Barnwell Industries Inc – ‘10-K405’ for 9/30/95

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Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Annual Report -- [x] Reg. S-K Item 405                66±   283K 
 2: EX-21       Subsidiaries of the Registrant                         1      6K 
 3: EX-27       Financial Data Schedule (Pre-XBRL)                     1      6K 

10-K405   —   Annual Report — [x] Reg. S-K Item 405
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10-K405
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K 

X    Annual Report Pursuant to Section 13 or 15(d) of the Securities  
---                                                                     
     Exchange Act of 1934 for the fiscal year ended September 30, 1995

       Transition Report Pursuant to Section 13 or 15(d) of the Securities
---                                                                     
Exchange Act of 1934                                        

COMMISSION FILE NUMBER 1-5103 

BARNWELL INDUSTRIES, INC. 
(Exact name of registrant as specified in its charter)

    DELAWARE                                                  72-0496921
(State or other jurisdiction of                                (I.R.S. Employer 
incorporation or organization)                               Identification No.)

1100 ALAKEA STREET, SUITE 2900, HONOLULU, HAWAII  96813-2833
   (Address of principal executive offices)       (Zip code)

(808) 531-8400
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: 

                                                   NAME OF EACH EXCHANGE
TITLE OF EACH CLASS                                    ON WHICH REGISTERED    
-------------------                                   ---------------------   

Common Stock, par value                               American Stock Exchange 
  $0.50 per share                                     Toronto Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: 

None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was     
required to file such reports), and (2) has been subject to such filing         
requirements for the past 90 days.                                              

Yes    X        No    
         -----           -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   [X]                                                                

The aggregate market value of the voting stock held by non-affiliates of the    
Registrant on December 12, 1995, based on the closing price on that date on the 
American Stock Exchange, was 478,423 shares x $17.00 = $8,133,000.              

As of December 12, 1995 there were 1,322,052 shares of common stock, par value  
$.50, outstanding.                                                              

DOCUMENTS INCORPORATED BY REFERENCE 
----------------------------------- 
  1.Proxy statement to be forwarded to shareholders on or about January 18, 1996
is incorporated by reference in Part III hereof.                      

     TABLE OF CONTENTS

PART I                                                                          
Item 1.  Description of Business                                            
General Development of Business                 
Financial Information about Industry Segments   
Narrative Description of Business               
Financial Information about Foreign and         
Domestic Operations and Export Sales      
Item 2.  Description of Properties                                          
Oil and Natural Gas Operations                            
General                                         
Well Drilling Activities                        
Oil and Natural Gas Production                  
Productive Wells                                
Developed Acreage and Undeveloped Acreage       
Reserves                                        
Estimated Future Net Revenues                   
Marketing of Oil and Natural Gas                
Governmental Regulation                         
Competition                                     
Contract Drilling Operations                              
Activity                                        
Competition                                     
Land Investment Operations                                
Activity                                        
Competition                                     
Item 3.  Legal Proceedings                                                  
Item 4.  Submission of Matters to a Vote of Security Holders                

PART II                                                                         
Item 5.  Market Price of and Dividends on the Registrant's                  
Common Stock and Related Stockholder Matters
Item 6.  Selected Financial Data                                            
Item 7.  Management's Discussion and Analysis of                            
 Financial Condition and Results of Operations
Item 8.  Financial Statements and Supplementary Data                        
Item 9.  Changes in and Disagreements with Accountants                      
on Accounting and Financial Disclosure      

PART III                                                                        
Item 10. Directors and Executive Officers of the Registrant                 
Item 11. Executive Compensation                                             
Item 12. Security Ownership of Certain Beneficial Owners and Management     
Item 13. Certain Relationships and Related Transactions                     

PART IV                                                                         
Item 14. Exhibits, Financial Statement Schedules                            
and Reports on Form 8-K                     

PART I                                                                          

Item 1.  Description of Business                                                
-----------------------                                       

(a) General Development of Business                                 
-------------------------------                             
Barnwell Industries, Inc. (referred to herein together with its       
subsidiaries as "Barnwell" or the "Company") was incorporated in 1956. During   
its last completed fiscal year Barnwell was engaged principally in exploring    
for, developing, producing and selling oil and natural gas in Canada and the    
United States, investing in leasehold land in Hawaii, and drilling and          
maintaining water systems in Hawaii.  The Company's oil and natural gas         
activities comprise its largest business segment.  Approximately 70% of the     
Company's revenues and 87% of the Company's capital expenditures for the fiscal 
year ended September 30, 1995 were attributable to its oil and natural gas      
activities.  The Company's contract drilling activities accounted for 25% of the
Company's revenues in fiscal 1995 with interest income and other comprising the 
remaining 5% of fiscal 1995 revenues.  The Company had no land investment       
revenue in 1995.                                                                

   (i) Oil and Natural Gas Activities.  In fiscal 1995, the Company invested
------------------------------                                
$3,434,000 in the acquisition, exploration and development of oil and natural   
gas properties, principally in Alberta, Canada.  The Company participated in the
drilling of 30 wells, of which nine were successful oil wells and six were      
successful natural gas wells, the recompletion of six wells and the acquisition 
of two wells in fiscal 1995.  The Company continued development of prospects in 
the following areas of Alberta:  Barrhead, Gilby, Hillsdown, Dunvegan and       
Thornbury in addition to new areas of Gilwood and Halkirk.  Also during fiscal  
1995, the Company sold interests in two non-core, non-producing natural gas     
properties.  The proceeds of $613,000 were used to reduce long-term debt.       

 The Company also continued development of oil prospects in North Dakota
with the drilling of four wells in fiscal 1995.  Of these four wells, one       
exploratory well and two development wells were successful.  One well was dry   
and abandoned. Additionally, the Company acquired a minor interest in the Blind 
River field in Louisiana in fiscal 1995.                                        

     (ii) Contract Drilling.  Barnwell's wholly-owned subsidiary Water Resources
-----------------                                           
International, Inc. ("WRI") conducts water well drilling, production and        
maintenance operations in Hawaii.  WRI owns and operates four rotary drill rigs,
pump service equipment and maintains drilling materials and pump inventory in   
Hawaii.  WRI contracts are usually fixed price contracts and are either         
negotiated with private individuals or entities or are obtained through         
competitive bidding with various local, state and Federal agencies.  Contract   
drilling contracts are not subject to renegotiation of profits or termination of
contracts at the election of the governmental entities involved.  Contracts     
provide for arbitration in the event of disputes.                               

In fiscal 1995, WRI started six water well and four water well pump   
installation contracts and completed five water well and two pump installation  
contracts.  All five of the completed water wells were started in the current   
fiscal year and one of the two completed water well pump installations was      
started in the prior year.  Twenty-eight percent (28%) of such well drilling and
pump installation jobs, representing 40% of total contract drilling revenues in 
fiscal 1995, have been pursuant to government contracts.                        

     At December 1, 1995, WRI had a backlog of four water well contracts, two of
which were in progress as of September 30, 1995, and nine pump installation     
contracts, seven of which were in progress as of September 30, 1995.  These     
contracts represent a backlog of contract drilling revenues of approximately    
$2,700,000 as of September 30, 1995.                                            

     (iii) Land Development.  In fiscal 1994, Kaupulehu Developments submitted a
-----------------                                         
petition to the State Land Use Commission to reclassify approximately 1,000     
acres of the approximately 2,180 acres zoned conservation.  Kaupulehu           
Developments seeks to have the 1,000 acres rezoned to permit the development of 
golf courses and residential sites.  In December 1994, the State Land Use       
Commission began the public hearing process of the rezoning petition; this      
process is currently ongoing.  See Item 2. "Land Investment Operations".        

  In April 1995, the option under which Kaupulehu Makai Venture could have
acquired Kaupulehu Developments' leasehold interest in the approximately 2,180  
leasehold acres of conservation zoned property in North Kona, Hawaii expired,   
unexercised.  There is no affiliation between Kaupulehu Makai Venture and the   
Company.  Costs applicable to the rezoning of the approximately 1,000 acres of  
the aforementioned 2,180 acres of conservation zoned property incurred          
subsequent to April 1995 are capitalized.  Such costs, inclusive of capitalized 
interest, amounted to $293,000 at September 30, 1995.                           

Kaupulehu Makai Venture has completed a significant amount of the     
construction of the first golf course, hotel and condominiums and related       
infrastructure in the 620 acre urban area.  The golf course is essentially      
complete and is expected to open in early 1996.  The hotel is expected to open  
in late 1996.                                                                   

(iv) Discontinued Food Products Activities.  In 1994, the Company   
-------------------------------------                     
transferred its 25% limited partnership interests in Pacific Tropical Products  
("PTP") and Orchard Development ("Orchard"), which had a carrying value of nil, 
to Mr. Anderson, a director and shareholder of the Company ("Anderson") in      
consideration for the release of the Company's future obligations with respect  
to PTP and Orchard.  Accordingly, operating results related to the food product 
segment have been reclassified and included in the statement of operations as   
discontinued operations.  PTP filed a petition under Chapter 11 of the Federal  
Bankruptcy Code in May 1994.                                                    

     There were no revenues, expenses nor income taxes allocable to discontinued
operations for fiscal 1994.  In fiscal 1993, the Company transferred its        
ownership of the two subsidiaries (together the "Subsidiaries") that held       
general partner ownership interests in PTP and Orchard to Anderson whereupon the
Company was relieved of the Subsidiaries' liabilities and recorded a gain of    
$617,000 which represented the Company's proportionate share of the             
partnerships' excess liabilities over assets at December 31, 1992.              
Simultaneously in fiscal 1993, the partnerships each issued a 25% limited       
partnership interest to a wholly-owned subsidiary of the Company, in            
consideration for the Company's agreement to provide certain accounting and     
operational services to the partnerships for a period of six months.  The       
earnings from discontinued food products operations of $296,000 for fiscal 1993 
represents the aforementioned gain on the transfer of ownership of the Company's
general partnership interest in PTP and Orchard less the Company's share of the 
fiscal 1993 losses of PTP and Orchard, net of income taxes.  Revenues and income
taxes allocable to discontinued operations for fiscal 1993 amounted to $620,000 
and $152,000, respectively.                                                     

(b)  Financial Information about Industry Segments                  
---------------------------------------------             

                                                                [Download Table]

     Revenues of each industry segment for the fiscal years ended                  
September 30, 1995, 1994 and 1993 are summarized as follows (all revenues were     
from unaffiliated customers with no intersegment sales or transfers):              

                           1995                     1994                 1993      
                                                                                   
                      -------------------  -------------------  -------------------
Oil and natural gas    $ 10,520,000    70%  $ 13,950,000   70%  $ 11,250,000    67%
Contract drilling         3,770,000    25%     5,090,000   25%     4,570,000    27%
Corporate and other         420,000     3%       760,000    4%       400,000     3%
                       ------------   ----  ------------  ----  ------------   ----

Revenues for segments    14,710,000    98%    19,800,000   99%    16,220,000    97%
Interest income             240,000     2%       200,000    1%       500,000     3%
                       ------------   ----  ------------  ----  ------------   ----

Total revenues         $ 14,950,000   100%  $ 20,000,000  100%  $ 16,720,000   100%
                       ============   ====  ============  ====  ============   ====

<FN>                                                                               
     For further discussion see Note 10 (Segment and Geographic Information) of    
"Notes to Consolidated Financial Statements" in Item 8.                            

(c) Narrative Description of Business                               
---------------------------------                           

     See the table above in Item 1(b) detailing revenue of each industry segment
and description of each industry segment of the Company's business under Item 2.

     As of September 30, 1995, Barnwell employed 39 full-time employees.  Twelve
are employed in oil and natural gas activities, 16 are employed in contract     
drilling, and 11 are members of the corporate and administrative staff.         

(d) Financial Information about Foreign and Domestic Operations and 
   ---------------------------------------------------------------
Export Sales                                                
------------                                                

  Revenues, operating profit or loss and identifiable assets by geographic
area for the three years ended September 30, 1995, 1994 and 1993 are set forth  
in Note 10 (Segment and Geographic Information) of "Notes to Consolidated       
Financial Statements" in Item 8.                                                

Item 2.  Description of Properties                                              
-------------------------                                     

OIL AND NATURAL GAS OPERATIONS                                        
------------------------------                                        

General                                                                         
-------                                                                         

Barnwell's oil and natural gas properties are located in Canada,      
principally in the Province of Alberta with the exception of the investment of  
$448,000 in oil wells in North Dakota and Louisiana.  These property interests  
are principally held under governmental leases or licenses.  Under the typical  
Canadian provincial governmental lease, Barnwell must perform exploratory       
operations and comply with certain other conditions. Lease terms vary with each 
province, but, in general, give Barnwell the right to remove oil, natural gas   
and related substances subject to payment of specified royalties on production. 

   Barnwell participates in exploratory and developmental operations for oil
and natural gas on property in which it has an interest and evaluates proposals 
by third parties with regard to participation in such exploratory and           
developmental operations elsewhere.  Exploratory and developmental operations on
property in which Barnwell has an interest and third party proposals for        
exploratory and developmental operations on other property are evaluated by     
Barnwell's Calgary, Alberta staff.  Barnwell also relies on independent         
consultants to aid in the evaluation of such exploration opportunities. In      
fiscal 1995, Barnwell participated in exploratory and developmental operations  
in the Canadian Province of Alberta and North Dakota, although Barnwell does not
limit its consideration of exploratory and developmental operations to these    
areas.                                                                          

Barnwell's producing natural gas properties are located principally in
Alberta.  The Province of Alberta determines its royalty share of natural gas by
using a reference price which averages all natural gas sales in Alberta.  In    
fiscal 1995, the weighted average royalty paid on natural gas from the Dunvegan 
Unit, Barnwell's principal oil and natural gas property, was reduced to 21%     
compared to 26% in fiscal 1994 due to a reduction in the royalty rate applied by
the Government.  This decrease in royalty rate was due to the approval by the   
Alberta Government of a change in the classification for royalty purposes of a  
portion of the Dunvegan natural gas.  The weighted average royalty paid on all  
natural gas was approximately 18% in fiscal 1995 compared to 20% in fiscal 1994 
primarily due to the change in classification of natural gas from the Dunvegan  
area.                                                                           

In fiscal 1995, 96% of Barnwell's oil production was from properties  
located in Alberta.  Oil royalty rates under government leases in Alberta are   
based on the selling price of oil.  In fiscal 1995, the weighted average royalty
paid on oil was approximately 14%.  The remaining 4% of Barnwell's oil          
production came from properties located in North Dakota; the weighted average   
royalty paid on oil produced in North Dakota was 12.5%  Additionally, the       
Company pays 5% of oil revenues as a severance tax on oil produced in North     
Dakota.                                                                         

     In fiscal 1995, the Company spent approximately $375,000 in fiscal 1995 for
land acquisition and seismic costs in various areas of Alberta to be evaluated  
and developed subsequent to fiscal 1995.                                        

     Typically, unit sales of natural gas are higher in the winter than at other
times due to demand for heating.  Unit sales of oil are not subject to seasonal 
fluctuations.                                                                   

Well Drilling Activities                                                        
------------------------                                                        

     During fiscal 1995, Barnwell participated in the drilling of 16 development
wells and 14 exploratory wells, of which 15 are capable of production.  The     
Company also acquired one natural gas and one oil well, and participated in the 
recompletion of six wells.  The most significant drilling operations took place 
in the West Greene/Coastal areas of North Dakota and the Barrhead and Thornbury 
areas of Alberta.                                                               

In fiscal year 1995, the Company continued to participate in the      
development of oil reserves discovered in fiscal 1994 in the state of North     
Dakota.  Four oil wells were drilled in this pool in 1995, two of which are     
capable of production and are producing.  One successful exploratory well was   
drilled in a similar prospect.  The Company now has four wells capable of       
producing from two petroleum reservoirs.  The Company's working interests in    
these wells is 11.667%.  The Company's portion of current production from these 
wells is approximately 37 barrels per day.                                      

    In fiscal 1995, the Company continued further development of a natural gas
project in the Thornbury area.  The Company participated in the drilling and    
flowline installation of two natural gas wells and the recompletion of one      
natural gas well.  A total of 33 zones of production from 31 wells are now      
contributing to an average daily production of 11 MMCF ("MMCF" means 1,000,000  
cubic feet and "MCF" means 1,000 cubic feet) per day.  The Company's working    
interest in these wells varies between 8.4375% and 22.5%.                       

     The Company participated in the drilling of four wells in the Barrhead area
of Central Alberta in fiscal 1995.  Two were completed as natural gas wells and 
two were dry and abandoned.  Approximately $180,000 was spent in construction of
a natural gas plant.  The Company's working interests in these wells varies     
between 10.0% and 17.5%, with a 17.5% working interest in the Barrhead natural  
gas plant.                                                                      

     At September 30, 1995, the Company was participating in the drilling of two
wells; one was subsequently completed as an oil well and the other was dry and  
abandoned.                                                                      

  The following table sets forth more detailed information with respect to
the number of exploratory ("Exp.") and development ("Dev.") wells drilled and   
acquired for the fiscal years ended September 30, 1995, 1994 and 1993 in which  
Barnwell participated:                                                          

                                                        [Enlarge/Download Table]

                                                 Total                               
        Productive  Productive    Acquired    Productive                             
         Oil Wells   Gas Wells     Wells         Wells      Dry Holes    Total Wells 
        ----------  ----------- -----------   -----------   ---------   -------------

         Exp. Dev.  Exp.   Dev.  Exp.  Dev.    Exp.  Dev.   Exp.  Dev.   Exp.    Dev.
        ----- ----  ----   ----  ----  ----    ----  ----   ----  ----   ----    ----

                                                                                     
-----------------------------------------------------------------------------------  

1995                                                                                 
----                                                                                 

Gross*  3.00  6.00   -    6.00     -   2.00   3.00  14.00  11.00  4.00   14.00  18.00
Net*    0.26  1.01   -    1.08     -   0.20   0.26   2.29   1.89   .83    2.15   3.12

1994                                                                                 
----                                                                                 

Gross*  3.00  7.00  8.00  23.00    -     -    11.00 30.00   9.00  2.00   20.00  32.00
Net*    0.64  1.60  1.26   3.20    -     -     1.90  4.80   1.33  0.18    3.23   4.98

1993                                                                                 
----                                                                                 

Gross*  1.00  3.00  6.00  13.00  1.00   2.00   8.00 18.00   3.00  2.00   11.00  20.00
Net*    0.20  0.70  1.25   1.95  0.40   0.21   1.85  2.86   0.55  0.23    2.40   3.09
<FN>                                                                                 

*    The term "Gross" refers to the total number of wells in which Barnwell owns     
     an interest, and "Net" refers to Barnwell's aggregate interest therein. For     
     example, a 50% interest in a well represents 1 gross well, but .50 net          
     well.  The gross figure includes interests owned of record by Barnwell and,     
     in addition, the portion owned by others.                                       


 The Dunvegan Unit, the Company's principal property located in Alberta,
Canada, has 134 natural gas wells comprising a total of 192 producing well zones
with a sustained capacity of the Unit estimated at 100,000 MCF per day, plus    
additional capacity due to the storage capacity program implemented in 1991.  In
fiscal 1995, the Company expended $365,000 in the continued development of the  
Dunvegan Unit by participating in the drilling of two natural gas wells, one of 
which is capable of production while the other was dry and abandoned. Further   
developmental drilling will be carried out, which is expected to maintain       
current production levels for the immediate future.                             

Oil and Natural Gas Production                                                  
------------------------------                                                  

  In fiscal 1995, approximately 49%, 40%, and 11% of the Company's oil and
natural gas revenues were from the sale of natural gas, sale of oil (including  
liquids) and the royalty tax credit (see "Description of Properties - Oil and   
Natural Gas Operations - Taxation"), respectively.                              

   Barnwell's natural gas production reached a Company record high in fiscal
1995 with an average net sales volume after royalties of 13,500 MCF per day,    
which represents an increase of 5% over fiscal 1994.  This increase was         
primarily attributable to production from new areas. Dunvegan provided 46% of   
the Company's fiscal 1995 natural gas production.                               

       In fiscal 1994, approximately 58%, 30% and 12% of the Company's oil and
natural gas revenues were from the sale of natural gas, sale of oil (including  
liquids) and the royalty tax credit, respectively.                              

    Barnwell's natural gas production in fiscal 1994 averaged net sales volume
after royalties of 12,800 MCF per day, an increase of 4% over fiscal 1993.  This
increase was primarily attributable to production from new areas.  Dunvegan     
provided 44% of the Company's fiscal 1994 natural gas production.               

   In fiscal 1995, oil sales averaged net production of 564 barrels per day,
an increase of 13% over the 500 barrels per day average in fiscal 1994. New     
production from the North Dakota project contributed approximately 30 barrels   
per day. The Company's major oil producing properties are the Red Earth, Chauvin
and Manyberries areas in Canada and the West Greene and Coastal areas in North  
Dakota.                                                                         

 In fiscal 1995, natural gas liquid sales averaged net production of 246
barrels per day, the same volume as in fiscal 1994.  The Company's major natural
gas liquids producing properties are the Dunvegan, Hillsdown and Pouce Coupe    
areas in Alberta.                                                               

   The following table summarizes (a) Barnwell's net production for the last
three fiscal years, based on sales of crude oil, natural gas, condensate and    
other natural gas liquids, from all wells in which Barnwell has or had an       
interest, and (b) the average sales prices and average production costs for such
production during the same periods.  All of Barnwell's net production in        
fiscal 1995, other than 100 barrels of oil and 98,000 MCF of natural gas derived
from the Province of Saskatchewan, 11,200 barrels of oil from the State of North
Dakota and 200 barrels of oil from the State of Louisiana, was derived from the 
Province of Alberta.  All dollar amounts in this table are in U.S. dollars.     

                                        Year Ended September 30,
                                       ---------------------------------------
                                       1995          1994         1993
                                       ------------  ------------ ------------

Annual net production:                                                          
     Natural gas liquids (BBLS)*            90,000       90,000       64,000
     Oil (BBLS)*                           206,000      182,000      183,000
     Natural gas (MCF)*                  4,916,000    4,679,000    4,506,000

Annual average sale price                                                       
per unit of production:                                                     
    BBL of liquids**                       $10.98       $ 9.48      $12.55
    BBL of oil**                           $15.71       $14.06      $15.96
    MCF of natural gas**                   $ 1.03       $ 1.57      $ 1.33

Annual average production cost                                                  
per unit of gross production:                                               
    BBL of oil or liquids                  $ 3.79       $ 3.49      $ 3.96
    MCF of natural gas                     $ 0.30       $ 0.30      $ 0.24

Productive Wells                                                                
----------------                                                                

             Productive Wells***
             -----------------------------
           Gross****     Net****
             ------------- ---------------
Location                          Oil    Gas    Oil      Gas                    
--------                         -----  -----  -----    -----                   
Canada                                                                          
------                                                                          
Alberta                            173    337  55.11    46.17                   

British Columbia                    -      -     -        -                     

Saskatchewan                         3     21   0.25     3.48                   

USA                                                                             
---                                                                             
North Dakota                         4     -    0.47      -                     

Louisiana                            1     -    0.02      -                     
             ------  ----- ------    -----
Total                              181    358  55.85    49.65                   
             ======  ===== ======    =====

*    When used in this report, "MCF" means 1,000 cubic feet of natural gas at   
   14.65 psia and 60 degrees F. and the term "BBLS" means stock tank barrels
of oil equivalent to 42 U.S. gallons.                                 

**   Calculated on revenues before royalty expense and royalty tax credit       
divided by gross production.                                          

***  Seventy natural gas wells have dual or multiple completions and six oil    
wells have dual completions.                                          

**** Please see note (2) on the following table.                                

Developed Acreage and Undeveloped Acreage                                       
-----------------------------------------                                       
    The following table sets forth certain information with respect to oil and
natural gas properties of Barnwell as of September 30, 1995:                    

                      Developed        Undeveloped     Developed and Undeveloped
              Acreage(1)       Acreage(1)             Acreage(1)
                  ----------------- ----------------   -------------------------

Location          Gross(2)  Net(2)   Gross(2)  Net(2)    Gross(2)      Net(2)   
--------          --------  ------   --------  ------  ----------      ------   
Canada                                                                          
------                                                                          

Alberta           239,639   37,415   116,874   25,676     356,513       63,091  
British Columbia      483       40     2,086      281       2,569          321  
Saskatchewan        3,696      719       200       11       3,896          730  

USA                                                                             
---                                                                             

North Dakota          560       64     4,588      552       5,148          616  
Louisiana              80        2     3,440       69       3,520           71  
                --------  ------   --------  ------  ----------      -------
Total             244,458   38,240   127,188   26,589     371,646       64,829  
                ========  ======   ========  ======  ==========      =======

Barnwell's leasehold interests in its undeveloped acreage, if not     
developed, expire over the next five fiscal years as follows: 7% expire during  
fiscal 1996; 6% expire during fiscal 1997; 11% expire during fiscal 1998; 15%   
expire during fiscal 1999; and 7% expire during fiscal 2000.                    

    Barnwell's undeveloped acreage includes major concentrations in Alberta at
Red Earth (5,977 net acres), Thornbury (2,541 net acres), Foley Lake (1,633 net 
acres) and Sutton (2,067 net acres).                                            

Reserves                                                                        
--------                                                                        

     The amounts set forth in the table below, prepared by Paddock Lindstrom and
Associates, Ltd., Barnwell's independent reservoir analysts, summarize the      
estimated net quantities of proved developed producing reserves and proved      
developed reserves of crude oil (including condensate and natural gas liquids)  
and natural gas as of September 30, 1995, 1994 and 1993 on all properties in    
which Barnwell has an interest. These reserves are before deductions for        
indebtedness secured by the properties and are based on constant dollars. No    
estimates of total proved net oil or natural gas reserves have been filed with  
or included in reports to any other federal authority or agency since October 1,
1980.                                                                           

(1)  "Developed Acreage" includes the acres covered by leases upon which there  
are one or more producing wells. "Undeveloped Acreage" includes acres 
 covered by leases upon which there are no producing wells and which are
     maintained in effect by the payment of delay rentals or the commencement of
drilling thereon.                                                     

(2)  "Gross" refers to the total number of wells or acres in which Barnwell owns
     an interest, and "Net" refers to Barnwell's aggregate interest therein. For
example, a 50% interest in a well represents 1 Gross Well, but .50 Net
Well, and similarly, a 50% interest in a 320 acre lease represents 320
  Gross Acres and 160 Net Acres. The gross wells and gross acreage figures
     include interests owned of record by Barnwell and, in addition, the portion
owned by others.                                                      

Proved Developed Producing Reserves              September 30,                  
----------------------------------- --------------------------------------      
                              1995         1994         1993
                              ------------ ------------ ------------

Oil - barrels (BBLS)                                                            
(including condensate and                                           
 natural gas liquids)             2,025,000     2,133,000    2,005,000
Natural gas - thousand                                                          
 cubic feet (MCF)                31,700,000    34,624,000   35,895,000

Total Proved Developed Reserves                                                 
(Includes Proved                                                            
Developed Producing Reserves)                    September 30,                  
----------------------------------- --------------------------------------      
                              1995         1994         1993
                              ------------ ------------ ------------

Oil - barrels (BBLS)                                                            
(including condensate and                                           
 natural gas liquids)           2,296,000     2,427,000    2,222,000
Natural gas - thousand                                                          
cubic feet (MCF)               46,746,000    51,850,000   50,711,000

    As of September 30, 1995, all of Barnwell's proved developed producing and
total proved developed reserves were located in the Province of Alberta, with   
the exception of 3,000 proved developed producing barrels of oil and 460,000    
proved developed producing MCF of natural gas located in the Province of        
Saskatchewan, 40,000 proved developed producing MCF of natural gas and 12,000   
proved developed producing barrels of oil located in the State of Louisiana and 
47,000 proved developed producing barrels of oil located in the State of North  
Dakota.                                                                         

During fiscal 1995, Barnwell's total net proved developed reserves    
decreased by 131,000 barrels of oil, condensate and natural gas liquids and by  
5,104,000 MCF of natural gas. The decrease in oil, condensate and natural gas   
liquids reserves was the net result of (a) production during the year of 296,000
barrels; (b) the addition of 97,000 barrels from the drilling of productive oil 
wells; (c) the independent engineer's 101,000 barrel upward revision of the     
Company's oil reserves; and (d) the sale of reserves in place of 33,000 barrels.
Barnwell's natural gas reserves decreased as a net result of (a) production     
during the year of 4,916,000 MCF; (b) the addition of 1,041,000 MCF from the    
drilling of productive wells; (c) the sale of reserves in place of 2,585,000    
MCF; and (d) the independent engineer's 1,356,000 MCF upward revision of the    
Company's natural gas reserves.                                                 

Barnwell's working interest in the Dunvegan Unit accounted for        
approximately 56% of its total proven natural gas reserves at September 30, 1995
compared to approximately 51% of its proven natural gas reserves at September   
30, 1994, and approximately 35% of proven oil and condensate reserves at        
September 30, 1995 compared to approximately 30% of proven oil and condensate   
reserves at September 30, 1994.                                                 

The following table sets out the Company's oil and natural gas        
reserves at September 30, 1995, by property name, based on information prepared 
by Paddock Lindstrom and Associates, Ltd., Barnwell's independent reservoir     
analysts.  Gross reserves are before the deduction of royalties; net reserves   
are after the deduction of royalties net of the Alberta Royalty Tax Credit.     
This table is based on constant dollars where reserve estimates are based on    
sales prices, costs and statutory tax rates in existence at the date of the     
projection. Oil, which includes natural gas liquids, is shown in thousands of   
barrels ("MBBLS") and natural gas is shown in millions of cubic feet ("MMCF").  

OIL AND NATURAL GAS RESERVES AT SEPTEMBER 30, 1995      

                   Proved Producing                 Total Proved
                     ----------------------------  -----------------------------

                     Oil           Gas             Oil           Gas
                     -------------- -------------  -------------- --------------

Property Name           GROSS   NET   GROSS   NET    GROSS    NET  GROSS   NET  
-------------                                                                   
                       (MBBLS)        (MMCF)          (MBBLS)       (MMCF)
Dunvegan Unit            691    618  22,595 19,915    893     797 29,209  26,066
Manyberries               95     89      80     69     95      89    769     676
Ardley (Alix)             10      9      -      -      10       9     -       - 
Barrhead                  -      -      607    515      7       7    960     872
Belloy                    -      -       99     91     -       -      99      91
Bow Island                 9      9      -      -       9       9     -       - 
Brooks                    -      -       48     44     -       -      48      45
Cessford                   2      2      -      -       2       2     -       - 
Charlotte Lake            -      -      875    802     -       -   1,394   1,289
Chauvin                  132    122      -      -     132     121     -       - 
Coyote                    -      -        3      3     -       -       3       3
Donalda                   -      -       -      -      -       -     106     103
Dunvegan (Non-Unit)       14     13     503    456     17      16  1,095   1,007
Faith South               -      -       -      -      -             906     863
Fenn Big Valley           -      -       26     24     -       -      26      24
Gilby                     16     15      -      -      35      34     -       - 
Gilwood                   17     16      -      -      -       -      91      81
Halkirk                   -      -       -      -      17      16     -       - 
Highvale                  18     17      -      -      18      18     -       - 
Hilda                     -      -       16     16     -       -      16      16
Hillsdown                102     93   4,096  3,678    120     110  4,384   3,956
Joffre                    -      -        4      4     -       -       4       4
Lanaway                   -      -       -      -      -       -     237     207
Lacombe                   21     19     915    833     21      19    915     836
Leduc                      1      1      76     67      1       1    261     247
Majeau Lake               -      -       43     39     -       -      43      39
Medicine River            68     62     243    220     73      66    366     325
Mitsue                    -      -       51     48     -       -      90      85
Pembina                   19     17     760    721     22      20  1,053     996
Pouce Coupe               10      9   1,932  1,762     11      10  2,643   2,430
Provost                   17     16      -      -      17      16     -       - 
Rainbow                    5      4      -      -       5       4     -       - 
Red Earth                770    740      -      -     766     734    328     298
Staplehurst                8      7      -      -      15      15     -       - 
Thornbury                 -      -    1,682  1,554     -       -   3,596   3,342
Wood River Unit            4      4     318    293     21      20    340     315
Wood River (Non Unit)     -      -        6      5     -       -       6       5
Worsley                   11     10      -      -      11      10     -       - 
Zama                      78     71      48     41     97      91  2,225   2,025
Hatton, Saskatchewan      -      -      608    460     -       -     608     460
Webb, Saskatchewan         3      3      -      -       3       3     -       - 
Coastal, ND               14     11      -      -      14      11     -       - 
West Greene, ND           46     36      -      -      46      36     -       - 
Blind River, LA           17     12      53     40     17      12     53      40
                       -----  -----  ------ ------ ------  ------ ------  ------
                       2,198  2,025  35,687 31,700  2,495   2,296 51,874  46,746
                       =====  =====  ====== ====== ======  ====== ======  ======

Properties are located in Alberta, Canada unless otherwise noted. 

Estimated Future Net Revenues                                                   
-----------------------------                                                   

   The following table sets forth Barnwell's "Estimated Future Net Revenues"
from proved producing reserves and total proved oil, natural gas and condensate 
reserves and the present value of Barnwell's "Estimated Future Net Revenues"    
(discounted at 10%).  Estimated future net revenues for total proved reserves   
are net of estimated development costs.  Net revenues have been calculated using
current sales prices and costs, after deducting all royalties, operating costs, 
future estimated capital expenditures, and income taxes.                        

                    Proved           Total
                   Producing          Proved
                    Reserves          Reserves
                    -------------     ------------

Year ending September 30,                                                       

       1996         $ 5,073,000      $ 4,095,000
       1997           3,879,000        4,375,000
       1998           3,045,000        3,235,000
       Thereafter    15,865,000       22,118,000
                    -----------      -----------

                    $27,862,000      $33,823,000
                    ===========      ===========

Present value (discounted at 10%)                                               
at September 30, 1995             $16,558,000      $20,350,000              
                    ===========      ===========

Marketing of Oil and Natural Gas                                                
--------------------------------                                                

     Barnwell sells substantially all of its oil and condensate production under
short-term contracts between the operator of the property and marketers of oil. 
The price of oil is determined by negotiation between the parties.              

In fiscal 1995, natural gas production from the Dunvegan Unit was     
responsible for approximately 46% of the Company's natural gas sales.  In fiscal
1995, the Company had only one significant customer, ProGas Limited, which      
accounted for 15% of the Company's oil and natural gas sales.                   

 In compliance with certain regulatory events and orders in the U.S. and
Canada affecting the sale and delivery of Canadian natural gas supplies to the  
California market, the natural gas purchase, sales and transportation           
agreements, under which Barnwell's Dunvegan natural gas was previously sold to  
Alberta and Southern Gas Co., Ltd., were terminated, effective November 1993.   

   New marketing arrangements were made for the sale of Dunvegan natural gas
for fiscal 1994 and future years.  Essentially all of Barnwell's Dunvegan       
production and a significant portion of its natural gas production from other   
properties is sold to several aggregators and marketers under various short-term
and long-term contracts, with the price of natural gas determined by            
negotiations between the parties.                                               

Governmental Regulation                                                         
-----------------------                                                         

General                                                               
-------                                                               

   The jurisdictions in which the oil and natural gas properties of Barnwell
are located have regulatory provisions relating to permits for the drilling of  
wells, the spacing of wells, the prevention of waste of oil and natural gas,    
allowable rates of production and other matters.  The amount of oil and natural 
gas produced is subject to control by regulatory agencies in each province and  
state which periodically assign allowable rates of production.  The Province of 
Alberta also regulates the volume of natural gas which may be removed from the  
province and the conditions of removal.                                         

    There is no current government regulation of the price that may be charged
on the sale of Canadian oil or natural gas production.  Canadian natural gas    
production destined for export is, as of November 1, 1988, priced by market     
forces subject to export contracts meeting certain criteria prescribed by       
Canada's National Energy Board and the government of Canada.                    

The right to explore for and develop oil and natural gas on lands in  
Alberta and Saskatchewan is controlled by the Governments of each of those      
provinces.  Changes in royalties and other terms of provincial leases, permits  
and reservations may have a substantial effect on the Company's operations. In  
addition to the foregoing, Barnwell's Canadian operations may be affected in the
future, from time to time, by political developments in Canada and by Canadian  
Federal, provincial and local laws and regulations, such as restrictions on     
production and export, oil and natural gas allocation and rationing, price      
controls, tax increases, expropriation of property, modification or cancellation
of contract rights, and environmental protection controls.  Further, operations 
may also be affected by United States import fees and restrictions.             

Different royalty rates are imposed by the producing provinces, the   
Government of Canada and private interests with respect to the production and   
sale of crude oil, natural gas and liquids. In addition, some producing         
provinces receive additional revenue through the imposition of taxes on crude   
oil and natural gas owned by private interests within the province. Essentially,
provincial royalties are calculated as a percentage of revenue, and vary        
depending on production volumes, selling prices and the date of discovery.  The 
Province of Alberta announced a series of changes in the calculation of         
royalties, which became effective on January 1, 1993.  The new calculation of   
royalties is more price-sensitive, reducing the royalty rates when prices are   
low and increasing them when prices are high.  These changes included reduced   
royalties for new oil pools discovered after October 1, 1992.  Effective        
January 1, 1994, the mechanics of the natural gas royalty calculation were      
simplified; the Company does not believe this simplification has had or will    
have a significant impact on the amount of net oil and natural gas revenues.    

  Canadian taxpayers are not permitted to deduct royalties, taxes, rentals
and similar levies paid to the Federal or provincial governments in connection  
with oil and natural gas production in computing income for purposes of Canadian
Federal income tax. However, they are allowed to deduct a "Resource Allowance"  
which is 25% of the taxpayer's "Resource Profits for the Year" (essentially,    
income from the production of oil, natural gas or minerals) in computing their  
taxable income.  The resource properties located in the United States are       
freehold mineral interests leased under market conditions, subject to extraction
and severance taxes imposed according to state regulations.                     

  The Province of Alberta has a "Royalty Tax Rebate" in its Income Tax Act
which eliminates the provincial share of income tax attributable to the         
inability to deduct such royalties, rentals and similar levies. In addition, the
Alberta Income Tax Act provides for a royalty tax credit to taxpayers calculated
as a percentage of the taxpayer's "Attributed Alberta Royalty Income" (being    
that portion of the royalties paid to the Province of Alberta which have been   
disallowed as a deduction or added back in computing income for tax purposes)   
subject to an annual limitation of the credit.  In effect, this returns to the  
taxpayer a portion of the royalties paid to the Province of Alberta.  For fiscal
years 1994 and 1993 and for the first quarter of fiscal 1995 the royalty tax    
credit was determined according to the prevailing price of oil and varied from a
high of 85% at prices below $15.00 a barrel to 73% at $20.00 a barrel and to a  
low of 25% at $30.00 a barrel or higher.  The maximum credit is equal to the    
applicable percentage multiplied by the Crown Royalty Shelter, which amounted to
$2,500,000 Canadian (referred to herein as "C") for fiscal 1994 and 1993 and for
the first quarter of fiscal 1995.                                               

     The Province of Alberta stated that changes in the Royalty Tax Rebate would
be announced three years in advance and that the royalty tax credit             
program would be continued to December 31, 1997.  In 1994, the Province of      
Alberta reduced the above-mentioned royalty tax credit percentage from 85% to   
75%, and reduced the above-mentioned Crown Royalty Shelter from C $2,500,000 to 
C $2,000,000, effective January 1, 1995.  As a result of this change, the       
Company's royalty tax credit for fiscal 1995 was $230,000 lower than the amount 
received for fiscal 1994.  The royalty tax credit program has been in effect in 
various forms since 1974 and the Company anticipates that it will be continued  
in some form for the foreseeable future.  If the Alberta Royalty Tax Credit is  
not continued, it will have a material adverse effect on the Company.  In 1995, 
the Province of Alberta made the royalty tax credit percentage increase or      
decrease based upon both natural gas and oil prices.  Under this program, the   
total royalty tax credit the Company receives declines as oil and natural gas   
prices rise and increases as oil and natural gas prices decline. The Company    
estimates that these changes, which were effective with the beginning of        
Barnwell's second quarter of fiscal 1995, will result in an approximate         
reduction of $80,000 in net earnings for fiscal 1996 as compared to fiscal 1995.

Natural Gas Pricing                                                   
-------------------                                                   

   The price of natural gas is freely negotiated between buyers and sellers.
Natural gas sold by the Company is generally sold under both long-term and      
short-term contracts with prices indexed to market prices and renegotiated      
annually.                                                                       

Oil Pricing                                                           
-----------                                                           

The price of oil is freely negotiated between buyers and sellers.     

Competition                                                                     
-----------                                                                     

    The majority of Barnwell's natural gas sales take place in Alberta, Canada
and the Northern California area.  Natural gas prices in Alberta are generally  
very competitive as there is a significant supply of natural gas with shut-in   
capacity.  Northern California prices are also competitive and are influenced by
competition from producers in the Southwestern United States (Texas, etc.).     
Barnwell's oil and natural gas liquids are sold in Alberta, North Dakota and    
Louisiana and are determined by the world price for oil.                        

 The Company competes in the sale of oil and natural gas on the basis of
price, and on the ability to deliver product currently.  The oil and natural gas
industry is intensely competitive in all phases, including the exploration for  
new production and reserves and the acquisition of equipment and labor necessary
to conduct drilling activities. The competition comes from numerous major oil   
companies as well as numerous other independent operators. There is also        
competition between the oil and natural gas industry and other industries in    
supplying the energy and fuel requirements of industrial, commercial and        
individual consumers. Barnwell is a minor factor in the industry and competes in
its oil and natural gas activities with many other companies having far greater 
financial and other resources.                                                  

CONTRACT DRILLING OPERATIONS                                                    
----------------------------                                                    

 Barnwell owns 100% of Water Resources International, Inc. ("WRI").  WRI
conducts water well drilling, pump installation and pump maintenance activities 
in Hawaii, and has also drilled geothermal wells in Hawaii in previous years.   
WRI owns and operates four rotary drill rigs, owns a two acre storage and       
maintenance yard near Hilo, Hawaii, leases a three-quarter of an acre           
maintenance facility in Honolulu and a one acre maintenance and storage facility
with 2,800 square feet of interior space in Kawaihae, Hawaii, and maintains     
drill and pump inventory.  As of September 30, 1995, WRI employed 16 drilling,  
pump and administrative employees, none of whom are union members.              

     WRI is capable of drilling both shallow and deep water wells in Hawaii, and
has drilled the deepest water well in the State.  Additionally, WRI is          
contracted to install and repair water pumps after wells are completed.  Pump   
installation and maintenance contracts are primarily obtained from municipal    
water utilities.  The demand for WRI's services is dependent upon land          
development activities in Hawaii, which can currently be described as moderate. 
WRI markets its services to land developers and government agencies, and        
identifies potential contracts through public notices and referrals.  Contracts 
are usually fixed price contracts and are negotiated with private entities or   
obtained through competitive bidding with various local, state and Federal      
agencies.  Contract revenues are not dependent upon the discovery of water, and 
contracts are not subject to renegotiation of profits or termination at the     
election of the governmental entities involved.  Contracts provide for          
arbitration in the event of disputes.                                           

 The Company's contract drilling segment which operates in Hawaii is not
subject to seasonal fluctuations.                                               

Activity                                                                        
--------                                                                        

In fiscal 1995, WRI started six water well and four water well pump   
installation contracts and completed five water well and two pump installation  
contracts.  All five of the completed water wells were started in the current   
fiscal year and one of the two completed water well pump installations was      
started in the prior year.  Twenty-eight percent (28%) of such well drilling and
pump installation jobs, representing 40% of total contract drilling revenues in 
fiscal 1995, have been pursuant to government contracts.  At December 1, 1995,  
WRI had a backlog of four water well contracts, two of which were in progress as
of September 30, 1995, and nine pump installation contracts, seven of which were
in progress as of September 30, 1995.  These thirteen contracts represent a     
backlog of contract drilling revenues of approximately $2,700,000 as of         
September 30, 1995.                                                             

Competition                                                                     
-----------                                                                     

    WRI utilizes rotary drill rigs which have the capability of drilling wells
faster than cable tool rigs.  There are six other drilling contractors in the   
State of Hawaii which use cable tool and rotary drill rigs that are capable of  
drilling water wells in Hawaii. These contractors compete actively with WRI for 
government and private contracts.  Pricing is the Company's major method of     
competition; reliability of service is also a major factor.                     

LAND INVESTMENT OPERATIONS                                                      
--------------------------                                                      

 In May 1984, the Company, through a wholly-owned subsidiary, acquired a
50.1% interest in approximately 10,800 acres of leasehold property on the Kona  
coast of the Island of Hawaii.  The Company's interest and the remaining        
leasehold interest in the property were contributed to a joint venture,         
Kaupulehu Developments, in which the Company has a 50.1% controlling interest.  

The property is located in the North Kona District between the Pacific
Ocean and Mamalahoa Highway.  The western end of the property features extensive
ocean frontage with shoreline lagoons formed by the interaction of the lava     
flows and the ocean.  The original approximately 10,800 acre parcel was divided 
by more than two miles of the Queen Kaahumanu Highway and had approximately four
miles of frontage on the Mamalahoa Highway along the eastern boundary of the    
property.  The land area between the Queen Kaahumanu Highway and the Pacific    
Ocean is approximately 2,800 acres in size and the land area between the Queen  
Kaahumanu Highway and the Mamalahoa Highway ("the upland portion") is           
approximately 8,000 acres in size.  Kaupulehu Developments obtained the rezoning
of approximately 620 acres of such leasehold property to urban for both state   
and county purposes to allow for two hotel sites, two golf courses, several     
residential sites interspersed around and within the planned golf courses and   
one commercial site.                                                            

Kaupulehu Developments granted options to independent third parties to
acquire the leasehold interest for the development of the hotel, commercial,    
golf course and residential sites, comprising the approximately 620 acre        
property, the approximately 2,180 acres zoned conservation adjoining the        
approximately 620 acre urban area and the approximately 8,000 acre upland       
portion.                                                                        

   In fiscal 1989 and 1990, options were exercised with respect to hotel and
golf course sites, the commercial site and the approximately 8,000 acre upland  
portion.                                                                        

   In fiscal 1991, Kaupulehu Developments entered into no land transactions.

   In fiscal 1992, Kaupulehu Developments entered into definitive agreements
with Kaupulehu Makai Venture.  Kaupulehu Makai Venture succeeded to all         
development rights and obligations previously held by other independent third   
parties.  The managing general partner of Kaupulehu Makai Venture is an         
affiliated company of Kajima Corporation of Japan, one of the largest           
construction companies in Japan.  There is no affiliation between Kaupulehu     
Makai Venture or its predecessors and the Company.  Kaupulehu Developments      
received cash consideration in partial payment for the residential sites in     
fiscal 1992.  This transaction resulted in a pre-tax gain, net of minority      
interests, of $2,410,000.                                                       

  In fiscal 1994, Kaupulehu Developments submitted a petition to the State
Land Use Commission to reclassify approximately 1,000 acres of the approximate  
2,180 acres zoned conservation.  Kaupulehu Developments seeks to have the 1,000 
acres rezoned to permit the development of golf courses and residential sites.  
Kaupulehu Developments, as part of the rezoning process, submitted to the State 
Land Use Commission an Environmental Impact Statement.  In September 1994, the  
State Land Use Commission accepted the Environmental Impact Statement.  In      
December 1994, the State Land Use Commission began the public hearing process of
the rezoning petition; this process is currently ongoing.                       

Activity                                                                        
--------                                                                        

In fiscal 1995, there were no land transactions.                      

  In April 1995, the option under which Kaupulehu Makai Venture could have
acquired Kaupulehu Developments' leasehold interest in approximately 2,180      
leasehold acres of conservation zoned property in North Kona, Hawaii expired,   
unexercised.  Costs applicable to the rezoning of the approximately 1,000 acres 
of the aforementioned 2,180 acres of conservation zoned property incurred       
subsequent to April 1995 are capitalized.  Such costs, inclusive of capitalized 
interest, amounted to $293,000 at September 30, 1995.                           

Kaupulehu Makai Venture has completed a significant amount of the     
construction of the first golf course, hotel and condominiums and related       
infrastructure in the 620 acre urban area.  The golf course is essentially      
complete and is expected to open in early 1996.  The hotel is expected to open  
in late 1996.                                                                   

   At September 30, 1995, the remaining real estate position (i.e. leasehold
interests and related development rights) held by Kaupulehu Developments is     
comprised of the approximately 2,180 leasehold acres zoned conservation and     
development rights with respect to lands zoned residential in the adjacent 620  
acre urban area. The residential lands are under option to Kaupulehu Makai      
Venture.  This option, if exercised, entitles the Company to receive $16,157,000
in connection with its 50.1% interest in Kaupulehu Developments.  The           
residential site option expires on April 30, 2007; however, this option will    
expire sooner unless 20% of the consideration is received on or before          
December 31, 1999 and 50% of the then remaining consideration is received on or 
before April 30, 2003.  There is no assurance that this option or any portion   
thereof will be exercised.                                                      

Competition                                                                     
-----------                                                                     

    The Company's land investment segment is subject to intense competition in
all phases of its operations including the acquisition of new properties, the   
securing of approvals necessary for land rezoning, and the search for potential 
buyers of property interests presently owned.  The competition comes from       
numerous independent land development companies and other industries involved in
land investment activities.  The principal methods of competition are the       
location of the project and pricing.  Kaupulehu Developments is a minor factor  
in the land development industry and competes in its land investment activities 
with many other entities having far greater financial and other resources.      

   For the past three years Hawaii's economy has been in a recession.  While
the current outlook is for moderate economic growth of 1% to 2%, the real estate
market is not expected to experience a measurable improvement in the near term. 

Item 3.  Legal Proceedings - None.                                              
-----------------                                             

Item 4.  Submission of Matters to a Vote of Security Holders - None.            
---------------------------------------------------           

PART II 

Item 5.  Market Price of and Dividends on the Registrant's Common Stock         
--------------------------------------------------------------
and Related Stockholder Matters                               
-------------------------------                               

     The principal market on which the Company's common stock is being traded is
the American Stock Exchange.  The following tables present the quarterly high   
and low closing prices, on the American Stock Exchange, for the registrant's    
common stock during the periods indicated:                                      

Quarter Ended        High     Low      Quarter Ended        High     Low        
-------------        ----     ---      -------------        ----     ---        

December 31, 1993   19-7/8   18-1/2   December 31, 1994    19-1/2   19          
March 31, 1994      23-5/8   18-5/8   March 31, 1995       20       19          
June 30, 1994       21       19-1/2   June 30, 1995        20       18-1/8      
September 30, 1994  19-3/4   18-1/2   September 30, 1995   19-1/8   18-1/8      

  As of December 1, 1995, there were 1,322,052 shares of common stock, par
value $.50, outstanding.  Additionally, there were approximately 500 holders of 
the common stock of the registrant as of December 1, 1995.                      

    The Company declared four quarterly dividends of $0.05 per share in fiscal
1994 and two quarterly dividends of $0.075 per share in fiscal 1995.  In May    
1995, quarterly dividend payments were suspended.                               

                                                        [Enlarge/Download Table]


Item 6.  Selected Financial Data                                                            
         -----------------------                                                            

For the fiscal year ended September 30:                                                     
---------------------------------------                                                     
                                 1995        1994         1993         1992         1991    
                                 ----        ----         ----         ----         ----    

                                                                                            
Revenues                     $14,950,000 $20,000,000  $16,720,000  $21,450,000  $16,530,000 
                             =========== ===========  ===========  ===========  =========== 

Earnings from                                                                               
  continuing operations                                                                     
  before extraordinary                                                                      
  gain and cumulative                                                                       
  effect of accounting                                                                      
  change                     $   650,000 $ 2,520,000  $ 2,114,000  $ 2,525,000  $ 2,973,000 
Earnings (loss) from                                                                        
  discontinued operations         -           -           296,000     (585,000)  (1,213,000)
Extraordinary gain                -           -            -           230,000       -      
Cumulative effect                                                                           
  of accounting change            -           -           800,000       -            -      
                             ----------- -----------  -----------  -----------  ----------- 
Net earnings                 $   650,000 $ 2,520,000  $ 3,210,000  $ 2,170,000  $ 1,760,000 
                             =========== ===========  ===========  ===========  =========== 

Net earnings per share,                                                                     
  primary:                                                                                  
Earnings from                                                                               
  continuing operations                                                                     
  before extraordinary                                                                      
  gain and cumulative                                                                       
  effect of accounting                                                                      
  change                           $0.49       $1.90        $1.59        $1.87        $2.13 
Earnings (loss) from                                                                        
  discontinued operations            -            -          0.22        (0.43)       (0.87)
Extraordinary gain                   -            -           -           0.17          -   
Cumulative effect                                                                           
  of accounting change               -            -          0.61          -            -   
                              ----------   ----------  ----------   ----------    --------- 
Net earnings per share,                                                                     
  primary                          $0.49        $1.90       $2.42        $1.61        $1.26 
                              ==========   ==========  ==========    =========    ========= 

Cash dividends                                                                              
  declared per share               $0.15        $0.20       $0.10        $0.30        $0.60 
                                   =====        =====       =====        =====        ===== 

Weighted average number                                                                     
  of shares outstanding        1,326,100    1,326,500   1,329,067    1,345,449    1,394,528 
                             ===========  ===========  ==========  ===========  =========== 

As of September 30:                                                                         
-------------------                                                                         

Long-term debt,                                                                             
  excluding current portion  $11,100,000 $10,600,000  $10,600,000  $12,000,000  $14,486,000 
                             =========== ===========  ===========  ===========  =========== 

Total assets                 $28,780,000 $30,622,000  $28,081,000  $31,231,000  $31,333,000 
                             =========== ===========  ===========  ===========  =========== 

Market price per share            $18.38      $19.00       $19.63       $14.25       $21.13 
                                  ======      ======       ======       ======       ====== 

Proved developed reserves:                                                                  
Oil and liquids-barrels        2,296,000   2,427,000    2,222,000    2,179,000    2,369,000 
                             =========== ===========  ===========  ===========  =========== 

Natural gas-thousand                                                                        
  cubic feet                  46,746,000  51,850,000   50,711,000   48,184,000   49,430,000 
                             =========== ===========  ===========  ===========  =========== 
<FN>                                                                                        
                              For further discussion see Items 7 and 8.                     

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                      
-------------------------------------------------             

CONDITION AND RESULTS OF OPERATIONS                           
-----------------------------------                           

LIQUIDITY AND CAPITAL RESOURCES                                                 
-------------------------------                                                 

   Cash flows from operations for fiscal 1995 were $1,924,000 as compared to
$4,336,000 in fiscal 1994.  This decrease of $2,412,000 was due to lower        
earnings resulting from lower natural gas prices and the receipt of $1,586,000  
in the prior year as a result of the termination of natural gas purchase, sales 
and transportation agreements with Alberta and Southern Gas Co., Ltd.  No such  
payment was received in the current period, and approximately $700,000 of taxes 
due on this fiscal 1994 receipt were paid in fiscal 1995.  Additionally, in     
fiscal 1995 the Company paid $1,420,000 in estimated income taxes related to the
April 1995 expiration of the unexercised option under which Kaupulehu Makai     
Venture could have acquired Kaupulehu Developments' leasehold interest in       
conservation zoned property in North Kona, Hawaii.  These decreases were        
partially offset by the sale of $958,000 of trading securities in 1995 which    
were purchased in 1994.                                                         

    The decrease in natural gas prices, which contributed significantly to the
Company's reduced earnings and cash flows from operations, has also led to      
reduced prices for natural gas leases.  To improve the Company's capacity to    
acquire more petroleum properties, the Company suspended its dividend in May    
1995 and issued $2,000,000 in convertible debentures in June 1995.  The notes   
are payable in 20 consecutive equal quarterly installments beginning in         
October 1998.  Interest is payable quarterly at an initial rate of 10% per annum
until October 1, 1995, after which the interest rate will be adjusted quarterly 
to the greater of 10% per annum or 1% over the prime rate of interest.  The     
notes are unsecured and convertible at any time at the holder's option into     
shares of the Company's common stock at a price of $20.00 per share, subject to 
adjustment for certain events including a stock split of, or stock dividend on, 
the Company's common stock.  The notes are redeemable, at the option of the     
Company, at any time after July 1, 1997 at premiums declining 1% annually from  
5% to 0% of the principal amount of the notes. $1,900,000 of such notes were    
issued to affiliates of the Company.  Due to the time involved in developing    
petroleum prospects, the proceeds from the issuance of these debentures will be 
largely utilized in fiscal 1996.                                                

 The Company's major credit facility is with the Royal Bank of Canada, a
Canadian bank, for Canadian (referred to herein as "C") $16,000,000 or its U.S. 
dollar equivalent of approximately $11,900,000 at September 30, 1995. Under the 
credit facility agreement, the facility is reviewed annually, based primarily on
the future cash flows related to the Company's oil and natural gas properties.  
The next review is planned for February 1996.  Subject to that review, the      
facility may be extended one year with no required debt repayments for one year 
or converted to a 6-year term loan by the bank.  The Company anticipates that   
the bank will reduce the amount of this facility upon its February 1996 review  
due to lower natural gas prices; any such reduction is not anticipated to be in 
excess of available credit.  If the facility is converted to a 6-year term loan,
the Company has agreed to the following repayment schedule of the then          
outstanding loan balance:  year 1-26%; year 2-24%; year 3-17%; year 4-15%; year 
5-12% and year 6-6%.  The facility is collateralized by the Company's interests 
in its major oil and natural gas properties and a negative pledge on its        
remaining oil and natural gas properties.                                       

No compensating bank balances are required on any of the Company's    
indebtedness under the facility.  The Company utilized $1,500,000 of its cash   
during fiscal 1995 to repay a portion of the debt outstanding under the         
facility.  At September 30, 1995, the Company had an unused line of credit      
available under this facility of approximately $2,800,000.                      

    Barnwell's consolidated cash balance at September 30, 1995 was $2,976,000,
a decrease of $1,222,000 from the Company's cash balance of $4,198,000 at       
September 30, 1994.  This decrease was primarily due to oil and natural gas     
capital expenditures totaling $3,434,000, which exceeded the $1,924,000 of cash 
flows provided by operations.                                                   

   In fiscal 1995, the Company sold two non-producing natural gas properties
for $613,000 in cash; no revenue or income was recognized as these proceeds were
credited to the full cost pool.  These proceeds were utilized to make a portion 
of the long-term debt repayment discussed above.                                

     Cash flows from operations in fiscal 1994 decreased from fiscal 1993 due to
the collection of a receivable in fiscal 1993 for an income tax refund of       
$1,220,000, the investment of $978,000 in trading securities in fiscal 1994 and 
an increase in contract drilling receivables attributable to an increase in     
contract drilling work at the end of fiscal 1994 compared to the end of fiscal  
1993.  These cash flow decreases were partially offset by an increase in natural
gas profits which resulted from higher natural gas prices and the receipt of the
aforementioned compensatory payment as a result of the termination of the       
natural gas sales contracts.  This payment was recognized as income in fiscal   
1994.                                                                           

In fiscal 1995, the Company invested $3,434,000 in the acquisition,   
exploration and development of oil and natural gas properties.  In fiscal 1995, 
the Company participated in the drilling of 16 development wells and 14         
exploratory wells, 15 of which are capable of production.  The Company also     
participated in two development oil and four development natural gas well       
recompletions.                                                                  

 The Company continued the development of several oil prospects in North
Dakota in fiscal 1995, drilling one exploratory and three development wells.  Of
these four wells, one exploratory well and two development wells were           
successful.  One other development well was dry and abandoned.  The Company     
further expanded its U.S. oil and natural gas operations acquiring an interest  
in an oil and natural gas prospect in Southwestern Louisiana for $163,000.      

The Company spent $203,000 on contract drilling and other property and
equipment and $293,000 towards the rezoning of land in North Kona, Hawaii, in   
fiscal 1995.                                                                    

   The following table sets forth the Company's capital expenditures and the
number of wells drilled for each of the last three fiscal years:                

                                           1995         1994          1993
                                          -----------  -----------   -----------

Other capital expenditures                $   496,000  $   387,000   $    73,000
Oil and natural gas capital expenditures  $ 3,434,000  $ 5,350,000   $ 3,193,000
Total capital expenditures                $ 3,930,000  $ 5,737,000   $ 3,266,000
Increase (decrease) in oil and natural                                          
  gas capital expenditures                $(1,916,000) $ 2,157,000   $   447,000
Development oil and                                                             
  natural gas wells drilled                        16           32            18
Exploratory oil and                                                             
  natural gas wells drilled                        14           20            10
Successful oil and                                                              
  natural gas wells drilled                        15           41            23

  It is anticipated that Barnwell's total fiscal 1996 capital expenditures
will be approximately one-third higher than that of fiscal 1995.  The Company   
also has a commitment to construct $200,000 of improvements at its contract     
drilling yard at Sand Island on Oahu, Hawaii, by June 1997.  The Company        
believes current cash balances and future cash flows from operations will be    
sufficient to fund these expenditures, make the scheduled repayments of its     
convertible notes, and repay the outstanding balance on its credit facility,    
should the Company or Royal Bank of Canada elect to convert the facility to a   
term loan.                                                                      

     The Company did not receive any cash payments in fiscal 1995, 1994 and 1993
related to its 50.1% interest in Kaupulehu Developments.  Kaupulehu             
Developments' cash flows specifically relate to the sale of leasehold interests,
which do not occur every year.                                                  

  In fiscal 1994, Kaupulehu Developments submitted a petition to the State
Land Use Commission to reclassify approximately 1,000 acres of the approximate  
2,180 acres zoned conservation.  Kaupulehu Developments seeks to have the 1,000 
acres rezoned to permit the development of golf courses and residential sites.  
In December 1994, the State Land Use Commission began the public hearing process
of the rezoning petition; this process is currently ongoing.                    

Kaupulehu Makai Venture has completed a significant amount of the     
construction of the first golf course, hotel and condominiums and related       
infrastructure in the 620 acre urban area.  The golf course is essentially      
complete and is expected to open in early 1996.  The hotel is expected to open  
in late 1996.                                                                   

  The remaining real estate position (i.e. leasehold interests and related
development rights) held by Kaupulehu Developments at September 30, 1995, is    
comprised of the approximately 2,180 leasehold acres zoned conservation and     
development rights with respect to lands zoned residential in the adjacent 620  
acre urban area.  The residential lands are under option to Kaupulehu Makai     
Venture.  This option, if exercised, entitles the Company to receive $16,157,000
in connection with its 50.1% interest in Kaupulehu Developments.  The           
residential site option expires on April 30, 2007; however, this option will    
expire sooner unless 20% of the consideration is received on or before          
December 31, 1999 and 50% of the then remaining consideration is received on or 
before April 30, 2003.  There is no assurance that this option or any portion   
thereof will be exercised.                                                      

   In fiscal 1993, the Company repurchased 16,500 shares of its common stock
from officers of the Company for $236,000, an average of $14.30 per share,      
under a stock repurchase program announced in March 1991. The Company did not   
repurchase any shares of its common stock in fiscal 1995 or 1994.  At           
September 30, 1995, the Company could purchase an additional 19,800 shares under
the March 1991 program.                                                         

 In fiscal 1994, the Company declared regular quarterly dividends on its
common stock at the rate of $0.05 per share.  The Company also declared and paid
dividends totaling $198,000 during the first half of fiscal 1995.  In May 1995, 
due to the decline in natural gas prices, the Company elected to suspend the    
payment of dividends pending further review of investment opportunities.        

RESULTS OF OPERATIONS                                                           
---------------------                                                           

  Barnwell reported net earnings of $650,000 in fiscal 1995, a decrease of
$1,870,000 from net earnings of $2,520,000 in fiscal 1994.  This decrease was   
due in part to net earnings of $880,000 recognized in fiscal 1994 as a result   
of cash received for the termination of natural gas purchase, sales and         
transportation agreements with Alberta and Southern Gas Co., Ltd.  No such      
payment was received in fiscal 1995.  In addition, fiscal 1995 earnings were    
reduced by a 34% decrease in natural gas prices, partially offset by a 5%       
increase in natural gas production and 13% and 12% increases in oil production  
and prices, respectively.                                                       

Barnwell reported earnings from continuing operations of $2,520,000 in
fiscal 1994, an increase of $406,000 (19%) over the $2,114,000 of earnings from 
continuing operations reported in fiscal 1993.  This increase was due to an     
$880,000 oil and natural gas decontracting payment, net of income taxes,        
received in November 1993, and 18% higher natural gas prices, which contributed 
to a $205,000 after-tax increase in the Company's oil and natural gas operating 
profit.  The increase in earnings from continuing operations was partially      
offset by a decrease in contract drilling profits due to lower demand for water 
well drilling work and an increase in Canadian taxes due to higher Canadian     
income.                                                                         

 Fiscal 1993 earnings from continuing operations of $2,114,000 decreased
$411,000 (16%) from earnings from continuing operations of $2,525,000 in fiscal 
1992.  This decrease was due to the fact that Kaupulehu Developments did not    
complete any land transactions in fiscal 1993 as compared to fiscal 1992.  In   
fiscal 1992, the Company earned $1,520,000 after taxes from Kaupulehu           
Developments.  This decrease was partially offset by higher fiscal 1993 natural 
gas prices and production which increased operating profit by $699,000, and by  
the fact that the Company incurred in fiscal 1992, a $286,000 after-tax write-  
off of the Company's advances to a Canadian corporation to improve an apartment 
building in British Columbia, Canada.                                           

                                                        [Enlarge/Download Table]

Oil and Natural Gas                                                                  
-------------------                                                                  

                                                            Annual Average Price     
                          Annual Net Production                   Per Unit           
                   -----------------------------------   ----------------------------

                                            Increase                       Increase  
                                           (Decrease)                     (Decrease) 
                                         -------------                  -------------

                     1995       1994      Units    %     1995    1994     $      %   
                  ---------  ---------  --------  ----  ------  ------ -------  ---- 
                                                                                     
Liquids (barrels)    90,000     90,000      -       -   $10.98  $ 9.48  $ 1.50   16% 
Oil (barrels)       206,000    182,000    24,000   13%  $15.71  $14.06  $ 1.65   12% 
Natural Gas (MCF) 4,916,000  4,679,000   237,000    5%  $ 1.03  $ 1.57  $(0.54) (34%)
                                                        [Enlarge/Download Table]
                                                            Annual Average Price     
                          Annual Net Production                   Per Unit           
                   -----------------------------------  -----------------------------

                                           Increase                        Increase  
                                          (Decrease)                      (Decrease) 
                                        --------------                  -------------

                     1994       1993      Units    %     1994    1993     $      %   
                  ---------  ---------  --------  ----  ------  ------ -------  ---- 
                                                                                     
Liquids (barrels)    90,000     64,000    26,000   41%  $ 9.48  $12.55  $(3.07) (24%)
Oil (barrels)       182,000    183,000    (1,000)  (1%) $14.06  $15.96  $(1.90) (12%)
Natural Gas (MCF) 4,679,000  4,506,000   173,000    4%  $ 1.57  $ 1.33  $ 0.24   18% 

     In fiscal 1995, oil and natural gas revenues decreased $3,430,000 (25%), as
compared to fiscal 1994.  A $1,586,000 decontracting payment, received from     
Alberta and Southern Gas Co., Ltd. in November 1993, was included in oil and    
natural gas revenues for fiscal 1994.  There was no such payment received in    
fiscal 1995.  This decontracting payment was the result of the termination of   
the Company's Dunvegan natural gas purchase, sales and transportation agreements
with Alberta and Southern Gas Co., Ltd., effective November 1, 1993.            

    The remaining $1,844,000 decrease was due to a 34% decrease in natural gas
prices, partially offset by a 5% increase in natural gas production, 13% and 12%
increases in oil production and prices, respectively.  Additionally, the        
Province of Alberta changed their royalty tax credit program effective January  
1, 1995 reducing the amount of the credit that Barnwell received.  The royalty  
tax credit program changes resulted in a reduction in net earnings in fiscal    
1995, as compared to fiscal 1994, of $230,000.  The Company estimates that these
changes, which were effective with the beginning of Barnwell's second quarter of
fiscal 1995, will result in an approximate reduction of $80,000 in net earnings 
in fiscal 1996 as compared to fiscal 1995.                                      

Marketing arrangements for the majority of the Company's natural gas  
production are handled on an individual contract basis with many agreements     
renegotiated annually.  The Dunvegan natural gas production is sold to          
aggregators under various short and long-term contracts.  A minimal amount of   
all production is sold on the spot market receiving the current market price.   

  Oil and natural gas operating expenses increased $185,000 (6%) in fiscal
1995, as compared to fiscal 1994, due to new production at the Pembina, Lacombe 
and Barrhead areas and due to increased repairs and maintenance in the older    
areas of the Dunvegan, Provost and Red Earth properties.  The Company expects   
oil and natural gas operating expenses to continue to increase at a rate higher 
than inflation due to higher costs of acquiring and developing new properties   
and higher costs associated with certain of the Company's older properties.     

    In fiscal 1994, oil and natural gas revenues increased $2,700,000 (24%) as
compared to fiscal 1993, due to 18% higher natural gas prices, partially offset 
by a 12% decrease in oil prices and a 24% decrease in liquids prices.  In fiscal
1994, natural gas production increased 4% and oil production decreased 1% as    
compared to fiscal 1993.  Additionally, the natural gas sales contracts         
involving the sale of the Company's Dunvegan natural gas were terminated        
effective November 1, 1993.  As a result of these contract terminations, the    
Company received a compensatory payment of $1,586,000, which was recognized as  
income in fiscal 1994.                                                          

    Oil and natural gas operating expenses increased $365,000 (13%) for fiscal
1994, as compared to fiscal 1993, due to new production at the Hillsdown and    
Thornbury areas.                                                                

     In fiscal 1993, oil and natural gas revenues increased $1,020,000 (10%), as
compared to fiscal 1992, due to higher natural gas production which increased by
593,000 MCF (15%) and higher natural gas prices which increased 7%.  Oil and    
liquids production and price changes essentially offset themselves.  The        
increase in natural gas production was due to higher production from the        
Company's principal producing property and higher production from the Company's 
newer developed areas.                                                          

   Oil and natural gas operating expenses increased $208,000 (8%) for fiscal
1993 as compared to fiscal 1992, primarily due to an increase in new production 
from properties brought on-line in 1993 and late 1992.  Increases in costs of   
maintaining existing oil production accounted for $30,000 of the increase.      

Contract Drilling                                                               
-----------------                                                               

  Contract drilling revenues and operating costs are associated with water
well drilling and water pump installation in Hawaii.  Increases or decreases in 
these revenues and costs are partially dependent on fluctuations in land        
development activity in Hawaii.                                                 

   Contract drilling revenues and operating costs decreased $1,320,000 (26%)
and $1,251,000 (30%), respectively, in fiscal 1995 as compared to fiscal 1994,  
due to decreased pump installation activity partially offset by higher water    
well drilling activity.  Combined operating profit before depreciation decreased
$69,000 (7%) in fiscal 1995, as compared to fiscal 1994, due to less cost       
efficiencies in fiscal 1995 brought on by the lower overall work performed by   
the contract drilling segment.                                                  

     Contract drilling revenues and operating costs increased $520,000 (11%) and
$1,035,000 (33%), respectively, in fiscal 1994 as compared to fiscal 1993, due  
to higher pump installation activity partially offset by lower water well       
drilling activity.  Pump installation revenues and operating costs increased    
$3,010,000 (702%) and $2,311,000 (739%), respectively, in fiscal 1994, whereas  
water well drilling revenues and operating costs decreased $2,446,000 (60%) and 
$1,205,000 (53%), respectively, in fiscal 1994, as compared to fiscal 1993.     
Combined operating profit before depreciation decreased $515,000 (35%) in fiscal
1994 primarily due to the fact that the gross margins on the pump installation  
contracts are lower than the gross margins for well drilling contracts.         
Additionally, water well drilling operations were at full capacity during part  
of fiscal 1993, enabling operations to be completed more efficiently.           

     Contract drilling revenues and operating costs decreased $780,000 (15%) and
$786,000 (20%), respectively, in fiscal 1993, as compared to fiscal 1992, due to
a decrease in pump installation work performed by the Company.  Operating profit
before depreciation increased $6,000 due to a $333,000 increase in water well   
drilling margin resulting from the simultaneous operation of four drilling rigs 
for a period of time in fiscal 1993, as compared to three rigs in the first half
of fiscal 1992.  This increase was offset by a $327,000 decrease in pump        
installation gross margin due to significantly less pump installation work.     

 The Company expects fiscal 1996 contract drilling activity to be fairly
consistent with or slightly lower than that of fiscal 1995.  Demand for water   
well drilling continues to be lower than in previous years due to the continuing
reduced rate of land development in the State of Hawaii.  However, land         
development continues throughout the State of Hawaii and the Company believes   
that its water well drilling activity in fiscal 1996 will be stable.            

     At December 1, 1995, WRI had a backlog of four water well contracts, two of
which were in progress as of September 30, 1995, and nine pump installation     
contracts, seven of which were in progress as of September 30, 1995.  These     
thirteen contracts represent a backlog of contract drilling revenues of         
approximately $2,700,000 as of September 30, 1995.                              

Investment in Land                                                              
------------------                                                              

    In fiscal 1995, 1994 and 1993, Kaupulehu Developments entered into no land
transactions.                                                                   

  In April 1995, the option under which Kaupulehu Makai Venture could have
acquired Kaupulehu Developments' leasehold interest in approximately 2,180      
leasehold acres of conservation zoned property in North Kona, Hawaii expired,   
unexercised.  Costs applicable to the rezoning of the approximately 1,000 acres 
of the 2,180 acres of conservation zoned property incurred subsequent to April  
1995 are being capitalized.  Such costs, inclusive of capitalized interest,     
amounted to $293,000 at September 30, 1995.                                     

   For the past three years Hawaii's economy has been in a recession.  While
the current outlook is for moderate economic growth of 1% to 2%, the real estate
market is not expected to experience a measurable improvement in the near term. 

Discontinued Food Products Operations                                           
-------------------------------------                                           

 There was no impact of discontinued operations on fiscal years 1995 and
1994.  In May 1994, the Company transferred its 25% limited partnership         
interests in Pacific Tropical Products ("PTP") and Orchard Development          
("Orchard"), which had a carrying value of nil, to Mr. Anderson, a director and 
shareholder of the Company.  For further discussion see Note 14 (Discontinued   
Operations) of "Notes to Consolidated Financial Statements".  Accordingly,      
operating results related to the food products segment have been reclassified   
and included in the statement of operations as discontinued operations for the  
year ended September 30, 1993.  The earnings from discontinued food products    
operations of $296,000 for fiscal 1993 represents the $617,000 gain on the      
transfer of ownership of the Company's general partnership interest in PTP and  
Orchard less the Company's share of the fiscal 1993 losses of PTP and Orchard,  
net of income taxes.                                                            

Interest Income and Other                                                       
-------------------------                                                       
   Interest income and other income decreased $300,000 (31%) in fiscal 1995,
as compared to fiscal 1994, due to lower average interest-bearing cash balances 
and reduced dividend income as a result of the sale of investments in preferred 
stocks.                                                                         

    Interest income and other income increased $60,000 (7%) in fiscal 1994, as
compared to fiscal 1993, due to increased dividend income as a result of the    
Company's investments in preferred stocks.                                      

Interest income and other income increased $260,000 in fiscal 1993, as
compared to fiscal 1992, due to higher interest income on interest bearing      
deposits due to the receipt of cash in September 1992 from the Kaupulehu        
Developments land transaction.                                                  

General and Administrative Expenses                                             
-----------------------------------                                             

General and administrative expenses decreased $412,000 (10%) in fiscal
1995, as compared to fiscal 1994, due to decreased personnel costs, decreases in
certain rezoning costs incurred by Kaupulehu Developments and non-recurring     
costs related to the relocation of the corporate office in Honolulu, Hawaii.    

     General and administrative expenses increased $198,000 (5%) in fiscal 1994,
as compared to fiscal 1993, due to increases in salaries, pension costs and     
costs related to the relocation of the corporate office in Honolulu, Hawaii.    

General and administrative expenses decreased $693,000 (15%) in fiscal
1993, as compared to fiscal 1992.  The decrease was due to the following items  
which were included in fiscal 1992 results but not in fiscal 1993 results:  (i) 
a non-recurring provision for the plugging of a geothermal well and related     
expenses of $200,000 and (ii) a $99,000 increase in the allowance for doubtful  
accounts.  The remaining decrease is attributable to a decline in property taxes
and legal costs of Kaupulehu Developments and to decreases in personnel costs.  

Interest Expense                                                                
----------------                                                                

 Interest expense increased $263,000 (53%) in fiscal 1995, due to higher
average interest rates on the Company's credit facility borrowings with the     
Royal Bank of Canada and interest on the convertible notes issued in June 1995. 
The average interest rate incurred during fiscal 1995 on the Company's          
outstanding debt was 6.67%, an increase of 41% from fiscal 1994's average of    
4.73%.  The average interest rate paid during fiscal 1995 on the Company's debt 
with the Royal Bank of Canada increased 37% from an average of 4.73% in fiscal  
1994 to 6.47% in fiscal 1995.  The interest rate on the convertible notes issued
in June 1995 was 10% per annum for the period June through September 1995.      

  Interest expense decreased $140,000 (22%) in fiscal 1994, due to a lower
average outstanding debt balance under the Company's credit facility with the   
Royal Bank of Canada in fiscal 1994, as compared to fiscal 1993.  The effect of 
the lower outstanding debt was partially offset by higher interest rates; the   
average interest rate paid during fiscal 1994 on the Company's debt with the    
Royal Bank of Canada increased 20% from an average of 3.94% in fiscal 1993 to   
4.73% in fiscal 1994.                                                           

  Interest expense decreased $208,000 (25%) in fiscal 1993, as compared to
fiscal 1992, due to a significant reduction in debt during fiscal 1993          
(outstanding long-term debt was reduced by $4,676,000 (31%) in fiscal 1993).  In
addition, the average interest rate paid during fiscal 1993 on the Company's    
debt with the Royal Bank of Canada decreased 24% from an average of 5.19% in    
fiscal 1992 to an average of 3.94% in fiscal 1993.                              

Depreciation, Depletion and Amortization                                        
----------------------------------------                                        
    Depreciation, depletion and amortization increased $206,000 (7%) in fiscal
1995, as compared to fiscal 1994, due to a $297,000 increase in depletion,      
partially offset by a $91,000 decrease in depreciation.  Depletion increased due
to a 5% increase in natural gas production and an increase in the depletion rate
of $.02 per MCF equivalent (5%).  The depletion rate increased due to higher    
finding costs in fiscal 1995.  Depreciation decreased because certain well      
drilling assets were fully depreciated in fiscal 1994.                          

     Depreciation, depletion and amortization increased $270,000 (10%) in fiscal
1994, as compared to fiscal 1993, due to a $347,000 increase in depletion,      
partially offset by a $62,000 decrease in depreciation.  Depletion increased due
to a 4% increase in natural gas production and an increase in the depletion rate
of $.04 per MCF equivalent (12%).  The Company's depletion rate increased as a  
result of the Company's capital expenditures on natural gas plants and natural  
gas gathering systems.  Depreciation decreased because certain corporate and    
well drilling assets were fully depreciated in fiscal 1993.                     

    Depreciation, depletion and amortization increased $118,000 (5%) in fiscal
1993, as compared to fiscal 1992, primarily because of a $113,000 increase in   
depletion.  Depletion increased due to a 15% increase in natural gas production 
partially offset by a decrease in the depletion rate of $.02 per                
MCF equivalent (6%).                                                            

Foreign Currency Fluctuations                                                   
-----------------------------                                                   

The Company conducts foreign operations in Canada.  Consequently, the 
Company is subject to foreign currency transaction gains and losses due to      
fluctuations of the exchange rates between the Canadian dollar and the U.S.     
dollar.  During fiscal 1995, the Company realized foreign currency transaction  
losses of $176,000.  Immaterial foreign currency transaction gains were realized
in fiscal 1994 and foreign currency transaction losses of $140,000 were realized
in fiscal 1993.  The Company cannot accurately predict future fluctuations      
between the Canadian and U.S. dollars.                                          

Taxes                                                                           
-----                                                                           

Effective October 1, 1992, the Company adopted Statement of Financial 
Accounting Standards ("SFAS") 109, "Accounting for Income Taxes" which requires 
a change from the deferred method of accounting for income taxes of APB Opinion 
11 to the asset and liability method of accounting for income taxes.  Under the 
asset and liability method of SFAS 109, deferred tax assets and liabilities are 
recognized for the estimated future tax consequences attributable to 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.  Under SFAS 109, 
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.  The       
cumulative effect of this change in accounting method (for years prior to fiscal
1993 which were not restated) increased net earnings by $800,000 in fiscal 1993.

     In fiscal 1995, 1994 and 1993, the provision for income taxes does not bear
a normal relationship to earnings because Canadian taxes were payable on the    
Canadian operations and losses from U.S. operations provide no foreign tax      
benefits.                                                                       

    In November 1995, officials of the U.S. and Canada formally ratified a new
agreement amending the Canada-U.S. Tax Treaty reducing the Canadian Branch tax, 
effective January 1, 1996, from 10% to 6% and effective January 1, 1997 to 5%.  
This change will decrease current tax expenses in fiscal 1996 by approximately  
$50,000 and decrease deferred tax expenses in fiscal 1996 by approximately      
$300,000.                                                                       

Environmental Matters                                                           
---------------------                                                           

    The application of Federal, state, and Canadian regulations to protect the
environment, particularly in regard to the discharge of materials into the      
environment, may increase the cost of operation for the Company's oil and       
natural gas and contract drilling operations.  The Company presently spends     
certain amounts, from time to time, to comply with environmental regulations.   
Although the Company is not aware of any specific problems, recent past may not 
be indicative of the amounts of expenditures that the Company may be required to
expend for these purposes in subsequent years.                                  

Inflation                                                                       
---------                                                                       

   The effect of inflation on the Company has generally been to increase its
cost of operations, interest cost (as essentially all of the Company's debt is  
at variable short-term rates of interest which tend to increase as inflation    
increases), general and administrative costs and direct costs associated with   
oil and natural gas production and contract drilling operations.  In the case of
contract drilling, the Company has not been able to increase its                
contract revenues to fully compensate for increased costs.  In the case of oil  
and natural gas, prices realized by the Company are essentially determined by   
world prices for oil and western Canadian/California/Southwest U.S. natural gas 
prices for natural gas.                                                         

New Statements of Financial Accounting Standards                                
------------------------------------------------                                

  In March 1995, the Financial Accounting Standards Board issued SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets To Be 
Disposed Of." SFAS 121 requires that long-lived assets to be held and used are  
evaluated for impairment whenever events or changes in circumstances indicate   
that the carrying amount of an asset may not be recoverable.  If the future cash
flows expected to result from use of the asset (undiscounted and without        
interest charges) are less than the carrying amount of the asset, an impairment 
loss is to be recognized.  Such impairment loss is measured as the amount by    
which the carrying amount of the asset exceeds the fair value of the asset.     
SFAS 121 also requires that long-lived assets to be disposed of be reported at  
the lower of the asset carrying amount or fair value, less cost to sell.        

  Effective September 30, 1995, the Company adopted the provisions of SFAS
121.  Adoption of the statement had no impact on financial condition or net     
earnings.                                                                       

    In October 1995, the Financial Accounting Standards Board issued SFAS 123,
"Accounting for Stock-Based Compensation".  SFAS 123 establishes a new, fair    
value based method of measuring stock-based compensation, but does not require  
an entity to adopt the new method for preparing its basic financial statements. 
For entities not adopting the new method, SFAS 123 requires disclosure in the   
footnotes of proforma net earnings and earnings per share information as if the 
fair value based method had been adopted.  Adoption of SFAS 123 is required for 
no later than the Company's year ending September 30, 1997.  The Company has not
yet determined if it will adopt the fair value based method of accounting for   
stock-based compensation for purposes of preparing its basic financial          
statements.                                                                     

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Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                           
-------------------------------------------                 
Independent Auditors' Report  
----------------------------  

The Board of Directors                                                          
Barnwell Industries, Inc.:                                                      

We have audited the consolidated financial statements of Barnwell Industries,   
Inc. and subsidiaries as listed in the index at Part IV, Item 14.  In           
connection with our audits of the consolidated financial statements, we also    
have audited the financial statement schedule as listed in the index at Part    
IV, Item 14.  These consolidated financial statements and financial statement   
schedule are the responsibility of the Company's management.  Our               
responsibility is to express an opinion on these consolidated financial         
statements and financial statement schedule based on our audits.                

We conducted our audits in accordance with generally accepted auditing          
standards.  Those standards require that we plan and perform the audit to       
obtain reasonable assurance about whether the financial statements are free of  
material misstatement.  An audit includes examining, on a test basis, evidence  
supporting the amounts and disclosures in the financial statements.  An audit   
also includes assessing the accounting principles used and significant          
estimates made by management, as well as evaluating the overall financial       
statement presentation.  We believe that our audits provide a reasonable basis  
for our opinion.                                                                

In our opinion, the consolidated financial statements referred to above         
present fairly, in all material respects, the financial position of Barnwell    
Industries, Inc. and subsidiaries as of September 30, 1995 and 1994, and the    
results of their operations and their cash flows for each of the years in the   
three-year period ended September 30, 1995, in conformity with generally        
accepted accounting principles.  Also in our opinion, the related financial     
statement schedule, when considered in relation to the basic consolidated       
financial statements taken as a whole, present fairly, in all material          
respects, the information set forth therein.                                    

As discussed in note 1 to the consolidated financial statements, Barnwell       
Industries, Inc. changed its method of accounting for income taxes in the       
fiscal year ended September 30, 1993.                                           

KPMG PEAT MARWICK LLP                                                           

Honolulu, Hawaii                                                                
November 28, 1995                                                               

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BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS 

ASSETS                                                     September 30,        
------                                              --------------------------  
CURRENT ASSETS:                                         1995           1994     
                                                  ------------   -----------
Cash, interest bearing of $2,976,000 in 1995                                    
and $4,182,000 in 1994                            $ 2,976,000    $ 4,198,000
Trading securities (Note 3)                               -            948,000  
Accounts receivable (Notes 2 and 11)                  2,485,000      2,719,000  
Royalty tax credit and taxes receivable                 215,000        239,000  
Costs and estimated earnings in excess of                                       
billings on uncompleted contracts (Note 2)            113,000        198,000
Deferred income tax assets (Note 6)                     120,000        200,000  
Inventories and other current assets                    215,000        191,000  
                                                  -----------    -----------
TOTAL CURRENT ASSETS                                6,124,000      8,693,000
                                                  -----------    -----------
INVESTMENT IN LAND (Notes 4 and 5)                      648,000          -      
                                                  -----------    -----------
OTHER ASSETS (Notes 2 and 3)                          1,011,000        903,000  
                                                  -----------    -----------

PROPERTY AND EQUIPMENT (Note 5):                                                
Land                                                    631,000        631,000  
Oil and natural gas properties                                                  
(full cost accounting)                              37,799,000     34,841,000 
Drilling rigs and equipment                           7,879,000      7,796,000  
Other property and equipment                          2,445,000      2,351,000  
                                                  -----------    -----------
                                                   48,754,000     45,619,000
Accumulated depreciation, depletion                                             
and amortization                                    27,757,000     24,593,000 
                                                  -----------    -----------
TOTAL PROPERTY AND EQUIPMENT                       20,997,000     21,026,000
                                                  -----------    -----------

TOTAL ASSETS                                        $28,780,000    $30,622,000  
                                                  ===========    ===========

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LIABILITIES AND STOCKHOLDERS' EQUITY                                            
------------------------------------                                            
CURRENT LIABILITIES:                                                            
Accounts payable                                    $ 1,065,000    $ 1,536,000  
Accrued expenses                                        523,000        840,000  
Billings in excess of costs and estimated                                       
earnings on uncompleted contracts (Note 2)            436,000        251,000
Payable to joint interest owners                        457,000        289,000  
Income taxes payable (Note 6)                             -            856,000  
                                                  -----------   ------------
TOTAL CURRENT LIABILITIES                           2,481,000      3,772,000
                                                  -----------    -----------

LONG-TERM DEBT (Note 5)                              11,100,000     10,600,000  
                                                  -----------    -----------
DEFERRED INCOME TAXES (Note 6)                        4,837,000      6,468,000  
                                                  -----------    -----------

COMMITMENTS AND CONTINGENCIES (Notes 7 and 9)                                   

STOCKHOLDERS' EQUITY (Notes 5 and 8):                                           
Common stock, par value $.50 per share:                                         
Authorized, 4,000,000 shares                                                
Issued, 1,642,797 shares                              821,000        821,000
Additional paid-in capital                            3,103,000      3,103,000  
Retained earnings                                    12,891,000     12,439,000  
Foreign currency translation adjustments             (1,683,000)    (1,891,000) 
Unrealized holding (losses) gains                                               
on securities (Notes 3 and 6)                         (65,000)        15,000
Treasury stock, at cost, 320,745 shares              (4,705,000)    (4,705,000) 
                                                  -----------    -----------
TOTAL STOCKHOLDERS' EQUITY                         10,362,000      9,782,000
                                                  -----------   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $28,780,000    $30,622,000  
                                                  ===========    ===========

See Notes to Consolidated Financial Statements

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                   BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES                       
                     CONSOLIDATED STATEMENTS OF OPERATIONS                          

                                                   Year ended September 30,         
                                             -------------------------------------- 
                                                 1995         1994         1993     
                                             -----------   -----------   ---------- 
                                                                                    
Revenues:                                                                           
Oil and natural gas (Note 13)                 $10,520,000  $13,950,000  $11,250,000 
Contract drilling                               3,770,000    5,090,000    4,570,000 
Interest income and other                         660,000      960,000      900,000 
                                              -----------  -----------  ----------- 
                                               14,950,000   20,000,000   16,720,000 
                                              -----------  -----------  ----------- 

Costs and expenses:                                                                 
Oil and natural gas operating                   3,373,000    3,188,000    2,823,000 
Contract drilling operating                     2,890,000    4,141,000    3,106,000 
General and administrative                      3,596,000    4,008,000    3,810,000 
Depreciation, depletion and amortization        3,103,000    2,897,000    2,627,000 
Interest expense (Note 5)                         756,000      493,000      633,000 
Foreign exchange losses                           176,000        -          140,000 
Minority interest in losses (Note 4)             (286,000)    (250,000)    (265,000)
                                              -----------  -----------  ----------- 
                                               13,608,000   14,477,000   12,874,000 
                                              -----------  -----------  ----------- 

Earnings from continuing operations before                                          
  income taxes and cumulative effect                                                
  of accounting change                          1,342,000    5,523,000    3,846,000 

Provision for income taxes (Note 6)               692,000    3,003,000    1,732,000 
                                              -----------  -----------  ----------- 
Earnings from continuing operations before                                          
  cumulative effect of accounting change          650,000    2,520,000    2,114,000 
Earnings from discontinued food                                                     
  products subsidiary, net of income tax                                            
  effect (Note 14)                                  -           -           296,000 
                                              -----------  ----------   ----------- 
Earnings before cumulative effect                                                   
  of accounting change                            650,000    2,520,000    2,410,000 
Cumulative effect of accounting                                                     
  change (Note 6)                                   -           -           800,000 
                                              -----------  -----------  ----------- 
NET EARNINGS                                  $   650,000  $ 2,520,000  $ 3,210,000 
                                              ===========  ===========  =========== 

NET EARNINGS PER SHARE:                                                             
Earnings from continuing operations before                                          
  cumulative effect of accounting change            $0.49        $1.90        $1.59 
Earnings from discontinued food                                                     
  products subsidiary, net of income tax                                            
  effect                                            -             -            0.22 
Cumulative effect of accounting change              -             -            0.61 
                                              -----------  -----------  ----------- 
Net earnings                                        $0.49        $1.90        $2.42 
                                              ===========  ===========  =========== 

WEIGHTED AVERAGE                                                                    
NUMBER OF SHARES OUTSTANDING                    1,326,100    1,326,500    1,329,067 
                                              ===========  ===========  =========== 

<FN>                                                                                
                 See Notes to Consolidated Financial Statements                     

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                   BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES                         
                      CONSOLIDATED STATEMENTS OF CASH FLOWS                           

                                                     Year ended September 30,         
                                             ---------------------------------------- 
                                                1995           1994           1993    
                                             ----------     ----------     ---------- 
                                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES:                                                 
Earnings from continuing operations          $  650,000     $2,520,000     $2,114,000 
Adjustments to reconcile earnings from                                                
  continuing operations to net cash                                                   
  provided by operating activities:                                                   
Depreciation, depletion and amortization      3,103,000      2,897,000      2,627,000 
Deferred income taxes                        (1,522,000)       564,000        470,000 
Minority interest in losses                    (286,000)      (250,000)      (265,000)
Prepaid natural gas delivered and other           -              -           (563,000)
                                             ----------     ----------     ---------- 
                                              1,945,000      5,731,000      4,383,000 
(Decrease) increase from changes in                                                   
  current assets and liabilities (Note 15)      (21,000)    (1,395,000)     1,444,000 
                                             ----------     ----------     ---------- 
Net cash provided by operating activities     1,924,000      4,336,000      5,827,000 
                                             ----------     ----------     ---------- 

CASH FLOWS FROM INVESTING ACTIVITIES:                                                 
Capital expenditures                         (3,930,000)    (5,737,000)    (3,266,000)
Increase in other assets                       (300,000)       (84,000)      (350,000)
Proceeds from sale of property                                                        
  and equipment                                 613,000        254,000          -     
Reduction of cash restricted for                                                      
  repayment of long-term debt                     -              -            883,000 
                                             ----------     ----------     ---------- 
Net cash used in investing activities        (3,617,000)    (5,567,000)    (2,733,000)
                                             ----------     ----------     ---------- 

CASH FLOWS FROM FINANCING ACTIVITIES:                                                 
Long-term debt borrowings (including                                                  
  $1,900,000 from affiliates (Note 5))        2,000,000          -              -     
Payment of dividends                           (198,000)      (396,000)         -     
Repayment of long-term debt                  (1,500,000)         -         (4,676,000)
Purchases of common stock for treasury            -              -           (236,000)
Proceeds from exercise of stock options           -              -            206,000 
                                             ----------     ----------     ---------- 
Net cash provided by (used in) financing                                              
  activities                                    302,000       (396,000)    (4,706,000)
                                             ----------     ----------     ---------- 
Effect of exchange rate changes on cash         169,000        (10,000)       293,000 
                                             ----------     ----------     ---------- 
Net decrease in cash                         (1,222,000)    (1,637,000)    (1,319,000)
Cash at beginning of year                     4,198,000      5,835,000      7,154,000 
                                             ----------     ----------     ---------- 
Cash at end of year                          $2,976,000     $4,198,000     $5,835,000 
                                             ==========     ==========     ========== 
<FN>                                                                                  
                   See Notes to Consolidated Financial Statements                     

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                                            BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES                                         
                                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                      

                                                                                          Foreign      Unrealized              
                                          Common Stock         Additional                 Currency       Holding               
                                     ------------------------   Paid-In      Retained    Translation     Gains/     Treasury   
                                       Shares        Amount     Capital      Earnings    Adjustments    (Losses)      Stock    
                                     -----------  -----------  -----------  -----------  -----------  -----------  ----------- 
                                                                                                                               
Balances at September 30, 1992         1,642,797  $ 821,000    $ 3,111,000  $ 7,105,000  $(1,306,000) $     -      $(4,683,000)

Net earnings                               -            -           -         3,210,000       -             -           -      

Dividends declared ($.10 per share)        -            -           -          (132,000)      -             -           -      

Purchase of 16,500 common shares                                                                                               
for treasury                               -            -           -            -            -             -         (236,000)

Exercise of stock options, 20,500                                                                                              
shares                                     -            -           (8,000)      -            -             -          214,000 

Foreign currency translation                                                                                                   
adjustments                                -            -           -            -          (471,000)       -           -      
                                     -----------  -----------  -----------  -----------  -----------  -----------  ----------- 

Balances at September 30, 1993         1,642,797      821,000    3,103,000   10,183,000   (1,777,000)       -       (4,705,000)

Net earnings                               -            -           -         2,520,000       -             -           -      

Dividends declared ($.20 per share)        -            -           -          (264,000)      -             -           -      

Foreign currency translation                                                                                                   
adjustments                                -            -           -            -          (114,000)       -           -      

Unrealized holding gain on                                                                                                     
securities                                 -            -           -            -            -            15,000       -      
                                     -----------  -----------  -----------  -----------  -----------  -----------  ----------- 

Balances at September 30, 1994         1,642,797      821,000    3,103,000   12,439,000   (1,891,000)      15,000   (4,705,000)

Net earnings                               -            -           -           650,000       -              -          -      

Dividends declared ($.15 per share)        -            -           -          (198,000)      -              -          -      

Foreign currency translation                                                                                                   
adjustments                                -            -           -            -           208,000         -          -      

Unrealized holding loss on                                                                                                     
securities                                 -            -           -            -            -           (80,000)      -      
                                     -----------  -----------  -----------  -----------  -----------  -----------  ----------- 

Balances at September 30, 1995         1,642,797  $   821,000  $ 3,103,000  $12,891,000  $(1,683,000) $   (65,000) $(4,705,000)
                                     ===========  ===========  ===========  ===========  ===========  ===========  =========== 
<FN>                                                                                                                           
                                        See Notes to Consolidated Financial Statements                                         

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BARNWELL INDUSTRIES, INC. 
------------------------- 

AND SUBSIDIARIES
----------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------

YEARS ENDED SEPTEMBER 30, 1995, 1994, AND 1993
----------------------------------------------

1.   SIGNIFICANT ACCOUNTING POLICIES                                            
-------------------------------                                       

Principles of consolidation                                                     
---------------------------                                                     

The consolidated financial statements include the accounts of Barnwell
Industries, Inc. and all majority-owned subsidiaries, including a land          
development joint venture (collectively referred to herein as "Company").  All  
significant intercompany accounts and transactions have been eliminated.        

Oil and natural gas properties                                                  
------------------------------                                                  

   The Company 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 unsuccessful wells, are capitalized until such time as the  
aggregate of such costs, on a country by country basis, equals the discounted   
present value of the Company's estimated future net cash flows from estimated   
production of proved oil and natural gas reserves, as determined by independent 
petroleum engineers, less related income tax effects.  Any capitalized costs in 
excess of the discounted present value are charged to expense.  Depletion of all
such costs is provided by the unit-of-production method based upon proved oil   
and natural gas reserves of all properties on a country by country basis.       
General and administrative costs related to oil and natural gas operations are  
expensed as incurred.  Estimated future site restoration and abandonment costs  
are charged to earnings at the rate of depletion and are included in accumulated
depreciation, depletion and amortization.  Proceeds from the disposition of     
minor producing oil and natural gas properties are credited to the cost of oil  
and natural gas properties.  Gains or losses are recognized on the disposition  
of significant oil and natural gas properties.                                  

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 year the losses are    
identified.  The performance of drilling contracts may extend over more than one
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  
the 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 one year in duration.      

Investment in land and revenue recognition                                      
------------------------------------------                                      

  The Company accounts for its investment in land at cost plus capitalized
interest on its investment.  Land sales for real estate under option as of      
September 30, 1995 are accounted for under the cost recovery method.  Under the 
cost recovery method, no gain is recognized until cash received exceeds the cost
and the estimated future costs related to the land sold.  The balance sheet     
includes zero cost for lands under option and accordingly, all cash receipts in 
excess of costs will be reported as revenues.  The Company's cost and           
capitalized interest for the land not under option is included in the balance   
sheet under the caption "Investment in Land." Costs are capitalized until the   
aggregate of such costs equals the land's estimated net realizable value.       

Investments                                                                     
-----------                                                                     

   In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") 115, "Accounting for Certain Investments
in Debt and Equity Securities."  SFAS 115 requires that investments be          
classified in three categories and accounted for as follows: (i) debt securities
which are purchased with the positive intent and ability to hold to maturity are
classified as held-to-maturity and are reported at amortized cost, (ii) debt and
equity securities which are bought and held principally for the purpose of      
selling them in the near term are classified as trading securities and are      
reported at fair value, with unrealized gains and losses included in earnings   
and (iii) debt and equity securities which are not classified as either held-to-
maturity or trading securities are classified as available for sale and are     
reported at fair value, with unrealized gains and losses, net of related tax    
effect, excluded from earnings and reported as a separate component of          
stockholders' equity.  Effective September 30, 1994, the Company adopted the    
provisions of SFAS 115.                                                         

     A decline in the market value of any available-for-sale or held-to-maturity
security below cost that is deemed other than temporary is charged to earnings, 
resulting in the establishment of a new cost basis for the security.            

Cost in computing realized gains and losses is determined using the   
specific identification method.                                                 

Drilling rigs and other equipment                                               
---------------------------------                                               

Drilling rigs and other equipment are stated at cost.  Depreciation is
computed using the straight-line method based on estimated useful lives.        

Inventories                                                                     
-----------                                                                     

     Inventories are comprised of drilling materials and are valued at the lower
of weighted average cost or net realizable value.                               

Income taxes                                                                    
------------                                                                    

  Effective October 1, 1992, the Company adopted SFAS 109, "Accounting for
Income Taxes", and has reported the cumulative effect of that change in the     
method of accounting for income taxes in the 1993 consolidated statement of     
operations.  Deferred income taxes are determined using the asset and liability 
method.  Deferred tax assets and liabilities are recognized for the estimated   
future tax consequences attributable to 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.                                                    

Earnings per share                                                              
------------------                                                              

Primary earnings per share are based on the weighted average number of
outstanding common shares during the year after consideration of the dilutive   
effect of outstanding stock options and convertible securities.  Fully diluted  
earnings per share are not presented because dilution is less than 3%.          

Foreign currency translation                                                    
----------------------------                                                    

Assets and liabilities of foreign operations and subsidiaries are     
translated at the year-end exchange rate and resulting translation gains or     
losses are accounted for in a stockholders' equity account entitled "foreign    
currency translation adjustments".  Operating results of foreign subsidiaries   
are translated at average exchange rates during the period.  Foreign currency   
transaction gains and losses are reflected in the accompanying consolidated     
statements of operations.                                                       

New Statements of Financial Accounting Standards                                
------------------------------------------------                                

  In March 1995, the Financial Accounting Standards Board issued SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets To Be 
Disposed Of." SFAS 121 requires that long-lived assets to be held and used are  
evaluated for impairment whenever events or changes in circumstances indicate   
that the carrying amount of an asset may not be recoverable.  If the future cash
flows expected to result from use of the asset (undiscounted and without        
interest charges) are less than the carrying amount of the asset, an impairment 
loss is to be recognized.  Such impairment loss is measured as the amount by    
which the carrying amount of the asset exceeds the fair value of the asset.     
SFAS 121 also requires that long-lived assets to be disposed of be reported at  
the lower of the asset carrying amount or fair value, less cost to sell.        

  Effective September 30, 1995, the Company adopted the provisions of SFAS
121.  Adoption of the statement had no impact on financial condition or net     
earnings.                                                                       

In October 1995, the Financial Accounting Standards Board issued      
SFAS 123 "Accounting for Stock-Based Compensation".  SFAS 123 establishes a     
new, fair value based method of measuring stock-based compensation, but does    
not require an entity to adopt the new method for purposes of preparing its     
basic financial statements.  For entities not adopting the new method, SFAS 123 
requires disclosure in the footnotes of proforma net earnings and earnings per  
share information as if the fair value based method had been adopted.  Adoption 
of SFAS 123 is required for no later than the Company's year ending September   
30, 1997.  The Company has not yet determined if it will adopt the fair value   
based method of accounting for stock-based compensation for purposes of         
preparing its basic financial statements.                                       

2.   RECEIVABLES AND CONTRACT COSTS                                             
------------------------------                                        

   Accounts receivable, current, are net of allowances for doubtful accounts
of $64,000 and $26,000 as of September 30, 1995 and 1994, respectively.         
Included in accounts receivable are contract retainage balances of $546,000 and 
$315,000 as of September 30, 1995 and 1994, respectively.  These balances are   
expected to be collected within one year, specifically within 45 days after the 
related contracts have received final acceptance and approval.                  

Included in other assets are long-term notes and other receivables of 
$642,000 and $341,000, net of an allowance for doubtful accounts of $267,000, as
of September 30, 1995 and 1994, respectively.                                   

Costs and estimated earnings on uncompleted contracts are as follows: 

                                                         September 30,
                                                       -----------------------
                                                         1995         1994
                                                         ----         ----

Costs incurred on uncompleted contracts                 $3,950,000   $4,687,000 
Estimated earnings                                       1,723,000    1,600,000 
                                                       ----------   ----------
                                                        5,673,000    6,287,000
Less billings to date                                    5,996,000    6,340,000 
                                                       ----------    ---------

                                                        $ (323,000)  $  (53,000)
                                                       ==========   ==========

   Costs and estimated earnings on uncompleted contracts are included in the
consolidated balance sheets under the following captions:                       

                                   September 30,
                                   ---------------------
                                    1995        1994
                                    ----        ----
Costs and estimated earnings in excess                                          
of billings on uncompleted contracts         $ 113,000  $ 198,000           
Billings in excess of costs and                                                 
estimated earnings on uncompleted contracts   (436,000)  (251,000)          
                                  ---------  ---------

                                   $(323,000) $( 53,000)
                                  =========  =========

3.   INVESTMENTS                                                                
-----------                                                           

 Included in other assets are available-for-sale equity securities.  The
following summarizes the aggregate market value, cost, gross unrealized holding 
gains and losses and income tax effect of available-for-sale securities:        

                                                               September 30,
                                                            ------------------
                                                             1995       1994
                                                             ----       ----
Market value                                                 $163,000  $285,000 

Cost                                                          261,000   261,000 
                                                            --------  --------
Gross unrealized holding                                                        
 (losses) gains before income tax effect                     (98,000)   24,000
Income tax effect                                              33,000    (9,000)
                                                            --------  --------
Gross unrealized holding (losses) gains, net of                             
     income tax effect, included in stockholders' equity    $(65,000) $ 15,000
                                                            ========  ========

   Realized losses on trading securities amounted to $68,000 in fiscal 1995,
$58,000 of which was recognized as unrealized holding losses in fiscal 1994.    

4.   INVESTMENT IN LAND                                                         
------------------                                                    

 In May 1984, the Company, through a wholly-owned subsidiary, acquired a
50.1% interest in approximately 10,800 acres of leasehold property at Kaupulehu,
North Kona, on the Kona coast of the Island of Hawaii.  The Company's interest  
and the remaining leasehold interest in the property were contributed to a joint
venture, Kaupulehu Developments, in which the Company has a 50.1% controlling   
interest.  Kaupulehu Developments subsequently obtained the rezoning of         
approximately 620 acres of such leasehold property to urban for both state and  
county purposes to allow for two hotel sites, two golf courses, several         
residential sites interspersed around and within the planned golf courses and   
one commercial site.  Kaupulehu Developments granted options to independent     
third parties to acquire the leasehold interest for the development of the      
hotel, commercial, golf course and residential sites, comprising the            
approximately 620 acre property, the approximately 2,180 acres zoned            
conservation adjoining the approximately 620 acre urban area and the            
approximately 8,000 acre upland portion.                                        

   In fiscal 1989 and 1990, options were exercised with respect to hotel and
golf course sites, the commercial site and the approximately 8,000 acre upland  
portion.                                                                        

   In fiscal 1991, Kaupulehu Developments entered into no land transactions.

   In fiscal 1992, Kaupulehu Developments entered into definitive agreements
with Kaupulehu Makai Venture.  Kaupulehu Makai Venture succeeded to all         
development rights and obligations previously held by other independent third   
parties.  The managing general partner of Kaupulehu Makai Venture is an         
affiliated company of Kajima Corporation of Japan.  There is no affiliation     
between Kaupulehu Makai Venture or its predecessors and the Company.  Kaupulehu 
Developments received cash consideration in partial payment for the residential 
sites in fiscal 1992.  This transaction resulted in a pre-tax gain, net of      
minority interests, of $2,410,000.                                              

  In fiscal 1994, Kaupulehu Developments submitted a petition to the State
Land Use Commission to reclassify approximately 1,000 acres of the approximate  
2,180 acres zoned conservation.  Kaupulehu Developments seeks to have the 1,000 
acres rezoned to permit the development of golf courses and residential sites.  
In December 1994, the State Land Use Commission began the public hearing process
of the rezoning petition; this process is currently ongoing.                    

    In fiscal 1995, 1994 and 1993, Kaupulehu Developments entered into no land
transactions.                                                                   

  In April 1995, the option under which Kaupulehu Makai Venture could have
acquired Kaupulehu Developments' leasehold interest in approximately 2,180      
leasehold acres of conservation zoned property in North Kona, Hawaii expired,   
unexercised.  Costs, inclusive of capitalized interest, applicable to the       
rezoning of the approximately 1,000 acres of the aforementioned 2,180 acres of  
conservation zoned property incurred subsequent to April 1995 are capitalized.  

Kaupulehu Makai Venture has completed a significant amount of the     
construction of the first golf course, hotel and condominiums and related       
infrastructure in the 620 acre urban area.  The golf course is virtually        
complete and is expected to open in early 1996.  The hotel is expected to open  
in late 1996.                                                                   

   At September 30, 1995, the real estate position (i.e. leasehold interests
and related development rights) held by Kaupulehu Developments consists of the  
approximately 2,180 leasehold acres zoned conservation and development rights   
with respect to lands zoned residential in the adjacent 620 acre urban area.    
The residential lands are under option to Kaupulehu Makai Venture.  This option,
if exercised, entitles the Company to receive $16,157,000 in connection with its
50.1% interest in Kaupulehu Developments.  The residential site option expires  
on April 30, 2007; however, this option will expire sooner unless 20% of the    
consideration is received on or before December 31, 1999 and 50% of the then    
remaining consideration is received on or before April 30, 2003.  There is no   
assurance that this option or any portion of it will be exercised.              

5.   LONG-TERM DEBT                                                             
--------------                                                        

   The Company has a credit facility at the Royal Bank of Canada, a Canadian
bank, for Canadian (referred to herein as "C") $16,000,000 or its U.S. dollar   
equivalent of approximately $11,900,000 at September 30, 1995.  Borrowings under
this facility were $9,100,000 and $10,600,000 at September 30, 1995 and         
September 30, 1994, respectively, and are included in long-term debt.           

 The facility is available in U.S. dollars at the London Interbank Offer
Rate ("LIBOR") plus 3/4%, at U.S. prime plus 1/2%, or in Canadian dollars at    
Canadian prime plus 1/2%.  Under the financing agreement, the facility is       
reviewed annually, with the next review planned for February 1996.  Subject to  
that review, the facility may be extended one year with no required debt        
repayments for one year or converted to a 6-year term loan by the bank.  If the 
facility is converted to a 6-year term loan, the Company has agreed to the      
following repayment schedule of the then outstanding loan balance:  year 1-26%; 
year 2-24%; year 3-17%; year 4-15%; year 5-12% and year 6-6%.                   

     The Company has the option to change the currency denomination and interest
rate applicable to the loan at periodic intervals during the term of the loan.  
During the year ended September 30, 1995, the Company paid interest at rates    
ranging from 4.563% to 6.875%.  At September 30, 1995, the rate was 6.625%.  The
facility is collateralized by the Company's interests in its major oil and      
natural gas properties and a negative pledge on its remaining oil and natural   
gas properties.  The facility is reviewed annually based primarily on the future
cash flows related to the Company's oil and natural gas properties.  No         
compensating bank balances are required on any of the Company's indebtedness.   
At September 30, 1995, the Company had unused credit available under this       
facility of approximately $2,800,000.                                           

In June 1995, the Company issued $2,000,000 of convertible notes due  
July 1, 2003.  $400,000 of such notes were purchased by Mr. Kinzler, President, 
Chief Executive Officer and Chairman of the Board of Directors of the Company,  
$200,000 were purchased by Mr. Anderson, a director, $200,000 were purchased by 
Dr. Magaro, a 15.9% shareholder of the Company, $100,000 were purchased by      
Dr. Sudarsky, a 9.2% shareholder of the Company, and $1,000,000 were purchased  
by Ingalls and Snyder Value Partners, L.P., a 7.5% shareholder of the Company.  
The notes are payable in 20 consecutive equal quarterly installments beginning  
in October 1998.  Interest is payable quarterly at an initial rate of 10% per   
annum until October 1, 1995, after which the interest rate will be adjusted     
quarterly to the greater of 10% per annum or 1% over the prime rate of interest.
The notes are unsecured and convertible at any time at the holder's option into 
shares of the Company's common stock at a price of $20.00 per share, subject to 
adjustment for certain events including a stock split of, or stock dividend on, 
the Company's common stock.  The notes are redeemable, at the option of the     
Company, at any time after July 1, 1997, at premiums declining 1% annually from 
5% to 0% of the principal amount of the notes.  These notes, amounting to       
$2,000,000 at September 30, 1995, are included in long-term debt.               

   At September 30, 1995, the maturities of long-term debt, exclusive of the
credit facility with the Canadian bank, are as follows:                         

1996                     $     -      
1997                           -      
1998                           -      
1999                        400,000   
2000                        400,000   
Thereafter                1,200,000   
                      ----------
                      $2,000,000
                      ==========

    The Company capitalized interest related to its investment in land for the
year ended September 30, 1995.  Interest expense for the year ended             
September 30, 1995 is as follows:                                               

Interest incurred                                     $ 769,000                 
Less interest capitalized on                                                    
investment in land                                    13,000              
                                     ---------
Interest expense                                      $ 756,000                 
                                     =========

6.   TAXES ON INCOME                                                            
---------------                                                       
    The components of earnings/(loss) from continuing operations before income
taxes and cumulative effect of accounting change are as follows:                

Year ended September 30,      
-----------------------------------------     
1995          1994          1993      
-----------   -----------   -----------       

United States    $(1,444,000) $(1,446,000)    $ (980,000)                       
Canadian           2,786,000    6,969,000      4,826,000                        
-----------  -----------     ----------       

$ 1,342,000  $ 5,523,000     $3,846,000       
===========  ===========     ==========       

The components of the provision for income taxes related to the above 
earnings/(loss) are as follows:                                                 

                                      Year ended September 30,
                                      ------------------------------------
                                      1995         1994         1993
                                      ----------   ----------   ----------
Current:                                                                        
United States - Federal                $1,069,000  $  170,000   $    6,000  
United States - State and local           241,000        -            -     
                                     ----------  ----------   ----------
United States - total                 1,310,000     170,000        6,000

Canadian                                  904,000   2,269,000    1,256,000  
                                     ----------  ----------   ----------
Total current                         2,214,000   2,439,000    1,262,000
                                     ----------  ----------   ----------
Deferred:                                                                       
United States                          (1,420,000)    (60,000)    (234,000) 
Canadian                                 (102,000)    624,000      704,000  
                                     ----------  ----------   ----------
Total deferred                       (1,522,000)    564,000      470,000
                                     ----------  ----------   ----------
                                     $  692,000  $3,003,000   $1,732,000
                                     ==========  ==========   ==========

For fiscal 1995, $33,000 of deferred income tax benefit related to the
unrealized holding loss on available for sale securities is reflected as a      
credit to stockholders' equity.  For fiscal 1994, $9,000 of deferred income tax 
expense related to the unrealized holding gain on available for sale securities 
is reflected as a charge to stockholders' equity.                               

As discussed in Note 1, the Company adopted SFAS 109 effective        
October 1, 1992.  The cumulative effect of the change in accounting method (for 
years prior to fiscal 1993, which were not restated) increased net earnings by  
$800,000 in fiscal 1993.                                                        

  A reconciliation between the reported provision for income taxes and the
amount computed by multiplying the earnings from continuing operations before   
income taxes and cumulative effect of accounting change by the United States    
federal tax rate is as follows:                                                 
                                        Year ended September 30,
                                        ------------------------------------
                                        1995         1994         1993
                                        ----------   ----------   ----------

Tax computed by applying statutory rate  $  470,000   $1,933,000   $1,336,000   
Effect of foreign tax                                                           
provision on the total tax provision     206,000      960,000      428,000
Other                                        16,000      110,000      (32,000)  
                                      ----------   ----------   ----------

                                      $  692,000   $3,003,000   $1,732,000
                                      ==========   ==========   ==========

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at             
September 30, 1995 and 1994 are as follows:                                     

Deferred income tax assets:                          1995          1994         
                                            ------------  ------------

Tax basis in land in excess of book basis      $ 1,106,000   $ 1,018,000    
Write-off of asset not deducted for tax            148,000       148,000    
U.S. tax effect of deferred Canadian taxes       2,049,000     2,042,000    
Foreign tax credit carryforward                    319,000       336,000    
Other                                              520,000       433,000    
                                            ----------   -----------
Total gross deferred tax assets                4,142,000     3,977,000  
Less-valuation allowance                      (2,368,000)   (2,378,000) 
                                            ----------   -----------
Net deferred tax assets                          1,774,000     1,599,000    
                                            ----------   -----------

Deferred tax liabilities:                                                       
Option proceeds received on investment                                      
in land                                          (25,000)   (1,643,000) 
Property and equipment tax depreciation                                     
and depletion in excess of book               (6,028,000)   (6,005,000) 
Other                                             (438,000)     (219,000)   
                                           -----------   -----------
Total deferred tax liabilities                  (6,491,000)   (7,867,000)   
                                           -----------   -----------

Net deferred income tax liability                $(4,717,000)  $(6,268,000)     
                                           ===========   ===========

The net change in the total valuation allowance for the years ended   
September 30, 1995 and 1994 was a $10,000 decrease and $537,000 increase,       
respectively.  The increase for fiscal 1994 was due to $201,000 of additional   
Canadian deferred income taxes and $336,000 of foreign tax credit carryforwards 
for which the Company did not provide a U.S. tax benefit.                       

     A valuation allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be realized.  The Company has        
established a valuation allowance for the Canadian tax deductions and foreign   
tax credits which may not be realizable in future years as there can be no      
assurance of any specific level of earnings or that the timing of U.S. earnings 
will coincide with the payment of Canadian taxes to enable Canadian taxes to be 
fully deducted for U.S. tax purposes.  Net deferred tax assets will primarily be
realized through the deduction of the cost basis in investment in land against  
proceeds from investment in land for tax purposes.  Under the cost recovery     
accounting method, this cost basis has already been expensed for book purposes. 

7.   PENSION PLAN                                                               
------------                                                          

 The Company has a noncontributory defined benefit pension plan covering
substantially all employees, with benefits based on years of service and the    
employee's highest consecutive five-year average earnings.  The Company'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.  The plan assets     
consist primarily of listed government mortgages.                               

 The funded status of the pension plan and the amounts recognized in the
consolidated financial statements is as follows:                                

                                    Year ended September 30,
                                   ---------------------------
                                   1995           1994
                                   ------------   ------------

Accumulated benefit obligation, including                                       
vested benefits of $1,482,000 and                                           
$1,363,000, respectively                  $ 1,530,000    $ 1,416,000        
                                  ===========    ===========

Projected benefit obligation for service                                        
rendered to date                          $(1,925,000)   $(1,790,000)       

Plan assets at fair market value              1,815,000      1,669,000          
                                  -----------    -----------

Plan assets less than                                                           
projected benefit obligation                 (110,000)      (121,000)       

Unrecognized net gain from past                                                 
experience different from that assumed                                      
and effects of changes in assumptions          (7,000)       (21,000)       

Unrecognized prior service cost                  57,000        120,000          

Unrecognized net asset at                                                       
October 1, 1988 being recognized over                                       
12.3 years                                     (5,000)        (6,000)       
                                  -----------    -----------

Accrued pension cost                        $   (65,000)   $   (28,000)         
                                  ===========    ===========

     As of September 30, 1995 and 1994, the discount rate assumed in determining
the actuarial present value of the projected benefit obligation was 7.5% and    
8.0%, respectively.                                                             

Net pension cost includes the following components:                   

                                                  Year ended September 30,
                                              --------------------------------
                                               1995        1994       1993
                                              ----------  ----------  --------

Service cost, benefits earned during the year  $ 38,000    $138,000    $115,000 
Interest cost on projected benefit obligation   126,000     135,000     127,000 
Actual return on plan assets, (gain) loss      (217,000)      8,000    (104,000)
Net amortization and deferral                    90,000    (122,000)    (19,000)
                                              --------    --------    --------

Net pension cost                               $ 37,000    $159,000    $119,000 
                                              ========    ========    ========

                                                  Year ended September 30,
                                                 ---------------------------
                                                1995        1994        1993
                                                ----        ----        ----
Assumed rate of increase in future                                              
compensation levels                              6.0%       6.0%        7.0%
                                                 ====       ====        ====

Expected long-term rate of return on assets        8.0%       9.0%        9.0%  
                                                 ====       ====        ====

8.   COMMON STOCK                                                               
------------                                                          

   In March, 1995, the Company granted 20,000 non-qualified stock options to
an officer of the Company at a purchase price of $19.625 per share (market      
price on date of grant), with 4,000 of such options vesting annually commencing 
one year from the date of grant.  These options have stock appreciation rights  
which 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.  The options expire ten years from the date of
grant.                                                                          

   In fiscal 1995 and 1994, the Company did not repurchase any shares of its
common stock.  In fiscal 1993, the Company repurchased 16,500 shares of its     
common stock from officers of the Company for $236,000, an average of $14.30 per
share (market price on date of purchase).  These purchases were made under a    
March 1991 authorization by the Company's Board of Directors.  As of July 1992, 
repurchases on the open market were suspended; privately negotiated repurchases 
will continue to be made if suitable opportunities become available. At         
September 30, 1995, the Company could purchase an additional 19,800 shares under
the March 1991 authorization.                                                   

    The Company had a stock option plan ("Option Plan") which became effective
November 1981 and expired November 1991.  Under the Option Plan, options to     
purchase a maximum of 120,000 shares of the Company's common stock could be     
granted to officers and key employees of the Company and its subsidiaries at    
prices not less than 100% of the fair market value at the date of the option    
grant.  Options granted under this plan became exercisable 25% annually         
beginning one year from the date of grant and expire five or ten years from the 
date of grant.                                                                  

Option transactions during fiscal 1995, 1994 and 1993 are as follows: 

                             Options
                            ------------------------
                              Outstanding  Exercisable
                              -----------  -----------

Balance at September 30, 1992                 66,000      52,125                

Became exercisable                              -         13,875                
Exercised ($6.25 to $13.625 per share)       (20,500)    (20,500)               
Canceled                                      (1,500)     (1,500)               
                             -------   ---------
Balance at September 30, 1993                 44,000      44,000                

Canceled                                     (20,000)    (20,000)               
                             -------   ---------
Balance at September 30, 1994                 24,000      24,000                

Issued ($19.625 per share)                    20,000        -                   
                             -------   ---------

Balance at September 30, 1995                 44,000      24,000                
                             =======   =========

Exercisable options at September 30, 1995 are as follows:                       

              Per share price  Number of options
              ---------------  -----------------

            $13.625                 14,000
            $22.250                 10,000
                                    ------

             Total                  24,000
                                    ======

9.   COMMITMENTS AND CONTINGENCIES                                              
-----------------------------                                         

The Company is contingently liable for the repayment of loans under a 
$750,000 loan facility to three participants in one of the Company's oil and    
natural gas ventures.  At September 30, 1995, the loan balance was $395,000,    
$100,000 of which is to an affiliate of the Company.  The three participants'   
interests in the venture are pledged as collateral to secure repayment of the   
loans. The Company believes the value of the collateral is significantly in     
excess of the loan balance.                                                     

    The Company has several operating leases for office space.  Rental expense
was $392,000 in 1995, $386,000 in 1994 and $299,000 in 1993.  The Company is    
committed under several non-cancelable operating leases for office and other    
space with minimum rental payments summarized by fiscal year period as follows: 
1996 - $360,000, 1997 - $339,000, 1998 - $349,000, 1999 - $361,000, 2000 -      
$362,000 and thereafter an aggregate of $1,888,000.                             

     The Company has committed to construct $200,000 of improvements at its yard
at Sand Island on Oahu, Hawaii, by June 1997.                                   

10.  SEGMENT AND GEOGRAPHIC INFORMATION                                         
----------------------------------                                    

     The Company operates in three industries:  oil and natural gas exploration,
development and production, contract drilling and land investment.              

                                                                [Download Table]

     Segment information is as follows:                                             

                                         Depreciation,                              
YEAR ENDED                               depletion and    Operating       Capital   
SEPTEMBER 30, 1995           Revenues     amortization  Profit/(loss)  expenditures 
------------------          ----------   -------------  -------------  ------------ 
                                                                                    
Oil and natural gas        $10,520,000   $   2,658,000   $  4,489,000  $  3,434,000 
Contract drilling            3,770,000         317,000        563,000        83,000 
Land investment                   -               -              -          293,000 
Corporate and other            420,000         128,000        292,000       120,000 
                           -----------   -------------   ------------  ------------ 
Total                      $14,710,000   $   3,103,000      5,344,000  $  3,930,000 
                           ===========   =============                 =============

General and administrative expenses                        (3,596,000)              
Interest expense (net of interest                                                   
  income of $240,000)                                        (516,000)              
Minority interest in losses                                   286,000               
Foreign exchange losses                                      (176,000)              
                                                         -------------              

Earnings before income taxes                             $  1,342,000               
                                                         ============               

                                         Depreciation,                              
YEAR ENDED                               depletion and    Operating       Capital   
SEPTEMBER 30, 1994           Revenues     amortization  Profit/(loss)  expenditures 
------------------          ----------   -------------  -------------  ------------ 

Oil and natural gas        $13,950,000   $   2,361,000   $  8,401,000  $  5,350,000 
Contract drilling            5,090,000         441,000        508,000        94,000 
Land investment                   -               -              -             -    
Corporate and other            760,000          95,000        665,000       293,000 
                           -----------   -------------   ------------  ------------ 
Total                      $19,800,000   $   2,897,000      9,574,000  $  5,737,000 
                           ===========   =============                 ============ 

General and administrative expenses                        (4,008,000)              
Interest expense (net of interest                                                   
  income of $200,000)                                        (293,000)              
Minority interest in losses                                   250,000               
                                                         ------------               

Earnings before income taxes                             $  5,523,000               
                                                         ============               

                                         Depreciation,                              
YEAR ENDED                               depletion and    Operating       Capital   
SEPTEMBER 30, 1993           Revenues     amortization  Profit/(loss)  expenditures 
------------------          ----------   -------------  -------------  ------------ 
Oil and natural gas        $11,250,000   $   2,014,000   $  6,413,000  $  3,193,000 
Contract drilling            4,570,000         463,000      1,001,000        49,000 
Land investment                   -               -              -             -    
Corporate and other            400,000         150,000        250,000        24,000 
                           -----------   -------------   ------------  ------------ 
Total                      $16,220,000   $   2,627,000      7,664,000  $  3,266,000 
                           ===========   =============                 ============ 

General and administrative expenses                        (3,810,000)              
Interest expense (net of interest                                                   
  income of $500,000)                                        (133,000)              
Minority interest in losses                                   265,000               
Foreign exchange losses                                      (140,000)              
                                                           -----------              
Earnings from continuing operations                                                 
  before income taxes and cumulative                                                
  effect of accounting change                            $  3,846,000               
                                                         ============               


                                 September 30,
                            ----------------------------------------------------
ASSETS BY SEGMENT:               1995              1994              1993       
------------------         ----------------- -----------------  ----------------
Oil and gas (1)            $20,918,000   73% $21,555,000   70%  $18,625,000  66%
Contract drilling (2)        2,461,000    9%   2,881,000    9%   2,851,000   10%
Land investment (2)            648,000    2%       -        -         -       - 
Other:                                                                          
  Cash                       2,976,000   10%   4,198,000   14%   5,835,000   21%

  Corporate and other        1,777,000    6%   1,988,000    7%     770,000    3%
                           -----------  ---- -----------  ----  ----------  ----

Total                      $28,780,000  100% $30,622,000  100%  $28,081,000 100%
                           ===========  ==== ===========  ====  =========== ====

(1)  Primarily located in the Province of Alberta, Canada.                      
(2)  Located in Hawaii.                                                         

Geographic information is as follows:                                 

                         September 30,
                            ----------------------------------------------------
ASSETS BY GEOGRAPHIC AREA:       1995             1994            1993          
-------------------------- ----------------- ----------------- -----------------

United States              $ 6,308,000   22% $ 6,380,000   21%  $ 9,121,000  32%
Canada                      22,472,000   78%  24,242,000   79%   18,960,000  68%
                           -----------  ---- -----------  ----  ----------- ----

Total                      $28,780,000  100% $30,622,000  100%  $28,081,000 100%
                           ===========  ==== ===========  ====  =========== ====

CAPITAL EXPENDITURES BY                          September 30,                  
-----------------------    -----------------------------------------------------
GEOGRAPHIC AREA:                 1995              1994               1993      
----------------           ----------------- -----------------   ---------------
United States              $   780,000   20% $   462,000    8%  $    73,000   2%
Canada                       3,150,000   80%   5,275,000   92%    3,193,000  98%
                           -----------  ---- -----------  ----  ----------- ----
Total                      $ 3,930,000  100% $ 5,737,000  100%  $ 3,266,000 100%
                           ===========  ==== ===========  ====  =========== ====

OPERATIONS BY GEOGRAPHIC AREA:                    Depreciation,                 
------------------------------                    depletion and      Operating  
                               Revenue         amortization       Profit
                                 ----------      ------------       ----------
YEAR ENDED                                                                      
SEPTEMBER 30, 1995                                                              
------------------                                                              
United States                    $ 3,965,000      $    448,000       $  613,000 
Canada                            10,745,000         2,655,000        4,731,000 
                                 ----------      ------------       ----------
Total                            $14,710,000      $  3,103,000       $5,344,000 
                                ===========      ============       ==========

YEAR ENDED                                                                      
SEPTEMBER 30, 1994                                                              
------------------                                                              
United States                    $ 5,528,000      $    489,000       $  898,000 
Canada                            14,272,000         2,408,000        8,676,000 
                                -----------      ------------       ----------

Total                            $19,800,000      $  2,897,000       $9,574,000 
                                ===========      ============       ==========

YEAR ENDED                                                                      
SEPTEMBER 30, 1993                                                              
------------------                                                              
United States                    $ 4,770,000      $    550,000       $1,110,000 
Canada                            11,450,000         2,077,000        6,554,000 
                                 ----------      ------------       ----------

Total                            $16,220,000      $  2,627,000       $7,664,000 
                                ===========      ============       ==========

Depletion per 1,000 cubic feet of natural gas (MCF) and natural gas   
equivalent was $0.40 in fiscal 1995, $0.38 in fiscal 1994 and $0.34 in fiscal   
1993. The increase in the per unit rate from fiscal 1994 to 1995 was due to     
higher finding costs in fiscal 1995 as compared to the prior years.  The        
increase in the per unit rate from fiscal 1993 to 1994 was due to increased     
expenditures on natural gas plants and natural gas gathering facilities.        

    In fiscal 1995, the Company had one significant customer, ProGas, Limited,
which accounted for 15% of the Company's oil and natural gas sales.  In fiscal  
1994, the Company had one significant customer, Pacific Gas & Electric, which   
accounted for 10% of the Company's oil and natural gas sales, exclusive of the  
$1,586,000 decontracting payment.  A contract with a Canadian company, Alberta  
and Southern Gas Co., Ltd., a wholly-owned subsidiary of Pacific Gas & Electric,
a Northern California electric utility, for the sale of natural gas accounted   
for approximately 22% of the Company's total oil and natural gas sales in fiscal
1993.                                                                           

    The Company's contract drilling subsidiary derived 28%, 40% and 78% of its
contract drilling revenues in fiscal 1995, 1994 and 1993, respectively, pursuant
to State of Hawaii and local county contracts.                                  

11.  CONCENTRATIONS OF CREDIT RISK                                              
-----------------------------                                         

    For the fiscal year ended September 30, 1995, 28% of the contract drilling
revenues were derived from the State of Hawaii and local county entities.       
Accounts receivable from the State of Hawaii and local county entities totaled  
approximately $212,000 at September 30, 1995.  The Company has lien rights on   
contracts with the State of Hawaii and local county entities.  For the year     
ended September 30, 1995, there was one significant customer for the oil and    
natural gas segment.  The Company had a receivable balance at September 1995    
from this customer of approximately $110,000.  Historically, the Company has not
incurred any significant credit related losses on its trade receivables, and    
management does not believe significant credit risk related to these trade      
receivables exists at September 30, 1995.                                       

12.  SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)                     
------------------------------------------------------                

     The following is a summary of unaudited quarterly results of operations for
the years ended September 30, 1995 and 1994:                                    

Year ended September 30, 1995:                  Quarter ended                   
----------------------------- ------------------------------------------------- 
                             December 31    March 31    June 30   September 30
                             -----------  ----------  ---------   ------------

Revenues                      $4,390,000   $3,730,000  $3,290,000    $3,540,000 
                             ===========  ==========  ==========    ==========

Operating income              $1,708,000   $1,252,000  $1,226,000    $1,158,000 
                             ===========  ==========  ==========    ==========

Net earnings                  $  200,000   $  140,000  $  140,000    $  170,000 
                             ===========  ==========  ==========    ==========

Net earnings per share:       $     0.15   $     0.11  $     0.11    $     0.13 
                             ===========  ==========  ==========    ==========

Year ended September 30, 1994:                 Quarter ended                    
----------------------------- ------------------------------------------------- 
                             December 31    March 31    June 30   September 30
                             -----------  ----------  ---------   ------------

Revenues                      $5,840,0001  $5,540,000  $4,490,000    $4,130,000 
                             ===========  ==========  ==========    ==========

Operating income              $3,580,000   $2,505,000  $2,095,000    $1,394,000 
                             ===========  ==========  ==========    ==========

Net earnings                  $1,350,000   $  470,000  $  370,000    $  330,000 
                             ===========  ==========  ==========    ==========

Net earnings per share:       $     1.02   $     0.36  $     0.28    $     0.24 
                             ===========  ==========  ==========    ==========

13.  OIL AND NATURAL GAS REVENUES                                               
----------------------------                                          

 In compliance with certain regulatory events and orders in the U.S. and
Canada affecting the sale and delivery of Canadian natural gas supplies to the  
California market, the Company's Dunvegan natural gas purchase, sales and       
transportation agreements with Alberta and Southern Gas Co., Ltd., were         
terminated on November 1, 1993.  As a result of these contract terminations, the
Company received a compensatory payment of U.S. $1,586,000 on November 1, 1993. 
This payment was included in Revenues - oil and natural gas in the consolidated 
statement of operations for the year ended September 30, 1994.                  

14.  DISCONTINUED OPERATIONS                                                    
-----------------------                                               
   In 1994, the Company transferred its 25% limited partnership interests in
Pacific Tropical Products ("PTP") and Orchard Development ("Orchard"), which had
a carrying value of nil, to Mr. Anderson, a director and shareholder of the     
Company ("Anderson") in consideration for the release of the Company's future   
obligations with respect to PTP and Orchard.  Accordingly, operating results    
related to the food product segment have been reclassified and included in the  
statement of operations as discontinued operations.                             

     There were no revenues, expenses nor income taxes allocable to discontinued
operations for fiscal 1994.  In fiscal 1993, the Company transferred its        
ownership of the two subsidiaries (together the "Subsidiaries") that held       
general partner ownership interests in PTP and Orchard to Anderson whereupon the
Company was relieved of the Subsidiaries' liabilities and recorded a gain of    
$617,000 which represented the Company's proportionate share of the             
partnerships' excess liabilities over assets at December 31, 1992.              
Simultaneously in fiscal 1993, the partnerships each issued a 25% limited       
partnership interest to a wholly-owned subsidiary of the Company, in            
consideration for the Company's agreement to provide certain accounting and     
operational services to the partnerships for a period of six months.  The       
earnings from discontinued food products operations of $296,000 for fiscal 1993 
represents the aforementioned gain on the transfer of ownership of the Company's
general partnership interest in PTP and Orchard less the Company's share of the 
fiscal 1993 losses of PTP and Orchard, net of income taxes.  Revenues and income
taxes allocable to discontinued operations for fiscal 1993 amounted to $620,000 
and $152,000, respectively.                                                     

15.  SUPPLEMENTAL STATEMENTS OF CASH FLOWS INFORMATION                          
-------------------------------------------------                     

                                                        [Enlarge/Download Table]


     The following details the effect of changes in current assets and                
liabilities on the statements of cash flows and supplemental disclosure of cash       
flow information:                                                                     
                                                      Year ended September 30,        
                                              ----------------------------------------
                                                 1995         1994           1993     
                                                 ----         ----           ----     

                                                                                      
Increase (decrease) from changes in:                                                  
Proceeds from sale of trading securities     $   958,000   $     -       $     -      
Purchase of trading securities                     -          (978,000)        -      
Receivables                                      131,000      (619,000)    1,152,000  
Costs and estimated earnings in excess                                                
  of billings on uncompleted contracts            85,000        (4,000)      129,000  
Inventories                                        7,000       (24,000)        1,000  
Other current assets                              62,000      (152,000)       (4,000) 
Accounts payable                                (457,000)      366,000       177,000  
Accrued expenses                                (272,000)       52,000      (561,000) 
Billings in excess of costs and                                                       
  estimated earnings on uncompleted                                                   
  contracts                                      185,000      (213,000)      102,000  
Payable to joint interest owners                 118,000      (315,000)      265,000  
Income taxes payable                            (838,000)      492,000       183,000  
                                             -----------   -----------    ----------  
  (Decrease) increase from changes                                                    
    in current assets and liabilities        $   (21,000)  $(1,395,000)   $1,444,000  
                                             ===========   ===========    ==========  

Supplemental disclosure of cash flow information                                      
Cash paid during the year for:                                                        
  Interest                                   $   764,000   $   471,000    $  721,000  
                                             ===========   ===========    ==========  

  Income taxes                               $ 3,288,000   $ 1,914,000    $1,078,000  
                                             ===========   ===========    ==========  


16.  SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION                              
---------------------------------------------                         

  The following tables summarize information relative to the Company's oil
and natural gas operations, which are substantially all conducted in Canada.    
Proved reserves are the estimated quantities of crude oil, condensate and       
natural gas 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 developed 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 developed and proved developed 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 (Unaudited)                                  
----------------------------------------                              

     The following table, based on information prepared by independent petroleum
engineers, Paddock Lindstrom and Associates, Ltd., summarizes changes in the    
estimates of the Company's net interests in total proved developed reserves of  
crude oil and condensate and natural gas ("MCF" means 1,000 cubic feet of       
natural gas) which are substantially all in Canada:                             

                                       OIL         GAS
Proved developed reserves:                       (Barrels)     (MCF)            
                                       ----------   ----------

Balance at September 30, 1992                   2,179,000    48,184,000         

Revisions of previous estimates                 102,000     1,460,000       
Extensions, discoveries and other additions     188,000     5,573,000       
Less production                                (247,000)   (4,506,000)      
                                       ----------   ----------

Balance at September 30, 1993                   2,222,000    50,711,000         

Revisions of previous estimates                 132,000      (775,000)      
Extensions, discoveries and other additions     366,000     6,890,000       
Less production                                (272,000)   (4,679,000)      
Sales of reserves in place                      (21,000)     (297,000)      
                                       ---------    ----------

Balance at September 30, 1994                   2,427,000    51,850,000         

Revisions of previous estimates                 101,000     1,356,000       
Extensions, discoveries and other additions      97,000     1,041,000       
Less production                                (296,000)   (4,916,000)      
Sales of reserves in place                      (33,000)   (2,585,000)      
                                       ---------    ----------

Balance at September 30, 1995                   2,296,000    46,746,000         
                                       =========    ==========

                                       OIL         GAS
Proved developed producing reserves at:          (Barrels)     (MCF)            
                                      ----------   ---------

September 30, 1992                               1,975,000   34,417,000         
                                        =========   ==========

September 30, 1993                               2,005,000   35,895,000         
                                        =========   ==========

September 30, 1994                               2,133,000   34,624,000         
                                        =========   ==========

September 30, 1995                               2,025,000   31,700,000         
                                        =========   ==========

     Included in the above tables are proved developed producing reserves in the
U.S. of 59,000 barrels of oil and 40,000 MCF at September 30, 1995.             

(B)  Capitalized Costs Relating to Oil and Natural Gas Producing Activities     
----------------------------------------------------------------------

             September 30,
           ---------------------------------------
          1995          1994          1993
           -----------   -----------   -----------

Proved properties         $35,438,000   $32,562,000   $27,956,000               

Unproved properties         2,361,000     2,279,000     1,914,000               
           -----------   -----------   -----------

Total capitalized costs    37,799,000    34,841,000    29,870,000               

Accumulated depletion                                                           
and depreciation         18,644,000    15,897,000    13,612,000             
           -----------   -----------   -----------

Net capitalized costs     $19,155,000   $18,944,000   $16,258,000               
           ===========   ===========   ===========

(C)  Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and
     ---------------------------------------------------------------------------
Development                                                           
-----------                                                           

              Year ended September 30,
              ------------------------------------
              1995         1994         1993
              ----------   ----------   ----------

Acquisition of properties:                                                      

Unproved                   $  176,000  $  589,000   $   85,000              
             ==========  ==========   ==========

Proved                     $  152,000  $  292,000   $  144,000              
             ==========  ==========   ==========

Exploration costs            $  273,000  $1,662,000   $  712,000                
             ==========  ==========   ==========

Development costs            $2,833,000  $2,807,000   $2,252,000                
             ==========  ==========   ==========

Included in the table above are capital expenditures of $112,000 and  
$336,000 in fiscal 1994 and 1995, respectively, in the United States.           

(D)  The Results of Operations of Barnwell's Oil and Natural Gas Producing      
----------------------------------------------------------------------
  Activities, Which Exclude Corporate Overhead and Interest and, in Fiscal
  ------------------------------------------------------------------------
1994, Contract Termination Fees of $1,586,000                         
---------------------------------------------                         

                        Year ended September 30,
                       ---------------------------------------
                        1995          1994          1993
                       -----------   -----------   -----------

Gross revenues                  $11,367,000   $14,321,000   $12,904,000         
Royalties, net of credit            847,000     1,957,000     1,654,000         
                       -----------   -----------   -----------

Net revenues                     10,520,000    12,364,000    11,250,000         

Production costs                  3,373,000     3,188,000     2,756,000         

Depletion and depreciation        2,658,000     2,361,000     2,014,000         
                       -----------   -----------   -----------

Pre-tax results of operations     4,489,000     6,815,000     6,480,000         

Estimated income tax expense      2,338,000     3,634,000     2,941,000         
                       -----------   -----------   -----------

Results of operations           $ 2,151,000   $ 3,181,000   $ 3,539,000         
                       ===========   ===========   ===========

     Revenues of $160,000 were received in fiscal 1995 from U.S. oil and natural
gas properties; no revenues were received in fiscal 1994 or fiscal 1993 from    
U.S. properties.                                                                

(E)  Standardized Measure, Including Year-to-Year Changes Therein, of Discounted
     ---------------------------------------------------------------------------
Future Net Cash Flows (Unaudited)                                     
---------------------------------                                     

    The following tables have been developed pursuant to procedures prescribed
by SFAS 69, and utilize reserve and production data estimated by petroleum      
engineers. The information may be useful for certain comparison purposes but    
should not be solely relied upon in evaluating the Company 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 future cash flows are based on sales prices, costs, and statutory 
income tax rates in existence at the dates of the projections. 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.                                          

                                                                [Download Table]

Standardized Measure of Discounted Future Net Cash Flows                            
--------------------------------------------------------                            

                                                    As of September 30,             
                                        ------------------------------------------- 
                                            1995            1994            1993    
                                        ------------    -----------     ----------- 

                                                                                    
Future cash inflows                     $ 74,143,000    $107,440,000    $96,798,000 

Future production costs                  (25,690,000)    (30,147,000)   (24,531,000)

Future development costs                  (2,289,000)     (2,668,000)    (1,322,000)
                                        -------------    -----------    ----------- 

Future net cash flows before income                                                 
  taxes                                   46,164,000      74,625,000     70,945,000 

Future income tax expenses               (12,341,000)    (22,677,000)   (22,451,000)
                                        ------------    ------------    ----------- 

Future net cash flows                     33,823,000      51,948,000     48,494,000 

10% annual discount for timing of                                                   
  cash flows                             (13,473,000)    (20,686,000)   (19,358,000)
                                        ------------    ------------   ------------ 

Standardized measure of                                                             
  discounted future net cash flows      $ 20,350,000    $ 31,262,000   $ 29,136,000 
                                        ============    ============   ============ 

                                                                [Download Table]


Changes in the Standardized Measure of Discounted Future Net Cash Flows           
-----------------------------------------------------------------------           

                                                  Year ended September 30,        
                                           ---------------------------------------
                                               1995          1994           1993  
                                           -----------   ----------   ----------- 

                                                                                  
Beginning of year                          $31,262,000  $29,136,000   $26,275,000 
                                           -----------  -----------   ----------- 

Sales of oil and natural gas                                                      
  produced, net of production costs         (7,147,000)  (9,176,000)   (8,494,000)

Net changes in prices and production                                              
  costs, net of royalties and wellhead                                            
  taxes                                    (13,335,000)   3,214,000     2,000,000 

Extensions and discoveries                     941,000    5,306,000     4,147,000 

Purchases (sales) of reserves in place,                                           
  net                                         (482,000)    (161,000)      346,000 

Revisions of previous quantity estimates        63,000    1,114,000     4,044,000 

Net change in Canadian dollar translation                                         
  rate                                        (144,000)    (287,000)   (1,346,000)

Changes in the timing of                                                          
  future production and other                 (604,000)  (1,120,000)     (176,000)

Net change in income taxes                   6,413,000     (366,000)     (579,000)

Accretion of discount                        3,383,000    3,602,000     2,919,000 
                                           -----------  -----------   ----------- 

Net change                                 (10,912,000)   2,126,000     2,861,000 
                                           ------------ -----------   ----------- 

End of year                                $20,350,000  $31,262,000   $29,136,000 
                                           ===========  ===========   =========== 


Item 9.   Changes in and Disagreements with Accountants on Accounting and       
   ---------------------------------------------------------------
Financial Disclosure                                        
--------------------                                        

None.                                                       

PART III

Item 10.  Directors and Executive Officers of the Registrant                    
--------------------------------------------------          

Item 11.  Executive Compensation                                                
----------------------                                      

Item 12.  Security Ownership of Certain Beneficial Owners and Management        
  --------------------------------------------------------------

Item 13.  Certain Relationships and Related Transactions                        
----------------------------------------------              

    Items 10, 11, 12, and 13 are omitted pursuant to General Instructions G(3)
of Form 10-K, since the Registrant will file its definitive proxy statement for 
the 1996 Annual Meeting of Stockholders not later than 120 days after the close 
of its fiscal year ended September 30, 1995, which proxy statement is           
incorporated herein by reference.                                               

PART IV 

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K       

(A) 1.    Financial Statements                                              

The following consolidated financial statements of Barnwell Industries,     
Inc. and its subsidiaries are included in Part II, Item 8:                    

Independent Auditors' Report - KPMG Peat Marwick LLP                

Consolidated Balance Sheets - September 30, 1995 and 1994           
Consolidated Statements of Operations -                             
for the three years ended September 30, 1995                  

Consolidated Statements of Cash Flows -                             
for the three years ended September 30, 1995                  

Consolidated Statements of Stockholders' Equity -                   
for the three years ended September 30, 1995                  

Notes to Consolidated Financial Statements                          

2.    Financial Statement Schedules                                 

Schedule II - Valuation and Qualifying Accounts and Reserves        

All other schedules have been omitted because they were not applicable, not   
required, or the information is included in the financial statements or       
notes thereto.                                                                

(B)     Reports on Form 8-K                                                 

There were no reports on Form 8-K filed during the three months ended         
September 30, 1995.                                                           

(C)     Exhibits                                                            

No. 3.1    Certificate of Incorporation                                   

No. 3.2    Amended and Restated By-Laws                                   

No. 4.0    Form of the Registrant's certificate of common stock, par value
$.50 per share.                                     

No. 10.4   The Barnwell Industries, Inc. Employees' Pension Plan (restated
as of October 1, 1989).                             

  Exhibits 3.1 and 3.2 are incorporated by reference to the Exhibits 3.3
 and 3.4, respectively, to the Registrant's Form S-8 dated November 8,
1991. Exhibit 4 is incorporated by reference to the registration    
     statement on Form S-1 originally filed by the Registrant January 29, 1957
    and as amended February 15, 1957 and February 19, 1957.  Exhibit 10.4 is
   incorporated by reference to Form 10-K for the year ended September 30,
1989.                                                               

No. 10.17  Phase I Makai Development Agreement dated June 30, 1992, by and
       between Kaupulehu Makai Venture and Kaupulehu Developments.

No. 10.18  KD/KMV Agreement dated June 30, 1992 by and between Kaupulehu  
Makai Venture and Kaupulehu Developments.           

    Exhibits 10.17 thru 10.18 are incorporated by reference to Form 10-K for
the year ended September 30, 1992.                                  

No. 21     Subsidiaries of the Registrant.                                

                                                                [Download Table]

                           BARNWELL INDUSTRIES, INC.                             
                                AND SUBSIDIARIES                                 
          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES           

                              Balance at    Additions                     Balance
                               beginning   charged to                     at end 
                                of year     expense     Deductions        of year
                               ----------  -----------  ----------       --------

YEAR ENDED SEPTEMBER 30, 1995:                                                   
                                                                                 
Allowance for doubtful                                                           
  accounts - accounts                                                            
  receivable                  $   26,000   $   38,000   $     -          $ 64,000

Allowance for doubtful                                                           
  accounts - long-term notes                                                     
  receivable                     267,000         -            -           267,000
                              ----------   ----------   ----------       --------

Total allowance for doubtful                                                     
  accounts                    $  293,000   $   38,000   $     -          $331,000
                              ==========   ==========   ==========       ========

YEAR ENDED SEPTEMBER 30, 1994:                                                   

Allowance for doubtful                                                           
  accounts - accounts                                                            
  receivable                  $   26,000   $   34,000   $   34,000  (1)  $ 26,000

Allowance for doubtful                                                           
  accounts - long-term notes                                                     
  receivable                     267,000         -            -           267,000
                              ----------   ----------   ----------       --------

Total allowance for doubtful                                                     
  accounts                    $  293,000   $   34,000   $   34,000       $293,000
                              ==========   ==========   ==========       ========

YEAR ENDED SEPTEMBER 30, 1993:                                                   

Allowance for doubtful                                                           
  accounts - accounts                                                            
  receivable                  $   29,000   $     -      $    3,000  (2)  $ 26,000

Allowance for doubtful                                                           
  accounts - long-term notes                                                     
  receivable                     271,000         -           4,000  (3)   267,000
                              ----------   ----------   ----------       --------

Total allowance for doubtful                                                     
  accounts                    $  300,000   $     -      $    7,000       $293,000
                              ==========   ==========   ==========       ========
<FN>                                                                             

  (1)     Accounts written off less recoveries.                                  
  (2)     Effect of change in the Canadian dollar exchange rate.                 
  (3)     Collections.                                                           

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.                       

BARNWELL INDUSTRIES, INC. 
(Registrant)

    /s/Morton H. Kinzler
 By:   Morton H. Kinzler
              Chief Executive Officer,
   President and
           Chairman of the Board

Date:    December 5, 1995                                                       

   Pursuant to the requirements of the Securities  Exchange Act of 1934, the
report has been signed below by the following persons on behalf of the          
registrant in the capacities and on the dates indicated.                        

/s/ Russell M. Gifford                                                          
RUSSELL M. GIFFORD                                                              
Chief Financial Officer, Vice President                                         

Date:    December 5, 1995                                                       

/s/ Morton H. Kinzler                                                           
MORTON H. KINZLER                                                               
Chief Executive Officer,                                                        
President and Director                                                          

Date:    December 5, 1995                                                       

/s/ Martin Anderson                       /s/ Alan D. Hunter                    
MARTIN ANDERSON, Director                 ALAN D. HUNTER, Director              
Date:  December 5, 1995                   Date:  December 5, 1995               

/s/ H. Whitney Boggs, Jr.                 /s/ Daniel Jacobson                   
H. WHITNEY BOGGS, JR., Director           DANIEL JACOBSON, Director             
Date:  December 5, 1995                   Date:  December 5, 1995               

/s/ Barry E. Emes                         /s/ William C. Warren                 
BARRY E. EMES, Director                   WILLIAM C. WARREN, Director           
Date:  December 5, 1995                   Date:  December 5, 1995               

/s/ Erik Hazelhoff-Roelfzema              /s/ Glenn Yago                        
ERIK HAZELHOFF-ROELFZEMA, Director        GLENN YAGO, Director                  
Date:  December 5, 1995                   Date:  December 5, 1995               

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