Barnwell Industries, Inc. has entered into an agreement to sell its Canadian oil and natural gas business to a local Canadian corporation. The transaction, signed on October 5, 2026, involves the acquisition of the shares of the Canadian operating company and a related intercompany note following a pre-closing reorganization.
The total base purchase price is C$9 million, structured as C$4 million in cash and a 5% gross overriding royalty valued at C$5 million. The buyer has placed a C$1 million deposit in escrow, which will be credited toward the cash consideration at closing. The price is subject to working-capital and other routine adjustments.
Barnwell will retain a 5% gross overriding royalty on the acquired business’s interest in future wells drilled on the lands covered by the royalty agreement. This royalty is payable to a wholly owned Canadian subsidiary of Barnwell. The buyer has the option to purchase this royalty at any time after closing for C$5 million; if the option is exercised, Barnwell retains any royalties paid prior to the exercise.
Barnwell continues to own and operate the Canadian business and retains its pre-closing operating economics, including revenues and associated costs, until the transaction closes. The company will retain excess cash and near-cash assets outside the sale. Future site restoration and abandonment obligations will transfer to the buyer at closing, though Barnwell remains subject to contractual indemnification obligations.
The agreement prohibits Barnwell from soliciting competing acquisition proposals. Before shareholder approval, the company may consider unsolicited proposals if it satisfies specific requirements, including Board determinations, notice procedures, payment of a C$500,000 termination fee, and return of the deposit. The sale proceeds will be paid to Barnwell and its designated subsidiary, not directly to individual shareholders.
