Executive Summary

Q1 2025 revenue was $4.477M with diluted EPS of -$0.19; results weakened year over year on lower commodity prices/volumes, a $613k non-cash impairment, and a $351k FX loss, though sequential revenue ticked up modestly versus Q4 2024 .
Oil & natural gas revenue fell 24% YoY to $3.897M; segment swung to a $116k operating loss (pre-G&A) due to price and production declines and the impairment; contract drilling posted a $201k operating loss on lower activity .
Management is streamlining: winding down/selling Water Resources (contract drilling); a drilling rig sale closed in Feb 2025 with gain recognized in Q2, and the subsidiary was sold for $1.05M in March (post-quarter) to refocus on oil & gas .
Governance actions included adopting a limited-duration shareholder rights plan (20% trigger; expires Jan 26, 2026) amid activism risk; potential proxy contest cited as a near-term liquidity risk by the CEO .

What Went Well and What Went Wrong

What Went Well

New Twining development well (100% owned/operated) began producing mid‑Sept 2024, contributing ~107 boe/d (~10,000 boe over the quarter); management reiterated asset quality and focus on cost reduction .
General & administrative expenses decreased 9% YoY (-$123k) in Q1; company remains debt-free with $1.957M cash and $642k working capital at quarter-end .
Strategic simplification: executed sale of rig and related equipment (fully depreciated) with gain recognized in Q2; pursued sale/wind-down of Water Resources, culminating in post-quarter sale for $1.05M .

What Went Wrong

YoY declines in commodity prices: natural gas (-40%), oil (-2%), NGLs (-8), and net production fell across gas (-21%), oil (-17%), NGL (-17%), pressuring oil & gas revenues .
Non‑cash ceiling test impairment ($613k) and FX loss ($351k) drove the net loss; FX swung from a $126k gain in Q1 2024 to a loss in Q1 2025 .
Contract drilling revenues fell 45% YoY ($543k vs $993k) with only one well job executed, sustaining operating losses and necessitating exit/wind-down considerations .

Financial Results

Metric	Q1 2024 (Dec 31, 2023)	Q4 2024 (Sep 30, 2024)	Q1 2025 (Dec 31, 2024)
Revenue ($USD Millions)	$6.155	$4.268	$4.477
Net Income ($USD Millions)	-$0.664	-$1.883	-$1.917
Diluted EPS ($USD)	-$0.07	-$0.19	-$0.19
Net Income Margin (%)	-10.8% (calc from revenue and net loss)	-44.1% (calc from revenue and net loss)	-42.8% (calc from revenue and net loss)

Segment revenues and operating results:

Segment	Q1 2024 Revenues ($USD)	Q1 2025 Revenues ($USD)	Q1 2025 Operating (Loss)/Profit pre-G&A ($USD)
Oil & Natural Gas	$5,130,000	$3,897,000	-$116,000
Contract Drilling	$993,000	$543,000	-$201,000
Other + Interest	$32,000 + $15,000	$48,000 + $26,000	$11,000
Total Revenues	$6,155,000	$4,477,000	—

KPIs:

KPI	Q1 2024	Q1 2025
Avg Natural Gas Price ($/Mcf)	$1.82	$1.09
Avg Oil Price ($/Bbl)	$67.08	$65.53
Avg NGL Price ($/Bbl)	$29.23	$26.98
Net Gas Production (Mcf)	379,000	298,000
Net Oil Production (Bbls)	58,000	48,000
Net NGL Production (Bbls)	18,000	15,000
Backlog (Drilling jobs >1 yr, rev next 12 mos)	—	$208,000
Cash and Cash Equivalents	$3,223,000	$1,957,000
Working Capital	—	$642,000

Drivers and items:

Depletion, depreciation and amortization declined YoY ($1.511M to $0.928M) on lower rates and production; impairment $613k recognized in U.S. oil and gas properties .
FX swung to a $351k loss vs $126k gain in Q1 2024; interest expense was zero, interest income $26k .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Oil & Gas Capital Expenditures	FY 2025	Not provided	$1.5M – $3.0M	Initiated
Gain on Sale of Drilling Rig	Q2 FY 2025	Not provided	Gain recognized upon Feb 2025 delivery/title transfer	New
Contract Drilling (Water Resources)	FY 2025	Strategic alternatives underway	Proceeding with sale/wind-down; subsidiary sold for $1.05M in Mar 2025 (post-quarter)	Executed/accelerated
Governance – Shareholder Rights Plan	Effective Jan 26, 2025; expires Jan 26, 2026	N/A	20% trigger; prevents “creeping” control absent Board approval	Adopted

No revenue, margin, OpEx, OI&E, tax-rate, or dividend guidance ranges were provided.

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in our document catalog; themes below reflect company filings/press releases.

Topic	Previous Mentions (Q-2: Q3 2024)	Previous Mentions (Q-1: Q4 2024)	Current Period (Q1 2025)	Trend
Twining development	Drilling underway; completion early Sept target	New well online; ~107 bbl/d avg first two months	New well contributed ~107 boe/d; ~10,000 boe in Q1	Execution progressing
Cost optimization	Production costs down YoY, -26% in Q3	Annual prod. operating costs down $585k (-6%)	G&A down 9% YoY (-$123k)	Ongoing improvement
FX/macro	FX loss in Q3; weaker CAD	Macro pricing declines drove impairments	$351k FX loss; price declines (gas -40%)	Persistent headwind
Impairments	$599k non-cash impairment	$609k quarterly; $2.885M annual impairments	$613k non-cash impairment (U.S.)	Continuing, price-driven
Contract drilling strategy	Exploring sale/wind-down	Plan to simplify, reduce admin costs	Rig sale gain Q2; subsidiary sold post-quarter	Accelerating exit
U.S. gas pricing/egress	Moderating declines	Matterhorn Express pipeline expected to improve TX pricing	Not updated beyond impact from prices; gas price down YoY	Awaiting benefits

Management Commentary

“Our new well is performing as anticipated, and we are well‑positioned to drill two additional wells from the same pad once sufficient capital is secured.” — Craig D. Hopkins, CEO .
“The planned wind‑down of our contract drilling business will help refocus our efforts and reduce fixed costs in the coming quarters.” — Craig D. Hopkins .
“We continue to work to simplify Barnwell’s other businesses and reduce the corresponding administrative costs to improve our returns and increase our cash available for investment.” — Craig D. Hopkins (Q4 release) .

Q&A Highlights

No Q1 2025 earnings call transcript was available; management’s filings clarify key drivers: $613k non‑cash impairment (rolling 12‑month price effects) and $351k FX loss due to a weaker CAD, alongside production and price declines .
Strategic actions regarding Water Resources: rig sale gain in Q2 and post‑quarter subsidiary sale for $1.05M to focus capital on oil & gas .
Governance update: adoption of a limited-duration rights plan in response to potential activism; CEO flagged the risk of a proxy contest to liquidity/investment pace .

Estimates Context

Wall Street consensus (S&P Global) EPS and revenue estimates for Q1 2025 were unavailable via the S&P Global API at the time of this analysis; therefore, estimate comparisons cannot be shown. Values retrieved from S&P Global.*

Key Takeaways for Investors

Q1 2025 results reflect macro pressure: gas price down 40% YoY, lower volumes, and FX losses; sequential revenue improved modestly vs Q4 but profitability remains challenged .
Twining is the growth locus: the new 100%-owned well delivered ~107 boe/d in Q1; management intends to drill two additional pad wells contingent on capital availability .
Balance sheet/liquidity: debt-free, $1.957M cash and $642k working capital at quarter-end; operating cash flow negative in Q1 amidst lower segment results and working capital changes .
Strategic simplification is advancing: rig sale gain recognized in Q2 and Water Resources subsidiary sold in March for $1.05M to reduce fixed costs and refocus capital into oil & gas .
Capital program: FY2025 oil & gas capex guided to $1.5–$3.0M; external funding may be required to scale drilling beyond maintenance levels given commodity volatility and liquidity constraints .
Risk watch: continued impairment risk under full‑cost ceiling tests if rolling average prices fall; FX sensitivity to CAD/USD moves; activist dynamics/rights plan could introduce governance volatility .
Near‑term catalysts: Q2 gain on rig sale; progress on Twining development plan and potential additional wells; any improvement in Texas gas pricing (Matterhorn Express egress) over time .

BARNWELL INDUSTRIES INC (BRN)·Q1 2025 Earnings Summary