In fiscal 2020, the Company listed its corporate office on the 29th floor of a commercial office building in downtown Honolulu, Hawaii for sale and on September 30, 2021, the Company's Honolulu corporate office was sold for approximately $1,864,000, net of related costs.

Critical Accounting Policies and Estimates

Oil and Natural Gas Properties - full cost ceiling calculation and depletion

Contract Drilling Revenues and Operating Expenses

Barnwell recognizes the financial statement effects of tax positions when it is more likely than not that the position will be sustained by a taxing authority.

Oil and Natural Gas Segment

Through Barnwell's 77.6% interest in Kaupulehu Developments, 75% interest in KD Kona, and 34.45% non-controlling interest in KKM Makai, the Company's land investment interests include the following:

of $300,000,000. Inventory of unsold lots at Increment I were nine single-family lots at September 30, 2021.

Oil and Natural Gas Segment

•A $5,441,000 increase in equity in income from affiliates as a result of increased operating results of the Kukio Resort Land Development Partnerships;

•A $2,341,000 gain recognized in the current year period from the termination of the Company's Post-retirement Medical plan and $1,982,000 in gains from the sales of assets in the current year period;

The following tables set forth Barnwell's annual average prices per unit of production and annual net production volumes for fiscal 2021 as compared to fiscal 2020. Production amounts reported are net of royalties.

* Natural gas price per unit is net of pipeline charges.

Sale of interest in leasehold land

Kaupulehu Developments is entitled to receive a percentage of the gross receipts from the sales of lots and/or residential units in Increment I by KD I.

The following table summarizes the revenues received from KD I and the amount of fees directly related to such revenues:

Contract drilling revenues and costs are associated with well drilling and water pump installation, replacement and repair in Hawaii.

During the year ended September 30, 2020, the Company recorded a $50,000 impairment in the carrying value of its investment in leasehold land interest in Lot 4C as a result of recent uncertainty regarding the timing of future development and potential use of water rights within Lot 4C prior to the expiration of the lease term. The lease terminates in December 2025.

Gain on termination of Post-Retirement Medical plan

Gain on sale of assets

to the Canada Revenue Agency for potential amounts due for Barnwell's Canadian income taxes related to the sale.

On September 30, 2021, the Company's Honolulu corporate office was sold for approximately $1,864,000, net of related costs, resulting in a gain of $1,164,000, which was recognized in the year ended September 30, 2021.

Equity in income of affiliates

of the Kukio Resort Land Development Partnership's cumulative earnings during the suspended period exceeds our share of the Kukio Resort Land Development Partnership's income recognized for the excess distributions.

The components of earnings (loss) before income taxes, after adjusting the earnings (loss) for non-controlling interests, are as follows:

Impact of Recently Issued Accounting Standards on Future Filings

Canada Emergency Business Account Loan

In fiscal 2020, the Company listed its corporate office on the 29th floor of a commercial office building in downtown Honolulu, Hawaii for sale and on September 30, 2021, the Company's Honolulu corporate office was sold for approximately $1,864,000, net of related costs.

NYSE American Continued Listing Standard

Oil and Natural Gas Capital Expenditures

The Company did not drill or participate in the drilling of wells in Canada during the year ended September 30, 2021. Drilling opportunities in the Company's core Twining area are being investigated for potential investment in the forthcoming months.

Oil and Natural Gas Property Acquisitions and Dispositions

There were no significant amounts paid for oil and natural gas property acquisitions during the year ended September 30, 2020.

Disclosure is not required as Barnwell qualifies as a smaller reporting company.

For a detailed discussion of contingencies, see Note 18 in the "Notes to Consolidated Financial Statements" in Item 8 of this report.

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