Barnwell Industries, Inc. (NYSE American: BRN) entered into a definitive Share Purchase and Sale Agreement on October 5, 2026, to sell its Canadian oil and natural gas business to 2798913 Alberta Ltd. The transaction is valued at a base purchase price of C$9,000,000, consisting of C$4,000,000 in cash and a 5% gross overriding royalty valued at C$5,000,000.
The sale is subject to customary closing conditions, including approval from a majority of Barnwell’s outstanding common shares. The closing is scheduled to occur five business days after all conditions are satisfied, with an outside date of January 18, 2027.
Barnwell intends to complete a pre-closing reorganization prior to the sale. In this reorganization, Barnwell Canada and Octavian Oil Ltd. will amalgamate to form a new Alberta corporation. The Company will retain certain assets, including shares of Barnwell Hawaiian Properties, Inc., excess cash, and near-cash assets. Additionally, Barnwell will issue a non-interest bearing demand promissory note in the principal amount of C$8,750,000 to the new corporation.
Under the terms of the agreement, Barnwell will retain a 5% gross overriding royalty on the acquired business’s interest in future wells drilled on the lands. The Company has established a wholly owned subsidiary to hold this royalty. Furthermore, an affiliate of the Purchaser has the right to purchase this royalty for C$5,000,000 at any time after closing. Notably, any royalty payments received by Barnwell prior to the exercise of this option will not reduce the C$5,000,000 purchase price, allowing Barnwell to retain those payments in addition to the full exercise price.
The Purchaser has paid a deposit of C$1,000,000 into escrow, which will be credited toward the purchase price at closing. The Board of Directors has determined the transaction is in the best interests of the Company and is recommending shareholder approval.
