identifies nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination. If any member of the Board up for re-election at an upcoming annual meeting of stockholders does not wish to continue in service, the Board identifies the desired skills and experience of a new nominee, if the Board determines that it is appropriate to replace the retiring member. The Board believes that potential directors should possess sound judgment, understanding of the business issues affecting the Company, integrity and the highest personal and professional ethics. In searching for potential Board nominees, the Board seeks directors who have a range of business, management and civic experience appropriate for the Board to discharge its responsibilities. In the case of both incumbent and new directors, the Board seeks persons who are able to devote significant time and effort to Board and Board committee responsibilities.

The Board will consider potential nominees brought to its attention by any director or officer of the Company. It also will evaluate recommendations for director nomineenominees proposed by a stockholder who (i) has continuously held at least 1% of the outstanding shares of the Company’s Common Stock entitled to vote at the annual meeting of stockholders for at least one year byprior to the date the stockholder makes the recommendation and (ii) undertakes to continue to hold the Common Stocksuch number of shares through the date of the meeting. Any recommendation for director nominee submitted by a qualifying stockholder must be received by the Company no later than 120 days prior to the anniversary of the date proxy statements were mailed to stockholders in connection with the prior year’s annual meeting of stockholders. Any stockholder recommendation for director nominee must be submitted to the Company’s Chairman of the Board in writing, including:

•      a statement by the stockholder that he/she is the holder of at least 1% of the outstanding shares of the Company’s Common Stock, and that the stock hasshares have been held for at least aone year prior to the date of the submission and that the stockholder will continue to hold the shares through the date of the annual meeting of stockholders;

•      the candidate’s resume, which will include a description of the candidate’s qualifications and business experience during, at a minimum, the last five years, including his/her principal occupation or employment and the name and principal business of any corporation or other organization in which the candidate was employed; and

The Board will evaluate recommendations for director nominees submitted by directors, management or qualifying stockholders in the same manner, using the criteria stated above. All directors and director nominees will submit a completed form of directors’ and officers’ questionnaire as part of the nominating process.

Stockholders may send any communication to the Board of Directors, as a whole, or individually, by mail to the Company’s address listed on page one of the Proxy Statement, to the attention of Russell M. Gifford, Secretary. All such communications will be forwarded to the Board of Directors or individual directors as appropriate. The Company strongly encourages its directors to attend the Annual Meeting. Three members of the Board of Directors attended the 2006 Annual Meeting of Stockholders of the Company.

COMPENSATION COMMITTEE

The members of the Compensation Committee are Mr. Hunter, Chairman, and Messrs.Mr. Anderson, Dr. Gardner Johnston and Ms. Diane Kranz. The Compensation Committee (i) determines the annual compensation of the Company’s senior officers; (ii) recommends, if appropriate, new employee benefit plans to the Board of Directors; (iii) administers all employee benefit plans and (iv) makes such other determinations regarding compensation or benefits as may be necessary or advisable. During the fiscal year ended September 30, 2006, the Compensation Committee held one meeting.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Johnston served as a member of the Compensation Committee until December 8, 2006. Although Mr. Johnston is not independent as defined in Section 121 (A) of the American Stock Exchange listing standards, the independent members of the Board of Directors have determined in accordance with the American Stock Exchange listing standards that Mr. Johnston, who is not an officer of the Company, bringsbrought a unique and valuable perspective to the Compensation Committee because of his real estate development experience and his opportunity to assess management’s capabilities due to his ownership interests in Kaupulehu Developments, the Company’s majority-owned real estate development general partnership.

No Director who served as a member of the Compensation Committee during fiscal year 2006 had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K, except for Mr. Johnston. Mr. Johnston controls Nearco, Inc. Barnwell Hawaiian Properties, Inc., a wholly-owned subsidiary of the Company, owns a 50.1% interest in Kaupulehu Developments, and Cambridge Hawaii Limited Partnership, which is 55.2% indirectly owned by the Company, owns the remaining 49.9% interest in Kaupulehu Developments. In 1987, Barnwell Hawaiian Properties, Inc. and Cambridge Hawaii Limited Partnership agreed to pay to Nearco, Inc. 2% and 4%, respectively, of the cash consideration received from the sale of property owned by Kaupulehu Developments. Pursuant to these agreements, in fiscal 2006 Barnwell Hawaiian Properties, Inc. and Cambridge Hawaii Limited Partnership paid fees of $331,000 and $661,000, respectively, to Nearco, Inc. in connection with Kaupulehu Developments’ receipt of proceeds from real estate transactions. Also, Mr. Johnston received approximately $2,846,000 during fiscal year 2006, in respect of the 20.6% interest in Kaupulehu Developments he owns indirectly through certain entities that he controls, including Nearco, Inc. Nearco Inc. was also paid $76,000 in fiscal 2006 as a fee for real estate consulting services Nearco, Inc. performed for the Company. The Company believes such fees are fair and reasonable compensation for such services. In June 2006, the Company entered into an agreement with Nearco, Inc. to form Mauka 3K, LLC, for the purpose of providing real estate consulting services and investing in real estate. The Company and Nearco, Inc. each have a 50% voting interest in Mauka 3K, LLC. Mauka 3K, LLC received $3,000,000 in real estate consulting fees during fiscal 2006 of which Mr. Johnston received $1,440,000 in respect of the 50% interest in Mauka 3K, LLC he owns indirectly through Nearco, Inc.

During fiscal year 2006, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer(s) served on our Compensation Committee or Board of Directors, and no member of our Compensation Committee was an employee or former employee of the Company.

REPORT OF THE COMPENSATION COMMITTEE

Objective and Philosophy

The Compensation Committee’s objective is to implement a compensation program which attracts, retains and motivates highly qualified executive officers and management personnel who will enhance the Company’s annual performance and long term growth objective. This program is in part based on the belief that the interests of the executives should be closely aligned with the interests of the Company’s stockholders. The Compensation Committee (i) determinesattempts to achieve these goals by linking compensation to the annualaccomplishment of specific results and the creation of value for the Company’s stockholders from both near-term and long-term performance perspectives. The Compensation Committee believes that cash compensation in the form of salary and incentive bonuses provides our executives with near-term rewards for completion of individual performance goals and

Company operations objectives and that long-term compensation through the award of stock options or other equity awards encourages growth in management stock ownership and gives management a stake in the Company’s long-term performance and success. The compensation committee considers all elements of compensation and these objectives when determining individual components of compensation packages.

Compensation Program Components

Currently, there are three principal components of the Company’s senior officers; (ii) recommends, if appropriate, new employee benefit plansexecutive compensation program, annual base salary, near-term incentive compensation in the form of performance bonuses payable in cash on an annual basis and long-term incentive compensation in the form of stock options and stock appreciation rights. These programs are structured in accordance with the Compensation Committee’s objectives and philosophy.

Base Salary

Base salary levels for the Company’s executives are based on a variety of factors including scope of responsibility, performance and an assessment of competitive conditions in the marketplace for executives of comparable talent and experience. Base salaries for executives (other than the Chief Executive Officer) are generally recommended by the Chief Executive Officer for the review and approval of the Compensation Committee which makes a final determination based on the factors described above and the executives’ performance during the year and then submits its recommendation to the Board of Directors; (iii) administers all employee benefit plansDirectors for approval. The Chief Executive Officer is not present during, and (iv) makes determinationsdoes not participate in, connection therewith asthe voting or deliberations of the Board of Directors on his own compensation.

Near-Term Incentive Compensation

The short-term incentive compensation component consists of performance bonuses. The amount of any bonus is determined, in part, based on individual and corporate performance, the achievement of performance objectives and goals, the accomplishment of specific results and the creation of value for our stockholders. Bonuses paid to each executive are based in part on measuring which of these goals and objectives have been realized.

Long-Term Incentive Compensation

The long-term incentive compensation component consists of the Company’s 1998 Stock Option Plan (the “Qualified Plan”) under which executives may be necessary or advisable.  Duringgranted stock options exercisable to purchase shares of Common Stock and occasional grants of non-qualified stock options with a stock appreciation right (“SAR”) component. Stock options granted under the fiscal year ended September 30, 2005,Qualified Plan become exercisable in equal increments over four years and generally expire ten years from the date of grant. Non-qualified stock options/SARs also are granted from time to time to key personnel, become exercisable over five years and generally expire ten years from the date of grant. The deferred vesting provisions of the stock options are designed to reward long-term contributions and create an incentive for executives to remain with the Company and create value for our stockholders. The Compensation Committee believes that granting stock options creates an incentive to promote the long-term interests of the Company and aligns the economic benefit to be obtained by the executives granted such options with those of the Company’s outside stockholders. Stock options are granted by the Compensation Committee heldto key employees based on management’s recommendation, and levels of participation in the plan generally vary based on the employee’s position with the Company.

Compensation of our Chief Executive Officer

Our Company’s CEO, Mr. Morton H. Kinzler, was a founder of the Company and has been employed by the Company for over 50 years. His vast knowledge of the Company’s operational history and his experience in managing the Company from its inception has proved invaluable to the Company’s growth from an initial capitalization of approximately $2,000,000 to its present market capitalization in excess of $150,000,000. In evaluating his compensation, the Compensation Committee considers the same factors as described above for all officers (except that the Company’s executive management does not make salary recommendations for the Chief Executive Officer) and also considers Mr. Kinzler’s long-term commitment and contributions to the Company. For fiscal year 2006, the Compensation Committee approved a base salary for our Chief Executive Officer of $517,500, an increase of $97,000 over the prior year, reflecting the Company’s strong financial results and the

significant increase in the value of the Company achieved during the prior year. He received a bonus of $950,000 for fiscal 2006 also reflecting the Company’s strong financial performance during the prior year.

Tax Considerations

In determining executive compensation, the Compensation Committee considers, among other factors, the possible tax consequences to the Company and to its executives. However, the Compensation Committee believes that it is important for it to retain maximum flexibility in designing compensation programs and therefore, while considering tax deductibility as one meeting.of its factors in determining compensation, will not limit compensation to those levels or types of compensation that will be deductible.

Compensation Committee of the Board of Directors

Alan D. Hunter, Chairman

Martin Anderson

Murray Gardner

Diane Kranz

AUDIT COMMITTEE

The members of the Audit Committee are Ms. Kranz, Chairperson, and Messrs. Gardner, Anderson, Hunter and Takata(1).Takata. All of the members of the Audit Committee are independent (as independence is defined in Section 121 (A) of the American Stock Exchange listing standards). The Board of Directors has determined that the Audit Committee has at least one audit committee financial expert (as audit committee financial expert is defined in Item 401(e)407(d) of Regulation S-B)S-K), namely Ms. Kranz, who is a financial expert based on her being a certified public accountant. The Board of Directors has adopted a written charter for the Audit Committee, a copy of which iswas annexed to thislast year’s Proxy

(1)  Mr. Takata was first appointed to the Audit Committee on December 9, 2005.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following summary compensation table sets forth the annual compensation paid or accrued during the last three fiscal years by the Company to the Chief Executive Officer and to executive officers whose annual compensation exceeded $100,000 for the fiscal year ended September 30, 20052006 (collectively the “Named Executive Officers”):

Directors who are not officers of the Company receive an annual fee of $12,500$15,000 and are reimbursed for expenses incurred with respect to meeting attendance and are offered medical coverage in the United States at the Company’s expense. Any such director who does not wish to obtain such medical coverage is paid an additional annual fee of $3,000.$5,000. The Chairman of the Compensation Committee receives an additional $9,000$12,000 annual fee. The Chairperson of the Audit Committee receives an additional $20,000$25,000 annual fee. The members of the Executive and Compensation Committees, other than the Chairmen, receive an additional $1,500$2,500 annual fee. The members of the Audit Committee, other than the Chairperson, receive an additional $7,500$10,000 annual fee.  In lieu of payment of such fees to Mr. Hazelhoff-Roelfzema, the Company reimburses him for certain expenses incurred in connection with his service as a director. Mr. Terry Johnston, a director of the Company, is also reimbursed for certain expenses incurred with respect to services he performs for Kaupulehu Developments, a real estate partnership which is majority owned by the Company.

(1)                      Mr. Steckley was granted 180,000 incentive units on June 1, 1998.  The value of such units directly relates to Barnwell of Canada, Limited’s (“BOC’s”) net income and to changes in the value of BOC’s oil and gas reserves since 1998, with adjustments for changes in commodities prices and subject to other terms and conditions.  Such adjusted reserve value is then divided by the number of shares of the Company’s outstanding common stock to determine the value of each unit.  These units became exercisable over 4 years from the date of grant, are now all vested and expire 10 years from such date.  At September 30, 2005, the U.S. dollar equivalent of the value of the units was $715,000.  This is an increase of US$185,000 over the value of these units at September 30, 2004.

(2)                      All amounts shown for Mr. Steckley in this table represent the average U.S. dollar equivalent during each fiscal year of payments made to him in Canadian dollars.

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Aggregated Option Exercises in Last Fiscal Year

and Fiscal Year-End Option Values

The following table sets forth information related to the number of shares of Common Stock acquired during the fiscal year ended September 30, 20052006 by the Named Executive Officers pursuant to the exercise of stock options, the value realized by the Named Executive Officers on exercise of such stock options and the number and value of unexercised stock options held by the Named Executive Officers at the end of the fiscal year ended September 30, 2005:2006:

(1)          150,000 non-qualified options with stock appreciation rights were granted and 30,000 of such options become exercisable annually on December 5, 2005, 2006, 2007, 2008 and 2009, respectively.

(2)          150,000 qualified options were granted

STOCK PERFORMANCE GRAPH AND CUMULATIVE TOTAL RETURN

The graph below compares the five-year cumulative total return, assuming the reinvestment of dividends, on Barnwell common stock with that of the AMEX Composite Index, the Dow Jones Exploration and 37,500Production Index and the Dow Jones Real Estate Holding and Development Index. This graph assumes $100 was invested on September 30, 2001, in each of Barnwell common stock, the companies in the AMEX Composite Index, the companies in the Dow Jones Exploration and Production Index, and the companies in the Dow Jones Real Estate Holding and Development Index.

Note: Stockholder returns shown in the graph below are based upon historical data and are not indicative of, or intended to forecast, future stockholder returns.

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*

AMONG BARNWELL INDUSTRIES, INC., THE AMEX COMPOSITE INDEX,

THE DOW JONES EXPLORATION AND PRODUCTION INDEX

AND THE DOW JONES REAL ESTATE HOLDING AND DEVELOPMENT INDEX

* $100 INVESTED ON 9/30/01 IN STOCK OR

INDEX-INCLUDING REINVESTMENT OF DIVIDENDS.

PENSION PLAN

Pension Plan Table

The following table shows estimated annual benefits payable at September 30, 2006, assuming retirement in 2006 at age 65 after selected periods of service, under the straight life annuity option of the Company’s pension plan. The benefits shown below include amounts to be paid pursuant to the Company’s pension plan, which is comprised of the Employee’s Pension Plan and the Supplemental Executive Retirement Plan. Covered compensation under the Company’s pension plan for Mr. M. Kinzler, Mr. A. Kinzler and Mr. Gifford includes “Salary” and “Bonus” as reported in the Summary Compensation Table, above. Since the maximum compensation recognized under the Plan is $315,000, the current covered compensation for each of the named executive officers is $315,000. Under each of the Employees’ Pension Plan and the Supplemental Executive Retirement Plan, a participant’s annual pension benefit at age 65 is equal to the product of (i) 0.9% of the participant’s compensation covered by the plan, plus 0.6% of that part, if any, of the average compensation in excess of such options become exercisable annually on December 5, 2005, 2006, 2007, and 2008, respectively.participant’s “social security covered compensation,” as defined in the plan, multiplied by (ii) such participant’s years of credited service, limited to 30 years. Plan benefits are not subject to any deduction for Social Security or other offset amounts. The benefits shown below are payable in the single life annuity form.

(3)          60,000 non-qualified optionsThe Company maintains a pension plan for its eligible employees to provide annual benefits payable on retirement. Eligibility is based upon attainment of age 21 and completion of one year of service. Benefits are calculated under a formula based upon years of service and the participant’s highest average annual compensation over 60 consecutive months of service. The credited years of service as of September 30, 2006 for the Company’s Chief Executive Officer and each of the other executive officers named in the Summary Compensation Table and covered under the plans are as follows: Mr. Morton H. Kinzler--30, Mr. Alexander C. Kinzler--22 and Mr. Russell M. Gifford--25. Mr. Warren D. Steckley does not participate in the Company’s pension plan since, as an employee of Barnwell of Canada, Limited, Mr. Steckley participates in Canada’s public pension system. The years of eligible service for Mr. M. Kinzler take into account his years of association with stock appreciation rights were granted and 12,000the Company prior to the date of such options become exercisable annuallyhis formal employment pursuant to a deferred compensation agreement with him. The supplemental benefits Mr. M. Kinzler is to receive as a result of these additional years of eligible service is provided by the Company on December 5, 2005, 2006, 2007, 2008 and 2009, respectively.an unfunded basis.

(4)          60,000 qualified options were granted and 15,000 of such options become exercisable annually on December 5, 2005, 2006, 2007, and 2008, respectively.

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(1)                      A person is deemed to be the beneficial owner of securities that such person can acquire as of and within the 60 days following the date of this table upon the exercise of options.  Each beneficial owner’s percentage of ownership is determined by assuming that options or conversion rights that are held by such person (but not those held by any other person) and which are exercisable as of and within 60 days following the date of this table have been exercised.  For purposes of the footnotes that follow, “currently exercisable” means options that are exercisable as of and within 60 days following the date of this table.  Except as indicated in the footnotes that follow, shares listed in the table are held with sole voting and investment power. The number of shares have been adjusted to reflect the 2-for-1 stock split in the form of a stock dividend which occurred in January, 2005 and the 3-for-1 stock split in the form of a stock dividend which occurred in November, 2005.

(2)                      David R. Jarvis and Malcolm F. MacLean IV are the managing members of Mercury Real Estate Advisors LLC.  Shares reported as beneficially owned by Mercury Real Estate Advisors LLC, David R. Jarvis and Malcolm F. MacLean IV represent shares held by Mercury Special Situations Fund LP, Mercury Special Situations Offshore Fund, Ltd. and certain other entities of which Mercury Real Estate Advisors LLC is the investment advisor.  The aggregate beneficial ownership of Messrs. Jarvis and MacLean and their affiliated entities as reported to the Securities and Exchange Commission is 1,363,500

(3)                      Includes 1,848 shares owned by Mr. Kinzler’s wife to which Mr. Kinzler disclaims beneficial ownership.

(4)                      Includes currently exercisable options to acquire 67,500 shares of Common Stock.

(5)                      Includes currently exercisable options to acquire 153,000 shares of Common Stock.

(6)                      Includes currently exercisable options to acquire 180,000 shares of Common Stock.

(7)                      Includes currently exercisable options held by executive officers of the Company to acquire 400,500 shares of Common Stock.

*                             Represents less than 1% of the outstanding shares of Common Stock of the Company.

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AUDIT COMMITTEE CHARTER
BARNWELL INDUSTRIES, INC.

STATEMENT OF PURPOSE

The Audit Committee is appointed by the Board of Directors of the Company (the “Board”) to: (A) assist the Board in monitoring: (1) the integrity of the financial statements of the Company, (2) the compliance by the Company with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence and (4) the performance of the Company’s internal audit function and independent auditor; and (B) prepare the report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement.

MEMBERSHIP

There shall be at least three members of the Audit Committee, all of whom shall be members of the Board who meet the independence requirements of the American Stock Exchange.  All members of the Audit Committee shall be “financially literate” as required by the rules of the American Stock Exchange.  An Audit Committee member may not, other than in his or her capacity as a member of the Audit Committee, the Board, or any other Board committee accept any consulting, advisory, or other compensatory fee from the Company or have any other affiliation with the Company or any of its subsidiaries.  A member of the Company’s Audit Committee shall not simultaneously serve on the audit committees of more than three public companies unless the Board affirmatively determines that such simultaneous service would not impair the ability of the member to serve effectively on the Company’s Audit Committee.

DUTIES AND RESPONSIBILITIES

The Audit Committee shall:

1.Review and reassess the adequacy of this Charter annually and submit it to the Board for approval.

2.Appoint and oversee the work of the independent auditor, which shall report to the Audit Committee, and meet with the independent auditor prior to the audit to review the planning and staffing of the audit.

3.Pre-approve any auditing services provided by the independent auditor to the Company.

4.Pre-approve any permissible non-audit services, including tax services, provided to the Company by its independent auditor unless such non-audit services satisfy the following three criteria: (i) the aggregate cost of the services provided to the Company constitutes 5% or less of the total payments made to the independent auditor during that fiscal year, (ii) the services provided were not recognized by the Company at the time of engagement as non-audit services, and (iii) the services are promptly brought to the attention of the Audit Committee and are approved by the Audit Committee prior to completion.

5.Determine the compensation to be paid to the independent auditor.

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6.Evaluate the performance of the independent auditor and, if so determined by the Audit Committee, replace the independent auditor.

7.Obtain and review, at least annually, a report by the independent auditor describing: (1) the independent auditor’s internal quality-control procedures, (2) any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditor, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the independent auditor, and any steps taken to deal with any such issues, and (3) all relationships between the independent auditor and the Company.  Discuss such reports in regards to the auditor’s independence with the auditor, and if so determined by the Audit Committee, take appropriate action to insure the independence of the auditor.

8.Set clear hiring policies for employees or former employees of the independent auditor.

9.Confirm with the independent auditor that the lead partner and reviewing partner are rotated after performing audit services for the Company for five consecutive years.

10.Review (i) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies; (ii) analyses prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements; (iii) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; and (iv) earnings press releases (paying particular attention to any use of “pro forma,” or “adjusted” non-GAAP, information), as well as financial information and earnings guidance provided to analysts and rating agencies.

11.Review with management and the independent auditor, prior to inclusion in any report filed by the Company with the Securities and Exchange Commission, the Company’s audited financial statements and quarterly financial statements, together with the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

12.Meet periodically with management, in person or by telephone, to review the Company’s policies with respect to risk assessment and risk management.

13.Review and evaluate any report prepared by the independent auditor for the Audit Committee.

14.Obtain from the independent auditor assurance that Section 10 A of the Private Securities Litigation Reform Act of 1995 has not been implicated.

15.Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61, as modified or amended, relating to the conduct of the audit.

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16.Review with the independent auditor any problems or difficulties the auditor may have encountered and any management letter provided by the auditor and the Company’s response to that letter.  Such review should include:

Any restrictions on the scope of activities or access to required information, and

Any changes required in the planned scope of the audit.

17.Review with the Company’s General Counsel legal matters that may have a material impact on the financial statements, the Company’s compliance policies and any material reports or inquiries received from regulators or governmental agencies.

18.Conduct an appropriate review of all related party transactions on an ongoing basis and review potential conflict of interest situations where appropriate.

19.Meet at least quarterly with the chief financial officer and the independent auditor in separate executive sessions.

20.Engage independent counsel and other advisors the Audit Committee determines are necessary to carry out its duties.

21.Request any officer or employee of the Company or the Company’s outside counsel or independent auditor to attend a meeting of the Audit Committee.

22.Resolve disagreements, if any, between management and the independent auditor.

23.Report to the Board at least annually on the conduct of the audit committee’s affairs.

24.Establish procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles.  This is the responsibility of management and the independent auditor.  Nor is it the duty of the Audit Committee to conduct investigations or to assure compliance with laws and regulations.

ANNUAL PERFORMANCE EVALUATION OF THE AUDIT COMMITTEE

The Audit Committee shall conduct an annual evaluation of its performance and shall establish procedures for such evaluation.

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ANNUAL MEETING OF STOCKHOLDERS OF

BARNWELL INDUSTRIES, INC.

March 6, 20065, 2007

Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.