Barnwell Industries Agrees to Sell Its Canadian Oil and Gas Business for C$9 Million

Barnwell Industries, Inc. (NYSE American: BRN), a Houston-based company with operations and interests in energy and related assets, announced on October 6, 2026 that it has entered into a definitive agreement to sell its Canadian oil and natural gas business. The base purchase price is C$9 million, made up of C$4 million in cash and a 5% gross overriding royalty valued at C$5 million. In addition, Barnwell’s Board of Directors is recommending that shareholders vote in favor of the deal.

The Terms of the Sale

According to the company’s Form 8-K filing, the buyer is 2798913 Alberta Ltd., an Alberta corporation. The deal is structured as a sale of the Canadian operating company’s shares and an assignment of a related intercompany note, following a pre-closing reorganization. Before closing, Barnwell will move certain assets out of the Canadian business, including its excess cash and near-cash assets.

The buyer has paid a C$1 million deposit into escrow, which will be credited toward the purchase price at closing. The buyer will also assume the Canadian business’s future site restoration and abandonment obligations. As a result, Barnwell expects those obligations to come off its consolidated balance sheet at closing, subject to its indemnification obligations under the agreement.

Closing requires approval from holders of a majority of Barnwell’s outstanding common shares, along with required governmental approvals and other customary conditions. Under the agreement, the deal must close no later than January 18, 2027. The company noted that there can be no assurance the transaction will close or as to its timing.

How the Royalty Works

Barnwell will keep a 5% gross overriding royalty on the acquired business’s interest in future wells drilled on all of its Canadian lands. An affiliate of the buyer can purchase that royalty at any time after closing for C$5 million. Notably, any royalty payments Barnwell receives before the option is exercised will not reduce that C$5 million price.

“We will receive cash at closing, retain meaningful participation in future drilling through the 5% gross overriding royalty, and transfer the business’s future site restoration and abandonment obligations,” said Philip Patman, Jr., Chief Financial Officer and a member of the Board. However, the company cautioned that royalty income depends on future drilling and production, and that exercise of the purchase option is at the buyer affiliate’s discretion. Based on its Canadian and U.S. tax attributes, Barnwell expects a limited tax impact on the C$9 million base consideration.

Part of a Broader Repositioning

The sale follows two other recent steps. On September 16, Barnwell completed the sale of its remaining Hawaii development interests, which brought total cash receipts of approximately $1.7 million. Then, on October 5, the company announced plans to terminate its defined benefit pension plan and recover the surplus assets once all benefit obligations are met.

As of September 30, 2026, the pension plan held approximately $12.8 million in assets against an estimated termination liability of $7.3 million. Including a related supplemental executive retirement plan obligation of about $1.8 million, plan assets exceed these estimated obligations by approximately $3.7 million before costs and taxes. Barnwell currently anticipates the reversion in December 2026, although it cannot assure the amount or timing.

Looking ahead, management intends to focus on redeploying Barnwell’s capital and public company platform at greater scale. “We are evaluating strategic investments, acquisitions and potential business combinations and will remain disciplined on valuation, balance-sheet strength and long-term per-share value creation,” Patman said.

Strategic Investment Summary

• Definitive Agreement: Barnwell Industries, Inc. (NYSE American: BRN) agreed to sell its Canadian oil and natural gas business for a base purchase price of C$9 million.
• Deal Consideration: The price consists of C$4 million in cash plus a 5% gross overriding royalty valued at C$5 million, with a C$1 million deposit already in escrow.
• Royalty Option: A buyer affiliate can purchase the royalty for C$5 million at any time after closing, and royalty payments received before then do not reduce that price.
• Liabilities Transferred: The buyer will assume the business’s future site restoration and abandonment obligations.
• Closing Conditions: The deal requires majority shareholder approval and governmental approvals, with an outside closing date of January 18, 2027.
• Repositioning: The sale follows the September completion of the Hawaii exit and the October 5 pension plan termination announcement.

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