000 based on the assets of the plan at September 30, 2017 . The effects of changing assumptions are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income. These unamortized gains and losses in excess of certain thresholds are amortized and reclassified to income (loss) over the average remaining service life of active employees. Asset Retirement Obligation Barnwell accounts for asset retirement obligations by recognizing the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. These assumptions represent Level 3 inputs. Barnwell’s estimated site restoration and abandonment costs of its oil and natural gas properties are capitalized as part of the carrying amount of oil and natural gas properties and depleted over the life of the related reserves. When the assumptions used to estimate a recorded asset retirement obligation change, a revision is recorded to both the asset retirement obligation and the capitalized cost of asset retirements. The liability is accreted at the end of each period through charges to oil and natural gas operating expense. Income Taxes Income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax impacts of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax asset will not be realized. Management evaluates its potential exposures from tax positions taken that have been or could be challenged by taxing authorities. These potential exposures result because taxing authorities may take positions that differ from those taken by management in the interpretation and application of statutes, regulations and rules. Management considers the possibility of alternative outcomes based upon past experience, previous actions by taxing authorities (e.g., actions taken in other jurisdictions) and advice from tax experts. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with a taxing authority on a jurisdiction-by-jurisdiction basis. Liabilities for unrecognized tax benefits related to such tax positions are included in long-term liabilities unless the tax position is expected to be settled within the upcoming year, in which case the liabilities are included in current liabilities. Interest and penalties related to uncertain tax positions are included in income tax expense. Contract Drilling Revenues, costs and profits applicable to contract drilling contracts are included in the Consolidated Statements of Operations using the percentage of completion method, principally measured by the percentage of labor dollars incurred to date for each contract to total estimated labor dollars for each contract. Contract losses are recognized in full in the period the losses are identified. The performance of drilling contracts may extend over more than a year and, in the interim periods, estimates of total contract costs and profits are used to determine revenues and profits earned for reporting the results of contract drilling operations. Revisions in the estimates required by subsequent performance and final contract settlements are included as adjustments to the results of operations in the period such revisions and settlements occur. Contracts are normally less than a year in duration. Environmental Barnwell is subject to extensive environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and maintenance of surface conditions and may require Barnwell to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed. Liabilities for expenditures of a noncapital nature are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated. Barnwell recognizes an insurance receivable related to environmental expenditures when collection of the receivable is deemed probable. Any recognition of an insurance receivable is recorded by crediting and offsetting the original charge. Any differential arising between insurance recoveries and insurance receivables is expensed or capitalized, consistent with the original treatment. Foreign Currency Translation Assets and liabilities of foreign subsidiaries are translated at the year-end exchange rate. Operating results of foreign subsidiaries are translated at average exchange rates during the period. Translation adjustments have no effect on net income and are included in “Accumulated other comprehensive loss, net” in stockholders’ equity. Fair Value Measurements Fair value is defined as the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: • Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities in active markets and have the highest priority. • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3: Unobservable inputs for the financial asset or liability and have the lowest priority. Recently Adopted Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” which requires an entity to evaluate at each reporting period whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year from the date the financial statements are issued and to provide related footnote disclosures in certain circumstances. The Company adopted the provisions of this ASU for the annual reporting period ended September 30, 2017. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to separately classify, present and disclose extraordinary events and transactions. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis," which simplifies the current consolidation guidance and will require companies to reevaluate limited partnerships and similar entities for consolidation. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This amendment was issued to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-12, "Plan Accounting: (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient." This ASU aims to simplify the accounting and presentation of plan accounting. Part I of this ASU requires fully benefit-responsive investment contracts to be measured at contract value instead of the current fair value measurement. Part II simplifies the investment disclosure requirements for employee benefit plans. Part III provides an alternative measurement date for fiscal periods that do not coincide with a month-end date. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments." This ASU eliminates the requirement to account for business combination measurement period adjustments retrospectively. Measurement period adjustments will now be recognized prospectively in the reporting period in which the adjustment amount is determined. The nature and amount of any measurement period adjustments recognized during the reporting period must be disclosed, including the value of the adjustment to each current period income statement line item relating to the income effects that would have been recognized in previous periods if the adjustment to provisional amounts were recognized as of the acquisition date. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, "Clarifying the Definition of a Business," which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in ASU No. 2017-01 provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If, however, the screen is not met, then the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. Finally, the amendments in this ASU narrow the definition of the term "output" so that it is consistent with the manner in which outputs are described in Topic 606. We elected to early adopt this pronouncement effective July 1, 2017. As a result of adopting this pronouncement we accounted for certain transactions as asset acquisitions which would have qualified as business combinations under the previous standard (see Note 9). |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 12 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities, which consist of outstanding stock options. Potentially dilutive shares are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive. Options to purchase 593,750 and 621,250 shares of common stock were excluded from the computation of diluted shares for the years ended September 30, 2017 and 2016 , respectively, as their inclusion would have been antidilutive. Reconciliations between net earnings (loss) attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net earnings (loss) per share computations are detailed in the following tables: Year ended September 30, 2017 Net Earnings Shares Per-Share (Numerator) (Denominator) Amount Basic net earnings per share $ 1,171,000 8,277,160 $ 0.14 Effect of dilutive securities - common stock options — — Diluted net earnings per share $ 1,171,000 8,277,160 $ 0.14 Year ended September 30, 2016 Net Loss Shares Per-Share (Numerator) (Denominator) Amount Basic net loss per share $ (3,615,000 ) 8,277,160 $ (0.44 ) Effect of dilutive securities - common stock options — — Diluted net loss per share $ (3,615,000 ) 8,277,160 $ (0.44 ) |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED PAYMENTS | SHARE-BASED PAYMENTS The Company’s share-based compensation expense (benefit) and related income tax effects are as follows: Year ended September 30, 2017 2016 Share-based expense (benefit) $ 15,000 $ (22,000 ) Income tax effect $ — $ — Share-based compensation expense (benefit) recognized in earnings (loss) for the years ended September 30, 2017 and 2016 are reflected in “General and administrative” expenses in the Consolidated Statements of Operations. There was no impact on income taxes for the years ended September 30, 2017 and 2016 due to a full valuation allowance on the related deferred tax asset. As of September 30, 2017 , there was $1,000 of total unrecognized compensation cost related to nonvested share options. That cost is expected to be recognized over 0.2 years. Description of Share-Based Payment Arrangements The Company’s stock option plans are administered by the Compensation Committee of the Board of Directors. The stockholder-approved 2008 Equity Incentive Plan provides for the issuance of incentive stock options, nonstatutory stock options, stock options with stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards, and stock grants to employees, consultants and non-employee members of the Board of Directors. 800,000 shares of Barnwell common stock have been reserved for issuance and as of September 30, 2017 , a total of 62,500 share options remain available for grant. Stock options grants include nonqualified stock options that have exercise prices equal to Barnwell’s stock price on the date of grant, vest annually over a service period of four years commencing one year from the date of grant and expire ten years from the date of grant. Certain options have stock appreciation rights that permit the holder to receive stock, cash or a combination thereof equal to the amount by which the fair market value, at the time of exercise of the option, exceeds the option price. Barnwell currently has a policy of issuing new shares to satisfy share option exercises when the optionee requests shares. Equity-classified Awards Compensation cost for equity-classified awards is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period. A summary of the activity in Barnwell’s equity-classified share options from October 1, 2016 through September 30, 2017 is presented below: Options Shares Weighted- Weighted- Aggregate Outstanding at October 1, 2016 30,000 $ 3.01 Granted — — Exercised — — Expired/Forfeited — — Outstanding at September 30, 2017 30,000 $ 3.01 6.2 $ — Exercisable at September 30, 2017 22,500 $ 3.01 6.2 $ — Total share-based compensation expense for equity-classified awards vested in the years ended September 30, 2017 and 2016 was $5,000 and $10,000 , respectively. Liability-classified Awards Compensation cost for liability-classified awards is remeasured to current fair value using a closed-form valuation model based on current values at each period end with the change in fair value recognized as an expense or benefit until the award is settled. The following assumptions were used in estimating fair value for all liability-classified share options outstanding: Year ended September 30, 2017 2016 Expected volatility range 53.1% to 69.5% 56.7% to 72.7% Weighted-average volatility 64.6% 63.6% Expected dividends None None Expected term (in years) 0.2 to 6.2 1.2 to 7.2 Risk-free interest rate 1.1% to 2.1% 0.6% to 1.4% Expected forfeitures None None The application of alternative assumptions could produce significantly different estimates of the fair value of share-based compensation, and consequently, the related costs reported in the Consolidated Statements of Operations. A summary of the activity in Barnwell’s liability-classified share options from October 1, 2016 through September 30, 2017 is presented below: Options Shares Weighted- Weighted- Aggregate Outstanding at October 1, 2016 591,250 $ 7.98 Granted — — Exercised — — Expired/Forfeited (27,500 ) 8.18 Outstanding at September 30, 2017 563,750 $ 7.97 1.6 $ — Exercisable at September 30, 2017 556,250 $ 8.04 1.5 $ — The following table summarizes the components of the total share-based compensation for liability-classified awards: Year ended September 30, 2017 2016 Due to vesting $ 2,000 $ 4,000 Due to remeasurement 8,000 (36,000 ) Total share-based compensation expense (benefit) for liability-based awards $ 10,000 $ (32,000 ) |
ACCOUNTS RECEIVABLE AND CONTRAC
ACCOUNTS RECEIVABLE AND CONTRACT COSTS | 12 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE AND CONTRACT COSTS | ACCOUNTS RECEIVABLE AND CONTRACT COSTS Accounts receivable are net of allowances for doubtful accounts of $46,000 and $40,000 as of September 30, 2017 and 2016 , respectively. Included in accounts receivable are contract retainage balances of $142,000 and $202,000 as of September 30, 2017 and 2016 , respectively. The retainage balance as of September 30, 2017 is expected to be collected within one year, generally within 45 days after the related contracts have received final acceptance and approval. Costs and estimated earnings on uncompleted contracts are as follows: September 30, 2017 2016 Costs incurred on uncompleted contracts $ 2,194,000 $ 966,000 Estimated earnings 89,000 70,000 2,283,000 1,036,000 Less billings to date 1,947,000 1,112,000 $ 336,000 $ (76,000 ) Costs and estimated earnings on uncompleted contracts are included in the Consolidated Balance Sheets as follows: September 30, 2017 2016 Costs and estimated earnings in excess of billings on uncompleted contracts (included in other current assets) $ 376,000 $ 89,000 Billings in excess of costs and estimated earnings on uncompleted contracts (included in other current liabilities) (40,000 ) (165,000 ) $ 336,000 $ (76,000 ) |
ASSET HELD FOR SALE
ASSET HELD FOR SALE | 12 Months Ended |
Sep. 30, 2017 | |
Asset held for sale [Abstract] | |
Asset held for sale | ASSET HELD FOR SALE The Company's New York office was designated as an asset held for sale and the carrying value in the aggregate amount of $1,829,000 was included in "Asset held for sale" on the Company's Consolidated Balance Sheet at September 30, 2016. On May 2, 2017, the Company's New York office was sold for approximately $2,360,000 , net of related costs, resulting in a gain of $527,000 , which was recognized in the year ended September 30, 2017 . |
INVESTMENT HELD FOR SALE
INVESTMENT HELD FOR SALE | 12 Months Ended |
Sep. 30, 2017 | |
INVESTMENT HELD FOR SALE [Abstract] | |
Investment held for sale | INVESTMENT HELD FOR SALE At September 30, 2017, Kaupulehu 2007 owned one residential lot available for sale in the Lot 4A Increment I area located in the North Kona District of the island of Hawaii, north of Hualalai Resort at Historic Ka`upulehu, between the Queen Kaahumanu Highway and the Pacific Ocean. During the year ended September 30, 2017, Kaupulehu 2007 recorded a $155,000 impairment of the residential lot held for sale as a result of changes in fair values for comparable real estate. |
RESIDENTIAL REAL ESTATE
RESIDENTIAL REAL ESTATE | 12 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
RESIDENTIAL REAL ESTATE | RESIDENTIAL REAL ESTATE In April 2016, the residence that was available for sale in Lot 4A Increment I was sold for $5,700,000 in gross proceeds, before commission and other closing costs, and as a result of the sale, income in the amount of $190,000 was recognized during the year ended September 30, 2016. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Sep. 30, 2017 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS | INVESTMENTS A summary of Barnwell’s non-current investments is as follows: September 30, 2017 2016 Investment in Kukio Resort land development partnerships $ 2,159,000 $ 3,502,000 Investment in leasehold land interest – Lot 4C 50,000 50,000 Total non-current investments $ 2,209,000 $ 3,552,000 Investment in Kukio Resort land development partnerships On November 27, 2013, Barnwell, through a wholly-owned subsidiary, entered into two limited liability limited partnerships, KD Kona 2013 LLLP and KKM Makai, LLLP, and indirectly acquired a 19.6% non-controlling ownership interest in each of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP for $5,140,000 . These entities own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KD Kaupulehu, LLLP, which is comprised of KD I and KD II, is the developer of Kaupulehu Lot 4A Increments I and II, the area in which Barnwell has interests in percentage of sales payments and percentage of future distributions to KD II's members. Barnwell’s investment in these entities is accounted for using the equity method of accounting. The partnerships derive income from the sale of residential parcels, of which 23 lots remained to be sold at Kaupulehu Increment I, as well as from commissions on real estate sales by the real estate sales office. During the year ended September 30, 2017 , Barnwell received net cash distributions in the amount of $3,223,000 from the Kukio Resort land development partnerships after distributing $396,000 to non-controlling interests. During the year ended September 30, 2016 , Barnwell received net cash distributions in the amount of $5,320,000 from the Kukio Resort land development partnerships after distributing $40,000 to non-controlling interests. Equity in income of affiliates was $2,276,000 and $2,624,000 for the years ended September 30, 2017 and 2016 , respectively. The equity in the underlying net assets of the Kukio Resort land development partnerships exceeds the carrying value of the investment in affiliates by approximately $322,000 as of September 30, 2017 , which is attributable to differences in the value of capitalized development costs and a note receivable. The basis difference will be recognized as the partnerships sell lots and recognize the associated costs and sell memberships for the Kuki`o Golf and Beach Club for which the receivable relates. The basis difference adjustments of $28,000 and $39,000 , for the years ended September 30, 2017 and 2016 , respectively, increased equity in income of affiliates. Summarized financial information for the Kukio Resort land development partnerships is as follows: Year ended September 30, 2017 2016 Revenue $ 31,578,000 $ 33,874,000 Gross profit $ 14,584,000 $ 15,332,000 Net earnings $ 11,107,000 $ 12,212,000 Sale of interest in leasehold land Kaupulehu Developments has the right to receive payments from KD I and KD II resulting from the sale of lots and/or residential units within approximately 870 acres of the Kaupulehu Lot 4A area by KD I and KD II in two increments (“Increment I” and “Increment II”) (see Note 19). With respect to Increment I, Kaupulehu Developments is entitled to receive payments from KD I based on the following percentages of the gross receipts from KD I’s sales of single-family residential lots in Increment I: 9% of the gross proceeds from single-family lot sales up to aggregate gross proceeds of $100,000,000 ; 10% of such aggregate gross proceeds greater than $100,000,000 up to $300,000,000 ; and 14% of such aggregate gross proceeds in excess of $300,000,000 . In fiscal 2017 , two single-family lots in Increment I were sold bringing the total amount of gross proceeds from single-family lot sales through September 30, 2017 to $208,000,000 . As of September 30, 2017 , 23 single-family lots, of the 80 lots developed within Increment I, remained to be sold. Kaupulehu Developments is entitled to receive payments from KD II resulting from the sale of lots and/or residential units by KD II within Increment II. The payments are based on a percentage of gross receipts from KD II's sales ranging from 8% to 10% of the price of improved or unimproved lots or 2.60% to 3.25% of the price of units constructed on a lot, to be determined in the future depending upon a number of variables, including whether the lots are sold prior to improvement. Two ocean front parcels approximately two to three acres in size fronting the ocean were developed within Increment II by KD II, of which one was sold in fiscal 2017 and one was sold in fiscal 2016. The remaining acreage within Increment II is not yet under development. It is uncertain when or if KD II will develop the other areas of Increment II. Kaupulehu Developments is also entitled to receive 50% of distributions otherwise payable from KD II to its members after the members of KD II have received distributions equal to the original basis of capital invested in the project, up to $8,000,000 . In fiscal 2017, the members of KD II received cumulative distributions equal to the original basis of capital invested in the project after which Kaupulehu Developments received $2,500,000 from KD II representing an amount equal to 50% of the distributions KD II made to its members in September 2017. Kaupulehu Developments incurred fees of $343,000 related to this payment which was included in "Accrued operating and other expenses" on the Company's Consolidated Balance Sheet at September 30, 2017 , and was paid in October 2017. The following table summarizes the Increment I and Increment II revenues received from KD I and KD II and the amount of fees directly related to such revenues (see Note 17 "Commitments and Contingencies - Other Matters"): Year ended September 30, 2017 2016 Sale of interest in leasehold land: Revenues - sale of interest in leasehold land $ 4,503,000 $ 2,255,000 Fees - included in general and administrative expenses (648,000 ) (340,000 ) Sale of interest in leasehold land, net of fees $ 3,855,000 $ 1,915,000 There is no assurance with regards to the amounts of future payments from Increment I or Increment II to be received. Investment in leasehold land interest – Lot 4C Kaupulehu Developments holds an interest in an area of approximately 1,000 acres of vacant leasehold land zoned conservation located adjacent to Lot 4A, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 12 Months Ended |
Sep. 30, 2017 | |
Extractive Industries [Abstract] | |
OIL AND NATURAL GAS PROPERTIES | OIL AND NATURAL GAS PROPERTIES 2017 Acquisition On September 27, 2017, Barnwell completed the acquisition of additional working interests in oil and natural gas properties located in the Spirit River area of Alberta, Canada, for cash consideration. The sales price per the agreement was adjusted to $381,000 for customary purchase price adjustments to reflect the economic activity from the effective date of June 1, 2017 to the closing date. The Spirit River acquisition was accounted for as an asset acquisition. 2017 Dispositions In June 2017, Barnwell entered into a Purchase and Sale Agreement with an independent third party and sold a portion of its oil and natural gas properties located in the Progress and Valhalla areas of Alberta, Canada. The sales price per the agreement was adjusted to $1,076,000 for customary purchase price adjustments to reflect the economic activity from the effective date of April 1, 2017 to the closing date. From Barnwell's net proceeds, $593,000 was withheld and remitted by the buyer to the Canada Revenue Agency for potential amounts due for Barnwell’s Canadian income taxes related to the sale, which is included in “Income taxes receivable” on the Consolidated Balance Sheet at September 30, 2017 . During the year ended September 30, 2017 , Barnwell also sold miscellaneous oil and natural gas properties for proceeds of $208,000 , of which $72,000 was withheld and remitted by the buyers to the Canada Revenue Agency for potential amounts due for Barnwell’s Canadian income taxes related to the sales which is included in “Income taxes receivable” on the Consolidated Balance Sheet at September 30, 2017 . No gain or loss was recognized related to these dispositions as these sales to multiple counterparties in unrelated transactions did not individually, or in aggregate, result in a significant alteration of the relationship between capitalized costs and proved reserves. 2016 Acquisition On September 12, 2016, Barnwell completed the acquisition of additional working interests in oil and natural gas properties located in the Wood River area of Alberta, Canada, for cash consideration. The sales price per the agreement was adjusted to $769,000 for customary purchase price adjustments to reflect the economic activity from the effective date of September 1, 2016 to the closing date. The Wood River acquisition was accounted for under the acquisition method of accounting, and as such, Barnwell estimated the fair value of the acquired property as of the September 12, 2016 acquisition date. The following table summarizes the allocation of the consideration paid to acquire the properties to the assets acquired and liabilities assumed in the transaction as of the acquisition date. See Note 16 for further information regarding the fair value measurement inputs. Property and equipment $ 813,000 Asset retirement obligation (44,000 ) Net identifiable assets acquired $ 769,000 The results of operations for the Wood River acquisition has been included in the consolidated financial statements from the closing date. 2016 Impairment of oil and natural gas assets Under the full cost method of accounting, the Company performs quarterly ceiling test calculations. Barnwell’s net capitalized costs exceeded the ceiling limitations at June 30, 2016. As such, Barnwell reduced the carrying value of its oil and natural gas properties by $1,154,000 during the year ended September 30, 2016. No such reduction was necessary during the current fiscal year. 2015 Disposition Barnwell entered into a purchase and sale agreement with an independent third party and, in September 2015, sold its interests in its principal oil and natural gas properties located in the Dunvegan and Belloy areas of Alberta, Canada. The disposition was recorded in fiscal 2015 using preliminary purchase price adjustments. Barnwell and the purchaser updated and finalized the purchase price adjustments in accordance with the terms of the purchase and sale agreement during fiscal 2016 which resulted in additional proceeds of $493,000 and the recognition of an additional gain in the amount of $472,000 during the year ended September 30, 2016. |
PROPERTY AND EQUIPMENT AND ASSE
PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION | 12 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION | |
PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION | PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION Barnwell’s property and equipment is detailed as follows: Estimated Gross Accumulated Net At September 30, 2017: Land $ 365,000 $ — $ 365,000 Oil and natural gas properties (full cost accounting) 68,708,000 (64,915,000 ) 3,793,000 Drilling rigs and equipment 3 – 10 years 6,577,000 (5,992,000 ) 585,000 Office 40 years 857,000 (295,000 ) 562,000 Other property and equipment 3 – 17 years 2,724,000 (2,660,000 ) 64,000 Total $ 79,231,000 $ (73,862,000 ) $ 5,369,000 Estimated Gross Accumulated Net At September 30, 2016: Land $ 365,000 $ — $ 365,000 Oil and natural gas properties (full cost accounting) 66,265,000 (61,060,000 ) 5,205,000 Drilling rigs and equipment 3 – 10 years 6,379,000 (5,770,000 ) 609,000 Office 40 years 857,000 (274,000 ) 583,000 Other property and equipment 3 – 17 years 3,002,000 (2,862,000 ) 140,000 Total $ 76,868,000 $ (69,966,000 ) $ 6,902,000 See Note 9 for discussion of acquisitions and divestitures of oil and natural gas properties in fiscal 2017 and 2016 and the impairment of oil and natural gas properties recognized in fiscal 2016. Barnwell recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. The following is a reconciliation of the asset retirement obligation: Year ended September 30, 2017 2016 Asset retirement obligation as of beginning of year $ 7,194,000 $ 6,936,000 Obligations incurred on new wells drilled or acquired 34,000 167,000 Liabilities associated with properties sold (406,000 ) — Revision of estimated obligation 154,000 (68,000 ) Accretion expense 433,000 464,000 Payments (833,000 ) (459,000 ) Foreign currency translation adjustment 287,000 154,000 Asset retirement obligation as of end of year 6,863,000 7,194,000 Less current portion (1,231,000 ) (1,017,000 ) Asset retirement obligation, long-term $ 5,632,000 $ 6,177,000 Asset retirement obligations were reduced by $406,000 in fiscal 2017 for those obligations that were assumed by purchasers of Barnwell's oil and natural gas properties. There were no such obligations assumed in fiscal 2016. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Canadian revolving demand facility In June 2016, Barnwell entered into an agreement with Royal Bank of Canada for a revolving demand facility in the amount of $500,000 Canadian dollars. Borrowings under this facility were $0 at September 30, 2016 . The obligations under the credit facility were secured by a $500,000 Canadian dollar guaranteed investment certificate pledged to Royal Bank of Canada, which is classified as "Restricted cash" on the accompanying Consolidated Balance Sheet at U.S. $381,000 , at the September 30, 2016 exchange rate. In April 2017, the revolving demand facility was canceled and the guaranteed investment certificate matured and the funds were reclassified to cash. Real estate loan Barnwell, together with its real estate joint venture, Kaupulehu 2007, had a non-revolving real estate loan with a Hawaii bank. In April 2016, the home collateralizing the loan was sold and in accordance with the terms of the loan agreement a portion of the proceeds from the sale was used to repay the $3,440,000 remaining balance of the real estate loan. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees, with benefits based on years of service and the employee’s highest consecutive 5 years average earnings. Barnwell’s funding policy is intended to provide for both benefits attributed to service to date and for those expected to be earned in the future. In addition, Barnwell sponsors a Supplemental Employee Retirement Plan (“SERP”), a noncontributory supplemental retirement benefit plan which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan, and a postretirement medical insurance benefits plan (“Postretirement Medical”) covering officers of Barnwell Industries, Inc., the parent company, who have attained at least 20 years of service of which at least 10 years were at the position of Vice President or higher, their spouses and qualifying dependents. The following tables detail the changes in benefit obligations, fair values of plan assets and reconciliations of the funded status of the retirement plans: Pension SERP Postretirement Medical September 30, 2017 2016 2017 2016 2017 2016 Change in Projected Benefit Obligation: Benefit obligation at beginning of year $ 10,055,000 $ 8,683,000 $ 2,366,000 $ 1,900,000 $ 2,486,000 $ 1,319,000 Service cost 237,000 261,000 34,000 68,000 — — Interest cost 336,000 364,000 56,000 86,000 87,000 56,000 Actuarial (gain) loss (740,000 ) 953,000 (847,000 ) 318,000 (533,000 ) 1,111,000 Benefits paid (255,000 ) (206,000 ) (4,000 ) (6,000 ) (11,000 ) — Benefit obligation at end of year 9,633,000 10,055,000 1,605,000 2,366,000 2,029,000 2,486,000 Change in Plan Assets: Fair value of plan assets at beginning of year 8,195,000 6,488,000 — — — — Actual return on plan assets 808,000 813,000 — — — — Employer contributions 350,000 1,100,000 4,000 6,000 11,000 — Benefits paid (255,000 ) (206,000 ) (4,000 ) (6,000 ) (11,000 ) — Fair value of plan assets at end of year 9,098,000 8,195,000 — — — — Funded status $ (535,000 ) $ (1,860,000 ) $ (1,605,000 ) $ (2,366,000 ) $ (2,029,000 ) $ (2,486,000 ) Pension SERP Postretirement Medical September 30, 2017 2016 2017 2016 2017 2016 Amounts recognized in the Consolidated Balance Sheets: Current liabilities $ — $ — $ (4,000 ) $ (5,000 ) $ (15,000 ) $ — Noncurrent liabilities (535,000 ) (1,860,000 ) (1,601,000 ) (2,361,000 ) (2,014,000 ) (2,486,000 ) Net amount $ (535,000 ) $ (1,860,000 ) $ (1,605,000 ) $ (2,366,000 ) $ (2,029,000 ) $ (2,486,000 ) Amounts recognized in accumulated other comprehensive loss (income) before income taxes: Net actuarial loss (gain) $ 2,374,000 $ 3,521,000 $ (50,000 ) $ 797,000 $ 280,000 $ 1,001,000 Prior service cost (credit) 65,000 70,000 (65,000 ) (70,000 ) — — Accumulated other comprehensive loss (income) $ 2,439,000 $ 3,591,000 $ (115,000 ) $ 727,000 $ 280,000 $ 1,001,000 Barnwell estimates that it will make approximately $500,000 in contributions to the Pension Plan during fiscal 2018 . In January 2017, the Postretirement Medical plan commenced payments for retiree medical insurance payments. The SERP and Postretirement Medical plans are unfunded and Barnwell funds benefits when payments are made. Expected payments under the Postretirement Medical plan and SERP for fiscal 2018 are not material. Fluctuations in actual market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods. The pension plan actuarial gains in fiscal 2017 were primarily due to an increase in the discount rate and actual investment returns that were greater than the assumed rate of return. The SERP actuarial gains in fiscal 2017 were primarily due to an increase in the discount rate and compensation increases that were lower than expected. The postretirement medical plan actuarial gains in fiscal 2017 were primarily due to an increase in the discount rate, an increase in the assumed retirement age, and decreases in the medical insurance premium assumptions. The pension plan actuarial losses in fiscal 2016 were primarily due to a decrease in the discount rate which was slightly offset by actual investment returns being greater than the assumed rate of return and an updated mortality projection scale. The SERP actuarial losses in fiscal 2016 were primarily due to a decrease in the discount rate which was slightly offset by an updated mortality projection scale. The postretirement medical plan actuarial losses in fiscal 2016 were primarily due to increases in the medical insurance premium assumptions and a decrease in the discount rate which were slightly offset by an updated mortality projection scale. The following table presents the weighted-average assumptions used to determine benefit obligations and net benefit costs: Pension SERP Postretirement Medical Year ended September 30, 2017 2016 2017 2016 2017 2016 Assumptions used to determine fiscal year-end benefit obligations: Discount rate 3.75% 3.50% 3.75% 3.50% 3.75% 3.50% Rate of compensation increase 4.00% 4.00% 4.00% 4.00% N/A N/A Assumptions used to determine net benefit costs (years ended): Discount rate 3.50% 4.25% 3.50% 4.25% 3.50% 4.25% Expected return on plan assets 6.50% 7.00% N/A N/A N/A N/A Rate of compensation increase 4.00% 4.00% 4.00% 4.00% N/A N/A The components of net periodic benefit cost are as follows: Pension SERP Postretirement Medical Year ended September 30, 2017 2016 2017 2016 2017 2016 Net periodic benefit cost for the year: Service cost $ 237,000 $ 261,000 $ 34,000 $ 68,000 $ — $ — Interest cost 336,000 364,000 56,000 86,000 87,000 56,000 Expected return on plan assets (539,000 ) (484,000 ) — — — — Amortization of prior service cost (credit) 6,000 5,000 (6,000 ) (5,000 ) — — Amortization of net actuarial loss 138,000 141,000 — 27,000 188,000 — Net periodic benefit cost $ 178,000 $ 287,000 $ 84,000 $ 176,000 $ 275,000 $ 56,000 The amounts that are estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost in the next fiscal year are as follows: Pension SERP Postretirement Prior service cost (credit) $ 6,000 $ (5,000 ) $ — Net actuarial loss 86,000 — 11,000 $ 92,000 $ (5,000 ) $ 11,000 The accumulated benefit obligation differs from the projected benefit obligation in that it assumes future compensation levels will remain unchanged. The accumulated benefit obligation for the pension plan was $8,530,000 and $8,566,000 at September 30, 2017 and 2016 , respectively. The accumulated benefit obligation for the SERP was $1,510,000 and $1,822,000 at September 30, 2017 and 2016 , respectively. The benefits expected to be paid under the retirement plans as of September 30, 2017 are as follows: Pension SERP Postretirement Expected Benefit Payments: Fiscal year ending September 30, 2018 $ 301,000 $ 4,000 $ 15,000 Fiscal year ending September 30, 2019 $ 284,000 $ 4,000 $ 15,000 Fiscal year ending September 30, 2020 $ 386,000 $ 58,000 $ 15,000 Fiscal year ending September 30, 2021 $ 404,000 $ 59,000 $ 42,000 Fiscal year ending September 30, 2022 $ 390,000 $ 58,000 $ 44,000 Fiscal years ending September 30, 2023 through 2027 $ 2,521,000 $ 531,000 $ 315,000 The following table provides the assumed health care cost trend rates related to the measurement of Barnwell’s postretirement medical obligations. Year ended September 30, 2017 2016 Health care cost trend rates assumed for next year 7.50% 7.75% Ultimate cost trend rate 5.0% 5.0% Year that the rate reaches the ultimate trend rate 2028 2028 A 7.75% annual rate of increase in the per capita cost of covered health care benefits was assumed for fiscal 2017 . This assumption is based on the plans’ recent experience. It is assumed that the rate will decrease gradually to 5% for fiscal 2028 and remain level thereafter. The assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement medical obligations. A one-percentage-point change in the assumed health care cost trend rates would have the following effects: 1-Percentage 1-Percentage Effect on total service and interest cost components $ 18,000 $ (15,000 ) Effect on accumulated postretirement benefit obligations $ 464,000 $ (361,000 ) Plan Assets Management communicates periodically with its professional investment advisors to establish investment policies, direct investments and select investment options. The overall investment objective of the Pension Plan is to attain a diversified combination of investments that provides long-term growth in the assets of the plan to fund future benefit obligations while managing risk in order to meet current benefit obligations. Generally, interest and dividends received provide cash flows to fund current benefit obligations. Longer-term obligations are generally estimated to be provided for by growth in equity securities. The Company’s investment policy permits investments in a diversified mix of U.S. and international equities, fixed income securities and cash equivalents. Barnwell’s investments in fixed income securities include corporate bonds, preferred securities, and fixed income exchange-traded funds. The Company’s investments in equity securities primarily include domestic and international large-cap companies, as well as, domestic and international equity securities exchange-traded funds. Plan assets include $4,000 of Barnwell’s stock at September 30, 2017 . The Company’s year-end target allocation, by asset category, and the actual asset allocations were as follows: Target September 30, Asset Category Allocation 2017 2016 Cash and other 0% - 30% 1% 7% Fixed income securities 20% - 60% 31% 23% Equity securities 30% - 70% 68% 70% Actual investment allocations may vary from our target allocations from time to time due to prevailing market conditions. We periodically review our actual investment allocations and rebalance our investments to our target allocations as dictated by current and anticipated market conditions and required cash flows. We categorize plan assets into three levels based upon the assumptions used to price the assets. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment in determining the fair value. Equity securities and exchange-traded funds are valued by obtaining quoted prices on recognized and highly liquid exchanges. Fixed income securities are valued based upon the closing price reported in the active market in which the security is traded. All of our plan assets are categorized as Level 1 assets, and as such, the actual market value is used to determine the fair value of assets. The following tables set forth by level, within the fair value hierarchy, pension plan assets at their fair value: Fair Value Measurements Using: Carrying Quoted Significant Significant Financial Assets: Cash $ 124,000 $ 124,000 $ — $ — Certificates of deposit 496,000 496,000 — — Corporate bonds 210,000 210,000 — — Fixed income exchange-traded funds 2,036,000 2,036,000 — — Preferred securities 51,000 51,000 — — Equity securities exchange-traded funds 553,000 553,000 — — Equities 5,628,000 5,628,000 — — Total $ 9,098,000 $ 9,098,000 $ — $ — Fair Value Measurements Using: Carrying Quoted Significant Significant Financial Assets: Cash $ 571,000 $ 571,000 $ — $ — Corporate bonds 316,000 316,000 — — Fixed income exchange-traded funds 1,414,000 1,414,000 — — Preferred securities 184,000 184,000 — — Equity securities exchange-traded funds 818,000 818,000 — — Equities 4,892,000 4,892,000 — — Total $ 8,195,000 $ 8,195,000 $ — $ — |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of earnings (loss) before income taxes, after adjusting the earnings (loss) for non-controlling interests, are as follows: Year ended September 30, 2017 2016 United States $ 1,522,000 $ (360,000 ) Canada (1,431,000 ) (3,977,000 ) $ 91,000 $ (4,337,000 ) The components of the income tax benefit related to the above income (loss) are as follows: Year ended September 30, 2017 2016 Current (benefit) provision: United States – Federal $ — $ — United States – State Before operating loss carryforwards 118,000 — Benefit of operating loss carryforwards (107,000 ) — After operating loss carryforwards 11,000 — 11,000 — Canadian (823,000 ) (651,000 ) Total current (812,000 ) (651,000 ) Deferred (benefit) provision: United States – Federal — — United States – State 11,000 220,000 Canadian (279,000 ) (291,000 ) Total deferred (268,000 ) (71,000 ) $ (1,080,000 ) $ (722,000 ) Consolidated taxes do not bear a customary relationship to pretax results due primarily to the fact that the Company is taxed separately in Canada based on Canadian source operations and in the U.S. based on consolidated operations, and essentially all deferred tax assets, net of relevant offsetting deferred tax liabilities and any amounts estimated to be realizable through tax carryback strategies, are not estimated to have a future benefit as tax credits or deductions. Income from our non-controlling interest in the Kukio Resort land development partnerships is treated as non-unitary for state of Hawaii unitary filing purposes, thus unitary Hawaii losses provide limited sheltering of such non-unitary income. In addition, the current Canadian income tax benefit for the year ended September 30, 2017 includes a $369,000 benefit from the lapsing of the statute of limitations on a previously accrued uncertain tax position in addition to the benefit attributable to the current year Canadian jurisdiction pretax loss. A reconciliation between the reported income tax benefit and the amount computed by multiplying the earnings (loss) attributable to Barnwell before income taxes by the U.S. federal tax rate of 35% is as follows: Year ended September 30, 2017 2016 Tax provision (benefit) computed by applying statutory rate $ 32,000 $ (1,518,000 ) (Decrease) increase in the valuation allowance (1,034,000 ) 1,102,000 Uncertain tax positions - lapse of statute (369,000 ) (173,000 ) Additional effect of the foreign tax provision on the total tax provision 254,000 (484,000 ) U.S. state tax provision, before changes in uncertain tax positions and net of federal benefit 22,000 314,000 Other 15,000 37,000 $ (1,080,000 ) $ (722,000 ) The changes in the valuation allowance shown in the table above exclude the impact of changes in uncertain tax positions and state taxes, the valuation allowance impacts of which are incorporated within the respective reconciliation line items elsewhere in the table. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: September 30, 2017 2016 Deferred income tax assets: Foreign tax credit carryover $ 3,062,000 $ 4,028,000 Alternative minimum tax credit carryover 460,000 460,000 U.S. federal net operating loss carryover 9,773,000 8,728,000 Tax basis of investment in land and residential real estate in excess of book basis 877,000 836,000 Property and equipment accumulated book depreciation and depletion in excess of tax under U.S. tax law 2,180,000 3,611,000 Liabilities accrued for books but not for tax under U.S. tax law 3,910,000 4,843,000 Liabilities accrued for books but not for tax under Canadian tax law 2,103,000 2,303,000 Other 1,091,000 1,108,000 Total gross deferred income tax assets 23,456,000 25,917,000 Less valuation allowance (21,158,000 ) (23,410,000 ) Net deferred income tax assets 2,298,000 2,507,000 Deferred income tax liabilities: Property and equipment accumulated tax depreciation and depletion in excess of book under Canadian tax law (914,000 ) (1,012,000 ) Book basis of investment in land development partnerships in excess of tax basis (1,289,000 ) (1,668,000 ) Other (31,000 ) (31,000 ) Total deferred income tax liabilities (2,234,000 ) (2,711,000 ) Net deferred income tax asset (liability) $ 64,000 $ (204,000 ) Reported as: Deferred income tax assets 300,000 — Deferred income tax liabilities (236,000 ) (204,000 ) Net deferred income tax asset (liability) $ 64,000 $ (204,000 ) The total valuation allowance decreased $2,252,000 for the year ended September 30, 2017 . The decrease was primarily due to decreases in various deferred tax assets for which a full valuation allowance had been provided, partially offset by an increase in the valuation allowance for deferred tax assets under U.S. federal tax law primarily related to an increase in U.S. federal net operating loss carryovers that are not more likely than not to have a future tax benefit. The decrease was also attributable to changes in the estimate of the future benefit of deferred tax assets under Canadian tax law from changes in the impacts of offsetting reversals of relevant deferred tax liabilities and changes in the amounts available for realization through tax strategies. Of the total net decrease in the valuation allowance for fiscal 2017 , $1,454,000 was recognized as an income tax benefit and $798,000 was credited to accumulated other comprehensive loss. Net deferred tax assets at September 30, 2017 of $2,298,000 consists of the portion of deferred tax assets for which it is estimated that it is more likely than not that such future deductions will be realizable as the result of concurrent deferred tax liability reversals or tax loss carryback strategies under Canadian tax law. At September 30, 2017 , Barnwell had foreign tax credit carryovers, alternative minimum tax credit carryovers, and U.S. federal net operating loss carryovers totaling $3,062,000 , $460,000 and $28,743,000 , respectively. All three items were fully offset by valuation allowances at September 30, 2017 . The net operating loss carryovers expire in fiscal years 2032-2037, and the foreign tax credit carryovers expire in fiscal years 2019-2025. FASB ASC Topic 740, Income Taxes , prescribes a threshold for recognizing the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. Below are the changes in unrecognized tax benefits. Year ended September 30, 2017 2016 Balance at beginning of year $ 377,000 $ 582,000 Effect of tax positions taken in prior years — — Accrued interest related to tax positions taken 11,000 20,000 Settlements (10,000 ) — Lapse of statute (369,000 ) (173,000 ) Translation adjustments (9,000 ) (52,000 ) Balance at end of year $ — $ 377,000 The Company has no remaining uncertain tax positions as of September 30, 2017 . Included in the liability for unrecognized tax benefits at September 30, 2016 , was accrued interest of $35,000 . Uncertain tax positions as of September 30, 2016 consisted primarily of Canadian federal and provincial issues that involved transfer pricing adjustments. Included below is a summary of the tax years, by jurisdiction, that remain subject to examination by taxing authorities at September 30, 2017 : Jurisdiction Fiscal Years Open U.S. federal 2014 – 2016 Various U.S. states 2014 – 2016 Canada federal 2010 – 2016 Various Canadian provinces 2010 – 2016 |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION Barnwell operates the following segments: 1) acquiring, developing, producing and selling oil and natural gas in Canada (oil and natural gas); 2) investing in land interests in Hawaii (land investment); and 3) drilling wells and installing and repairing water pumping systems in Hawaii (contract drilling). In previous years, Barnwell developed homes for sale in Hawaii in its residential real estate segment. The following table presents certain financial information related to Barnwell’s reporting segments. All revenues reported are from external customers with no intersegment sales or transfers. Year ended September 30, 2017 2016 Revenues: Oil and natural gas $ 4,383,000 $ 3,177,000 Land investment 4,503,000 2,255,000 Contract drilling 3,938,000 2,233,000 Residential real estate — 5,700,000 Other 113,000 216,000 Total before interest income 12,937,000 13,581,000 Interest income 93,000 46,000 Total revenues $ 13,030,000 $ 13,627,000 Depletion, depreciation, and amortization: Oil and natural gas $ 848,000 $ 1,236,000 Contract drilling 270,000 251,000 Other 85,000 120,000 Total depletion, depreciation, and amortization $ 1,203,000 $ 1,607,000 Impairment: Land investment $ 155,000 $ — Oil and natural gas — 1,154,000 Total impairment $ 155,000 $ 1,154,000 Operating profit (loss) (before general and administrative expenses): Oil and natural gas $ 507,000 $ (2,355,000 ) Land investment 4,348,000 2,255,000 Contract drilling 437,000 (116,000 ) Residential real estate — 190,000 Other 28,000 96,000 Gain on sales of assets 527,000 472,000 Total operating profit 5,847,000 542,000 Equity in income of affiliates: Land investment 2,276,000 2,624,000 General and administrative expenses (6,976,000 ) (6,701,000 ) Interest expense (6,000 ) (97,000 ) Interest income 93,000 46,000 Earnings (loss) before income taxes $ 1,234,000 $ (3,586,000 ) Capital Expenditures: Year ended September 30, 2017 2016 Oil and natural gas $ 1,037,000 $ 1,872,000 Contract drilling 229,000 66,000 Other 9,000 2,000 Total $ 1,275,000 $ 1,940,000 Assets By Segment: September 30, 2017 2016 Oil and natural gas (1) $ 5,910,000 $ 6,323,000 Land investment (2) 3,247,000 4,744,000 Contract drilling (2) 1,543,000 1,438,000 Other: Cash and cash equivalents 16,281,000 15,550,000 Certificates of deposit 4,413,000 — Restricted cash — 381,000 Corporate and other 1,626,000 3,132,000 Total $ 33,020,000 $ 31,568,000 ______________ (1) Primarily located in the province of Alberta, Canada. (2) Located in Hawaii. Long-Lived Assets By Geographic Area: September 30, 2017 2016 United States $ 3,765,000 $ 5,187,000 Canada 4,113,000 5,267,000 Total $ 7,878,000 $ 10,454,000 Revenue By Geographic Area: Year ended September 30, 2017 2016 United States $ 8,444,000 $ 10,226,000 Canada 4,493,000 3,355,000 Total (excluding interest income) $ 12,937,000 $ 13,581,000 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Components of accumulated other comprehensive income (loss), net of taxes, are as follows: Year ended September 30, 2017 2016 Foreign currency translation: Beginning accumulated foreign currency translation $ 906,000 $ 819,000 Change in cumulative translation adjustment before reclassifications 147,000 87,000 Income taxes — — Net current period other comprehensive income 147,000 87,000 Ending accumulated foreign currency translation 1,053,000 906,000 Retirement plans: Beginning accumulated retirement plans benefit cost (4,826,000 ) (2,941,000 ) Amortization of net actuarial loss and prior service cost 326,000 168,000 Net actuarial gain (loss) arising during the period 2,389,000 (2,053,000 ) Income taxes — — Net current period other comprehensive income (loss) 2,715,000 (1,885,000 ) Ending accumulated retirement plans benefit cost (2,111,000 ) (4,826,000 ) Accumulated other comprehensive loss, net of taxes $ (1,058,000 ) $ (3,920,000 ) The amortization of accumulated other comprehensive loss components for the retirement plans are included in the computation of net periodic benefit cost which is a component of “General and administrative” expenses on the accompanying Consolidated Statements of Operations (see Note 12 for additional details). |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments The carrying values of cash and cash equivalents, certificates of deposit, restricted cash, accounts and other receivables, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis At September 30, 2017, the carrying value of the investment held for sale was $1,037,000 , and a $155,000 impairment of the value of the investment held for sale was recognized in the year ended September 30, 2017. In determining the estimated fair value of the investment held for sale at September 30, 2017, prices for comparable sales transactions and analysis of current market conditions were used by an independent real estate consulting and appraisal firm. This fair value measurement has been classified as a Level 2 valuation. The estimated fair values of oil and natural gas properties and the asset retirement obligation assumed in the acquisitions of additional oil and natural gas working interests are based on an estimated discounted cash flow model and market assumptions. The significant Level 3 assumptions used in the calculation of estimated discounted cash flows included future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates. See Note 9 for additional information regarding oil and natural gas property acquisitions. Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements. As further described in Note 10, the Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. Asset retirement obligations are not measured at fair value subsequent to initial recognition. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments Barnwell has several non-cancelable operating leases for office space, contract drilling base yard space and leasehold land, and records rent on a straight-line basis over the lease term. Rental expense was $426,000 and $404,000 for the years ended September 30, 2017 and 2016 , respectively. At September 30, 2017 , the difference between the recognized rent expense and the amounts paid totaled $21,000 and was reported as a non-current liability within "Deferred rent" on the Consolidated Balance Sheet. There was no deferred rent liability at September 30, 2016. Barnwell is committed under these leases for minimum rental payments summarized by fiscal year as follows: Fiscal year ending 2018 $ 298,000 2019 277,000 2020 277,000 2021 277,000 2022 219,000 Thereafter through 2047 6,482,000 Total $ 7,830,000 The lease payments for the Lot 4C leasehold land were subject to renegotiation as of January 1, 2006. Per the lease agreement, the lease payments will remain unchanged pending an appraisal, whereupon the lease rent could be adjusted to fair market value. Barnwell does not know the amount of the new lease payments which could be effective upon performance of the appraisal; they may remain unchanged or increase, and Barnwell currently expects the adjustment, if any, to not be material. The future rental payment disclosures above assume the minimum lease payments for leasehold land in effect at December 31, 2005 remain unchanged through December 2025, the end of the lease term. Environmental Matters In February 2016, a gas migration was detected at one of our previously abandoned non-operated wells in Alberta, Canada. Barnwell’s working interest in the well is 50% and as non-operator we have no control over the actual cost or timing of the remediation. In February 2016, we accrued approximately $200,000 for estimated probable environmental remediation costs, which was the balance of the accrual in "Accrued operating and other expenses" at September 30, 2016. However, based on recent information from the operator of the well, the cost to remediate will be less than originally estimated and the remaining liability is approximately $2,000 at September 30, 2017 , which has not been discounted and was accrued in "Accrued operating and other expenses" on the Consolidated Balance Sheets. Because of the inherent uncertainties associated with environmental assessment and remediation activities, future expenses to remediate the currently identified sites, and sites identified in the future, if any, could be incurred. Legal and Regulatory Matters Barnwell is routinely involved in disputes with third parties that occasionally require litigation. In addition, Barnwell is required to maintain compliance with all current governmental controls and regulations in the ordinary course of business. Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity. Other Matters Barnwell is obligated to pay Nearco Enterprises Ltd. 10.4% , net of non-controlling interests' share, of Kaupulehu Developments’ gross receipts from real estate transactions. The fees represent compensation for promotion and marketing of Kaupulehu Developments’ property and were determined based on the estimated fair value of such services. These fees are included in general and administrative expenses. Barnwell is obligated to pay its external real estate legal counsel 1.2% , net of non-controlling interests' share, of all Increment II payments received by Kaupulehu Developments for services provided by its external real estate legal counsel in the negotiation and closing of the Increment II transaction. These fees are included in general and administrative expenses. |
INFORMATION RELATING TO THE CON
INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS | INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS The following table details the effect of changes in current assets and liabilities on the Consolidated Statements of Cash Flows, and presents supplemental cash flow information: Year ended September 30, 2017 2016 Increase (decrease) from changes in: Receivables $ (166,000 ) $ 933,000 Other current assets (289,000 ) 197,000 Accounts payable (279,000 ) (1,456,000 ) Accrued compensation (72,000 ) (79,000 ) Other current liabilities 192,000 (882,000 ) Decrease from changes in current assets and liabilities $ (614,000 ) $ (1,287,000 ) Supplemental disclosure of cash flow information: Cash paid (received) during the year for: Interest $ 6,000 $ 94,000 Income taxes refunded, net $ (90,000 ) $ (219,000 ) Supplemental disclosure of non-cash investing activities: Canadian income tax withholding on proceeds from the sale of oil and natural gas properties $ 665,000 $ — Capital expenditure accruals related to oil and natural gas acquisition and development decreased $101,000 and increased $76,000 during the years ended September 30, 2017 and 2016 , respectively. Additionally, during the years ended September 30, 2017 and 2016 , capital expenditure accruals related to oil and natural gas asset retirement obligations increased $188,000 and $99,000 , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Kaupulehu Developments is entitled to receive a percentage of the gross receipts from the sales of lots in Increment I from KD I and the sales of lots and/or residential units in Increment II from KD II. Kaupulehu Developments is also entitled to receive 50% of distributions, up to $8,000,000 , otherwise payable from KD II to its members, after the members of KD II have received distributions equal to the original basis of the capital they invested in the project, which occurred in fiscal 2017. KD I and KD II are part of the Kukio Resort land development partnerships in which Barnwell holds an indirect 19.6% non-controlling ownership interest accounted for under the equity method of investment. The percentage payments and percent of distribution payments are part of transactions which took place in 2004 and 2006 where Kaupulehu Developments sold its leasehold interests in Increment I and Increment II to KD I's and KD II's predecessors in interest, respectively, which was prior to Barnwell’s affiliation with KD I and KD II which commenced on November 27, 2013, the acquisition date of our ownership interest in the Kukio Resort land development partnerships. During the year ended September 30, 2017 , Barnwell received $2,003,000 in percentage of sales payments from KD I and KD II from the sale of two lots within Phase II of Increment I and the sale of one lot within Increment II. In fiscal 2017, the members of KD II received cumulative distributions equal to the original basis of capital invested in the project after which Kaupulehu Developments received $2,500,000 during the year ended September 30, 2017 . During the year ended September 30, 2016 , Barnwell received $2,255,000 in percentage of sales payments from KD I and KD II from the sale of three lots within Phase II of Increment I and one lot within Increment II. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In October 2017, Barnwell entered into a Purchase and Sale Agreement with an independent third party and sold its oil and natural gas properties located in the Pouce Coupe area of Alberta, Canada. The sales price per the agreement was adjusted to $73,000 for customary purchase price adjustments to reflect the economic activity from the effective date of May 1, 2017 to the closing date. From Barnwell's net proceeds, $36,000 was withheld and remitted by the buyer to the Canada Revenue Agency for potential amounts due for Barnwell’s Canadian income taxes. In December 2017, Barnwell entered into a Purchase and Sale Agreement with an independent third party to sell its oil properties located in the Red Earth area of Alberta, Canada for $1,560,000 , which is expected to close in January 2018. The sales price per the agreement will be adjusted at closing for customary purchase price adjustments to reflect the economic activity from the effective date of October 1, 2017 to the closing date. |
SUMMARY OF SELECTED QUARTERLY F
SUMMARY OF SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUMMARY OF SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SUMMARY OF SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Disclosure is not required as Barnwell qualifies as a smaller reporting company. |
SUPPLEMENTARY OIL AND NATURAL G
SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED) | 12 Months Ended |
Sep. 30, 2017 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED) | SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED) The following tables summarize information relative to Barnwell’s oil and natural gas operations, which are conducted in Canada. Proved reserves are the estimated quantities of oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved producing oil and natural gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. The estimated net interests in total proved and proved producing reserves are based upon subjective engineering judgments and may be affected by the limitations inherent in such estimations. The process of estimating reserves is subject to continual revision as additional information becomes available as a result of drilling, testing, reservoir studies and production history. There can be no assurance that such estimates will not be materially revised in subsequent periods. (A) Oil and Natural Gas Reserves The following table summarizes changes in the estimates of Barnwell’s net interests in total proved developed reserves of oil and natural gas liquids and natural gas, which are all in Canada. The Company has no proved undeveloped reserves. All of the information regarding reserves in this Form 10-K is derived from the report of our independent petroleum reserve engineers, InSite, and is included as an Exhibit to this Form 10-K. OIL & NGL GAS Total Proved reserves: Balance at September 30, 2015 469,000 3,124,000 1,008,000 Revisions of previous estimates (23,000 ) (1,320,000 ) (251,000 ) Extensions, discoveries and other additions 54,000 95,000 70,000 Acquisitions of reserves 34,000 18,000 37,000 Less production (84,000 ) (476,000 ) (166,000 ) Balance at September 30, 2016 450,000 1,441,000 698,000 Revisions of previous estimates 85,000 2,103,000 447,000 Acquisitions of reserves 31,000 39,000 38,000 Less sales of reserves (67,000 ) (200,000 ) (101,000 ) Less production (86,000 ) (378,000 ) (151,000 ) Balance at September 30, 2017 413,000 3,005,000 931,000 (B) Capitalized Costs Relating to Oil and Natural Gas Producing Activities All capitalized costs relating to oil and natural gas producing activities, which were being depleted in all years, are summarized as follows: September 30, 2017 2016 Proved properties $ 68,522,000 $ 66,044,000 Unproved properties 186,000 221,000 Total capitalized costs 68,708,000 66,265,000 Accumulated depletion and depreciation 64,915,000 61,060,000 Net capitalized costs $ 3,793,000 $ 5,205,000 (C) Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Year ended September 30, 2017 2016 Acquisition of properties: Unproved $ 70,000 $ 161,000 Proved 381,000 608,000 Development costs 586,000 1,103,000 Total $ 1,037,000 $ 1,872,000 Development costs incurred in the table above include additions and revisions to Barnwell’s asset retirement obligation of $188,000 and $99,000 for the years ended September 30, 2017 and 2016 , respectively. (D) Results of Operations for Oil and Natural Gas Producing Activities Year ended September 30, 2017 2016 Net revenues $ 4,383,000 $ 3,177,000 Production costs (3,028,000 ) (3,142,000 ) Depletion (848,000 ) (1,236,000 ) Impairment of assets — (1,154,000 ) Pre-tax results of operations (1) 507,000 (2,355,000 ) Estimated income tax benefit (2) 282,000 297,000 Results of operations (1) $ 789,000 $ (2,058,000 ) _________________ (1) Before gain on sale of oil and natural gas properties, general and administrative expenses, interest expense, and foreign exchange gains and losses. (2) Estimated income tax benefit includes changes to the deferred income tax valuation allowance necessary for the portion of Canadian tax law deferred tax assets that may not be realizable. (E) Standardized Measure, Including Year-to-Year Changes Therein, of Estimated Discounted Future Net Cash Flows The following tables utilize reserve and production data estimated by independent petroleum reserve engineers. The information may be useful for certain comparison purposes but should not be solely relied upon in evaluating Barnwell or its performance. Moreover, the projections should not be construed as realistic estimates of future cash flows, nor should the standardized measure be viewed as representing current value. The estimated future cash flows at September 30, 2017 and 2016 were based on average sales prices in effect on the first day of the month for the preceding twelve month period in accordance with SEC Release No. 33-8995. The future production and development costs represent the estimated future expenditures that we will incur to develop and produce the proved reserves, assuming continuation of existing economic conditions. The future income tax expenses were computed by applying statutory income tax rates in existence at September 30, 2017 and 2016 to the future pre-tax net cash flows relating to proved reserves, net of the tax basis of the properties involved. Material revisions to reserve estimates may occur in the future, development and production of the oil and natural gas reserves may not occur in the periods assumed and actual prices realized and actual costs incurred are expected to vary significantly from those used. Management does not rely upon this information in making investment and operating decisions; rather, those decisions are based upon a wide range of factors, including estimates of probable reserves as well as proved reserves and price and cost assumptions different than those reflected herein. Standardized Measure of Discounted Future Net Cash Flows September 30, 2017 2016 Future cash inflows $ 24,786,000 $ 17,259,000 Future production costs (15,140,000 ) (11,951,000 ) Future development costs (1,172,000 ) (426,000 ) Future income tax expenses (2,401,000 ) (1,016,000 ) Future net cash flows 6,073,000 3,866,000 10% annual discount for timing of cash flows (1,756,000 ) (956,000 ) Standardized measure of discounted future net cash flows $ 4,317,000 $ 2,910,000 Changes in the Standardized Measure of Discounted Future Net Cash Flows Year ended September 30, 2017 2016 Beginning of year $ 2,910,000 $ 4,035,000 Sales of oil and natural gas produced, net of production costs (1,355,000 ) (35,000 ) Net changes in prices and production costs, net of royalties and wellhead taxes 3,033,000 (4,134,000 ) Extensions and discoveries — 1,285,000 Net change due to purchases and sales of minerals in place (305,000 ) 470,000 Revisions of previous quantity estimates 511,000 (343,000 ) Net change in income taxes (1,247,000 ) 98,000 Accretion of discount 305,000 412,000 Other - changes in the timing of future production and other 400,000 1,018,000 Other - net change in Canadian dollar translation rate 65,000 104,000 Net change 1,407,000 (1,125,000 ) End of year $ 4,317,000 $ 2,910,000 |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Barnwell Industries, Inc. and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6% -owned land investment general partnership (Kaupulehu Developments), a 75% -owned land investment partnership (KD Kona 2013 LLLP) and an 80% -owned joint venture (Kaupulehu 2007, LLLP). All significant intercompany accounts and transactions have been eliminated. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in VIEs in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of the financial statements in conformity with U.S. GAAP requires management of Barnwell to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ significantly from those estimates. Significant assumptions are required in the valuation of deferred tax assets, asset retirement obligations, share-based payment arrangements, obligations for retirement plans, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded. |
Reclassification | Reclassification Fees related to percentage of sales payments have been reclassified to general and administrative expenses rather than being presented net with sale of interest in leasehold land revenues for the prior year to conform to the current year presentation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and short-term investments with original maturities of three months or less. |
Certificates of deposit | Certificates of deposit Certificates of deposit include certificates of deposit at various financial institutions with original maturities in excess of three months. |
Restricted Cash | Restricted Cash Restricted cash at September 30, 2016 consisted of a $500,000 Canadian dollar, or U.S. $381,000 at the September 30, 2016 exchange rate, guaranteed investment certificate pledged to the Royal Bank of Canada as was required by our revolving demand facility. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and certificates of deposit. We maintain bank account balances with high quality financial institutions which often exceed insured limits. We have not experienced any losses with these accounts and believe that we are not exposed to any significant credit risk on cash. Certificates of deposit are maintained at separate high-quality financial institutions within insured limits and are therefore not exposed to any credit risk. |
Accounts and Other Receivables | Accounts and Other Receivables Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is Barnwell’s best estimate of the amount of probable credit losses in Barnwell’s existing accounts receivable and is based on historical write-off experience and the application of the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Barnwell does not have any off-balance sheet credit exposure related to its customers. |
Investment Held for Sale | Investment Held for Sale Investment held for sale is reported at the lower of the asset carrying value or fair value less costs to sell. The recorded balance is evaluated for impairment whenever events or changes in circumstances indicate that the balance may not be fully recoverable. This evaluation requires management to make assumptions and apply considerable judgments to, among others, estimates of the timing and amount of future cash flows, uncertainty about future events, including changes in economic conditions, changes in operating performance, and ongoing cost of maintenance and improvements of the assets. Changes in these and other assumptions may require impairment charges that may materially impact the Company’s future operating results. Assets are classified as held for sale if management commits to a plan to sell the property, the Company actively markets the property in its current condition for a price that is reasonable in comparison to its fair value and management considers the sale of such property within one year of the balance sheet date to be probable. |
Investments in Real Estate | Investments in Real Estate Barnwell accounts for sales of Increment I and Increment II leasehold land interests under the full accrual method. Gains from such sales were recognized when the buyer’s investments were adequate to demonstrate a commitment to pay for the property, risks and rewards of ownership transferred to the buyer, and Barnwell did not have a substantial continuing involvement with the property sold. With regard to payments Kaupulehu Developments is entitled to receive from KD I and KD II, the percentage of sales payments from KD I and KD II and percentage of distributions from KD II are contingent future profits which will be recognized when they are realized. All costs of the sales of Increment I and Increment II leasehold land interests were recognized at the time of sale and were not deferred to future periods when any contingent profits will be recognized. |
Equity Method Investments | Equity Method Investments Affiliated companies, which are limited partnerships or similar entities, in which Barnwell holds more than a 3% to 5% ownership interest and does not control, are accounted for as equity method investments. Equity method investment adjustments include Barnwell’s proportionate share of investee income or loss, adjustments to recognize certain differences between Barnwell’s carrying value and Barnwell’s equity in net assets of the investee at the date of investment, impairments and other adjustments required by the equity method. Gains or losses are realized when such investments are sold. Investments in equity method investees are evaluated for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of the assets exceed their respective fair values, additional impairment tests are performed to measure the amounts of the impairment losses, if any. When an impairment test demonstrates that the fair value of an investment is less than its carrying value, management will determine whether the impairment is either temporary or other-than-temporary. Examples of factors which may be indicative of an other-than-temporary impairment include (a) the length of time and extent to which fair value has been less than carrying value, (b) the financial condition and near-term prospects of the investee, and (c) the intent and ability to retain the investment in the investee for a period of time sufficient to allow for any anticipated recovery in fair value. If the decline in fair value is determined by management to be other-than-temporary, the carrying value of the investment is written down to its estimated fair value as of the balance sheet date of the reporting period in which the assessment is made. |
Variable Interest Entities | Variable Interest Entities The consolidation of VIEs is required when an enterprise has a controlling financial interest and is therefore the VIE’s primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE and, if so, whether the Company is primary beneficiary, may require significant judgment. Barnwell analyzes its unconsolidated affiliates in which it has an investment to determine whether the unconsolidated entities are VIEs and, if so, whether the Company is the primary beneficiary. This analysis includes a qualitative review based on an evaluation of the design of the entity, its organizational structure, including decision making ability and financial agreements, as well as a quantitative review. Our unconsolidated affiliates that have been determined to be VIEs are accounted under the equity method because we do not have a controlling financial interest and are therefore not the VIE’s primary beneficiary (see Note 8). |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Barnwell uses the full cost method of accounting under which all costs incurred in the acquisition, exploration and development of oil and natural gas reserves, including costs related to unsuccessful wells and estimated future site restoration and abandonment, are capitalized. We capitalize internal costs that can be directly identified with our acquisition, exploration and development activities and do not include any costs related to production, general corporate overhead or similar activities. Under the full cost method of accounting, we review the carrying value of our oil and natural gas properties, on a country-by-country basis, each quarter in what is commonly referred to as the ceiling test. Under the ceiling test, capitalized costs, net of accumulated depletion and oil and natural gas related deferred income taxes, may not exceed an amount equal to the sum of 1) the discounted present value (at 10% ), using average first-day-of-the-month prices during the 12-month period ending as of the balance sheet date held constant over the life of the reserves, of Barnwell’s estimated future net cash flows from estimated production of proved oil and natural gas reserves as determined by independent petroleum reserve engineers, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations; plus 2) the cost of major development projects and unproven properties not subject to depletion, if any; plus 3) the lower of cost or estimated fair value of unproven properties included in costs subject to depletion; less 4) related income tax effects. If net capitalized costs exceed this limit, the excess is expensed. Depletion is computed using the units-of-production method whereby capitalized costs, net of estimated salvage values, plus estimated future costs to develop proved reserves and satisfy asset retirement obligations, are amortized over the total estimated proved reserves on a country-by-country basis. Investments in major development projects are not depleted until either proved reserves are associated with the projects or impairment has been determined. Proceeds from the disposition of oil and natural gas properties are credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves in a particular country. Revenues associated with the sale of oil, natural gas and natural gas liquids are recognized in the Consolidated Statements of Operations when the oil, natural gas and natural gas liquids are delivered and title has passed to the customer. Barnwell’s sales reflect its working interest share after royalties. Barnwell’s production is generally delivered and sold at the plant gate. Barnwell does not have transportation volume commitments with pipelines and does not have natural gas imbalances related to natural gas balancing arrangements with its partners. |
Acquisitions | Acquisitions In accordance with the guidance for business combinations, Barnwell determines whether an acquisition is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method of accounting. If the assets acquired are not a business, the Company accounts for the transaction as an asset acquisition. Under both methods purchase prices are allocated to acquired assets and assumed liabilities based on their estimated fair value at the time of the acquisition. For transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. |
Long-lived Assets | Long-lived Assets Long-lived assets to be held and used, other than oil and natural gas properties, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Recoverability is measured by comparing the carrying amount of the asset to the future net cash flows expected to result from use of the asset (undiscounted and without interest charges). If it is determined that the asset may not be recoverable, impairment loss is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of the asset carrying value or fair value, less cost to sell. Water well drilling rigs, office and other property and equipment are depreciated using the straight-line method based on estimated useful lives. |
Share-based Compensation | Share-based Compensation Share-based compensation cost is measured at fair value. Barnwell utilizes a closed-form valuation model to determine the fair value of each option award. Expected volatilities are based on the historical volatility of Barnwell’s stock over a period consistent with that of the expected terms of the options. The expected terms of the options represent expectations of future employee exercise and are estimated based on factors such as vesting periods, contractual expiration dates, historical trends in Barnwell’s stock price, and historical exercise behavior. The risk-free rates for periods within the contractual life of the options are based on the yields of U.S. Treasury instruments with terms comparable to the estimated option terms. Expected dividends are based on current and historical dividend payments. |
Retirement Plans | Retirement Plans Barnwell accounts for its defined benefit pension plan, Supplemental Employee Retirement Plan, and postretirement medical insurance benefits plan by recognizing the over-funded or under-funded status as an asset or liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which the changes occur through comprehensive income. See further discussion at Note 12. The estimation of Barnwell’s retirement plan obligations, costs and liabilities requires management to estimate the amount and timing of cash outflows for projected future payments and cash inflows for maturities and expected returns on plan assets. These assumptions may have an effect on the amount and timing of future contributions. At the end of each year, Barnwell determines the discount rate to be used to calculate the present value of plan liabilities and the net periodic benefit cost. The discount rate is an estimate of the current interest rate at which the retirement plan liabilities could be effectively settled at the end of the year. In estimating this rate, Barnwell performs a cash-flow matching discount rate analysis developed using high-quality corporate bonds yield. The discount rate used to value the future benefit obligation as of each year-end is the rate used to determine the periodic benefit cost in the following year. The expected long-term return on assets assumption for the pension plans represents the average rate of return to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. The actual fair value of plan assets and estimated rate of return is used to determine the expected investment return during the year. The estimated rate of return on plan assets is based on an estimate of future experience for plan asset returns, the mix of plan assets, current market conditions, and expectations for future market conditions. A decrease (increase) of 50 basis points in the expected return on assets assumption would increase (decrease) pension expense by approximately $47,000 based on the assets of the plan at September 30, 2017 . The effects of changing assumptions are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income. These unamortized gains and losses in excess of certain thresholds are amortized and reclassified to income (loss) over the average remaining service life of active employees. |
Asset Retirement Obligation | Asset Retirement Obligation Barnwell accounts for asset retirement obligations by recognizing the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. These assumptions represent Level 3 inputs. Barnwell’s estimated site restoration and abandonment costs of its oil and natural gas properties are capitalized as part of the carrying amount of oil and natural gas properties and depleted over the life of the related reserves. When the assumptions used to estimate a recorded asset retirement obligation change, a revision is recorded to both the asset retirement obligation and the capitalized cost of asset retirements. The liability is accreted at the end of each period through charges to oil and natural gas operating expense. |
Income Taxes | Income Taxes Income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax impacts of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax asset will not be realized. Management evaluates its potential exposures from tax positions taken that have been or could be challenged by taxing authorities. These potential exposures result because taxing authorities may take positions that differ from those taken by management in the interpretation and application of statutes, regulations and rules. Management considers the possibility of alternative outcomes based upon past experience, previous actions by taxing authorities (e.g., actions taken in other jurisdictions) and advice from tax experts. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with a taxing authority on a jurisdiction-by-jurisdiction basis. Liabilities for unrecognized tax benefits related to such tax positions are included in long-term liabilities unless the tax position is expected to be settled within the upcoming year, in which case the liabilities are included in current liabilities. Interest and penalties related to uncertain tax positions are included in income tax expense. |
Contract Drilling | Contract Drilling Revenues, costs and profits applicable to contract drilling contracts are included in the Consolidated Statements of Operations using the percentage of completion method, principally measured by the percentage of labor dollars incurred to date for each contract to total estimated labor dollars for each contract. Contract losses are recognized in full in the period the losses are identified. The performance of drilling contracts may extend over more than a year and, in the interim periods, estimates of total contract costs and profits are used to determine revenues and profits earned for reporting the results of contract drilling operations. Revisions in the estimates required by subsequent performance and final contract settlements are included as adjustments to the results of operations in the period such revisions and settlements occur. Contracts are normally less than a year in duration. |
Environmental | Environmental Barnwell is subject to extensive environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and maintenance of surface conditions and may require Barnwell to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed. Liabilities for expenditures of a noncapital nature are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated. Barnwell recognizes an insurance receivable related to environmental expenditures when collection of the receivable is deemed probable. Any recognition of an insurance receivable is recorded by crediting and offsetting the original charge. Any differential arising between insurance recoveries and insurance receivables is expensed or capitalized, consistent with the original treatment. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of foreign subsidiaries are translated at the year-end exchange rate. Operating results of foreign subsidiaries are translated at average exchange rates during the period. Translation adjustments have no effect on net income and are included in “Accumulated other comprehensive loss, net” in stockholders’ equity. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: • Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities in active markets and have the highest priority. • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3: Unobservable inputs for the financial asset or liability and have the lowest priority. |
Recent Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” which requires an entity to evaluate at each reporting period whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year from the date the financial statements are issued and to provide related footnote disclosures in certain circumstances. The Company adopted the provisions of this ASU for the annual reporting period ended September 30, 2017. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to separately classify, present and disclose extraordinary events and transactions. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis," which simplifies the current consolidation guidance and will require companies to reevaluate limited partnerships and similar entities for consolidation. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This amendment was issued to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-12, "Plan Accounting: (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient." This ASU aims to simplify the accounting and presentation of plan accounting. Part I of this ASU requires fully benefit-responsive investment contracts to be measured at contract value instead of the current fair value measurement. Part II simplifies the investment disclosure requirements for employee benefit plans. Part III provides an alternative measurement date for fiscal periods that do not coincide with a month-end date. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments." This ASU eliminates the requirement to account for business combination measurement period adjustments retrospectively. Measurement period adjustments will now be recognized prospectively in the reporting period in which the adjustment amount is determined. The nature and amount of any measurement period adjustments recognized during the reporting period must be disclosed, including the value of the adjustment to each current period income statement line item relating to the income effects that would have been recognized in previous periods if the adjustment to provisional amounts were recognized as of the acquisition date. The Company adopted the provisions of this ASU effective October 1, 2016. The adoption of this update did not have a material impact on Barnwell’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, "Clarifying the Definition of a Business," which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in ASU No. 2017-01 provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If, however, the screen is not met, then the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. Finally, the amendments in this ASU narrow the definition of the term "output" so that it is consistent with the manner in which outputs are described in Topic 606. We elected to early adopt this pronouncement effective July 1, 2017. As a result of adopting this pronouncement we accounted for certain transactions as asset acquisitions which would have qualified as business combinations under the previous standard (see Note 9). |
EARNINGS (LOSS) PER COMMON SH33
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliations between net earnings (loss) attributable to stockholders and common shares outstanding of the basic and diluted net earnings (loss) per share computations | Reconciliations between net earnings (loss) attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net earnings (loss) per share computations are detailed in the following tables: Year ended September 30, 2017 Net Earnings Shares Per-Share (Numerator) (Denominator) Amount Basic net earnings per share $ 1,171,000 8,277,160 $ 0.14 Effect of dilutive securities - common stock options — — Diluted net earnings per share $ 1,171,000 8,277,160 $ 0.14 Year ended September 30, 2016 Net Loss Shares Per-Share (Numerator) (Denominator) Amount Basic net loss per share $ (3,615,000 ) 8,277,160 $ (0.44 ) Effect of dilutive securities - common stock options — — Diluted net loss per share $ (3,615,000 ) 8,277,160 $ (0.44 ) |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Share-based payments | |
Schedule of share-based compensation expense (benefit) | The Company’s share-based compensation expense (benefit) and related income tax effects are as follows: Year ended September 30, 2017 2016 Share-based expense (benefit) $ 15,000 $ (22,000 ) Income tax effect $ — $ — |
Equity-classified share options | |
Share-based payments | |
Summary of the activity in share options | A summary of the activity in Barnwell’s equity-classified share options from October 1, 2016 through September 30, 2017 is presented below: Options Shares Weighted- Weighted- Aggregate Outstanding at October 1, 2016 30,000 $ 3.01 Granted — — Exercised — — Expired/Forfeited — — Outstanding at September 30, 2017 30,000 $ 3.01 6.2 $ — Exercisable at September 30, 2017 22,500 $ 3.01 6.2 $ — |
Liability-classified share options | |
Share-based payments | |
Schedule of share-based compensation expense (benefit) | The following table summarizes the components of the total share-based compensation for liability-classified awards: Year ended September 30, 2017 2016 Due to vesting $ 2,000 $ 4,000 Due to remeasurement 8,000 (36,000 ) Total share-based compensation expense (benefit) for liability-based awards $ 10,000 $ (32,000 ) |
Summary of the activity in share options | A summary of the activity in Barnwell’s liability-classified share options from October 1, 2016 through September 30, 2017 is presented below: Options Shares Weighted- Weighted- Aggregate Outstanding at October 1, 2016 591,250 $ 7.98 Granted — — Exercised — — Expired/Forfeited (27,500 ) 8.18 Outstanding at September 30, 2017 563,750 $ 7.97 1.6 $ — Exercisable at September 30, 2017 556,250 $ 8.04 1.5 $ — |
Schedule of assumptions used in estimating fair value | The following assumptions were used in estimating fair value for all liability-classified share options outstanding: Year ended September 30, 2017 2016 Expected volatility range 53.1% to 69.5% 56.7% to 72.7% Weighted-average volatility 64.6% 63.6% Expected dividends None None Expected term (in years) 0.2 to 6.2 1.2 to 7.2 Risk-free interest rate 1.1% to 2.1% 0.6% to 1.4% Expected forfeitures None None |
ACCOUNTS RECEIVABLE AND CONTR35
ACCOUNTS RECEIVABLE AND CONTRACT COSTS (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of costs and estimated earnings (loss) on uncompleted contracts | Costs and estimated earnings on uncompleted contracts are as follows: September 30, 2017 2016 Costs incurred on uncompleted contracts $ 2,194,000 $ 966,000 Estimated earnings 89,000 70,000 2,283,000 1,036,000 Less billings to date 1,947,000 1,112,000 $ 336,000 $ (76,000 ) |
Schedule of costs and estimated earnings (loss) on uncompleted contracts included in the Consolidated Balance Sheets | Costs and estimated earnings on uncompleted contracts are included in the Consolidated Balance Sheets as follows: September 30, 2017 2016 Costs and estimated earnings in excess of billings on uncompleted contracts (included in other current assets) $ 376,000 $ 89,000 Billings in excess of costs and estimated earnings on uncompleted contracts (included in other current liabilities) (40,000 ) (165,000 ) $ 336,000 $ (76,000 ) |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Investments, All Other Investments [Abstract] | |
Summary of investments | A summary of Barnwell’s non-current investments is as follows: September 30, 2017 2016 Investment in Kukio Resort land development partnerships $ 2,159,000 $ 3,502,000 Investment in leasehold land interest – Lot 4C 50,000 50,000 Total non-current investments $ 2,209,000 $ 3,552,000 |
Summarized financial information for the land development partnerships | Summarized financial information for the Kukio Resort land development partnerships is as follows: Year ended September 30, 2017 2016 Revenue $ 31,578,000 $ 33,874,000 Gross profit $ 14,584,000 $ 15,332,000 Net earnings $ 11,107,000 $ 12,212,000 |
Summary of Increment I and Increment II percentage of sales payment revenues received | The following table summarizes the Increment I and Increment II revenues received from KD I and KD II and the amount of fees directly related to such revenues (see Note 17 "Commitments and Contingencies - Other Matters"): Year ended September 30, 2017 2016 Sale of interest in leasehold land: Revenues - sale of interest in leasehold land $ 4,503,000 $ 2,255,000 Fees - included in general and administrative expenses (648,000 ) (340,000 ) Sale of interest in leasehold land, net of fees $ 3,855,000 $ 1,915,000 |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Extractive Industries [Abstract] | |
Schedule of recognized identified assets acquired and liabilities assumed | The Wood River acquisition was accounted for under the acquisition method of accounting, and as such, Barnwell estimated the fair value of the acquired property as of the September 12, 2016 acquisition date. The following table summarizes the allocation of the consideration paid to acquire the properties to the assets acquired and liabilities assumed in the transaction as of the acquisition date. See Note 16 for further information regarding the fair value measurement inputs. Property and equipment $ 813,000 Asset retirement obligation (44,000 ) Net identifiable assets acquired $ 769,000 |
PROPERTY AND EQUIPMENT AND AS38
PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION | |
Schedule of property and equipment | Barnwell’s property and equipment is detailed as follows: Estimated Gross Accumulated Net At September 30, 2017: Land $ 365,000 $ — $ 365,000 Oil and natural gas properties (full cost accounting) 68,708,000 (64,915,000 ) 3,793,000 Drilling rigs and equipment 3 – 10 years 6,577,000 (5,992,000 ) 585,000 Office 40 years 857,000 (295,000 ) 562,000 Other property and equipment 3 – 17 years 2,724,000 (2,660,000 ) 64,000 Total $ 79,231,000 $ (73,862,000 ) $ 5,369,000 Estimated Gross Accumulated Net At September 30, 2016: Land $ 365,000 $ — $ 365,000 Oil and natural gas properties (full cost accounting) 66,265,000 (61,060,000 ) 5,205,000 Drilling rigs and equipment 3 – 10 years 6,379,000 (5,770,000 ) 609,000 Office 40 years 857,000 (274,000 ) 583,000 Other property and equipment 3 – 17 years 3,002,000 (2,862,000 ) 140,000 Total $ 76,868,000 $ (69,966,000 ) $ 6,902,000 |
Schedule of reconciliation of the asset retirement obligation | The following is a reconciliation of the asset retirement obligation: Year ended September 30, 2017 2016 Asset retirement obligation as of beginning of year $ 7,194,000 $ 6,936,000 Obligations incurred on new wells drilled or acquired 34,000 167,000 Liabilities associated with properties sold (406,000 ) — Revision of estimated obligation 154,000 (68,000 ) Accretion expense 433,000 464,000 Payments (833,000 ) (459,000 ) Foreign currency translation adjustment 287,000 154,000 Asset retirement obligation as of end of year 6,863,000 7,194,000 Less current portion (1,231,000 ) (1,017,000 ) Asset retirement obligation, long-term $ 5,632,000 $ 6,177,000 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of changes in benefit obligations, fair values of plan assets and reconciliations of the funded status of the retirement plans | The following tables detail the changes in benefit obligations, fair values of plan assets and reconciliations of the funded status of the retirement plans: Pension SERP Postretirement Medical September 30, 2017 2016 2017 2016 2017 2016 Change in Projected Benefit Obligation: Benefit obligation at beginning of year $ 10,055,000 $ 8,683,000 $ 2,366,000 $ 1,900,000 $ 2,486,000 $ 1,319,000 Service cost 237,000 261,000 34,000 68,000 — — Interest cost 336,000 364,000 56,000 86,000 87,000 56,000 Actuarial (gain) loss (740,000 ) 953,000 (847,000 ) 318,000 (533,000 ) 1,111,000 Benefits paid (255,000 ) (206,000 ) (4,000 ) (6,000 ) (11,000 ) — Benefit obligation at end of year 9,633,000 10,055,000 1,605,000 2,366,000 2,029,000 2,486,000 Change in Plan Assets: Fair value of plan assets at beginning of year 8,195,000 6,488,000 — — — — Actual return on plan assets 808,000 813,000 — — — — Employer contributions 350,000 1,100,000 4,000 6,000 11,000 — Benefits paid (255,000 ) (206,000 ) (4,000 ) (6,000 ) (11,000 ) — Fair value of plan assets at end of year 9,098,000 8,195,000 — — — — Funded status $ (535,000 ) $ (1,860,000 ) $ (1,605,000 ) $ (2,366,000 ) $ (2,029,000 ) $ (2,486,000 ) |
Schedule of amounts recognized in the consolidated balance sheets | Pension SERP Postretirement Medical September 30, 2017 2016 2017 2016 2017 2016 Amounts recognized in the Consolidated Balance Sheets: Current liabilities $ — $ — $ (4,000 ) $ (5,000 ) $ (15,000 ) $ — Noncurrent liabilities (535,000 ) (1,860,000 ) (1,601,000 ) (2,361,000 ) (2,014,000 ) (2,486,000 ) Net amount $ (535,000 ) $ (1,860,000 ) $ (1,605,000 ) $ (2,366,000 ) $ (2,029,000 ) $ (2,486,000 ) Amounts recognized in accumulated other comprehensive loss (income) before income taxes: Net actuarial loss (gain) $ 2,374,000 $ 3,521,000 $ (50,000 ) $ 797,000 $ 280,000 $ 1,001,000 Prior service cost (credit) 65,000 70,000 (65,000 ) (70,000 ) — — Accumulated other comprehensive loss (income) $ 2,439,000 $ 3,591,000 $ (115,000 ) $ 727,000 $ 280,000 $ 1,001,000 |
Schedule of amounts recognized in accumulated other comprehensive (loss) income | Pension SERP Postretirement Medical September 30, 2017 2016 2017 2016 2017 2016 Amounts recognized in the Consolidated Balance Sheets: Current liabilities $ — $ — $ (4,000 ) $ (5,000 ) $ (15,000 ) $ — Noncurrent liabilities (535,000 ) (1,860,000 ) (1,601,000 ) (2,361,000 ) (2,014,000 ) (2,486,000 ) Net amount $ (535,000 ) $ (1,860,000 ) $ (1,605,000 ) $ (2,366,000 ) $ (2,029,000 ) $ (2,486,000 ) Amounts recognized in accumulated other comprehensive loss (income) before income taxes: Net actuarial loss (gain) $ 2,374,000 $ 3,521,000 $ (50,000 ) $ 797,000 $ 280,000 $ 1,001,000 Prior service cost (credit) 65,000 70,000 (65,000 ) (70,000 ) — — Accumulated other comprehensive loss (income) $ 2,439,000 $ 3,591,000 $ (115,000 ) $ 727,000 $ 280,000 $ 1,001,000 |
Schedule of weighted-average assumptions used to determine benefit obligations and net periodic benefit costs | The following table presents the weighted-average assumptions used to determine benefit obligations and net benefit costs: Pension SERP Postretirement Medical Year ended September 30, 2017 2016 2017 2016 2017 2016 Assumptions used to determine fiscal year-end benefit obligations: Discount rate 3.75% 3.50% 3.75% 3.50% 3.75% 3.50% Rate of compensation increase 4.00% 4.00% 4.00% 4.00% N/A N/A Assumptions used to determine net benefit costs (years ended): Discount rate 3.50% 4.25% 3.50% 4.25% 3.50% 4.25% Expected return on plan assets 6.50% 7.00% N/A N/A N/A N/A Rate of compensation increase 4.00% 4.00% 4.00% 4.00% N/A N/A |
Schedule of components of net periodic benefit cost | The components of net periodic benefit cost are as follows: Pension SERP Postretirement Medical Year ended September 30, 2017 2016 2017 2016 2017 2016 Net periodic benefit cost for the year: Service cost $ 237,000 $ 261,000 $ 34,000 $ 68,000 $ — $ — Interest cost 336,000 364,000 56,000 86,000 87,000 56,000 Expected return on plan assets (539,000 ) (484,000 ) — — — — Amortization of prior service cost (credit) 6,000 5,000 (6,000 ) (5,000 ) — — Amortization of net actuarial loss 138,000 141,000 — 27,000 188,000 — Net periodic benefit cost $ 178,000 $ 287,000 $ 84,000 $ 176,000 $ 275,000 $ 56,000 |
Schedule of amounts that are estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost in the next fiscal year | The amounts that are estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost in the next fiscal year are as follows: Pension SERP Postretirement Prior service cost (credit) $ 6,000 $ (5,000 ) $ — Net actuarial loss 86,000 — 11,000 $ 92,000 $ (5,000 ) $ 11,000 |
Schedule of benefits expected to be paid under the retirement plans | The benefits expected to be paid under the retirement plans as of September 30, 2017 are as follows: Pension SERP Postretirement Expected Benefit Payments: Fiscal year ending September 30, 2018 $ 301,000 $ 4,000 $ 15,000 Fiscal year ending September 30, 2019 $ 284,000 $ 4,000 $ 15,000 Fiscal year ending September 30, 2020 $ 386,000 $ 58,000 $ 15,000 Fiscal year ending September 30, 2021 $ 404,000 $ 59,000 $ 42,000 Fiscal year ending September 30, 2022 $ 390,000 $ 58,000 $ 44,000 Fiscal years ending September 30, 2023 through 2027 $ 2,521,000 $ 531,000 $ 315,000 |
Schedule of assumed health care cost trend rates related to the measurement of postretirement medical obligations | The following table provides the assumed health care cost trend rates related to the measurement of Barnwell’s postretirement medical obligations. Year ended September 30, 2017 2016 Health care cost trend rates assumed for next year 7.50% 7.75% Ultimate cost trend rate 5.0% 5.0% Year that the rate reaches the ultimate trend rate 2028 2028 |
Schedule of effects of one-percentage-point change in the assumed health care cost trend rates | A one-percentage-point change in the assumed health care cost trend rates would have the following effects: 1-Percentage 1-Percentage Effect on total service and interest cost components $ 18,000 $ (15,000 ) Effect on accumulated postretirement benefit obligations $ 464,000 $ (361,000 ) |
Schedule of year-end target allocation, by asset category, and the actual asset allocations | The Company’s year-end target allocation, by asset category, and the actual asset allocations were as follows: Target September 30, Asset Category Allocation 2017 2016 Cash and other 0% - 30% 1% 7% Fixed income securities 20% - 60% 31% 23% Equity securities 30% - 70% 68% 70% |
Schedule of pension plan assets at fair value | The following tables set forth by level, within the fair value hierarchy, pension plan assets at their fair value: Fair Value Measurements Using: Carrying Quoted Significant Significant Financial Assets: Cash $ 124,000 $ 124,000 $ — $ — Certificates of deposit 496,000 496,000 — — Corporate bonds 210,000 210,000 — — Fixed income exchange-traded funds 2,036,000 2,036,000 — — Preferred securities 51,000 51,000 — — Equity securities exchange-traded funds 553,000 553,000 — — Equities 5,628,000 5,628,000 — — Total $ 9,098,000 $ 9,098,000 $ — $ — Fair Value Measurements Using: Carrying Quoted Significant Significant Financial Assets: Cash $ 571,000 $ 571,000 $ — $ — Corporate bonds 316,000 316,000 — — Fixed income exchange-traded funds 1,414,000 1,414,000 — — Preferred securities 184,000 184,000 — — Equity securities exchange-traded funds 818,000 818,000 — — Equities 4,892,000 4,892,000 — — Total $ 8,195,000 $ 8,195,000 $ — $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of income (loss) before income taxes, after adjusting the income (loss) for non-controlling interests | The components of earnings (loss) before income taxes, after adjusting the earnings (loss) for non-controlling interests, are as follows: Year ended September 30, 2017 2016 United States $ 1,522,000 $ (360,000 ) Canada (1,431,000 ) (3,977,000 ) $ 91,000 $ (4,337,000 ) |
Schedule of components of the income tax provision (benefit) | The components of the income tax benefit related to the above income (loss) are as follows: Year ended September 30, 2017 2016 Current (benefit) provision: United States – Federal $ — $ — United States – State Before operating loss carryforwards 118,000 — Benefit of operating loss carryforwards (107,000 ) — After operating loss carryforwards 11,000 — 11,000 — Canadian (823,000 ) (651,000 ) Total current (812,000 ) (651,000 ) Deferred (benefit) provision: United States – Federal — — United States – State 11,000 220,000 Canadian (279,000 ) (291,000 ) Total deferred (268,000 ) (71,000 ) $ (1,080,000 ) $ (722,000 ) |
Summary of reconciliation between the reported income tax provision (benefit) and the amount computed by multiplying the loss by the U.S. federal tax rate | A reconciliation between the reported income tax benefit and the amount computed by multiplying the earnings (loss) attributable to Barnwell before income taxes by the U.S. federal tax rate of 35% is as follows: Year ended September 30, 2017 2016 Tax provision (benefit) computed by applying statutory rate $ 32,000 $ (1,518,000 ) (Decrease) increase in the valuation allowance (1,034,000 ) 1,102,000 Uncertain tax positions - lapse of statute (369,000 ) (173,000 ) Additional effect of the foreign tax provision on the total tax provision 254,000 (484,000 ) U.S. state tax provision, before changes in uncertain tax positions and net of federal benefit 22,000 314,000 Other 15,000 37,000 $ (1,080,000 ) $ (722,000 ) |
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: September 30, 2017 2016 Deferred income tax assets: Foreign tax credit carryover $ 3,062,000 $ 4,028,000 Alternative minimum tax credit carryover 460,000 460,000 U.S. federal net operating loss carryover 9,773,000 8,728,000 Tax basis of investment in land and residential real estate in excess of book basis 877,000 836,000 Property and equipment accumulated book depreciation and depletion in excess of tax under U.S. tax law 2,180,000 3,611,000 Liabilities accrued for books but not for tax under U.S. tax law 3,910,000 4,843,000 Liabilities accrued for books but not for tax under Canadian tax law 2,103,000 2,303,000 Other 1,091,000 1,108,000 Total gross deferred income tax assets 23,456,000 25,917,000 Less valuation allowance (21,158,000 ) (23,410,000 ) Net deferred income tax assets 2,298,000 2,507,000 Deferred income tax liabilities: Property and equipment accumulated tax depreciation and depletion in excess of book under Canadian tax law (914,000 ) (1,012,000 ) Book basis of investment in land development partnerships in excess of tax basis (1,289,000 ) (1,668,000 ) Other (31,000 ) (31,000 ) Total deferred income tax liabilities (2,234,000 ) (2,711,000 ) Net deferred income tax asset (liability) $ 64,000 $ (204,000 ) Reported as: Deferred income tax assets 300,000 — Deferred income tax liabilities (236,000 ) (204,000 ) Net deferred income tax asset (liability) $ 64,000 $ (204,000 ) |
Schedule of changes in unrecognized tax benefits | Below are the changes in unrecognized tax benefits. Year ended September 30, 2017 2016 Balance at beginning of year $ 377,000 $ 582,000 Effect of tax positions taken in prior years — — Accrued interest related to tax positions taken 11,000 20,000 Settlements (10,000 ) — Lapse of statute (369,000 ) (173,000 ) Translation adjustments (9,000 ) (52,000 ) Balance at end of year $ — $ 377,000 |
Summary of tax years, by jurisdiction, that remain subject to examination by taxing authorities | Included below is a summary of the tax years, by jurisdiction, that remain subject to examination by taxing authorities at September 30, 2017 : Jurisdiction Fiscal Years Open U.S. federal 2014 – 2016 Various U.S. states 2014 – 2016 Canada federal 2010 – 2016 Various Canadian provinces 2010 – 2016 |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of financial information related to reporting segments | The following table presents certain financial information related to Barnwell’s reporting segments. All revenues reported are from external customers with no intersegment sales or transfers. Year ended September 30, 2017 2016 Revenues: Oil and natural gas $ 4,383,000 $ 3,177,000 Land investment 4,503,000 2,255,000 Contract drilling 3,938,000 2,233,000 Residential real estate — 5,700,000 Other 113,000 216,000 Total before interest income 12,937,000 13,581,000 Interest income 93,000 46,000 Total revenues $ 13,030,000 $ 13,627,000 Depletion, depreciation, and amortization: Oil and natural gas $ 848,000 $ 1,236,000 Contract drilling 270,000 251,000 Other 85,000 120,000 Total depletion, depreciation, and amortization $ 1,203,000 $ 1,607,000 Impairment: Land investment $ 155,000 $ — Oil and natural gas — 1,154,000 Total impairment $ 155,000 $ 1,154,000 Operating profit (loss) (before general and administrative expenses): Oil and natural gas $ 507,000 $ (2,355,000 ) Land investment 4,348,000 2,255,000 Contract drilling 437,000 (116,000 ) Residential real estate — 190,000 Other 28,000 96,000 Gain on sales of assets 527,000 472,000 Total operating profit 5,847,000 542,000 Equity in income of affiliates: Land investment 2,276,000 2,624,000 General and administrative expenses (6,976,000 ) (6,701,000 ) Interest expense (6,000 ) (97,000 ) Interest income 93,000 46,000 Earnings (loss) before income taxes $ 1,234,000 $ (3,586,000 ) Capital Expenditures: Year ended September 30, 2017 2016 Oil and natural gas $ 1,037,000 $ 1,872,000 Contract drilling 229,000 66,000 Other 9,000 2,000 Total $ 1,275,000 $ 1,940,000 Assets By Segment: September 30, 2017 2016 Oil and natural gas (1) $ 5,910,000 $ 6,323,000 Land investment (2) 3,247,000 4,744,000 Contract drilling (2) 1,543,000 1,438,000 Other: Cash and cash equivalents 16,281,000 15,550,000 Certificates of deposit 4,413,000 — Restricted cash — 381,000 Corporate and other 1,626,000 3,132,000 Total $ 33,020,000 $ 31,568,000 ______________ (1) Primarily located in the province of Alberta, Canada. (2) Located in Hawaii. |
Schedule of long-lived assets and revenue by geographic area | Long-Lived Assets By Geographic Area: September 30, 2017 2016 United States $ 3,765,000 $ 5,187,000 Canada 4,113,000 5,267,000 Total $ 7,878,000 $ 10,454,000 Revenue By Geographic Area: Year ended September 30, 2017 2016 United States $ 8,444,000 $ 10,226,000 Canada 4,493,000 3,355,000 Total (excluding interest income) $ 12,937,000 $ 13,581,000 |
ACCUMULATED OTHER COMPREHENSI42
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of components of accumulated other comprehensive (loss) income, net of taxes | Components of accumulated other comprehensive income (loss), net of taxes, are as follows: Year ended September 30, 2017 2016 Foreign currency translation: Beginning accumulated foreign currency translation $ 906,000 $ 819,000 Change in cumulative translation adjustment before reclassifications 147,000 87,000 Income taxes — — Net current period other comprehensive income 147,000 87,000 Ending accumulated foreign currency translation 1,053,000 906,000 Retirement plans: Beginning accumulated retirement plans benefit cost (4,826,000 ) (2,941,000 ) Amortization of net actuarial loss and prior service cost 326,000 168,000 Net actuarial gain (loss) arising during the period 2,389,000 (2,053,000 ) Income taxes — — Net current period other comprehensive income (loss) 2,715,000 (1,885,000 ) Ending accumulated retirement plans benefit cost (2,111,000 ) (4,826,000 ) Accumulated other comprehensive loss, net of taxes $ (1,058,000 ) $ (3,920,000 ) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of minimum rental payments under non-cancelable operating leases | Barnwell is committed under these leases for minimum rental payments summarized by fiscal year as follows: Fiscal year ending 2018 $ 298,000 2019 277,000 2020 277,000 2021 277,000 2022 219,000 Thereafter through 2047 6,482,000 Total $ 7,830,000 |
INFORMATION RELATING TO THE C44
INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | The following table details the effect of changes in current assets and liabilities on the Consolidated Statements of Cash Flows, and presents supplemental cash flow information: Year ended September 30, 2017 2016 Increase (decrease) from changes in: Receivables $ (166,000 ) $ 933,000 Other current assets (289,000 ) 197,000 Accounts payable (279,000 ) (1,456,000 ) Accrued compensation (72,000 ) (79,000 ) Other current liabilities 192,000 (882,000 ) Decrease from changes in current assets and liabilities $ (614,000 ) $ (1,287,000 ) Supplemental disclosure of cash flow information: Cash paid (received) during the year for: Interest $ 6,000 $ 94,000 Income taxes refunded, net $ (90,000 ) $ (219,000 ) Supplemental disclosure of non-cash investing activities: Canadian income tax withholding on proceeds from the sale of oil and natural gas properties $ 665,000 $ — |
SUPPLEMENTARY OIL AND NATURAL45
SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Summary of changes in the estimates of net interests in total proved developed reserves of oil and natural gas liquids and natural gas | OIL & NGL GAS Total Proved reserves: Balance at September 30, 2015 469,000 3,124,000 1,008,000 Revisions of previous estimates (23,000 ) (1,320,000 ) (251,000 ) Extensions, discoveries and other additions 54,000 95,000 70,000 Acquisitions of reserves 34,000 18,000 37,000 Less production (84,000 ) (476,000 ) (166,000 ) Balance at September 30, 2016 450,000 1,441,000 698,000 Revisions of previous estimates 85,000 2,103,000 447,000 Acquisitions of reserves 31,000 39,000 38,000 Less sales of reserves (67,000 ) (200,000 ) (101,000 ) Less production (86,000 ) (378,000 ) (151,000 ) Balance at September 30, 2017 413,000 3,005,000 931,000 |
Schedule of capitalized costs relating to oil and natural gas producing activities | All capitalized costs relating to oil and natural gas producing activities, which were being depleted in all years, are summarized as follows: September 30, 2017 2016 Proved properties $ 68,522,000 $ 66,044,000 Unproved properties 186,000 221,000 Total capitalized costs 68,708,000 66,265,000 Accumulated depletion and depreciation 64,915,000 61,060,000 Net capitalized costs $ 3,793,000 $ 5,205,000 |
Schedule of costs incurred in oil and natural gas property acquisition, exploration and development | Year ended September 30, 2017 2016 Acquisition of properties: Unproved $ 70,000 $ 161,000 Proved 381,000 608,000 Development costs 586,000 1,103,000 Total $ 1,037,000 $ 1,872,000 |
Schedule of results of operations for oil and natural gas producing activities | Year ended September 30, 2017 2016 Net revenues $ 4,383,000 $ 3,177,000 Production costs (3,028,000 ) (3,142,000 ) Depletion (848,000 ) (1,236,000 ) Impairment of assets — (1,154,000 ) Pre-tax results of operations (1) 507,000 (2,355,000 ) Estimated income tax benefit (2) 282,000 297,000 Results of operations (1) $ 789,000 $ (2,058,000 ) _________________ (1) Before gain on sale of oil and natural gas properties, general and administrative expenses, interest expense, and foreign exchange gains and losses. (2) Estimated income tax benefit includes changes to the deferred income tax valuation allowance necessary for the portion of Canadian tax law deferred tax assets that may not be realizable. |
Schedule of standardized measure of discounted future net cash flows | September 30, 2017 2016 Future cash inflows $ 24,786,000 $ 17,259,000 Future production costs (15,140,000 ) (11,951,000 ) Future development costs (1,172,000 ) (426,000 ) Future income tax expenses (2,401,000 ) (1,016,000 ) Future net cash flows 6,073,000 3,866,000 10% annual discount for timing of cash flows (1,756,000 ) (956,000 ) Standardized measure of discounted future net cash flows $ 4,317,000 $ 2,910,000 |
Schedule of changes in standardized measure of discounted future net cash flows | Year ended September 30, 2017 2016 Beginning of year $ 2,910,000 $ 4,035,000 Sales of oil and natural gas produced, net of production costs (1,355,000 ) (35,000 ) Net changes in prices and production costs, net of royalties and wellhead taxes 3,033,000 (4,134,000 ) Extensions and discoveries — 1,285,000 Net change due to purchases and sales of minerals in place (305,000 ) 470,000 Revisions of previous quantity estimates 511,000 (343,000 ) Net change in income taxes (1,247,000 ) 98,000 Accretion of discount 305,000 412,000 Other - changes in the timing of future production and other 400,000 1,018,000 Other - net change in Canadian dollar translation rate 65,000 104,000 Net change 1,407,000 (1,125,000 ) End of year $ 4,317,000 $ 2,910,000 |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) CAD in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016CAD | Sep. 30, 2016USD ($) | |
Restricted Cash and Investments [Abstract] | |||
Restricted cash | $ 0 | CAD 500 | $ 381 |
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Abstract] | |||
Discount Rate | 10.00% | ||
Retirement Plans | |||
Increase (decrease) pension expense | $ 47 | ||
Minimum | |||
Equity Method Investments | |||
Ownership interest in affiliated companies required to account for investments under equity method investments (more than) | 3.00% | ||
Maximum | |||
Equity Method Investments | |||
Ownership interest in affiliated companies required to account for investments under equity method investments (more than) | 5.00% | ||
Retirement Plans | |||
Decrease (increase) in the expected return on plan assets assumption | 0.50% | ||
Kaupulehu Developments | |||
Principles of Consolidation | |||
Ownership interest in subsidiaries | 77.60% | ||
KD Kona 2013 LLLP | |||
Principles of Consolidation | |||
Ownership interest in subsidiaries | 75.00% | ||
Kaupulehu 2007, LLLP | |||
Principles of Consolidation | |||
Ownership interest in subsidiaries | 80.00% |
EARNINGS (LOSS) PER COMMON SH47
EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net Earnings (Loss) (Numerator) | ||
Basic | $ 1,171 | $ (3,615) |
Diluted | $ 1,171 | $ (3,615) |
Shares (Denominator) | ||
Basic (in shares) | 8,277,160 | 8,277,160 |
Effect of dilutive securities-common stock options (in shares) | 0 | 0 |
Diluted (in shares) | 8,277,160 | 8,277,160 |
Per-Share Amount | ||
Basic net earnings (loss) per common share attributable to Barnwell Industries, Inc. stockholders (in dollars per share) | $ 0.14 | $ (0.44) |
Diluted net earnings (loss) per common share attributable to Barnwell Industries, Inc. stockholders (in dollars per share) | $ 0.14 | $ (0.44) |
Options | ||
Antidilutive shares of common stock excluded from the computation of diluted shares | ||
Antidilutive shares excluded from computation of earnings (loss) per share (in shares) | 593,750 | 621,250 |
SHARE-BASED PAYMENTS (Details)
SHARE-BASED PAYMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Components of the total share-based compensation | ||
Share-based compensation expense (benefit) | $ 15 | $ (22) |
Income tax effect related to share-based compensation expense (benefit) | 0 | 0 |
Total unrecognized compensation cost | $ 1 | |
Period over which unrecognized compensation cost is expected to be recognized | 2 months 12 days | |
Liability-classified share options | ||
Components of the total share-based compensation | ||
Share Based Compensation Expense Due to Vesting | $ 2 | 4 |
Share Based Compensation Expense (Benefit) Due to Remeasurement | 8 | (36) |
Share-based compensation expense (benefit) | 10 | (32) |
Equity-classified share options | ||
Components of the total share-based compensation | ||
Share-based compensation expense (benefit) | $ 5 | $ 10 |
2008 Equity Incentive Plan | ||
Components of the total share-based compensation | ||
Shares authorized and reserved for issuance (in shares) | 800,000 | |
Shares available for grant (in shares) | 62,500 | |
Vesting period | 4 years | |
Period from the date of grant from which vesting commences | 1 year | |
Expiration period | 10 years |
SHARE-BASED PAYMENTS Equity- an
SHARE-BASED PAYMENTS Equity- and Liability- Classified Awards (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Liability-classified share options | ||
Shares | ||
Outstanding at the beginning of the period (in shares) | 591,250 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Expired/Forfeited (in shares) | (27,500) | |
Outstanding at the end of the period (in shares) | 563,750 | 591,250 |
Exercisable at the end of period (in shares) | 556,250 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 7.98 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Expired/Forfeited (in dollars per share) | 8.18 | |
Outstanding at the end of the period (in dollars per share) | 7.97 | $ 7.98 |
Exercisable at the end of period (in dollars per share) | $ 8.04 | |
Weighted-Average Remaining Contractual Term | ||
Options outstanding, weighted average contractual life | 1 year 7 months 6 days | |
Options exercisable, weighted average contractual life | 1 year 6 months | |
Aggregate Intrinsic Value | ||
Options outstanding, aggregate intrinsic value | $ 0 | |
Options exercisable, aggregate intrinsic value | $ 0 | |
Assumptions used in estimating fair value | ||
Expected volatility range, minimum | 53.10% | 56.70% |
Expected volatility range, maximum | 69.50% | 72.70% |
Weighted-average volatility | 64.60% | 63.60% |
Expected dividends | 0.00% | 0.00% |
Risk-free interest rate, minimum | 1.10% | 0.60% |
Risk-free interest rate, maximum | 2.10% | 1.40% |
Expected forfeitures | 0.00% | 0.00% |
Liability-classified share options | Minimum | ||
Assumptions used in estimating fair value | ||
Expected term | 2 months 12 days | 1 year 2 months 12 days |
Liability-classified share options | Maximum | ||
Assumptions used in estimating fair value | ||
Expected term | 6 years 2 months 12 days | 7 years 2 months 12 days |
Equity-classified share options | ||
Shares | ||
Outstanding at the beginning of the period (in shares) | 30,000 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Expired/Forfeited (in shares) | 0 | |
Outstanding at the end of the period (in shares) | 30,000 | 30,000 |
Exercisable at the end of period (in shares) | 22,500 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 3.01 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Expired/Forfeited (in dollars per share) | 0 | |
Outstanding at the end of the period (in dollars per share) | 3.01 | $ 3.01 |
Exercisable at the end of period (in dollars per share) | $ 3.01 | |
Weighted-Average Remaining Contractual Term | ||
Options outstanding, weighted average contractual life | 6 years 2 months 12 days | |
Options exercisable, weighted average contractual life | 6 years 2 months 12 days | |
Aggregate Intrinsic Value | ||
Options outstanding, aggregate intrinsic value | $ 0 | |
Options exercisable, aggregate intrinsic value | $ 0 |
ACCOUNTS RECEIVABLE AND CONTR50
ACCOUNTS RECEIVABLE AND CONTRACT COSTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Receivables [Abstract] | ||
Allowances for doubtful accounts | $ 46 | $ 40 |
Contract retainage balance included in accounts receivable | $ 142 | 202 |
Expected collection period of retainage balance | 1 year | |
Expected collection period of retainage balance after the related contracts have received final acceptance and approval | 45 days | |
Costs and estimated earnings (loss) on uncompleted contracts | ||
Costs incurred on uncompleted contracts | $ 2,194 | 966 |
Estimated earnings | 89 | 70 |
Costs and estimated earnings (loss) on uncompleted contracts | 2,283 | 1,036 |
Less billings to date | 1,947 | 1,112 |
Net costs and estimated earnings (loss) in excess of (less than) billings | 336 | (76) |
Costs and estimated earnings (loss) on uncompleted contracts included in the consolidated balance sheets | ||
Costs and estimated earnings in excess of billings on uncompleted contracts (included in other current assets) | 376 | 89 |
Billings in excess of costs and estimated earnings on uncompleted contracts (included in other current liabilities) | (40) | (165) |
Net costs and estimated earnings (loss) in excess of (less than) billings | $ 336 | $ (76) |
ASSET HELD FOR SALE Asset Held
ASSET HELD FOR SALE Asset Held for Sale (Details) - USD ($) $ in Thousands | May 02, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
ASSETS HELD FOR SALE [Abstract] | |||
Asset held for sale | $ 0 | $ 1,829 | |
Proceeds from Sale of Property, Plant, and Equipment | $ 2,360 | 2,360 | 0 |
Gain (Loss) on Disposition of Assets | $ 527 | $ 472 |
INVESTMENT HELD FOR SALE Invest
INVESTMENT HELD FOR SALE Investment held for sale (Details) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017USD ($)parcel | Sep. 30, 2016USD ($) | |
Investment in Land [Line Items] | ||
Impairment of assets | $ 155 | $ 1,154 |
Investment in land | ||
Investment in Land [Line Items] | ||
Number of residential parcels owned | parcel | 1 | |
Impairment of assets | $ 155 |
RESIDENTIAL REAL ESTATE (Detail
RESIDENTIAL REAL ESTATE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Real estate held for sale | ||
Residential real estate | $ 0 | $ 5,700 |
Operating Income (Loss) | $ 5,847 | 542 |
Kaupulehu 2007, LLLP | ||
Real estate held for sale | ||
Residential real estate | 5,700 | |
Operating Income (Loss) | $ 190 |
INVESTMENTS (Details)
INVESTMENTS (Details) | Nov. 27, 2013USD ($)partnership | Sep. 30, 2017USD ($)aincrementlot | Sep. 30, 2016USD ($)lot |
Summary of investments | |||
Total investments | $ 2,209,000 | $ 3,552,000 | |
Equity in income of affiliates | 2,276,000 | 2,624,000 | |
Sale of interest in leasehold land | $ 4,503,000 | 2,255,000 | |
Kaupulehu Developments | |||
Summary of investments | |||
Area of land (in acres) | a | 870 | ||
Number of development increments | increment | 2 | ||
Sale of interest in leasehold land | $ 4,503,000 | 2,255,000 | |
Sale of interest in leasehold land: Fees | (648,000) | (340,000) | |
Sale of interest in leasehold land, net | 3,855,000 | $ 1,915,000 | |
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | |||
Summary of investments | |||
Gross proceeds from sale of Increment I single-family lots on which payments to be received from KD I is based | $ 208,000,000 | ||
Number of Lots Remaining to be Sold | lot | 23 | ||
Number of lots sold | lot | 2 | ||
Number of lots developed | lot | 80 | ||
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | Aggregate gross proceeds up to $100,000,000 | |||
Summary of investments | |||
Payments Entitled to be Received as Percentage of Gross Proceeds from Sale of Single Family Lots | 9.00% | ||
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | Aggregate gross proceeds greater than $100,000,000 up to $300,000,000 | |||
Summary of investments | |||
Payments Entitled to be Received as Percentage of Gross Proceeds from Sale of Single Family Lots | 10.00% | ||
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | Aggregate gross proceeds in excess of $300,000,000 | |||
Summary of investments | |||
Payments Entitled to be Received as Percentage of Gross Proceeds from Sale of Single Family Lots | 14.00% | ||
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | Minimum | Aggregate gross proceeds greater than $100,000,000 up to $300,000,000 | |||
Summary of investments | |||
Gross proceeds from sale of Increment I single-family lots on which payments to be received from KD I is based | $ 100,000,000 | ||
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | Minimum | Aggregate gross proceeds in excess of $300,000,000 | |||
Summary of investments | |||
Gross proceeds from sale of Increment I single-family lots on which payments to be received from KD I is based | 300,000,000 | ||
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | Maximum | Aggregate gross proceeds up to $100,000,000 | |||
Summary of investments | |||
Gross proceeds from sale of Increment I single-family lots on which payments to be received from KD I is based | 100,000,000 | ||
KD Kaupulehu LLLP Increment I | Kaupulehu Developments | Maximum | Aggregate gross proceeds greater than $100,000,000 up to $300,000,000 | |||
Summary of investments | |||
Gross proceeds from sale of Increment I single-family lots on which payments to be received from KD I is based | $ 300,000,000 | ||
KD Kaupulehu LLLP Increment II | Kaupulehu Developments | |||
Summary of investments | |||
Percent of Increment II Distributions | 50.00% | ||
50% of Increment II Distributions Received | $ 2,500,000 | ||
Fees related to land payments | 343,000 | ||
Contingent Payments, Unrecorded | $ 8,000,000 | ||
Number of lots sold | lot | 1 | 1 | |
Number of lots developed | lot | 2 | ||
KD Kaupulehu LLLP Increment II | Kaupulehu Developments | Minimum | |||
Summary of investments | |||
Payments Entitled to be Received as Percentage of Gross Proceeds from Sale of Single Family Lots | 8.00% | ||
Payments Entitled to be Received as Percentage of Gross Proceeds from Sale of Units on a Lot | 2.60% | ||
Increment II Lot size | a | 2 | ||
KD Kaupulehu LLLP Increment II | Kaupulehu Developments | Maximum | |||
Summary of investments | |||
Payments Entitled to be Received as Percentage of Gross Proceeds from Sale of Single Family Lots | 10.00% | ||
Payments Entitled to be Received as Percentage of Gross Proceeds from Sale of Units on a Lot | 3.25% | ||
Increment II Lot size | a | 3 | ||
Investment in land development partnerships | |||
Summary of investments | |||
Total investments | $ 2,159,000 | $ 3,502,000 | |
Number of limited liability limited partnerships formed | partnership | 2 | ||
Cash Distribution from Equity Method Investment, Net | 3,223,000 | 5,320,000 | |
Minority interests portion of distribution from equity investee | 396,000 | 40,000 | |
Equity in income of affiliates | 2,276,000 | 2,624,000 | |
Basis difference between the underlying equity in net assets of the investee and the carrying value of the entity's investment | 322,000 | ||
Basis difference adjustment | 28,000 | 39,000 | |
Summarized financial information | |||
Revenue | 31,578,000 | 33,874,000 | |
Gross profit | 14,584,000 | 15,332,000 | |
Net earnings | $ 11,107,000 | 12,212,000 | |
Investment in land development partnerships | KD Kukio Resorts, LLLP, KD Maniniowali, LLLP, and KD Kaupulehu, LLLP | |||
Summary of investments | |||
Ownership interest acquired, aggregate cost | $ 5,140,000 | ||
Investment in land development partnerships | KD Kukio Resorts, LLLP | |||
Summary of investments | |||
Ownership interest acquired | 19.60% | ||
Investment in land development partnerships | KD Maniniowali, LLLP | |||
Summary of investments | |||
Ownership interest acquired | 19.60% | ||
Investment in land development partnerships | KD Kaupulehu, LLLP | |||
Summary of investments | |||
Ownership interest acquired | 19.60% | ||
Investment in land | KD Kaupulehu LLLP Increment I | |||
Summary of investments | |||
Number of residential parcels held by equity method investment | lot | 23 | ||
Investment in leasehold land interest - Lot 4C | |||
Summary of investments | |||
Total investments | $ 50,000 | $ 50,000 | |
Area of land (in acres) | a | 1,000 |
OIL AND NATURAL GAS PROPERTIE55
OIL AND NATURAL GAS PROPERTIES (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 12, 2016 | |
Oil and natural gas properties | |||
Payments to Acquire Oil and Gas Properties | $ 381,000 | $ 769,000 | |
Impairment of assets | 155,000 | 1,154,000 | |
Proceeds from sale of oil and natural gas assets | 619,000 | 493,000 | |
Income taxes receivable | 1,145,000 | 378,000 | |
Gain (loss) recognized from property sales | 0 | ||
Spirit River 2017 [Member] | |||
Oil and natural gas properties | |||
Payments to Acquire Oil and Gas Properties | 381,000 | ||
Progress and Valhalla June 2017 [Member] | |||
Oil and natural gas properties | |||
Proceeds from sale of oil and natural gas assets | 1,076,000 | ||
Income taxes receivable | 593,000 | ||
Miscellaneous Oil And Natural Gas Properties [Member] | |||
Oil and natural gas properties | |||
Proceeds from sale of oil and natural gas assets | 208,000 | ||
Income taxes receivable | $ 72,000 | ||
Wood River [Member] | |||
Oil and natural gas properties | |||
Property and equipment | $ 813,000 | ||
Asset retirement obligation | (44,000) | ||
Net identifiable assets acquired | $ 769,000 | ||
Dunvegan and Belloy areas [Member] | |||
Oil and natural gas properties | |||
Proceeds from sale of oil and natural gas assets | 493,000 | ||
Gain (loss) recognized from property sales | $ 472,000 |
PROPERTY AND EQUIPMENT AND AS56
PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Property and equipment | ||
Gross Property and Equipment | $ 79,231 | $ 76,868 |
Accumulated Depletion, Depreciation, and Amortization | (73,862) | (69,966) |
Net Property and Equipment | 5,369 | 6,902 |
Change in the asset retirement obligation | ||
Balance at the beginning of the year | 7,194 | 6,936 |
Obligations incurred on new wells drilled or acquired | 34 | 167 |
Liabilities associated with properties sold | (406) | 0 |
Revision of estimated obligation | 154 | (68) |
Accretion expense | 433 | 464 |
Payments | (833) | (459) |
Foreign currency translation adjustment | 287 | 154 |
Balance at the end of the year | 6,863 | 7,194 |
Less current portion | (1,231) | (1,017) |
Asset retirement obligation, long-term | 5,632 | 6,177 |
Land | ||
Property and equipment | ||
Gross Property and Equipment | 365 | 365 |
Net Property and Equipment | 365 | 365 |
Oil and natural gas properties | ||
Property and equipment | ||
Gross Property and Equipment | 68,708 | 66,265 |
Accumulated Depletion, Depreciation, and Amortization | (64,915) | (61,060) |
Net Property and Equipment | 3,793 | 5,205 |
Drilling rigs and equipment | ||
Property and equipment | ||
Gross Property and Equipment | 6,577 | 6,379 |
Accumulated Depletion, Depreciation, and Amortization | (5,992) | (5,770) |
Net Property and Equipment | $ 585 | $ 609 |
Drilling rigs and equipment | Minimum | ||
Property and equipment | ||
Estimated useful lives | 3 years | 3 years |
Drilling rigs and equipment | Maximum | ||
Property and equipment | ||
Estimated useful lives | 10 years | 10 years |
Offices | ||
Property and equipment | ||
Estimated useful lives | 40 years | 40 years |
Gross Property and Equipment | $ 857 | $ 857 |
Accumulated Depletion, Depreciation, and Amortization | (295) | (274) |
Net Property and Equipment | 562 | 583 |
Other property and equipment | ||
Property and equipment | ||
Gross Property and Equipment | 2,724 | 3,002 |
Accumulated Depletion, Depreciation, and Amortization | (2,660) | (2,862) |
Net Property and Equipment | $ 64 | $ 140 |
Other property and equipment | Minimum | ||
Property and equipment | ||
Estimated useful lives | 3 years | 3 years |
Other property and equipment | Maximum | ||
Property and equipment | ||
Estimated useful lives | 17 years | 17 years |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | 12 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2016CAD | Sep. 30, 2016USD ($) | |
Long-term debt | ||||
Restricted cash | $ 0 | CAD 500,000 | $ 381,000 | |
Repayments of Long-term Debt | $ 0 | $ 3,440,000 | ||
Revolving Demand Facility [Member] | ||||
Long-term debt | ||||
Long-term debt | 0 | |||
Maximum borrowing capacity | CAD | 500,000 | |||
Restricted cash | CAD 500,000 | $ 381,000 | ||
Real Estate Loan [Member] | ||||
Long-term debt | ||||
Repayments of Long-term Debt | $ 3,440,000 |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Change in Plan Assets: | ||
Fair value of plan assets at beginning of year | $ 8,195 | |
Fair value of plan assets at end of year | 9,098 | $ 8,195 |
Amounts recognized in the Consolidated Balance Sheets: | ||
Noncurrent liabilities | $ (4,150) | (6,707) |
Pension Plan | ||
Retirement plans | ||
Period of employee's highest average earnings on which benefits are based | 5 years | |
Change in Projected Benefit Obligation: | ||
Benefit obligation at beginning of year | $ 10,055 | 8,683 |
Service cost | 237 | 261 |
Interest cost | 336 | 364 |
Actuarial (gain) loss | (740) | 953 |
Benefits paid | (255) | (206) |
Benefit obligation at end of year | 9,633 | 10,055 |
Change in Plan Assets: | ||
Fair value of plan assets at beginning of year | 8,195 | 6,488 |
Actual return on plan assets | 808 | 813 |
Employer contributions | 350 | 1,100 |
Benefits paid | (255) | (206) |
Fair value of plan assets at end of year | 9,098 | 8,195 |
Funded status | (535) | (1,860) |
Amounts recognized in the Consolidated Balance Sheets: | ||
Noncurrent liabilities | (535) | (1,860) |
Net amount | (535) | (1,860) |
Amounts recognized in accumulated other comprehensive loss (income) before income taxes: | ||
Net actuarial loss (gain) | 2,374 | 3,521 |
Prior service cost (credit) | 65 | 70 |
Accumulated other comprehensive loss (income) | 2,439 | $ 3,591 |
Other disclosures | ||
Expected contributions | $ 500 | |
Assumptions used to determine fiscal year-end benefit obligations: | ||
Discount rate | 3.75% | 3.50% |
Rate of compensation increase | 4.00% | 4.00% |
Assumptions used to determine net benefit costs (years ended): | ||
Discount rate | 3.50% | 4.25% |
Expected return on plan assets | 6.50% | 7.00% |
Rate of compensation increase | 4.00% | 4.00% |
Net periodic benefit cost for the year: | ||
Service cost | $ 237 | $ 261 |
Interest cost | 336 | 364 |
Expected return on plan assets | (539) | (484) |
Amortization of prior service cost (credit) | 6 | 5 |
Amortization of net actuarial loss | 138 | 141 |
Net periodic benefit cost | 178 | 287 |
Amounts that are estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost in the next fiscal year | ||
Prior service cost (credit) | 6 | |
Net actuarial loss (gain) | 86 | |
Total amount | 92 | |
Accumulated benefit obligation | 8,530 | 8,566 |
Expected Benefit Payments: | ||
Fiscal year ending September 30, 2018 | 301 | |
Fiscal year ending September 30, 2019 | 284 | |
Fiscal year ending September 30, 2020 | 386 | |
Fiscal year ending September 30, 2021 | 404 | |
Fiscal year ending September 30, 2022 | 390 | |
Fiscal years ending September 30, 2023 through 2027 | 2,521 | |
SERP | ||
Change in Projected Benefit Obligation: | ||
Benefit obligation at beginning of year | 2,366 | 1,900 |
Service cost | 34 | 68 |
Interest cost | 56 | 86 |
Actuarial (gain) loss | (847) | 318 |
Benefits paid | (4) | (6) |
Benefit obligation at end of year | 1,605 | 2,366 |
Change in Plan Assets: | ||
Employer contributions | 4 | 6 |
Benefits paid | (4) | (6) |
Funded status | (1,605) | (2,366) |
Amounts recognized in the Consolidated Balance Sheets: | ||
Current liabilities | (4) | (5) |
Noncurrent liabilities | (1,601) | (2,361) |
Net amount | (1,605) | (2,366) |
Amounts recognized in accumulated other comprehensive loss (income) before income taxes: | ||
Net actuarial loss (gain) | (50) | 797 |
Prior service cost (credit) | (65) | (70) |
Accumulated other comprehensive loss (income) | $ (115) | $ 727 |
Assumptions used to determine fiscal year-end benefit obligations: | ||
Discount rate | 3.75% | 3.50% |
Rate of compensation increase | 4.00% | 4.00% |
Assumptions used to determine net benefit costs (years ended): | ||
Discount rate | 3.50% | 4.25% |
Rate of compensation increase | 4.00% | 4.00% |
Net periodic benefit cost for the year: | ||
Service cost | $ 34 | $ 68 |
Interest cost | 56 | 86 |
Amortization of prior service cost (credit) | (6) | (5) |
Amortization of net actuarial loss | 0 | 27 |
Net periodic benefit cost | 84 | 176 |
Amounts that are estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost in the next fiscal year | ||
Prior service cost (credit) | (5) | |
Net actuarial loss (gain) | 0 | |
Total amount | (5) | |
Accumulated benefit obligation | 1,510 | 1,822 |
Expected Benefit Payments: | ||
Fiscal year ending September 30, 2018 | 4 | |
Fiscal year ending September 30, 2019 | 4 | |
Fiscal year ending September 30, 2020 | 58 | |
Fiscal year ending September 30, 2021 | 59 | |
Fiscal year ending September 30, 2022 | 58 | |
Fiscal years ending September 30, 2023 through 2027 | $ 531 | |
Postretirement Medical | ||
Retirement plans | ||
Minimum period of service to be attained for being covered under the plan | 20 years | |
Minimum period of service to be attained at the position of Vice President or higher for being covered under the plan | 10 years | |
Change in Projected Benefit Obligation: | ||
Benefit obligation at beginning of year | $ 2,486 | 1,319 |
Service cost | 0 | 0 |
Interest cost | 87 | 56 |
Actuarial (gain) loss | (533) | 1,111 |
Benefits paid | (11) | 0 |
Benefit obligation at end of year | 2,029 | 2,486 |
Change in Plan Assets: | ||
Employer contributions | 11 | |
Benefits paid | (11) | |
Funded status | (2,029) | (2,486) |
Amounts recognized in the Consolidated Balance Sheets: | ||
Current liabilities | (15) | 0 |
Noncurrent liabilities | (2,014) | (2,486) |
Net amount | (2,029) | (2,486) |
Amounts recognized in accumulated other comprehensive loss (income) before income taxes: | ||
Net actuarial loss (gain) | 280 | 1,001 |
Prior service cost (credit) | 0 | 0 |
Accumulated other comprehensive loss (income) | $ 280 | $ 1,001 |
Assumptions used to determine fiscal year-end benefit obligations: | ||
Discount rate | 3.75% | 3.50% |
Assumptions used to determine net benefit costs (years ended): | ||
Discount rate | 3.50% | 4.25% |
Net periodic benefit cost for the year: | ||
Service cost | $ 0 | $ 0 |
Interest cost | 87 | 56 |
Amortization of prior service cost (credit) | 0 | 0 |
Amortization of net actuarial loss | 188 | 0 |
Net periodic benefit cost | 275 | $ 56 |
Amounts that are estimated to be amortized from accumulated other comprehensive loss into net periodic benefit cost in the next fiscal year | ||
Net actuarial loss (gain) | 11 | |
Total amount | 11 | |
Expected Benefit Payments: | ||
Fiscal year ending September 30, 2018 | 15 | |
Fiscal year ending September 30, 2019 | 15 | |
Fiscal year ending September 30, 2020 | 15 | |
Fiscal year ending September 30, 2021 | 42 | |
Fiscal year ending September 30, 2022 | 44 | |
Fiscal years ending September 30, 2023 through 2027 | $ 315 | |
Assumed health care cost trend rates related to the measurement of entity's postretirement medical obligations | ||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed, Next Fiscal Year | 7.50% | 7.80% |
Ultimate cost trend rate | 5.00% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2,028 | 2,028 |
Health care cost trend rates assumed for current fiscal year | 7.80% | |
Effects of one-percentage-point change in the assumed health care cost trend rates | ||
Effect on total service and interest cost components, increase | $ 18 | |
Effect on accumulated postretirement benefit obligations, increase | 464 | |
Effect on total service and interest cost components, decrease | (15) | |
Effect on accumulated postretirement benefit obligations, decrease | $ (361) |
RETIREMENT PLANS - FAIR VALUE (
RETIREMENT PLANS - FAIR VALUE (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Plan assets | ||
Entity's stock included in plan assets | $ 4 | |
Pension plan assets at the fair value | ||
Fair value measurements | 9,098 | $ 8,195 |
Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | $ 9,098 | $ 8,195 |
Cash and cash equivalents | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Actual asset allocation | 1.00% | 7.00% |
Cash and cash equivalents | Maximum | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Target allocation | 30.00% | |
Cash and cash equivalents | Minimum | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Target allocation | 0.00% | |
Fixed income securities | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Actual asset allocation | 31.00% | 23.00% |
Fixed income securities | Maximum | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Target allocation | 60.00% | |
Fixed income securities | Minimum | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Target allocation | 20.00% | |
Equity securities | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Actual asset allocation | 68.00% | 70.00% |
Equity securities | Maximum | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Target allocation | 70.00% | |
Equity securities | Minimum | ||
Entity's year-end target allocation, by asset category, and the actual asset allocations | ||
Target allocation | 30.00% | |
Cash | ||
Pension plan assets at the fair value | ||
Fair value measurements | $ 124 | $ 571 |
Cash | Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | 124 | 571 |
Certificates of Deposit [Member] | ||
Pension plan assets at the fair value | ||
Fair value measurements | 496 | |
Certificates of Deposit [Member] | Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | 496 | |
Corporate bonds | ||
Pension plan assets at the fair value | ||
Fair value measurements | 210 | 316 |
Corporate bonds | Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | 210 | 316 |
Fixed income exchange-traded funds | ||
Pension plan assets at the fair value | ||
Fair value measurements | 2,036 | 1,414 |
Fixed income exchange-traded funds | Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | 2,036 | 1,414 |
Preferred securities | ||
Pension plan assets at the fair value | ||
Fair value measurements | 51 | 184 |
Preferred securities | Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | 51 | 184 |
Equity securities exchange- traded funds | ||
Pension plan assets at the fair value | ||
Fair value measurements | 553 | 818 |
Equity securities exchange- traded funds | Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | 553 | 818 |
Equities | ||
Pension plan assets at the fair value | ||
Fair value measurements | 5,628 | 4,892 |
Equities | Quoted Prices in Active Markets (Level 1) | ||
Pension plan assets at the fair value | ||
Fair value measurements | $ 5,628 | $ 4,892 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Components of income (loss) before income taxes, after adjusting the income (loss) for non-controlling interests | ||
United States | $ 1,522 | $ (360) |
Canada | (1,431) | (3,977) |
Total | 91 | (4,337) |
Current (benefit) provision : | ||
United States - Federal | 0 | 0 |
State tax before operating loss carryforward | 118 | 0 |
Benefit of operating loss carryforward | (107) | 0 |
United States - State | 11 | 0 |
Total United States | 11 | 0 |
Canadian | (823) | (651) |
Total current | (812) | (651) |
Deferred benefit: | ||
United States - Federal | 0 | 0 |
United States - State | 11 | 220 |
Canadian | (279) | (291) |
Total deferred | (268) | (71) |
Total | $ (1,080) | (722) |
Reconciliation between the reported income tax provision (benefit) and the amount computed by multiplying the earnings (loss) attributable to the entity by the U.S. federal tax rate | ||
U.S. federal tax rate | 35.00% | |
Tax provision (benefit) computed by applying statutory rate | $ 32 | (1,518) |
(Decrease) increase in the valuation allowance | (1,034) | 1,102 |
Uncertain tax position lapse of statute | (369) | (173) |
Additional effect of the foreign tax provision on the total tax provision | 254 | (484) |
U.S. state tax provision, before changes in uncertain tax positions and net of federal benefit | 22 | 314 |
Other | 15 | 37 |
Total | (1,080) | (722) |
Deferred income tax assets: | ||
Foreign tax credit carryover | 3,062 | 4,028 |
Alternative minimum tax credit carryover | 460 | 460 |
U.S. federal net operating loss carryover | 9,773 | 8,728 |
Tax basis of investment in land and residential real estate in excess of book basis | 877 | 836 |
Property and equipment accumulated book depreciation and depletion in excess of tax under U.S. tax law | 2,180 | 3,611 |
Liabilities accrued for books but not for tax under U.S. tax law | 3,910 | 4,843 |
Liabilities accrued for books but not for tax under Canadian tax law | 2,103 | 2,303 |
Other | 1,091 | 1,108 |
Total gross deferred income tax assets | 23,456 | 25,917 |
Less Valuation allowance | (21,158) | (23,410) |
Net deferred income tax assets | 2,298 | 2,507 |
Deferred income tax liabilities: | ||
Property and equipment accumulated tax depreciation and depletion in excess of book under Canadian tax law | (914) | (1,012) |
Book basis of investment in land development partnerships in excess of tax basis | (1,289) | (1,668) |
Other | (31) | (31) |
Total deferred income tax liabilities | (2,234) | (2,711) |
Deferred Tax Assets, Net | 64 | |
Deferred Tax Liabilities, Net | (204) | |
Net deferred income tax liability included in Consolidated Balance Sheets: | ||
Deferred income tax assets | 300 | 0 |
Deferred income tax liability | (236) | (204) |
Valuation allowance, other disclosures | ||
Decrease in valuation allowance | 2,252 | |
Decrease in valuation allowance recognized as income tax benefit | 1,454 | |
Decrease in valuation allowance credited to accumulated other comprehensive loss | 798 | |
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 369 | $ 173 |
Alternative minimum tax credit | ||
Tax credit carryforward | ||
Tax credit carryovers | 460 | |
Foreign | ||
Tax credit carryforward | ||
Tax credit carryovers | 3,062 | |
Federal | ||
Tax credit carryforward | ||
Operating loss carryovers | $ 28,743 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in uncertain tax positions | ||
Balance at the beginning of the period | $ 377 | $ 582 |
Effect of tax positions taken in prior years | 0 | 0 |
Accrued interest related to tax positions taken | 11 | 20 |
Settlements | (10) | 0 |
Lapse of statute | (369) | (173) |
Translation adjustments | (9) | (52) |
Balance at the end of the period | $ 0 | 377 |
Accrued interest | $ 35 |
SEGMENT AND GEOGRAPHIC INFORM62
SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||
Total before interest income | $ 12,937,000 | $ 13,581,000 |
Interest income | 93,000 | 46,000 |
Total revenues | 13,030,000 | 13,627,000 |
Depletion, depreciation, and amortization: | ||
Depletion, depreciation, and amortization | 1,203,000 | 1,607,000 |
Impairment: | ||
Impairment of assets | 155,000 | 1,154,000 |
Operating profit (loss) (before general and administrative expenses): | ||
Total operating profit (loss) | 5,847,000 | 542,000 |
Equity in income (loss) of affiliates: | ||
Equity in income of affiliates | 2,276,000 | 2,624,000 |
General and administrative expenses | (6,976,000) | (6,701,000) |
Interest expense | (6,000) | (97,000) |
Interest income | 93,000 | 46,000 |
Earnings (loss) before income taxes | 1,234,000 | (3,586,000) |
Capital Expenditures: | ||
Capital Expenditure | 1,275,000 | 1,940,000 |
Assets By Segment: | ||
Total assets | 33,020,000 | 31,568,000 |
Land investment | ||
Equity in income (loss) of affiliates: | ||
Equity in income of affiliates | 2,276,000 | 2,624,000 |
Intersegment elimination | ||
Revenues: | ||
Total revenues | 0 | 0 |
Operating Segments | Oil and natural gas | ||
Revenues: | ||
Total before interest income | 4,383,000 | 3,177,000 |
Depletion, depreciation, and amortization: | ||
Depletion, depreciation, and amortization | 848,000 | 1,236,000 |
Impairment: | ||
Impairment of assets | 0 | 1,154,000 |
Operating profit (loss) (before general and administrative expenses): | ||
Total operating profit (loss) | 507,000 | (2,355,000) |
Capital Expenditures: | ||
Capital Expenditure | 1,037,000 | 1,872,000 |
Assets By Segment: | ||
Total assets | 5,910,000 | 6,323,000 |
Operating Segments | Land investment | ||
Revenues: | ||
Total before interest income | 4,503,000 | 2,255,000 |
Impairment: | ||
Impairment of assets | 155,000 | 0 |
Operating profit (loss) (before general and administrative expenses): | ||
Total operating profit (loss) | 4,348,000 | 2,255,000 |
Assets By Segment: | ||
Total assets | 3,247,000 | 4,744,000 |
Operating Segments | Contract drilling | ||
Revenues: | ||
Total before interest income | 3,938,000 | 2,233,000 |
Depletion, depreciation, and amortization: | ||
Depletion, depreciation, and amortization | 270,000 | 251,000 |
Operating profit (loss) (before general and administrative expenses): | ||
Total operating profit (loss) | 437,000 | (116,000) |
Capital Expenditures: | ||
Capital Expenditure | 229,000 | 66,000 |
Assets By Segment: | ||
Total assets | 1,543,000 | 1,438,000 |
Operating Segments | Residential real estate | ||
Revenues: | ||
Total before interest income | 0 | 5,700,000 |
Operating profit (loss) (before general and administrative expenses): | ||
Total operating profit (loss) | 0 | 190,000 |
Corporate and Other | ||
Revenues: | ||
Total before interest income | 113,000 | 216,000 |
Depletion, depreciation, and amortization: | ||
Depletion, depreciation, and amortization | 85,000 | 120,000 |
Capital Expenditures: | ||
Capital Expenditure | 9,000 | 2,000 |
Assets By Segment: | ||
Total assets | 1,626,000 | 3,132,000 |
Corporate and Other | Cash and cash equivalents | ||
Assets By Segment: | ||
Total assets | 16,281,000 | 15,550,000 |
Corporate and Other | Certificates of Deposit [Member] | ||
Assets By Segment: | ||
Total assets | 4,413,000 | 0 |
Corporate and Other | Restricted cash | ||
Assets By Segment: | ||
Total assets | 0 | 381,000 |
Other operating (loss) profit | Corporate and Other | ||
Operating profit (loss) (before general and administrative expenses): | ||
Total operating profit (loss) | 28,000 | 96,000 |
Gain on sale of assets | Corporate and Other | ||
Operating profit (loss) (before general and administrative expenses): | ||
Total operating profit (loss) | $ 527,000 | $ 472,000 |
SEGMENT AND GEOGRAPHIC INFORM63
SEGMENT AND GEOGRAPHIC INFORMATION - GEOGRAPHIC AREAS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Geographic information | ||
Long-lived assets | $ 7,878 | $ 10,454 |
Total revenue (excluding interest income) | 12,937 | 13,581 |
United States | ||
Geographic information | ||
Long-lived assets | 3,765 | 5,187 |
Total revenue (excluding interest income) | 8,444 | 10,226 |
Canada | ||
Geographic information | ||
Long-lived assets | 4,113 | 5,267 |
Total revenue (excluding interest income) | $ 4,493 | $ 3,355 |
ACCUMULATED OTHER COMPREHENSI64
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Foreign currency translation: | ||
Balance at beginning of period | $ 906 | $ 819 |
Change in cumulative translation adjustment before reclassifications | 147 | 87 |
Income taxes | 0 | 0 |
Net current period other comprehensive income | 147 | 87 |
Balance at end of the period | 1,053 | 906 |
Retirement plans: | ||
Balance at beginning of period | (4,826) | (2,941) |
Amortization of net actuarial loss and prior service cost | 326 | 168 |
Net actuarial gain (loss) arising during the period | 2,389 | (2,053) |
Income taxes | 0 | 0 |
Net current period other comprehensive income (loss) | 2,715 | (1,885) |
Balance at end of the period | (2,111) | (4,826) |
Accumulated other comprehensive loss, net of taxes | $ (1,058) | $ (3,920) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment held for sale | $ 1,037 | $ 1,192 |
Impairment of assets | 155 | $ 1,154 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment of assets | $ 155 |
COMMITMENTS AND CONTINGENCIES66
COMMITMENTS AND CONTINGENCIES (Detail) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Commitments and contingencies | ||
Deferred rent | $ 21,000 | $ 0 |
Kaupulehu Developments | ||
Commitments and contingencies | ||
Fees to be paid to Nearco | 10.40% | |
Percentage of Increment II receipts to be paid to external real estate counsel for services provided in the negotiation and closing of the Increment II transaction | 1.20% | |
Gas leak [Member] | ||
Commitments and contingencies | ||
Percentage of working interest | 50.00% | |
Accrual for environmental remediation costs | $ 2,000 | 200,000 |
Lease Agreements [Member] | ||
Commitments and contingencies | ||
Rental expense | 426,000 | 404,000 |
Deferred rent | 21,000 | $ 0 |
Minimum rental payments | ||
2,018 | 298,000 | |
2,019 | 277,000 | |
2,020 | 277,000 | |
2,021 | 277,000 | |
2,022 | 219,000 | |
Thereafter through 2047 | 6,482,000 | |
Total | $ 7,830,000 |
INFORMATION RELATING TO THE C67
INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (decrease) from changes in: | ||
Receivables | $ (166) | $ 933 |
Other current assets | (289) | 197 |
Accounts payable | (279) | (1,456) |
Accrued compensation | (72) | (79) |
Other current liabilities | 192 | (882) |
Decrease from changes in current assets and liabilities | (614) | (1,287) |
Supplemental disclosure of cash flow information: | ||
Interest | 6 | 94 |
Income taxes refunded, net | (90) | (219) |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Income tax withholding on proceeds from sale of oil and natural gas properties | 665 | 0 |
Supplemental disclosures of cash flow information: | ||
Increase in capital expenditure accruals related to oil and natural gas asset retirement obligations | 188 | 99 |
Oil and natural gas | ||
Supplemental disclosures of cash flow information: | ||
Increase (decrease) in capital expenditure accruals related to oil and natural gas exploration and development | (101) | 76 |
Increase in capital expenditure accruals related to oil and natural gas asset retirement obligations | $ 188 | $ 99 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 12 Months Ended | |
Sep. 30, 2017USD ($)lot | Sep. 30, 2016USD ($)lot | |
Related party transactions | ||
Proceeds received from percentage of sales payments | $ 4,503 | $ 2,255 |
Kaupulehu Developments | ||
Related party transactions | ||
Proceeds received from percentage of sales payments | $ 4,503 | 2,255 |
Kaupulehu Developments | KD Kaupulehu, LLLP | Investment in land development partnerships | ||
Related party transactions | ||
Ownership interest acquired | 19.60% | |
Proceeds received from percentage of sales payments | $ 2,003 | $ 2,255 |
Increment I [Member] | Phase II | Kaupulehu Developments | KD Kaupulehu, LLLP | Investment in land development partnerships | ||
Related party transactions | ||
Number of lots sold | lot | 2 | 3 |
Increment II [Member] | Kaupulehu Developments | KD Kaupulehu, LLLP | Investment in land development partnerships | ||
Related party transactions | ||
Number of lots sold | lot | 1 | 1 |
KD Kaupulehu LLLP Increment II | Kaupulehu Developments | ||
Related party transactions | ||
Number of lots sold | lot | 1 | 1 |
Percent of Increment II Distributions | 50.00% | |
Contingent Payments, Unrecorded | $ 8,000 | |
50% of Increment II Distributions Received | $ 2,500 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Subsequent Event [Line Items] | ||||
Proceeds from sale of oil and natural gas assets | $ 619 | $ 493 | ||
Income taxes receivable | $ 1,145 | $ 378 | ||
Pouce Coupe [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Proceeds from sale of oil and natural gas assets | $ 73 | |||
Income taxes receivable | $ 36 | |||
Red Earth [Member] [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Purchase and sale agreement price | $ 1,560 |
SUPPLEMENTARY OIL AND NATURAL70
SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED) (Details) bbl in Thousands, MMcf in Thousands, $ in Thousands | 12 Months Ended | |||
Sep. 30, 2017USD ($)BoeMMcfbbl | Sep. 30, 2016USD ($)BoeMMcfbbl | Sep. 30, 2017USD ($)Boe | Sep. 30, 2016USD ($) | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||||
Proved undeveloped reserves | Boe | 0 | |||
Changes in the estimates of net interests in total proved developed reserves of oil and natural gas liquids and natural gas | ||||
Balance at the beginning of the period | Boe | 698,000 | 1,008,000 | ||
Revisions of previous estimates | Boe | 447,000 | (251,000) | ||
Extensions, discoveries and other additions | Boe | 70,000 | |||
Acquisitions of reserves | Boe | 38,000 | 37,000 | ||
Less sales of reserves | Boe | (101,000) | |||
Less production | Boe | (151,000) | (166,000) | ||
Balance at the end of the period | Boe | 931,000 | 698,000 | ||
Capitalized Costs Relating to Oil and Natural Gas Producing Activities | ||||
Proved properties | $ 68,522 | $ 66,044 | ||
Unproved properties | 186 | 221 | ||
Total capitalized costs | 68,708 | 66,265 | ||
Accumulated depletion and depreciation | 64,915 | 61,060 | ||
Net capitalized costs | 3,793 | 5,205 | ||
Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development | ||||
Acquisition of unproved properties | $ 70 | $ 161 | ||
Acquisition of proved properties | 381 | 608 | ||
Development costs | 586 | 1,103 | ||
Total | 1,037 | 1,872 | ||
Additions and revisions to asset retirement obligation included in development costs | 188 | 99 | ||
Results of Operations for Oil and Natural Gas Producing Activities | ||||
Net revenues | 4,383 | 3,177 | ||
Production costs | (3,028) | (3,142) | ||
Depletion | (848) | (1,236) | ||
Impairment of assets | 0 | (1,154) | ||
Pre-tax results of operations | 507 | (2,355) | ||
Estimated income tax benefit (expense) | 282 | 297 | ||
Results of operations | 789 | (2,058) | ||
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Abstract] | ||||
Future cash inflows | 24,786 | 17,259 | ||
Future production costs | (15,140) | (11,951) | ||
Future development costs | (1,172) | (426) | ||
Future income tax expenses | (2,401) | (1,016) | ||
Future net cash flows | 6,073 | 3,866 | ||
10% annual discount for timing of cash flows | (1,756) | (956) | ||
Standardized measure of discounted future net cash flows | 2,910 | 4,035 | $ 4,317 | $ 2,910 |
Changes in the Standardized Measure of Discounted Future Net Cash Flows | ||||
Beginning of year | 2,910 | 4,035 | ||
Sales of oil and natural gas produced, net of production costs | (1,355) | (35) | ||
Net changes in prices and production costs, net of royalties and wellhead taxes | 3,033 | (4,134) | ||
Extensions and discoveries | 0 | 1,285 | ||
Net change due to purchases and sales of minerals in place | (305) | 470 | ||
Revisions of previous quantity estimates | 511 | (343) | ||
Net change in income taxes | (1,247) | 98 | ||
Accretion of discount | 305 | 412 | ||
Other - changes in the timing of future production and other | 400 | 1,018 | ||
Other - net change in Canadian dollar translation rate | 65 | 104 | ||
Net change | 1,407 | (1,125) | ||
End of year | $ 4,317 | $ 2,910 | ||
OIL & NGL (Bbls) | ||||
Changes in the estimates of net interests in total proved developed reserves of oil and natural gas liquids and natural gas | ||||
Balance at the beginning of the period | bbl | 450 | 469 | ||
Revisions of previous estimates | bbl | 85 | (23) | ||
Extensions, discoveries and other additions | bbl | 54 | |||
Acquisitions of reserves | bbl | 31 | 34 | ||
Less sales of reserves | bbl | (67) | |||
Less production | bbl | (86) | (84) | ||
Balance at the end of the period | bbl | 413 | 450 | ||
GAS (Mcf) | ||||
Changes in the estimates of net interests in total proved developed reserves of oil and natural gas liquids and natural gas | ||||
Balance at the beginning of the period | MMcf | 1,441 | 3,124 | ||
Revisions of previous estimates | MMcf | 2,103 | (1,320) | ||
Extensions, discoveries and other additions | MMcf | 95 | |||
Acquisitions of reserves | MMcf | 39 | 18 | ||
Less sales of reserves | MMcf | (200) | |||
Less production | MMcf | (378) | (476) | ||
Balance at the end of the period | MMcf | 3,005 | 1,441 |