Barnwell industries, inc. provides update on its oil and gas operations

Barnwell industries, inc. provided an update on recent developments with respect to its oil and gas operations. production volumes are presented as “boe” (barrel of oil equivalent at the rate of 5.8 thousand cubic feet of natural gas per barrel of oil or natural gas liquid). the company previously identified two horizontal well drilling opportunities that were set to proceed subject to market conditions and contingent on financing. the company to report that due to improved commodity pricing and an asset sale described below were able to drill and complete both wells without outside financing. in october 2019, participated with a 28.3% working interest in the drilling and completion of a successful horizontal charlie lake development well in the spirit river area of alberta. this well, operated by tourmaline oil corp, has a horizontal section of more than 9,000 feet, and was completed with 46 fracture stages. this well was connected and equipped for production in mid-november 2019, producing an average of more than 1,000 boe per day during its first 2 full weeks on production. these initial production rates will be subject to normal well declines, but this initial production has exceeded estimates and expectations. under the alberta modernized royalty framework, this well qualifies for an incentive royalty rate of 5% for an initial period roughly equal to payout, which is expected to occur within 6 months. also, in november 2019, operated the drilling and completion of first 100%-owned horizontal development well at twining, alberta. this well has a 4,500-foot horizontal section, was completed in late november with 26 fracture stages and will soon be equipped and tied in tonearby operated facilities. further updates on twining will be provided after the well has commenced production. net production for fiscal 2019 doubled year over year, averaging 685 boe per day for the full fiscal year 2019, as compared to 337 boe per day for the full fiscal year 2018. current production is approximately 900 boe per day.in october 2019, closed on the sale of assets in the progress area of alberta for cash proceeds of approximately $600,000. cash from this sale helped to fund drilling activity. included in this divestiture were two non-producing wells that were considered as liabilities; in october 2019, the company also closed on an acquisition of producing conventional oil interests in the central alberta area for cash consideration of $70,000, bringing the company an additional 60 boe per day with development upside plus some strategic facility interests that expect will improve the economics of an existing asset.
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