Barnwell Sheds US Assets, Focuses on Canadian Oil & Gas

TL;DR

**BRN is going all-in on Canadian oil and gas, ditching US assets and drilling, a risky but potentially rewarding focus play.**

AI Summary

Barnwell Industries Inc. (BRN) reported a significant strategic shift in fiscal year 2025, divesting its contract drilling segment and U.S. oil and natural gas interests. On March 14, 2025, the company sold Water Resources International, Inc., its contract drilling subsidiary. Subsequently, on August 8, 2025, Barnwell sold its non-operated working interests in seven wells in Oklahoma and two wells in the Permian Basin in Texas, which collectively represented 11% of its fiscal 2025 production. As a result of these divestitures and production, total net proved reserves of oil and natural gas liquids decreased by 339,000 Bbls (35%) and 198,000 Bbls (55%), respectively, and natural gas reserves decreased by 3,026,000 Mcf (47%), for a combined decrease of 1,043,000 Boe (43%). The Twining field in Alberta, Canada, now represents 86% of Barnwell's fiscal 2025 production, with total net revenues from Twining reaching $9,610,000 for oil, $1,216,000 for NGL, and $1,218,000 for gas. The company's strategy is now focused on opportunistic drilling in the Twining area when commodity prices are favorable, leveraging its low annual decline rates below 15% for operated oil wells.

Why It Matters

Barnwell's strategic divestment of its contract drilling segment and all U.S. oil and natural gas interests signals a significant shift towards a more focused, Canada-centric oil and natural gas exploration and production model, primarily in the Twining field. This move could streamline operations and reduce exposure to diverse regulatory and market conditions, potentially improving efficiency and profitability for investors. However, it also concentrates risk within a single geographic area and commodity market, making the company more susceptible to Canadian energy policies and AECO hub natural gas pricing. For employees, this could mean a more stable, albeit narrower, operational focus, while customers of the divested Water Resources International, Inc. will now deal with a new owner. Competitively, this specialization might allow Barnwell to better compete with smaller, regional Canadian E&P firms, but it reduces its diversification compared to larger, multi-basin players.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant concentration of operations in the Twining field, Alberta, Canada, which now accounts for 86% of Barnwell's fiscal 2025 production. This concentration increases exposure to regional commodity price fluctuations (WTI differentials, AECO hub pricing), Canadian regulatory changes, and specific operational risks within that area. The 43% decrease in total net proved reserves (1,043,000 Boe) due to asset sales and production also indicates a smaller asset base, which can amplify the impact of operational setbacks or market downturns.

Analyst Insight

Investors should closely monitor Canadian oil and natural gas price trends, particularly WTI differentials and AECO hub pricing, as these will directly impact Barnwell's profitability. Evaluate the company's capital allocation strategy for the Twining field and its ability to execute opportunistic drilling to grow reserves and production, given the 43% reduction in proved reserves. Consider if the increased focus justifies the concentrated risk.

Financial Highlights

debt To Equity

N/A

revenue

$11,944,000

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $5,290,000 — Aggregate market value of voting common stock held by non-affiliates (As of March 31, 2025)
• 12,538,064 — Shares of common stock outstanding (As of December 8, 2025)
• 86% — Percentage of fiscal 2025 production from Twining field (Highlights concentration of operations)
• 339,000 Bbls — Decrease in total net proved oil reserves (35% decrease during fiscal 2025 due to sales and production)
• 198,000 Bbls — Decrease in total net proved natural gas liquids reserves (55% decrease during fiscal 2025 due to sales and production)
• 3,026,000 Mcf — Decrease in total net proved natural gas reserves (47% decrease during fiscal 2025 due to sales and production)
• 1,043,000 Boe — Combined decrease in total net proved reserves (43% decrease during fiscal 2025 due to sales and production)
• $9,610,000 — Net revenues from Twining oil production (For the year ended September 30, 2025)
• $1,216,000 — Net revenues from Twining NGL production (For the year ended September 30, 2025)
• $1,218,000 — Net revenues from Twining gas production (For the year ended September 30, 2025)

Key Players & Entities

• BARNWELL INDUSTRIES INC. (company) — Registrant
• Water Resources International, Inc. (company) — Wholly-owned subsidiary sold on March 14, 2025
• Twining field (location) — Represents 86% of Barnwell's fiscal 2025 production
• Alberta, Canada (location) — Primary operational area for oil and natural gas segment
• InSite Petroleum Consultants Ltd. (company) — Independent petroleum reserve engineers
• Pine Cliff Energy Ltd. (company) — Operator of some Twining field assets
• NYSE American (regulator) — Exchange where Common Stock is registered
• SEC (regulator) — United States Securities and Exchange Commission
• March 31, 2025 (date) — Date for market value of voting common stock calculation
• August 8, 2025 (date) — Date of sale for U.S. oil and natural gas interests

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: The company's strategy is to drill opportunistically when commodity prices are favorable. Fluctuations in oil and natural gas prices directly impact revenue and profitability, especially with the increased concentration in the Twining field which now represents 86% of production.
• Concentration of Operations [high — operational]: Following divestitures, 86% of Barnwell's fiscal 2025 production is from the Twining field in Alberta, Canada. This high concentration increases operational risk, as any disruption in this single area could significantly impact overall production and revenue.
• Dependence on Canadian Operations [medium — operational]: The divestiture of U.S. oil and natural gas interests leaves Barnwell heavily reliant on its Canadian assets, specifically the Twining field. This geographic concentration exposes the company to risks associated with Canadian regulatory, political, and economic environments.
• Reserve Depletion and Replacement [medium — financial]: Total net proved reserves decreased significantly in fiscal 2025: oil by 35% (339,000 Bbls), NGL by 55% (198,000 Bbls), and natural gas by 47% (3,026,000 Mcf). The ability to replace these reserves through future drilling or acquisitions is critical for long-term viability.
• Environmental Regulations [medium — regulatory]: As an oil and gas producer, Barnwell is subject to environmental regulations in Canada. Changes in environmental laws, compliance costs, or liabilities related to exploration and production activities could adversely affect operations and financial performance.
• Production Decline Rates [low — operational]: While operated oil wells in the Twining field have low annual decline rates below 15%, this is a key operational metric. Maintaining production levels requires ongoing investment, and any increase in decline rates would necessitate higher capital expenditure.

Industry Context

Barnwell Industries operates in the oil and natural gas sector, which is characterized by significant capital intensity, commodity price volatility, and evolving regulatory landscapes. The industry is seeing a trend towards consolidation and strategic divestitures as companies focus on core assets and optimize operations. Companies are increasingly emphasizing lower-cost production and efficient development, particularly in mature fields with predictable decline rates.

Regulatory Implications

As an oil and gas producer operating primarily in Canada, Barnwell is subject to federal and provincial environmental and resource regulations. Compliance with these regulations, including those related to emissions, water usage, and land reclamation, is critical. Changes in Canadian energy policy or stricter environmental standards could increase operating costs or impact production activities.

What Investors Should Do

1. Monitor Twining Field Performance
2. Assess Reserve Replacement Strategy
3. Evaluate Commodity Price Sensitivity
4. Analyze Capital Allocation for Opportunistic Drilling

Key Dates

• 2025-03-14: Sale of Water Resources International, Inc. — Divested the contract drilling segment, classifying it as discontinued operations.
• 2025-08-08: Sale of U.S. oil and natural gas interests — Exited U.S. oil and gas operations, further concentrating the business in Canada.
• 2025-09-30: End of Fiscal Year 2025 — Reporting period for the significant strategic shifts and financial results, highlighting the Twining field's dominance.
• 2025-12-08: Shares of common stock outstanding reported — Provides a baseline for per-share metrics and market capitalization calculations.
• 2025-03-31: Aggregate market value of voting common stock held by non-affiliates reported — Indicates the public float and market valuation as of a specific date.

Glossary

Discontinued Operations

Financial reporting treatment for a segment of a business that a company has sold or plans to sell, and that has a major impact on operations. (Barnwell has classified its contract drilling and U.S. oil and gas interests as discontinued operations following their sale.)

Net Proved Reserves

Estimates of the amount of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in the future from known reservoirs under existing economic and operating conditions. (Significant decreases in proved reserves were reported due to divestitures and production in fiscal 2025.)

Boe

Barrel of Oil Equivalent. A unit used to measure and report reserves and production of oil and natural gas on a common basis. (Used to quantify the combined decrease in total net proved reserves.)

Decline Rates

The rate at which production from an oil or gas well decreases over time. (Low decline rates (below 15%) for operated oil wells in the Twining field are a key factor in the company's strategy.)

Opportunistic Drilling

Drilling activities undertaken when market conditions, such as favorable commodity prices, make the prospect of profitable production more likely. (This is a core element of Barnwell's revised strategy, focusing on the Twining field.)

Working Interests

A form of mineral rights ownership that allows the owner to explore, develop, and produce oil and gas, and to share in the revenues and costs associated with the operation. (Barnwell sold its non-operated working interests in U.S. wells.)

Year-Over-Year Comparison

Fiscal year 2025 marks a significant strategic pivot for Barnwell Industries, characterized by the divestiture of its contract drilling subsidiary and U.S. oil and natural gas interests. This has led to a substantial reduction in total proved reserves across oil, NGL, and natural gas. Consequently, the company's operational focus has become highly concentrated on the Twining field in Alberta, Canada, which now accounts for 86% of its production. This shift implies a fundamental change in the company's risk profile and revenue generation model compared to the previous year.

Key Financial Figures

• $0.50 — ange on which registered Common Stock, $0.50 par value BRN NYSE American Common Sto
• $1.09 — ts were based on a natural gas price of $1.09 per Mcf and an oil price of $60.92 per
• $60.92 — ce of $1.09 per Mcf and an oil price of $60.92 per Bbl) and costs, and a discount fact
• $1.27 — nit of production: Mcf of natural gas* $1.27 $1.41 $2.64 Bbl of oil** $60.49 $66.49
• $1.41 — production: Mcf of natural gas* $1.27 $1.41 $2.64 Bbl of oil** $60.49 $66.49 $69.7
• $2.64 B — ction: Mcf of natural gas* $1.27 $1.41 $2.64 Bbl of oil** $60.49 $66.49 $69.77 Bbl of
• $60.49 — al gas* $1.27 $1.41 $2.64 Bbl of oil** $60.49 $66.49 $69.77 Bbl of natural gas liqui
• $66.49 — $1.27 $1.41 $2.64 Bbl of oil** $60.49 $66.49 $69.77 Bbl of natural gas liquids** $2
• $69.77 B — $1.41 $2.64 Bbl of oil** $60.49 $66.49 $69.77 Bbl of natural gas liquids** $28.38 $29.3
• $28.38 — 49 $69.77 Bbl of natural gas liquids** $28.38 $29.38 $32.24 Annual average productio
• $29.38 — 77 Bbl of natural gas liquids** $28.38 $29.38 $32.24 Annual average production cost
• $32.24 — of natural gas liquids** $28.38 $29.38 $32.24 Annual average production cost per Boe
• $21.45 — age production cost per Boe produced*** $21.45 $19.82 $22.10 Annual average productio
• $19.82 — duction cost per Boe produced*** $21.45 $19.82 $22.10 Annual average production cost
• $22.10 — cost per Boe produced*** $21.45 $19.82 $22.10 Annual average production cost per Mcf

Filing Documents

• brn-20250930.htm (10-K) — 2697KB
• exhibitno4293025.htm (EX-4.2) — 30KB
• exhibitno19193025.htm (EX-19) — 28KB
• exhibitno2193025.htm (EX-21) — 6KB
• exhibitno23193025.htm (EX-23.1) — 3KB
• exhibitno23293025.htm (EX-23.2) — 4KB
• exhibitno31193025.htm (EX-31.1) — 13KB
• exhibitno31293025.htm (EX-31.2) — 13KB
• exhibitno3293025.htm (EX-32) — 9KB
• exhibitno99193025.htm (EX-99) — 23KB
• insiteimage1a02.jpg (GRAPHIC) — 75KB
• 0001628280-25-058738.txt ( ) — 15871KB
• brn-20250930.xsd (EX-101.SCH) — 103KB
• brn-20250930_cal.xml (EX-101.CAL) — 151KB
• brn-20250930_def.xml (EX-101.DEF) — 580KB
• brn-20250930_lab.xml (EX-101.LAB) — 1202KB
• brn-20250930_pre.xml (EX-101.PRE) — 934KB
• brn-20250930_htm.xml (XML) — 2787KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 18 Item 1B. Unresolved Staff Comments 29 Item 1C. Cybersecurity 29 Item 2.

Properties

Properties 29 Item 3.

Legal Proceedings

Legal Proceedings 30 Item 4. Mine Safety Disclosures 30 PART II Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31 Item 6. [Reserved] 32 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 50 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 51 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 111 Item 9A.

Controls and Procedures

Controls and Procedures 111 Item 9B. Other Information 112 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 112 PART III Item 10. Directors, Executive Officers and Corporate Governance 113 Item 11.

Executive Compensation

Executive Compensation 118 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 121 Item 13. Certain Relationships and Related Transactions, and Director Independence 123 Item 14. Principal Accounting Fees and Services 123 PART IV Item 15. Exhibits, Financial Statement Schedules 125

Signatures

Signatures 128 Index to Exhibits 130 2 GLOSSARY OF TERMS Unless otherwise indicated, all references to "dollars" in this Form 10-K are to U.S. dollars. Defined below are certain terms used in this Form 10-K: Terms Definitions AER - Alberta Energy Regulator ARO - Asset retirement obligation ASC - Accounting Standards Codification ASU - Accounting Standards Update Barnwell of Canada - Barnwell of Canada, Limited Bbl(s) - stock tank barrel(s) of oil equivalent to 42 U.S. gallons Boe - barrel of oil equivalent at the rate of 6 Mcf per Bbl of oil or NGL Consolidated Balance Sheets - The consolidated balance sheets of Barnwell Industries, Inc. and its subsidiaries. FASB - Financial Accounting Standards Board GAAP - U.S. generally accepted accounting principles Gross - Total number of acres or wells in which Barnwell owns an interest; includes interests owned of record by Barnwell and, in addition, the portion(s) owned by others; for example, a 50% interest in a 320 acre lease represents 320 gross acres and a 50% interest in a well represents 1 gross well. In the context of production volumes, gross represents amounts before deduction of the royalty share due others. InSite - InSite Petroleum Consultants Ltd. KD I - KD Acquisition, LLLP, formerly known as WB KD Acquisition, LLC KD II - KD Acquisition II, LP, formerly known as WB KD Acquisition, II, LLC KD Development KD Development, LLC KDK - KD Kaupulehu, LLLP, which consists of KD I and KD II KD Kona - KD Kona 2013 LLLP KKM Makai - KKM Makai, LLLP Kukio Resort Land Development Partnerships - The following partnerships in which Barnwell owns non-controlling interest: KD Kukio Resorts, LLLP ("KD Kukio Resorts") KD Maniniowali, LLLP ("KD Maniniowali") KD Kaupulehu, LLLP ("KDK") LCA - Licensee Capability Assessment LGX - LGX Oil & Gas Ltd. MBbls - thousands of barrels of oil Mcf - one thousand cubic feet of natural gas at 14.65 pounds per square inch absolute and 60 degrees Fahrenhei

BUSINESS

ITEM 1. BUSINESS Overview Barnwell was incorporated in Delaware in 1956 and fiscal 2025 represented Barnwell's 69th year of operations. Barnwell operates in the following two principal business segments: Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and in the U.S. Land Investment Segment - Barnwell owns land interests in the State of Hawaii. Discontinued Operations On March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources International, Inc. ("Water Resources"). Water Resources drills water wells and installs and repairs water pumping systems in the State of Hawaii and represented Barnwell's contract drilling segment. As a result of the sale, the Company has classified the related assets, liabilities and the results of its contract drilling business as discontinued operations in the consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. Unless otherwise noted, the discussions throughout Part I of this Form 10-K pertains only to Barnwell's continuing operations. For information on discontinued operations, refer to Note 3 "Discontinued Operations" in the Notes to Consolidated Financial Statements in Item 8 of this report. Oil and Natural Gas Segment Overview Barnwell acquires and develops crude oil and natural gas assets in the province of Alberta, Canada via two corporate entities, Barnwell of Canada, Limited and Octavian Oil Limited. Barnwell of Canada is a U.S. incorporated company that has been active in Canada for over 50 years, primarily as a non-operator participating in exploration projects operated by others. Octavian Oil is a Canadian company incorporated in 2016 to achieve growth through the acquisition and development of crude oil reserves in the field of Twining, Alberta. Additionally,

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