Barnwell Industries Inc (BRN) News & EventsBRNBarnwell Industries Inc

Barnwell Industries Sells Canadian Oil and Gas Business for C$9M

Barnwell Industries announced that it has posted a set of questions and answers on its website regarding the previously announced agreement to sell its Canadian oil and natural gas business to a Canadian corporation. The information from these Q&As include: Barnwell has agreed to sell its Canadian oil and natural gas business to a local Canadian corporation. Following a pre-closing reorganization, the buyer will acquire the shares of the Canadian operating company and a related intercompany note. The agreement was signed on October 5, 2026; The base purchase price is C$9M, consisting of C$4M in cash and a 5% gross overriding royalty assigned a value of C$5M for purposes of the transaction; A wholly owned Canadian subsidiary of Barnwell will receive a 5% gross overriding royalty on the acquired business's interest in future wells drilled on the lands covered by the royalty agreement; Barnwell continues to own and operate the Canadian business and retains its pre-closing operating economics; The Canadian business's future site restoration and abandonment obligations will remain with the sold business under the buyer's ownership.

Barnwell Industries Sells Canadian Oil and Gas Business for C$9M

Barnwell Industries announced that it has entered into a definitive agreement to sell its Canadian oil and natural gas business to an Alberta corporation for a base purchase price of C$9M, subject to working capital and indebtedness adjustments. The consideration consists of C$4M in cash and a 5% gross overriding royalty providing Barnwell with continued participation in future drilling, valued at C$5M for purposes of the transaction. Barnwell's board of directors determined the transaction is in the best interests of the company and the board of directors is recommending that Barnwell shareholders vote in favor of the transaction. Following the completed sale of its remaining Hawaii development interests in September, the company separately announced its decision to terminate its defined benefit pension plan and the planned reversion of surplus assets after satisfying benefit obligations, costs and applicable taxes. Together, these actions are intended to simplify Barnwell, reduce legacy obligations, increase financial flexibility and position the company to pursue strategic opportunities capable of materially increasing long-term per-share value. Barnwell will retain meaningful participation in the future development of the properties through a 5% gross overriding royalty on the acquired business's interest in future wells drilled on the all of Barnwell's Canadian lands. An affiliate of the buyer will have the right to purchase the royalty at any time after closing for C$5M. Any royalty payments received by Barnwell prior to exercise of the option will not reduce the C$5M purchase price, allowing Barnwell to retain those royalty payments in addition to the full C$5M exercise price if the option is subsequently exercised. This structure gives the buyer a strong economic incentive to exercise the option rather than to continue making royalty payments. Future royalty payments will depend on future drilling and production, and exercise of the C$5M purchase option is at the buyer affiliate's discretion and is not assured. The buyer has paid a C$1M deposit into escrow, which will be credited toward the purchase price at closing. The transaction 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. Barnwell will retain specified assets, including excess cash and near-cash assets, outside the sale. Based on its available Canadian and U.S. tax attributes, Barnwell expects a limited tax impact on the C$9M base consideration. Aggregate royalty payments and call-option proceeds exceeding the C$5M value attributed to the royalty would be subject to tax. Closing is subject to approval by holders of a majority of Barnwell's outstanding common shares, completion of the pre-closing reorganization, required governmental approvals and other customary conditions. There can be no assurance that the transaction will close or as to its timing. The agreement prohibits Barnwell and its representatives from soliciting competing acquisition proposals. Before shareholder approval, specified exceptions permit Barnwell to consider and, under certain conditions, negotiate unsolicited proposals. During that period, Barnwell may also terminate the agreement to enter into a definitive agreement for a superior proposal, subject to the Board making the required determinations, compliance with notice and buyer matching procedures, and payment of a C$500,000 termination fee and the return of the deposit.

Barnwell Industries Terminates Pension Plan to Simplify Balance Sheet

Barnwell Industries "announced that it has decided to terminate its qualified defined benefit pension plan and satisfy all benefit obligations. The termination is another step in simplifying Barnwell's balance sheet, reducing legacy liabilities and positioning its capital for future value creation. The net surplus available after the plan termination will bolster the Company's ability to pursue strategic transactions. The Company will satisfy all plan obligations, settle related supplemental executive retirement plan obligations, and pay administrative and transaction costs and applicable excise and other taxes from plan assets. Barnwell has retained an actuarial and pension consulting firm and separate ERISA legal counsel to advise on the termination and reversion of surplus assets. The Company intends to secure participants' benefits by purchasing annuity contracts. Any surplus remaining after the annuity purchase and satisfaction of other obligations will revert to Barnwell."